Avon Calls on Foreign Markets

| January 27, 2015

Complete your assigned readings before you complete the assessment.

Prepare a paper (700 to 1,050 words) discussing the case and incorporating answers to the questions below. It is important to address each of the questions presented. CSU requires that students use the APA format in writing course papers. Therefore, the APA rules for formatting, quoting, paraphrasing, citing, and listing of sources are to be followed. The Reference List is not included in the required paper length. Your paper must contain at least five references, which may include your course textbook, internet sources, books, and professional journals or other appropriate resources. Please do not copy or plagiarize others materials. All papers are electronically scanned by TurnItIn. Significant deduction of points may result when copying and plagiarism is evident.

Read the closing case “Avon Calls on Foreign Markets” at the end of Chapter 16 in your course textbook. Incorporate into your analysis responses to the following questions. You should make sure to incorporate core concepts from your reading assignment.

1. Your reading assignment for this unit describes different marketing orientations. Discuss the applicability of each to Avon’s global operations.

2. Why is Avon so much more dependent on its foreign operations than on its home ( U.S.) operations?

3. Discuss socioeconomic and demographic changes that could affect Avon.

4. How might a global recession, such as the one that began in 2008, impact Avon’s operations?

5. What are the major competitive advantages that Avon has? How easily might other companies duplicate these advantages?

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Avon Calls on Foreign Markets Avon Calls on Foreign Markets Avon, founded in 1886, is one of the world’s oldest and largest manufacturers and marketers of beauty and related products. 92 Many are most familiar with Avon through its long-standing ad, ‘ Ding dong, Avon calling’, but the company has recently switched to ‘Hello Tomorrow’ to change its image and better reflect the company’s new marketing approaches. Where Opportunity Currently Knocks Avon is headquartered in the United States, but over three-quarters of its sales and employees are outside its North American division. It seems to be selling everywhere moisturizer to Inuits above the Arctic Circle and makeup delivered by canoe to residents of Brazil’s Amazon region. It has its own sales operations in 66 countries and territories, and it distributes to another 44. Altogether, there are about 5.8 million independent representatives selling Avon products. However, Avon was 28 years old (an adult by human standards) before it ever ventured abroad, and then only to nearby Canada. Forty years later, a geriatric in human terms, it moved into its second foreign market, Venezuela. Map 16.1 shows how Avon now divides the world regionally and the portion of its business in each region. Why Avon Went Global So why has Avon put so much emphasis on international expansion in recent years? First, Avon forecast a slow growth potential in the U. S. market, because there is virtually no remaining untapped market for cosmetics, fragrances, and toiletries. To grow rapidly in the United States would mean taking sales from competitors, and the U. S. beauty market is very competitive. If you doubt this, just try weaving through a large U. S. department store without being accosted and sprayed on. Avon has preferred to put emphasis on less-competitive markets, and its latest annual report even states that it expects U. S. growth to be in line with that of the overall beauty market -which means its domestic sales will depend…


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MBA 6601, International Business
International Business

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