AVON PRODUCTS, INC.:
DEVELOPING A GLOBAL PERSPECTIVE
“When the history of this organization is written,” noted James E. Preston, chairman and chief executive officer of Avon Products, Inc., in February, 1993, “a meeting last June in Florida of 60 managers from around the world may turn out to have been a watershed event. Our four days of brainstorming, debate and discussion brought to an end two years of research and examination of our basic businesses, and launched us on a new way of thinking about and managing those businesses.”
Preston was excited about the new direction taking shape at Avon. The past several years had been difficult for the organization. Hostile takeover ...view middle of the document...
Clinton of the University of Northern Colorado and is intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. Case content is derived primarily from interviews with corporate executives on February 5, 1993.
All rights reserved to the authors. Copyright c 1993 by James W. Camerius and James W. Clinton.
Management developed the Avon vision statement to inspire this new direction: “To be the company that best understands and satisfies the product, service and self-fulfillment needs of women, globally.” As Preston noted:
We are, uniquely among major corporations, a woman’s company. We sell our products to, for and through women. We understand their needs and preferences better than most. This understanding should guide our basic business and influence our choice of new business opportunities. We need to become, and are becoming, more customer-oriented and more market- driven.
I can’t think of a better definition of a women’s company. And that has a lot of implications for us. If we are really going to be a preeminent company for women around the world, it requires that we have on a market by market basis, a very good understanding of where women are; what their needs, wants, and aspirations are; what the issues are; and what the trends are regarding women, segment by segment.
Each one of the 18 words in the vision statement has considerable meaning. The three most important elements, however, are the focus on women, on being global, and on the additional opportunities for Avon in self-fulfillment.
THE COMPANY AND ITS PRODUCTS
Avon Products, Inc., was the world’s largest direct selling organization and merchandiser of beauty and beauty related products. From corporate offices in New York City, Avon marketed product lines to women in 112 countries through 1.6 million independent sales representatives who sold primarily on a “door-to-door” basis. Total sales in 1992 were $3.8 billion. The company work force of 29,900 employees staffed divisions of product management, manufacturing, and sales and service, worldwide.
Avon’s product line included skin care items, makeup, perfume fragrances for men and women, and toiletries for bath, hair care, personal care, hand and body care and sun care. Recognizable brand names included Skin-So-Soft, a product in the bath products area, which benefited from wide publicity concerning alternative uses; Moisture Therapy; and Imari fragrance. Newer products included “Avon Color,” an entirely new line of more than 350 shades of lip, eye, face, and nail colors. The product line would assure customers that Avon had just the right shade for them and that their total “look” could be coordinated. “Anew Perfecting Complex for Face,” another new product, was judged the most successful skin care product in Avon history.
Internationally, the company’s product line was marketed primarily at moderate price points. The marketing...