Avon's Global Marketing Strategy and Supply Chain Operations

Company Overview and Strategic Direction

Avon was founded in 1886 and has developed to become one of the oldest and largest producers and marketers of beauty-related products throughout the world. As part of enhancing its productivity and success, Avon has recently switched its marketing strategy to transform its image and enhance its marketing approaches. The company has combined national responsiveness with globally standardized marketing initiatives to push into foreign markets and increase its global operations. The firm focuses on standardized products with a global brand and conveys its successful practices and organizational learning from one country to the next.

Marketing Orientations and Customer Strategy

Marketing orientation can be defined as a strategy that is utilized by a business or company to enhance its position in order to meet the needs of its customers. There are various marketing management orientations with varying mechanisms for creating, producing, and marketing products—including strategic marketing, selling, production, social marketing, and product orientations (Roberts, n.d.). The production marketing orientation is the only one that does not apply to Avon since the firm focuses on a sales orientation rather than product adaptation in its global operations.

The applicability of product orientation is evident in Avon's modification of its products to meet certain needs of customers. The strategic marketing orientation is evident in Avon's modification of its distribution technique, especially in China. In contrast, social marketing orientation is incorporated in the firm's global image initiatives of supporting women and their needs. The selling orientation is characterized by the use of direct sales representatives in Avon's marketing approaches.

Dependence on Foreign Operations

Avon has become increasingly dependent on its foreign operations rather than its domestic or U.S. operations, to an extent that it has sales operations in more than 65 countries across the globe. The increased dependence on foreign operations is largely influenced by the company's efforts to create a global image that portrays it as a firm that supports women and their needs. Moreover, the outlook in foreign markets is brighter than the United States outlook, which is gloomy.

This implies that the company has focused on foreign markets because these markets have higher potential for increased productivity and success compared to the United States market. The other reason for this dependence is that the domestic market—the U.S. market—is fully exploited and has no untapped market for its products due to the presence of several competitors and intense rivalry.

Socioeconomic and Demographic Influences

Similar to other companies operating globally, Avon is vulnerable to socioeconomic and demographic changes that could affect its operations. These changes include an increase in the number of employed women, preference to buy expensive products from Avon's competitors, and economic growth of various countries. The economic growth of various countries would have positive impacts on Avon's operations since it will make its products more appealing to customers with more disposable income who would have otherwise considered the products as secondary needs.

The other two changes would impact the company negatively. An increase in the number of employed women will affect the ability of women to schedule appointments for direct sales. As more women are employed, they are likely to opt for expensive products from Avon's competitors as part of creating perceptions of a higher social status.

Economic Recession Impact

Since Avon is more dependent on foreign operations than domestic ones, it is likely to suffer from any global recession such as the recent one in 2008. According to Marcial (2008), this company has seemingly been recession-resistant since women do not avoid buying beauty products whether in good or bad times. However, Patterson and Kennedy (2011) state that any global recession would impact the company's operations by lessening its share value.

Moreover, a global recession would contribute to lower sales, especially in BRIC countries where potential customers would prefer buying other products rather than beauty products because of a decrease in disposable income. Conversely, a global recession would increase Avon's sales in the U.S. since the company will reach out to many potential customers who lose their jobs through the direct sales marketing strategy.

Conclusion

This case study provides important insights regarding some of the major aspects related to dependence on foreign markets rather than domestic markets. In addition to highlighting some of the major issues related to Avon's operations, the study helps in understanding the major decisions that influence the firm's global operations. It shows the major considerations for a company that seeks to maintain and expand its global operations.

Marcial, G. (2008, October 27). Marcial: Avon's allure in uncertain times. Bloomberg Businessweek. Retrieved January 12, 2015, from

Ng, S. (2013, February 21). Avon weighs exit from more countries. The Wall Street Journal. Retrieved January 12, 2015, from http://www.wsj.com/articles/SB10001424127887323549204578318633000614380

Patterson, M., & Kennedy, S. (2011, September 1). BRICs no cure for global economy this time as Avon to Siemens shares sink. Bloomberg. Retrieved January 12, 2015, from http://www.bloomberg.com/news/2011-08-31/brics-no-cure-for-global-economy-this-time-as-avon-to-siemens-shares-sink.html

Roberts, C. (n.d.). What are the five different marketing management orientations? Retrieved January 12, 2015, from

Supplier diversity. (n.d.). Avon—The company for women. Retrieved January 12, 2015, from