Marketing Case Study: Avon's E-Sales Company

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Avon was the largest beauty product seller and enjoyed success from their direct selling model as well as their close customer approach. As the market has changed, Avon must now decide how to act in the technologically advancing world. Avon.com was to be launched in September and the company had to make a decision on the following: products to be sold online, promotion of the site, and the best method to leverage their 500,000 sales representatives. Through the introduction of e-commerce, Avon wanted to remain its identity and maintain the balance between keeping direct relationships with customers while enhancing online sales.

Furthermore, Avon had to choose whether to build a commerce only site (Eve.com) or an appealing one (iVillage.com).
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By establishing an online presence, Avon needs to make it known to their employees and customers that Avon is still a direct sales company and not becoming packaged goods company.

From a financial perspective, the use of e-commerce allows Avon to realize cost savings of approximately $385 million as cost of processing an order decreases from $1 to 20 cents. (Cost = Update $5Million + Ordering system $60 million = $65 million vs. Present cost of ordering process: $1 each order. Number of sales rep 0.5 million* 12 campaigns *15 customers= $90 million * 5 years = $450 million). Therefore, Avon should proceed with an online platform that hosts e-commerce.

It is important that Avon enter the e-commerce environment, as it will allow the company to be successful in the long run. By positioning the new Avon.com as a tool for sales representatives to better connect with customers (providing commissions to reps for online sales), Avon will not run into the issue of alienating their labour force. The new online system will also allow easier order-entry for sales representatives and at the same time give the company access to the customer lists, which eliminates the stranded customers issue. Additionally, Avon should re-brand as a leader of online sales and a company that expands to meet the current needs of its

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