Avon Case Assignment

Case #2: Avon

By Venkata Mandapaka, Onyeka Enwerem, Amin Afshar and Poi Kuo Question 1: Who is Avon’s target market? How can it be segmented? Avon’s target market is women in 25-50 age range and who has average to below-average household income. Additionally, Avon targeted women who either needed advice on purchasing beauty products or wanted a personal connection with reps, so the scenario would be more one-on-one meeting either at home or office rather than the party style, thus products can be explained and understood. The market can be segmented by demographic data showing ages, shopping habits, preferred products style and income levels.
Question 2: Should Avon sell direct to consumers? Why or why not?
Initially, Avon did not sell directly to consumers, the reason was that the orders from customers were small and hard to meet the required margin. In this case, a major role of the sales representatives was to aggregate the inventory in the distribution channel. However, with the prosperity of many other developed channels (Ebay, Amazon), it’s possible to “rent” the distribution channel or build a new channel. Although doing so requires more capital and neat evaluation to see if the new channel is profitable or not with existing product prices. In our opinion, we think direct selling is worth trying and will be beneficial to Avon. Direct selling can provide an increase in the profit margin, as the product will not have to be discounted twice, this channel might bring in new customers, create an increased product value proposition. With this channel Avon can train its own sales reps in stores on the right way to sell and upsell its product, or

have self explanatory videos or product details on its website to educate customers better. Question 3: What does “selling” mean here? Can the Web do this for Avon? “Selling” in this situation means closing the gap between customer and Avon’s products, including the one-on-one connection, advice section, customer...