AVON is an American based skin beauty oriented products manufacturer company, that sells products through representatives in over 140 countries across the world. Recently their anti aging serum, after the successfull establishment in American market wants to enter in the European Market. But in Europe already some reknown beauty products exist. Entering European market they will face some barriers as they are out of boundary. Some market environmental factors will influence their business. Their positioning, pricing, branding strategies have to be renovated in the new market. Finally after the successful establishment in Europe market they will focus on how the business can be broadened in the long run.
Task 1: Understand the conceps & process of marketing
1.1 Explain the various elements of the marketing process for Avon.
The Parties: Parties means a group of people who generally enjoy the products or services offered by AVON. Normally consumers expect to do some spending of wealth and effort for enjoying a particular product. So AVON needs to define the consumers at first whether they are individual or a group of people (Avoncompany.com. 2014). AVON must have a marketing offering with which it can be able to satisfy the parties and can obtain its main objectives. Finally, the consumers should be introduced with the easy & straight marketing offer by AVON.
Marketing Research: Any marketing process requires an understanding of consumer’s needs & wants. AVON will focus on marketing research to highlight whether the desires and needs of the European consumers match the company’s offering. If it is not, then AVON will have to further work on it. The marketing research will pave the way how long AVON will sustain in the European markets by offering the same chain as it did on the USA.
The four Ps: The core fact of the marketing is developing a response in the marketplace. In defining “Marketing is the execution of conception, pricing, promotions, distributions of goods, ideas & services. The four Ps or Product, price, promotion, Places are the core factors for defining the marketing process. Let’s see how AVON must respond to those factors.
Products refer to the goods or services offered by the AVON in the market. As the AVON is a supplier of beauty & personal care product, these products are highly sensitive to the quality & standards, AVON should ensure the same quality as it did on the USA.
Price means the exchange value the consumers are willing to pay for obtaining the products. As the products are new in the European market AVON should set a market penetration price.
In case of Promotion, AVON Has the best quality as it proved in the last century through the advertising campaign “Ding Dong Avon Calling” (Klepacki, 2005). That strategy can be further use by the company to promote its own products.
Place is the manner through which a particular products is offered to the consumer. Normally the product is offered through the own Representatives of the AVON. But to enter the new market Avon must invite some others to offer the same.
1.2 Evaluate the costs and benefits of marketing orientation for Avon
The marketing conditions and factors have been changing over time. So, to obtain optimum result, it is required to choose the correct marketing methods (Gay et al., 2007). These changes can be listed below
- Changes in the norms of society and dynamics of business
- Changes in the taste of consumers
- Changes in the marketing & production companies
Changes in the norms of society and dynamics of business: The social structure in the Europe may lead AVON to face some challenges along with the business challenges. The social structure & business cycle in the European Market is different from USA. So AVON must be aware of choosing right kind of orientation program to initiate them in the market.
Changes in the taste of consumers: Consumers are the main priority for the introduction of a product. The consumers in the European market behave different from USA. Their modes of action are completely inversely. So AVON will face some challenges towards consumers who possess different tastes & attitudes. AVON’S marketing orientation plan should be made by keeping those factors prior.
Changes in the marketing & production companies: With the continuous changes in science & technology, the business organizations are changing rapidly. As the structure of the organization changes the product feature got new ideas & features. AVON in this case can establish new manufacturing firms in the European market.
Task: 2 Be able to use the concepts of segmentation, targeting and positioning
2.1 Show some of the macro and micro environmental factors which influence your marketing decisions.
Micro factors:
Organization: AVON is organization itself and a factor of internal environment. It plays a vital role to perform the duty of an organization (Foxwall, Gordon, 1981).
- At first top management of AVON is responsible for decision making, deriving company objectives, Setting goals, mission, vision etc
- Marketing managers must make decisions within the parameters established by top management.
Suppliers: Suppliers are also important environmental factors. It means the individuals and bodies that supply factors of production required by the companies.
- One concern is to take care of the supply system (sometimes supply halt can affect).
- Another concern is to observe the price of important production factors. Supply cost should be observed with care.
Marketing Intermediaries: These consist of those persons who are involved in the overall process to reach the product to the final consumers. They play a vital role in reaching the products to the ultimate owner (Keller, Kevin, 2012).
Customers: Customers are the main focus of business. The motive of modern day business is to provide maximum customer satisfaction. These customers may vary in terms of different factors. Customer markets are-
Competitors:
The business market is full of challenges from the competitors. The company which deals with the challenges with an effective strategy survives the show. However, it can be said that a single strategy is cannot effective for all the companies.
Macro factors:
The company operates in a bigger scene which is named as the macro environmental stage. There are certain forces of this environment which shapes the behavior of all the companies that fall under the environment. There are six forces that work in the macro environment (Kotler et al. 2010).
Demographic Environment: It refers to the classification of the consumers groups based on the size, age, location, sex, race, occupation and so on. AVON as switching to the European market, they must be aware to focus on the factors that related to the demography.
Economic Environment: Economic environmental factors are the factors that determine the economic well-being of the consumers. It also takes into account the power of purchasing of the customer and pattern in which customers make expenditures. This state in the European market is highly stable, which is a good sign for the AVON.
Technological Environment: This includes the opportunities in the development technology to manufacture products. There are certain forces
Political Environment: Business organizations are also influenced by various governmental regulations and laws created. These forces altogether create a political environment.
2.2 Propose segmentation criteria to be used for the products of Avon in different markets
To segment the market effectively, first Avon should chose the market segmentation criteria with utmost knowledge. This is how it should reach its targeted customers efficiently. These criteria should come under the five characteristics (Kotler, 2008). They are-
Measurable
the first thing that should be made sure is that the quantity of the segment should be determinable in terms of number. The data regarding the income and purchase ability of the customers should be accurate. Only if the research is carried out accurately, we can get the clear idea about the numbers of customers.
Substantial
the segment must be a homogeneous group; (AVON) itself has beauty care products. So it can make the product homogeneous easily). Different products with similar characteristics can be marketed as well. The segment chosen must be substantial for AVON
Accessible
The targeted segments should be accessible because if they are not accessible then there is no point in choosing them. Many of them might not have knowledge of internet or email, so the communication vehicles should be chosen accordingly.
Differentiable
Different segments must be differentiated, they must react differently to different campaigns or products, and different marketing tools would be used to target these audiences.AVON’S characteristics must be differentiated and their understanding of the marketing efforts and the product or service must be different.
Actionable
The segments should be formed in way that it is possible to have an action on them. Otherwise there is no effect in choosing them. Also they should have a implementable value. Thus there should a action to begin with.
2.3 Choose a targeting strategy for a selected product or service of ACL Company
After segmentation is made, the proper market should be chosen. The company should only choose the segment which it can serve in the most efficient and effective way. There should be strategies formed to judge the segments and choose one of them. These strategies differ by type of market (Crawford, Merle, 1972). But there are three general ways to choose the target market. They are-
- Undifferentiated Targeting: Under this method, the whole market is taken as targeted segment. And this only one strategy is used for the whole market. This is useful for a market with not much big size or much difference in taste of different segments.
- Concentrated Targeting: Under this method, a whole niche of a market is selected as the target market. And the needs of that niche segment are satisfied. For that reason, there should detailed study on the niche.
- Multi-Segment Targeting: This means selecting two or more segments of the market at the same time for executing marketing efforts. As the same product might be useful to people falling in the two or more segments, this targeting reaches the product to them.
Before selecting a particular targeting strategy, we should perform a cost benefit analysis between all available strategies and determine which will suit our situation best. This tells that we can easily go for a multi segmented market as AVON is entering a completely new market. They may face different consumers group & can apply the specific targeting strategy.
2.4 Demonstrate how buying behavior affects the marketing activities of ACL in two different buying situations.
Buying behavior is made up of the internal and external factors that explain why consumers buy and use certain products or services (Henry, 2008).
These factors affect the buying situations by following
- B2B: Many of the transactions are done within the business organizations. For example a manufacturer sells the product to dealers. A dealer sells them to retailers So by analyzing those buying factors AVON sets their buying strategies like, how much to buy from which business & how much to sell against the purchase.
- B2C: The sale of goods and services from individuals or businesses to the end-user. AVON including others beauty oriented product’s firms have the main target to deliver their product to the ultimate consumers.
- New buy: A purchasing situation requiring the purchase of a product for the very first time. As AVON entering the market as a new supplier they may ensure good quality to these new consumers.
- Modified re-buy: A purchasing situation where the buyer’s revisions to the order need further analysis or .Quality ensures is the most necessary in this case. Because the marketing research at the end of the day focus on the quality.
2.5 Propose a new positioning strategy for one of Avon’s products or services.
Even though companies do not face a similar situation, historically there have few common strategies that have been used by all the companies. With these strategies they have found success irrespective of the type of business they are operating (Kapferer, Jean-Noel, 2012).
- Brand Positioning Strategy
- Product Positioning Strategy
- Competitive Pricing Strategy
- Competitive Positioning Strategy
- Alternatives to Marketing Consulting Firms
In this case AVON should look for the product positioning strategy. They are already an established brand in the American market. Their goodwill dragged them to the European market. The consumers groups of European market are well introduced to the brand. So now they are expecting some good quality products. Now AVON just needs to satisfy them with the product.
Task: 3 Understand the individual elements of the extended marketing mix
3.1 Explain how the Anti-Aging Serum has been developed to sustain a competitive advantage.
The new anti aging product introduced by the AVON in the European market is for trating some skin concerns. And we are expecting that it will make a comperative advantage which will susutain in the long run (Avoncompany.com, 2014).
This serum is designed such a way that it will treat skin concerns & will give the results one dreams of. AVON suggest to use this serum in the 2nd phase of anti aging treatment after the face cleaning & before the moistiorising. Finally AVON ANEW anti aging serums help one to choose a particular serums they are offering. some of these are,
- A new genetic treatment concentrate
- A new rejuvenate flash facial concentrate
- A new renewal serum
As they are offering different aging treatment according to the demand, it will keep them one step ahead in the market.
3.2 Explain how distribution is arranged to provide customer convenience
For ensuring customer convenience AVON can take following initiatives to make the distribution arrangements (Healey, 2008)
Customer Service: The ultimate target of a product is the consumer. So the customer service is necessary for AVON. The easier the customer service system the easier the goals to achieve. And having a good customer service than the competitor’s product in the market consumer will switch to the particular good.
Order system: Introducing a simple ordering system can make a simple distribution for the customers. For this AVON can introduce online order system & delivery system. Besides, free transportation can be given.
Packaging & material: This is also important in distribution cases. Sometimes a better product having a normal packaging gets low popularity. Besides a normal product having a good packaging can reach to the maximum consumers. So this is important for AVON to put emphasis on the packaging & materials quality.
3.3 Explain how prices are set to reflect Avon’s marketing objectives and the market conditions.
Let’s see what pricing strategy to be taken to sustain for a long time in the European market by AVON.
Normally various types of pricing are seen in the market like (Keller, 2010) ,
Premium pricing is where a high price is set to introducing the product. This is done because customer may have a perception that a product having a high price may have something special on the market. SO they can try the product.
In penetration pricing a lower price is set intentionally to enter the market. This is done if there are a lot of competitors in the market.
Under economic pricing a low profit margin is expected. The price is set by keeping the facts on mind. Normally to target a mass market this strategy is used.
Analyzing the above pricing policy AVON can make a price to achieve its objectives. As they are new in the European market & expect to sustain a long period. To get the maximum coverage in the market AVON should make penetration pricin.
3.4 Illustrate how promotional activities are integrated to achieve the marketing objectives of Avon.
Promotional activities are important for a new market because this is the best way to reach the targeted consumers (Kotler, 2008). Different approach are seen in this regards-
Advertising: Advertising is the most modern mode of promotion under which a product details are shown to the commercial Advertising. AVON should choose a best advertising policy & highlight the core benefits of their product by the advertising. In TV commercial advertising it will make a good coverage.
Selling: It does not necessarily mean just selling the product at normal price level. In this promotional strategy selling the product at a lower price or zero prices will make a good coverage for the product. This is another mode to reach the product.
Public Relation: Normally public relation means creating a good relation with the stakeholders OF OUR BUSINESS. So AVON can make the arrangements for Seminar or workshops for the products.
3.5 Analyze the additional elements of the extended marketing mix for the Anti-Aging Serum
In normal marketing mixes we see the combination of product, price, promotion & place. Besides these additional three Ps can influence the product or services. Let’s see how the extended elements create differences in anti-aging serum.
Physical layout: In the old days physical layout was not an important factor to the consumers but nowadays consumers come to the contact of the product by the retailers & they expect a high level of presentation in modern shops. These presentation or good physical layout helps products to achieve maximum consumers.
Provisions of Customer services: Customer service is the heart of modern service industry. The anti-aging serum should initiate a good service so that an appealing for the product is made.
Processes: In customer services a number of processes are involved to make the marketing effective. So in anti-aging serum any wrong processing may mislead the consumers.
Task 4: Be able to use the marketing mix in different contexts
4.1 Plan the marketing mixes for two different segments of Avon in the European retail and consumer markets.
Retail market segmentation: Under the retail market segmentation the following mixes can be planned,
Customer Type: AVON at first needs to focus how their customers are. Based on the customer types different actions can be taken. Those are highly sensitive can be offered with different product sizes & types.
Buyer Behavior: This criterion focuses on how customers are loyal to the products of AVON. Those customers are not regular & disloyal can be removed from the action plan.
Customer Market Segmentation: Customer market segmentation can be done by the following marketing mixes.
Geographic Segmentation: dividing the customers based on the location, climate & population growth rate. AVON can make several actions planning based on the geographical factors.
Demographic Segmentation: Dividing the consumers under the age, sex, education, occupation etc. The people of different age prefer different products. So AVON should offer the product variation based on the preferences.
Psychographic Segmentation: Different customers have different attitudes toward the product. AVON should carefully focus on the attitudes & response accordingly (Henry, 2008).
4.2 Illustrate differences in marketing products and services to business rather than Consumers
There are few differences in terms of marketing products to business organizations and marketing products to consumers. They differ on many aspects (Hisrich et al, 2008). These are listed below-
The businesses are buyers who actually want to purchase: Many consumers buy products they really don’t want to purchase. But, thank goes to advertisements. But it doesn’t hold water in terms of B2B system. All business firms regularly buy products so that they can stay profitable, competitive & successful in the market. The evidence for this is the existence of purchasing agent who performs the function of purchasing.
The buyer will search a lot of evidences: The business buyer constantly looking for information as he is a information seeker which will help him to perform the duty better even to increase profits. But in case of consumers they show less interest in purchasing a product. As they are the final consumers, sometimes they purchase the product knowing that the product has low quality.
4.3 Show how and why international marketing of Avon differs from domestic marketing.
Domestic marketing refers to sell and promotion of the product to local areas within the border whereas International marketing is the selling & promotion of products beyond the boundary. So AVON has to focus on as they will find some basic differences between these two markets (Healey, 2008), like
- In domestic market the consumers groups are well known to the products & their attitudes towards the products seem positive most of the case but in international market some consumer groups are positive toward the product but most of them are lacking the preferences for the products as they lack information.
- Local markets are not as broad as international. So the plans of action have to be different in both cases. In domestically they need less financial resources but internationally higher amount of financial resources are to be needed.
- Domestically the organizations face less language barriers than internationally. So the modes of behaving with the consumers groups in both cases are different.
Conclusion
With all the best efforts AVON will make their position n the European market hopefully. The market is competitive & advance. So AVON needs to make decisions carefully. Any imperfections can lead them out of market. So the strategy planning and their implementation is important for them. Regular customer evaluation & recommendation have to be taken. Refreshing workforce & enthusiastic managers can make a good future for AVON.
References
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