Avon Products Inc which is popularly known as Avon is a direct marketing company that sells cosmetics, home products, fashion accessories and personal care products. Headquartered in London, the UK the company reaches out to customers across the globe through its network of around 7.2 million representatives through a process of multi-level marketing.
The company which was set up in the year 1886 has been in operation for almost 130 years now and successfully sells in regions such as Middle East, Africa, Latin America, Europe, UK, USA and the Asia Pacific. The company registered profits to the tune of 6 billion USD in the year 2016 and is currently the second largest direct selling organization in the world.
Strengths in the SWOT analysis of Avon
The following are the strengths of Avon:
- Clear Target Segment: Avon has a very clear segment that it targets which are women. In order to lure them, they also ensure that preference is given to women in the selection of representatives. Their products are also primarily for women and the company in most of their social causes also has the undeterred focus on woman empowerment.
- Good stakeholder relationships: Avon clearly understand that the success of any direct marketing company lies in the satisfaction of their stakeholders and with this in mind the company focuses on maximizing the value of each stakeholder be it their partners, agents or customers.
- Strong recognition: Research indicates that Avon is amongst the world’s most recognized brands with a brand recognition fo around 90 %. In order to ensure that there is strong brand recognition, the brand ensures that their products cater to every beauty and personal care need of various segments such as women, men, and children.
- The maximization of returns: Avon guarantees an extra income to all its representatives for which they provide two options either be a representative or a sales leader. While the former is responsible for direct selling the latter manages a team of representatives and gets the commission for sale made by each of them.
- Leveraging technology: Avon uses technology to reach out to its customers and other stakeholders. Some of their recent technology innovations include social media environments that are customizable, e-brochure and monitoring tools for sales leaders.
- Cultural Consciousness: Avon has customers across the world which means that they deal with myriad types of skins and hair in their beauty segment.Most of their products are developed after careful research on the target segment for which it is meant for and the brand is also culturally sensitive in the advertisements and brochures used in each geography.
Weaknesses in the SWOT analysis of Avon
Some of the key weaknesses of Avon are :
- Change of women in society: Earlier there were more women at home and as more started entering into the workforce the number of homemakers who were willing to become sales representatives of Avon for an extra bit of income started reducing in numbers.
- Competition from online retailers: The biggest reason why customers preferred to get Avon products was that of the convenience involved. However, with the growth of online retailers, the convenience of shopping from home as well as the choice of more better brands has shifted the preference in favor of the online retailers in comparison to Avon.
- Too high expectations: In a bid to compete against traditional and online retailers Avon tried to make unrealistic promises about both the quality of their products as well as the incentives given to partners. These unrealistic expectations created the loss of face for the brand.
- The sudden reduction in US sales: The dip in the US sales panicked Avon since it was one of their leading markets by share and this was also coupled with a dip in the number of representatives. Both these together resulted in the company shifting focus to lower income segments and to countries like Vietnam, South Korea, and Africa.
Opportunities in the SWOT analysis of Avon
Some of the opportunities include :
- Selling through online portals: In addition to direct selling, Avon can also use the support of online retailers like Amazon or Flipkart to get the products to customers. This will help them target bigger markets in a cost-effective manner.
- Need for extra income: As the rate of inflation increases people who are employed are also looking for an extra source of income to supplement their basic source. This gives a lot of scopes for multi-level marketing companies to widen their network which in turn will mean more business.
Threats in the SWOT analysis of Avon
Some of the threats include:
- Competition: The major competitor of Avon is Amway.