Case Study:

“Avon Products”

Prepared by:
Bulan, Maria Jessa Bianca
Comediero, Loraine C.
Del Castillo, Ma. Zarmin S.
Laggui, Amanda
Villacarlos, Christine Dan C.

Date of Submission:
September 27, 2023

Submitted to:
Sir Jummitsu E. Sorimachi
Introduction/ Presentation

Beauty, fashion, and personal care are some of the things enjoyed by Filipinos.
Established in 1886 in New York, Avon has grown into an internationally recognized brand
known for its diverse product range and innovative direct-selling model. In 1980, Avon ventured
into the Asian market by entering the Philippine market. Due to its affordable prices, the broad
range of products, and effective adjustment to local preferences, Avon has grown in popularity in
the Philippines.

Point of View

Avon has a long history, starting over 100 years ago, known for its creativity, business
growth, and unique sales methods. It was founded by David H. McConnell in New York City.
Originally, McConnell sold books door-to-door and gave free perfume samples to attract buyers.
He soon noticed that people liked the perfumes more than the books, so he decided to focus on
selling fragrances instead. Avon began as a perfume company and later became a global leader in
beauty products, offering a wide range of items like cosmetics, skincare, and personal care
products. The company also expanded its business to other countries.

In recent years, Avon has faced challenges due to changes in how people shop, the rise of
online shopping, and increased competition from online beauty retailers. Its traditional method of
selling products directly to customers has struggled to compete in the digital age, leading Avon
to update its business by improving its online presence.

Avon has also supported important community programs, especially those focused on
women's health and domestic violence awareness. However, there have been concerns about the
quality of its products and how well its business model can keep up with the fast-changing retail
environment. Overall, while Avon’s long history and community efforts are impressive, it faces
modern challenges as it tries to stay competitive in a digital-first world.
Time Context

September 25th, 2024

Statement of the Problem

Avon, a company with a long history recognized for its creativity, growth in business,
sales strategies and strong brand recognition in the Philippines. This company is facing
challenges, but they've worked through them to strengthen their business. Even though Avon has
a loyal customer, there are a few aspects that should be taken into consideration as they might
have an effect on the company's future. Potential issues/problems: 1.) Brand Perception and
Relevance, 2.) Management and Leadership Instability, and 3.) Market Saturation.

Statement of the Objective

>To ensure the safety and well-being of consumers by replacing talc, which has
been linked to asbestos contamination and cancer risks, with cornstarch in Avon
products.
> To cultivate a culture of excellence by empowering Avon's leaders and
managers with the skills, knowledge, and tools needed to drive business success.
> Leverage collaboration with influencers to effectively express Avon’s ethical
attitude and product transparency. Through this relationship, we hope to reach a
larger audience, create trust, and position the brand.

Areas of Consideration

AVON’S STRENGTHS
> Strong Brand Recognition - Avon is a well-known brand that has been around
for a long time and is recognized worldwide.
> Direct Sales Model- The company’s way of selling directly to people has helped
build personal connections between sales representatives and customers.
> Diverse Product Range- Avon offers a wide variety of beauty, skincare, and
personal care products.
> Community Involvement- Avon supports important causes like women's health
and domestic violence awareness, which helps improve its reputation.

AVON’S WEAKNESSES
> Struggles in Digital Transition- Avon has been slow to keep up with online
shopping trends, falling behind companies that started online.
> Quality Concerns- Some customers have raised concerns about product quality,
which could hurt brand loyalty.
> Declining Direct Sales- Avon's traditional door-to-door sales model has lost
effectiveness in modern, fast-paced markets where online shopping is more
convenient.

AVON’S OPPORTUNITIES
> Expansion in Emerging Markets- Avon can grow in developing countries where
direct selling might still work well.
> Digital Transformation- Improving its online shopping options can help Avon
compete in the digital world.
> New Product Lines- Avon can explore expanding its product offerings, such as
eco-friendly or health-focused products, to meet growing consumer demands.

AVON’S THREATS
> Intense Competition- Avon faces strong competition from online beauty brands,
big stores, and other companies that sell directly.
> Changing Consumer Preferences- Today’s customers like the ease of online
shopping, which makes it hard for Avon’s old ways of selling.
> Economic Downturns- A global recession or economic challenges could reduce
consumer spending on non-essential beauty products.
Assumption

Avon products are frequently based on their effectiveness and quality. Given its
extensive experience in the beauty industry, Avon is expected to maintain high standards
for both the performance. To give a high-quality product to the customer. In general,
consumers anticipate that Avon's cosmetics and fragrance products will come up to their
expectations.

The Avon product we are discussing is based on the assumption that they do not
rely on online platforms or influencers to stay updated with online trends that are
typically important to customers. Additionally, there have been changes in their strategic
direction, which has impacted long-term planning and raised concerns about the potential
health effects of the product. It may be essential for Avon to regain its brand recognition
through promotional and marketing strategies that cater to consumer preferences.

Alternative Courses of Action (ACA)

A. Lack of Advertisement
> Avon products should consider enhancing their social media, online ads, TV,
commercials, and billboards to compete with other brands of beauty items.
Adapting to the advances in online purchasing while staying true to its original
business model and strategy can help the company's sales.

B. Use of Talc that causes Cancer

> Using talc as an ingredient in cosmetic products can be harmful for overall
health. We use an alternative product. Since it improves moisture absorption and
keeps the product dry, cornstarch powder is the safest substitute for talcum
powder. Cornstarch is good and safe for the skin . Additionally, it smooths out the
texture of the formulation, giving the skin a smoother feel.

C. Management and Leadership Instability

> Training- To improve their methods and regain lost brand loyalty, AVON could
introduce a consumer benefits program, a growth plan, or a strategy that doesn't
affect everyone. There needs to be a clear vision to not change the strategy to be
implemented, as a change in leadership can affect employee engagement and
reduce productivity
Analysis/Evaluation of the Courses of Action

First Course of Action

Advantages
1) One of the potential results of pursuing this course is that it will have a
Broader Audience Reach and access to various consumers through
platforms like social media, TV, and online ads. This Increased Brand
Awareness could result in higher visibility in the competitive beauty
industry. It has the ability to enhance marketing efficiency. Greater
exposure can lead to a larger customer base and sales growth.
Disadvantages
1) Running ads on various platforms can be expensive.

Second Course of Action

Advantages
1) One of the potential results of this course is that cornstarch is a safer
alternative to talc, avoiding health risks such as cancer concerns. Avon can
market itself as a company that prioritizes health and safety. Shifting to
safer ingredients could build stronger customer loyalty. This reduces the
risk of lawsuits or challenges related to talc use.
Disadvantages
1) Changing the ingredient may require significant financial investment.
Cornstarch may change the texture or effectiveness of the product, which
might not appeal to existing customers.

Third Course of Action

Advantages
1) One of the potential results of this course is that it enhances strategic
thinking and decision-making capabilities, leading to better solutions and
outcomes for the organizations with trained leaders who have better
candidates for future leadership positions, ensuring smooth transitions and
continuity.

Disadvantages
1) Leadership and management training programs can be expensive,
especially when hiring external trainers or enrolling in specialized
programs. Not all individuals may embrace the training or apply what they
learn effectively. Some may resist changing their management style,
limiting the training's effectiveness.
 Decision Matrix Table

Criteria ACA1 ACA2 ACA3

Ease of Implementation 2 3 2

Time Frame 1 3 3

Cost Efficient 1 3 2

4 9 7

1 - least favorable
2 - favorable
3 - most favorable

Recommendation

● Based on the Decision Matrix Table, after evaluating the Alternative Courses of
Action (ACA), it is clear that the second alternative course of action which
ACA2: Using Cornstarch as a Safer Alternative for Talc is most favorable and
highly recommended based on the criteria above. This course of action addresses
a significant health concern-potential cancer risk associated with talc-while
positioning Avon as a company that prioritizes customer safety and well-being.
Although there may be initial costs for reformulation, the long-term benefits,
including enhanced brand loyalty, reduced legal risks, and the ability to market a
safer product.
● By Implementing the second Alternative Course of Action (ACA2: Using
Cornstarch as Safer Alternative for Talc) by transitioning to cornstarch as a safer
ingredient, Avon can leverage this change in its marketing campaigns to
emphasize its commitment to health and safety, fostering stronger customer
loyalty. Supporting the first Alternative Course of Action (ACA1: Lack of
Advertisement) with a moderate increase in digital and social media advertising,
focusing on platforms that provide targeted and cost-effective option to boost
brand visibility and sales, without overextending the budget. And also
Implementing the third Alternative Course of Action (ACA3: Management and
Leadership Training) by introducing leadership programs selectively, prioritizing
key personnel and ensuring alignment with the company's long-term vision. This
will help improve internal stability while managing costs.
● A phased approach that prioritizes product safety, enhances brand visibility, and
fosters strong leadership will set Avon on a path toward sustainable growth and
consumer trust.
Plan of Action

Activities Person in Charge Time Frame Budget

Meeting on how Talc Managers, Trainers 1 week none

free powder and
collaborations with
influencers will be
conducted.

Approval of the Plan Managers, Trainers 1 day none

General Assembly Staff, Managers, 1 day none

Informing the Team of Trainers
the Training

Talc Free Powder CEO / Executive 2 years 23,000.00 php

Leadership Team/
Marketing Team

Collaborate with local Marketing Team 1 year 1,300,000.00 php

influencers