Company case: The Newest Avon Lady-Barbie
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1) The following are the factors in the microenvironment that had influenced in shaping Avon’s strategy:
·Marketing intermediaries was one of the most crucial forces that make Avon changes its strategy. The ladies that promoted, sold, and distributed its products decided that they needed more than part time jobs. Therefore, the salesforce turnover increased more than 200 percent. This caused that many customers could not find a salesperson when they wanted to buy a product. In 1997, they have the most radical change because they try to sell its products through retail stores.
·Customers were another microenvironment force that caused changes in Avon’s strategy. As women started working outside home, many times when salespersons rang the doorbells nobody answered.
·Competitors also influenced in Avon’s strategy because they offered full-time jobs. As a result, many ladies that used to work at Avon’s company moved to its competitors.
Among the forces in the in the macroenvironment we find:
·Demography: the increasing mobility of the US population meant that both customers and salespersons were moving. This made it difficult to establish loyal, stable customer bases.
·Political: Avon faced a big problem during 1998 in China when the government announced that direct sales were prohibited. Likely, by mid-1998 Avon negotiated with the Chinese government to restart its business by operating as a wholesaler.
2) In the microenvironment:
Firstly, the companies have to study their customer market by determining the needs and the wants of target market. In addition, they should deliver the desired satisfaction better than their competitors do.
Secondly, they should consider the marketing intermediaries because they are the ones in charge of promoting, selling and distributing the products. In international markets they do not have to worry about retailers stores if they use a direct salesforce. Moreover, in many developing economies, being a direct sales agent might be a very interesting job for women.
Finally, they should also take into account their competitors. They have to attempt to gain strategic advantage over their competitors by positioning their products in the mind of consumers. Also, they should provide more value and satisfaction than their competitors do.
In the macroenvironment:
In general, they should study all factors in the macroenvironment. However, they have to pay more attention to the following: cultural environment: the companies should found out the basic values, perceptions, preferences and behaviors of the society because these characteristics affect marketing decision-making. They should also study the political environment especially every law concerning to public policy, consumers’ protection and society interests.
3) I think that Avon’s strategy is well orientated, but it should be reinforced. They can improve their strategy by making more advertising campaigns showing the advantages of their products over the competitors ones. Therefore, they should try to position their products in the consumers’ minds. They also can try to motivate their marketing intermediaries by offering more commissions percentage over sales, so that they will make more effort to attract new customers and keep the old ones.
4) I think that the best strategy to be successful in China is to put into practice market segmentation due to the fact that income between families is very different. Another business strategy could be emphasizing that product are made in USA because Chinese people prefer those kind of products that reflect good quality.