An Over View Of The Avon Company Marketing Essay

August 30, 2017 Marketing

Chapter 1

The chief intent of this thesis is to find the just market value ( Intrinsic Value ) of Avon Products Incorporation as at 31st December, 2009 for academic intents.

Based on an accounting rule – Traveling concern, which states that a company will go on to run for an indefinitely long period in the hereafter, it is assumed that the resources presently available to the company will be used in its hereafter operations.

1.2 Methodology

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The purpose of this thesis is to set up the rating procedure of Avon Products Incorporation. The appraisal of the intrinsic value is every bit at 31st December, 2009, which is the company ‘s financial twelvemonth terminal.

A top-down attack is used to discourse overall economic environment and the personal and family merchandises sector.

Premises for the company ‘s future public presentation are made based on its operations scheme, planetary and regional mentality.

The first four subdivisions explain the company ‘s internal and external operating environment while subdivision five-onward trade with historical fiscal public presentation and prognosiss.

Discounted hard currency flow rating technique is used in this paper

Decision is drawn from the above theoretical account and sensitiveness analysis at the terminal.


Chapter 2

2.1 Company Overview

David H. McConnell founded the company in 1886 at the age of 28 old ages old. He sold books door-to-door and distributed aroma to entice adult females to purchase his books. His aroma was more popular than his books, so he so founded the California Perfume Company ( CPC ) in New York, New York in a 500-square-foot ( 46A M2 ) fabrication and transportation office at 126 Chambers Street. Mrs. P.F.E. Albee was the company ‘s first representative. In 1897, McConnell built a little ( 3000 square pes ) research lab in Suffern, New York. In 1906, the West Coast office in San Francisco was destroyed in the Great Earthquake. In 1914 the first non-US office was opened in the Canadian state of Quebec. January 28, 1916, David H. McConnell and Alexander D. Henderson ( man of affairs ) in Suffern, New York[ 1 ]incorporated the California Perfume company. Gross saless attained $ 2 million by 1928 following five million units sold in North America. The company name was changed to Avon Products Incorporation in October 1939 which was taken populace in 1954, gross revenues reached $ 55 million, and the “ Avon Calling ” advertisement run introduced. Avon Suffern Research and Development installation came into being in 1971. With one million gross revenues representatives, gross revenues reached $ 3 million, soon ; gross revenues exceed $ 10 billion worldwide. Avon Products was selected by the Chinese authorities to prove direct merchandising in Tianjin, Beijing and Guangdong Province in China and the 100 million dollar Research and Development installation which house 300 research scientists on the original site in Suffern, New York was opened in 2005 with a comprehensive turnaround program to reconstruct sustainable growing[ 2 ]. Product Line Simplification plan ( “ PLS ” ) and Strategic Sourcing Initiative ( “ SSI ” ) were launched in 2007 with the purpose of presenting annualized nest eggs of about $ 430 million one time all enterprises are to the full implemented by 2011-2012 ( “ 2005 Restructuring plan ” ) . 2009 witnessed the new restructuring plan which targets increasing degrees of efficiency and organisational effectivity across planetary operations. The new enterprise is expected to present annualized nest eggs of about $ 200million one time all enterprises are to the full implemented by 2012-2013.[ 3 ]

Avon besides has offices in Luzerne, Pennsylvania and Davenport, Iowa.

Andrea Jung is the company ‘s Chairman and Chief Executive Officer, who was selected for the place in 1999. As at December 2009, the company had about 41,000 employees[ 4 ].

2.2 Company Profile

2.2.1Organizational Structure

“ As stated in Avon ‘s 2009 one-year study, the Office of the Chairman is responsible for placing growing enterprises, integrating planetary schemes, and allocating resources to Avon units around the universe. In add-on, as portion of the reorganisation, the house ‘s three International Regional central offices were to be phased out, alternated by 10 streamlined concern units covering gross revenues, selling and distribution around the universe. Net income and loss answerability rested with them. Directors of these units would describe straight to the Office of the Chairman.

Besides describing to the president are planetary staff sections: human resources and corporate duty, planetary trade name, planetary communications, planetary direct merchandising and theoretical account invention, planetary supply concatenation, general advocate and corporate secretary and a new section – planetary penetrations and selling intelligence. Each section assumes world-wide duty for its map.

Table 2.2.1 Avon Products Inc. Organizational Structure

Chairman and Chief Executive Officer

Vice Chairman, Chief Finance and Strategy Officer

Executive Vice President, Latin America and Central & A ; Eastern Europe

Senior Vice President,

Chief Information Officer

Senior Vice President,

Global Communicationss

Senior Vice President,

Human Resources & A ; Corporate Duty

Senior Vice President,

Senior Vice President,

Western Europe, Middle East & A ; Africa, Asia Pacific & A ; China

Senior Vice President and President, North America

Beginning: Avon Annual Report, 2009.

2.2.2 Major Lines of Business

Avon Products Incorporation is a planetary maker and seller of beauty and related merchandises carry oning concern in the extremely competitory beauty industry and against other consumer packed goods and direct merchandising companies to make, industry and market beauty and non-beauty related merchandises. Primarily, Avon Products generates grosss from three chief classs: Beauty merchandises, Fashion merchandises and Home merchandises.

Table 2.2.2 Avon Products Inc. Sources of Gross







72 %

72 %

70 %

69 %


17 %

18 %

18 %

18 %


11 %

10 %

12 %

13 %

Beginning: Avon Annual Report, 2009

Beauty Merchandises: Cosmetics, aromas, skin attention and personal attention.

Manner Merchandises are Jewelry, tickers, dress, footwear and accoutrements.

Home Merchandises: Home wares, gifts, amusement and leisure merchandises, wellness and wellness merchandise and cosmetic merchandises.

2.3 Operating Schemes

2.3.1 Mission Statements and Management Aims

Avon Products Inc. is unambiguously among major corporations, a adult female ‘s company. The company sells merchandises to, for and through adult females. The company understands adult females ‘s demands and penchants better than most companies. This understanding guides the basic concern and influences the pick of new concern chances. Avon needs to go and are going, more customer-oriented and more market-driven.

Each one of the 18 words in the vision statement “ to be the company that best understands and satisfies the merchandise, service and self-fulfill demands of women-globally ” has considerable significance. The three most of import elements, nevertheless, are the focal point on adult females, on being planetary and on the extra chances for Avon in self-realization.

Avon Products Inc. intends being the company that best understands meets and satisfies adult females demands globally.

The International Beauty taking company intends to excel rivals in quality, invention, value and raising image to go adult females ‘s favourites Beauty Company worldwide by making alone trade names.

The company aims at being the finish shop for adult females, guaranting assortments of multiple trade names and usher, and supplying one-on-one shopping experience that helps make and construct enduring client relationships. The Premier Direct Seller will spread out the company ‘s presence in door-to-door and steer the reinvention of the channel, giving superior net incomes chances to enterprisers, acknowledgment, service and support, doing it convenient and honouring to be associated with Avon and raising the chance of the industry.

Avon merchandises ‘ leading border is through passion for high criterions, regard for diverseness and finding to make uncommon chances for professional growing so that associates can carry through their highest potency.

The company ‘s philanthropic attempts aim at extinguishing chest malignant neoplastic disease and authorising adult females to be economic independent. As a manner of making wealth for stockholders, Avon seeks new growing chances and bettering profitableness, a socially responsible, ethical company that is noticed and imitated as a theoretical account of success.

Avon Products Incorporation Values and Principles

The company ‘s five values and rules as ballad down by the laminitis, David H McConnell, have served as a go oning beginning of strength throughout Avon ‘s proud history and they remain in the bosom of who the company is:

The Five Valuess of Avon Products Inc.

Trust, Respect, Belief, Humility and Integrity.

Principles that Guide Avon

1. To supply persons with extra earning means to back up wellbeing and felicity.

2. To guarantee households satisfaction from quality merchandises

3. To render outstanding service to clients in its helpfulness and courtesy ;

4. To admit and honor employees and Representatives parts.

5. To administer the dividend of growing and success with others ;

6. To run into societal corporate duty ; and

7. To maintain and prize the hospitable Avon spirit.


2.3.2 Business Models and Schemes


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