Avon in China.doc - Future of Avon in China Direct Sales...

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Future of Avon in China: Direct Sales, Retail Sales or Both A Case Analysis Marketing Management BA 206
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I. Perspective Held by the Group The group would like to take the viewpoint of a top-level executive or marketing manager who can determine as to what strategies to undertake. Specifically, we would like to solve this case in the perspective of the manager in charge of its Chinese operation. II. Statement of the Problem a) Avon is currently facing a dilemma as to what strategy to implement in distributing its products to the Chinese market. Changing and determining the operations model would involve a lot of trade-offs for Avon China. III. Objectives a) To determine what strategy or model to implement in distributing the products to the market. b) To determine or develop a model that is beneficial and sustainable in the long-run scenario. IIII. Analysis of Relevant Case Facts From the viewpoint of the marketing manager, the following are the external macro- environment factors that have affected and may affect the business operations of Avon China, determined through PEST Analysis. Political Factors The Bureau of State Administration for Industry and Commerce in China has conducted reviews regarding business models similar to Avon, and in year 1998, China has banned such models which greatly affected Avon China. Though the ban was eventually lifted, the direct selling model would seem to be a trial version overseen by the Chinese government. The probability of another ban in the future would make the operations unstable and unsustainable.
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