What are the major competitive advantages that Avon has How easily might other

What are the major competitive advantages that avon

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What are the major competitive advantages that Avon has? How easily might other companies duplicate these advantages? Some of the most important competitive benefits that are with Avon are: Presence of a Global brand – Avon is recognized as a brand that meets women’s needs. There has been years of promotional activities and exercises behind that. Customer Base – It has a huge loyal customer base for its products. This base not only brings in revenue, but also multiplies because of word-of-mouth promotion[www20]. Representatives – There are millions of Avon reps working in its distribution channel. Product portfolio – The decentralized product development has led to an extensive, diverse product portfolio for Avon. Well, the kind of ecosystem that Avon has developed over all these years is hard to duplicate in markets where it already exists. But, in new markets, where none of these advantages are behind Avon, a new player can challenge it. Avon does not sell within the United States in retail establishments (with the exceptions of kiosks handled by some of its reps). What are the pros and cons of distributing that way? Advantages (Pros): 1) Cost-saving: Avon’s distribution channel is dependent on reps who do not take any full time salary. Hence, the operational costs reduce. 2) Small number of on-roll employees. Thus, easier management 3) Advertising and promotional budget can be reduced. Word-of-mouth becomes a significant channel of promotion. 4) As products are represented and sold to customers by their own acquaintances and friends, a loyal customer base if formed. Disadvantages (Cons): 1) Total control on the sales team is not present. As representatives are part-time entities, Avon cannot command their work with the same control as they can do for their regular employees. 2) With such a distribution channel, customers do not have the liberty to buy the product whenever they want to. They can make a purchase only when they are approached. Instantaneous sale provision is not present (unlike retail). 3) Even decisions are to be made by looking at the catalogue. Reps cannot provide all types of samples to the customers. Hence, it hinders high end product sales. 4) Direct marketing and distribution is slowly reducing its credibility. People generally don’t’ want to be approached directly by reps or salesman. This has happened because of the increasing number of salespeople who are employed by companies to have a competitive edge. If you were advising Avon on the selection of new suppliers, what would be your major concerns as you evaluate firms that are potential suppliers? What criteria should the company use to make decisions on where to manufacture their products?
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  • Spring '12
  • Bablin
  • Business, Marketing, Avon, Avon’s distribution, maturity helps/restricts Avon, concept – Avon

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