StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Avon Calls for Foreign Market - Case Study Example

Cite this document
Summary
The paper closes with Avon’s challenges in maintaining and expanding global manufacturing and supply chain network. Different companies use different marketing strategies such as Avon’s marketing orientation. It discusses the applicability of Avon’s marketing orientation to its global operations. …
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER92% of users find it useful
Avon Calls for Foreign Market
Read Text Preview

Extract of sample "Avon Calls for Foreign Market"

Avon Calls on Foreign Markets Avon Calls on Foreign Markets Different companies use different marketing strategies such as Avon’smarketing orientation. This paper discusses the applicability of Avon’s marketing orientation to its global operations. The paper covers Avon’s reasons for depending on its foreign operations more than its home operations. The paper will discuss the socioeconomic and demographic changes and the global recession on Avon’s operations. There is a review on Avon’s competitive advantages and emphases in distributing more to its foreign market than home market. There is a brief section on major considerations in choosing new suppliers and manufacturing location. The paper closes with Avon’s challenges in maintaining and expanding global manufacturing and supply chain network. Initially, Avon applied product orientation strategy where it produced its goods and went to its customers to check whether they will be interested. Oudan & N.S. U, 2007 observes that this orientation has the advantage of saving the customer the burden to second-guess how a new product would develop. Product orientation allowed Avon to keep producing the items it was good in without having to deal with the risks involved in producing new products. Marketing orientation bears more advantages. In their line of duty, Avon representatives meet people and they get to hear their varying queries, ideas, and needs. Marketing orientation allows Avon to adapt its products to address their customers’ felt needs. Customers’ needs vary with individuals and regions and Avon’s flexibility and adaptability helps build and retain loyalty. This loyalty is what guarantees Avon’s profits in its foreign markets (Oudan & N.S. U, 2007). Avon depends more on foreign markets because they do not stiff competition. There are many cosmetic manufacturers in the U.S. cosmetic industry. Avon’s independent salespersons help advertise products through the word of mouth. This cuts advertising costs that would accrue from other ways of marketing such as media (Oudan & N.S. U, 2007). Growth in the numbers of women who use cosmetics would raise Avon’s profitability. These are women of ages ranging between young adulthood and middle age. On the other hand, if the elderly exceeded the young, Avon’s profitability will go down. Avon targets women and an unbalanced growth in population that would lead to more men than women would reduce Avon’s sales and profitability. Global recession renders some people unemployed because companies resort to lay-offs and retrenchments in order to cut on their costs. This provides Avon with more people to work as direct sellers from the resultant pool of job seekers. Increase in the number of direct sellers increases Avon’s sales. Avon’s direct sales strategy is its competitive advantage. Its representatives are able to reach some of the places that would seem relatively inaccessible using other sales methods. The representatives canoe across rivers to interior parts where there is poor infrastructure. According to Singh, 2008 direct selling is a convenient strategy that costs companies little to adopt. The strategy is flexible and helps companies to attend to all consumers including those who prefer door-to-door services and those who cannot afford time for product demonstrations. Expansion into new markets is another element of Avon’s business strategy that companies can domesticate. Avon’s emphasis in selling largely to its foreign market has the advantage of earning it profound reputation. This leads to a proportionate growth in its sales in the foreign market. On the other hand, U.S’s cosmetic industry is flooded and a firm’s reputation does not stand out as much as in foreign markets. Selling to the home market through kiosks allows Avon to attend to its loyal customers in the U.S. However, this way of distribution has the risk of not having a good standing to fall back on in the home market. This is because home market serves to cushion businesses when their foreign operations fail (Singh, 2008). Price is an element of consideration when choosing new suppliers. The services of the new supplier have to be affordable but competitive pricing is the best option. Avon has to be cautious not to focus so much on price as to compromise the quality of its products. Avon also needs to consider supplier reliability in order to identify the suppliers who can deliver the right goods or services on time in order not to delay the availability of Avon’s products to its customers. Supplier capacity is important and companies measure it through the amount of stock the supplier can produce or keep at a time (Gordon, 2008). Gordon, 2008 asserts that the proximity and distance of a supplier from the company is important because it determines whether goods and services will get to the company on time or not. In deciding where to manufacture their products, Avon should consider transportation. A strategic location for a manufacturing plant should be open to at least two means of transport. They should consider the location of their markets and ensure that their manufacturing sites are near their markets. Political and strategic considerations will require Avon to manufacture its products from the place where the government would direct. Places where raw materials are readily availability would be ideal for Avon to manufacture its products. A challenge that Avon experiences in maintaining and expanding its manufacturing operations is how to come up with a procurement network that supports and reacts to its supply chain needs. Koster & Delfmann, 2007 argue that it is challenging to select strategic suppliers who can provide manufacturing locations that works well with a company’s global quality and still maintain local service that is reliable. It is becoming increasingly challenging to access latest technology that supports new product development. According to Sule, 2009 increased business expansion and growth such as Avon’s requires global customer and supplier networks. Some of these networks form complex global supply chains that need highly effective management. Optimizing end-to-end supply chains costs is a task for a company of Avon’s caliber and outsourcing and improved globalization of supply chains are some of the ways of reducing these costs. In conclusion, Avon’s marketing orientation enables it to address customers’ felt needs and helps cut down on advertising costs. Avon depends on its foreign markets more than its home market because foreign markets do not have competition as stiff as its home market. A growth in the numbers of women who uses cosmetics would increase Avon’s sales and profitability whereas more men than women would mean a decrease in the same. Through direct selling, Avon enjoys improved access to places inaccessible to other businesses. Price, reliability and capacity are examples of major considerations in choosing suppliers. Transportation and proximity to the market are determinants of an ideal place for locating a manufacturing plant. Global supply chain complexity and end-to-end cost optimization are Avon’s challenges in maintaining and expanding global manufacturing and supply chain networks. References Gordon, S. (2008). Supplier evaluation and performance management excellence. Boca Raton, Fla: J. Ross. Koster, M. B. M., & Delfmann, W. (2007). Managing supply chains: Challenges and opportunities. Køge, Denmark: Copenhagen Business School Press. Oudan, R., & Nova Southeastern University. (2007). Market Orientation: Benefits to firm and economic development, theories, concepts and methods. Saarbrucken: VDM Verlag Dr. Muller. Singh, M. (2008). Strategic management and competitive advantage. New Delhi: Global India Publications. Sule, D. R. (2009). Manufacturing facilities: Location, planning, and design. Boca Raton: CRC Press. Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Avon Calls for Foreign Market Case Study Example | Topics and Well Written Essays - 1000 words”, n.d.)
Avon Calls for Foreign Market Case Study Example | Topics and Well Written Essays - 1000 words. Retrieved from https://studentshare.org/business/1631615-avon-calls-for-foreign-market
(Avon Calls for Foreign Market Case Study Example | Topics and Well Written Essays - 1000 Words)
Avon Calls for Foreign Market Case Study Example | Topics and Well Written Essays - 1000 Words. https://studentshare.org/business/1631615-avon-calls-for-foreign-market.
“Avon Calls for Foreign Market Case Study Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/business/1631615-avon-calls-for-foreign-market.
  • Cited: 0 times

CHECK THESE SAMPLES OF Avon Calls for Foreign Market

Avon Calls on Foreign Markets

avon calls on Foreign Markets One of the biggest companies, which started off in 1886, as one of the world's premier most makers and marketers of women's beauty related products, is Avon.... Avon's marketing orientations For the US market, Avon has resorted to door to door selling via saleswomen who have been marketing the products via the word of mouth and establishing personal contacts with the customers and tapping a huge customer base.... was low, since it had no new place to spread within the country to create a market for cosmetics, toiletries and fragrances....
3 Pages (750 words) Case Study

Avon Calls on Foreign Markets

To add, since Avon has diversified its market to capture the foreign market is not likely to affect all the markets negatively at once.... In the paper “avon calls on Foreign Markets” the author analyzes Avon's marketing strategies, which have been focused on the international plane rather the United States' market because of the stiff competition it facing from other beauty manufacturers.... market.... market given that most of the market had been permeated already, and there remained no virgin market for its products....
5 Pages (1250 words) Case Study

Zara Company Analysis

The analysis of the internal market reveals that ZARA is faring well because of its strong supply chain and its vertical integration.... The analysis of the external market reveals that the rivalry within the firm is medium to high.... This fashion retailer has introduced a different strategy within the fashion market that goes against the existing strategies of the fashion industry (Anon, nd.... The EU is beneficial for the company as it has made the entire region work as a local market....
17 Pages (4250 words) Essay

Consolidating Foreign Subsidiary Financial Statements

hellip; Adoption of both IFRs and VAS calls for technical, operational and strategic changes.... The third literature is one which studies the market and the many emerging behaviors related to market patterns, and the final study reveals different preferences that are used as translating methods, this is done by making early adoption and embracing SFAS.... 5, the two of them shows different market positions at different time....
7 Pages (1750 words) Research Paper

Manufacturing Technologies

Today, there is much more research being conducted in this production field which ultimately aims at improving the existing models and brings into market more sufficient models that are of high quality.... The author of the current paper states that bicycle frames have been made, for at least the last century, from an assembly of tubes....
6 Pages (1500 words) Coursework

International Marketing Plan for Sephora

It was only in 1990's that India opened up its market for foreign cosmetics.... Though it is more popular in the elite and luxury consumers, the cosmetic giant has the potential to dominate the Indian market by capitalizing on its… The cosmetic market in India is just in its nascent stage.... According to International market Research, India's current per capita expenditure is approximately $0.... Since market penetration levels of international cosmetics brands in India are low, Sephora should sell local brands, such as Lakme, the highest selling local brand, in their retail outlets....
4 Pages (1000 words) Essay

Currency Forward and Currency Futures

To hedge its position the company can enter into a forward contract that will entitle it to sell the receivables after three months at an agreed-upon rate irrespective of the rate prevailing in the market.... nbsp; Considering the volume of these foreign currency receivables and payables, most of the companies hedge their overseas exposures through currency forwards or options or futures.... In the event of any adverse movement in the foreign currency receivables, the company can exercise the forwards or the options....
7 Pages (1750 words) Coursework

Difficulties of Multinationals in Carrying Out Transactions

It is generally assumed that a depreciation of the currency of the host country reduces the amount of foreign currency needed to purchase the asset, but it also reduces the nominal return one receives in the foreign currency, thus not changing the rate of return for the foreign investor....
8 Pages (2000 words) Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us