Developing And Delivering A Positioning Strategy

To be the company that best understands and satisfies the product, service and self-fulfilment needs of women – globally.

Company Profile

Avon is the world’s leading direct seller of beauty and related products, reaching women in over 120 countries through 5.8 million independent sales Representatives.

2009 sees Avon celebrate its 50th Anniversary in the UK. Avon UK has gone from strength to strength and now is one of the top beauty brands in the country, providing its customers with innovative, stylish, and great value products.

Avon offers an extensive range of products including make-up, skincare, fragrance, jewellery, lingerie, personal care, accessories and gifts.

Avon is dedicated to empowering women and supporting their causes. Since 1992, Avon (UK) has raised nearly £15 million for breast cancer charities.

http://www.avon.uk.com/PRSuite/whoWeAreMain.page [Accessed 09 March 2010] (Avon UK, 2010)

Our Vision

To be the company that best understands and satisfies the product, service and self-fulfilment needs of woman globally. Our five values are Trust, Respect, Belief, Humility and Integrity. We believe that everything we do, everything we say, and everything we produce as a company are infused with these values

http://www.avon.ie/PRSuite/whoweare_main.page [Accessed 09 March 2010] (Avon UK, 2010)

Literature Review

Business and marketing are changing itself from conventional processes towards new high tech processes. It is changing radically as a result of major societal forces such as technological advances, globalisation, and deregulation. These major forces have created new behaviours and challenges.

Customers increasingly expect higher quality and service and some customisation. They perceive fewer real product differences and show less brand loyalty. They can obtain extensive product information from the Internet and other sources, which permit them to shop more intelligently. They are showing greater price sensitivity in their search for value.

Brand manufacturers are facing intense competition from domestic and foreign brands, which is resulting in rising promotion costs and shrinking profit margins. They are being further buffeted by powerful retailers who command limited shelf space and are putting out their own store brands in competition with national brands.

Store based retailers are suffering; small retailers are succumbing to the growing power of giant retailers and ‘category killers’. Store based retailers are facing growing competition from catalogue houses; direct mail firms; newspaper, magazine, and TV direct to customer ads, home shopping TV and internet. As a result they are experiencing shrinking margins.

http://www.eauc.hk/show.asp?id=121 [Accessed 09 March 2010]

Developing and Delivering a Positioning Strategy

All marketing strategy is built on Segmentation, Targeting and Positioning. Organisation discovers different needs and groups in the marketplace, targets those needs and groups that is can satisfy in a superior way, and then positions its offering so that the target market recognises the organisation’s distinctive offering and image. If a company does a poor job of positioning, the market will be confused as to what to expect, whereas if a company does an excellent job of positioning, then it can work out the rest of its marketing planning and differentiation from its positioning strategy.

Positioning is actually the act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market. The end result of positioning is the successful creation of a customer focused value proposition, a cogent reason why the target market should but the product.

To communicate a company or brand positioning, a marketing plan should include a positioning statement. Avon has a very clear cut positioning statement which defines their offerings, brand image and targeted segments, Avon states, ‘The Company for women’ this statement builds a clear perception in the minds of target customers which helps organisations to address and cater them effectively.

Branding

Branding is a major issue in product strategy. Perhaps the most distinctive skill of professional marketers is their ability to create, maintain, protect, and enhance brands. Branding is the art and cornerstone of marketing. ‘According to American Marketing Association defines a brand as: a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors’ (Marketing Management Eleventh Edition by Philip Kotler)

Building Brand Identity

A brand is a complex symbol that can convey up to six levels of meaning,

Attributes: A brand brings to mind certain attributes. Like Avon suggests high quality, high performance, reasonable pricing, and durable cosmetics range.

Benefits: Attributes must be translated into functional and emotional benefits. The attributes such as ‘durable’ for Avon cosmetics could be translated into the functional benefits. The attribute ‘reasonable pricing’ translates into the emotional benefits.

Values: The brand also says something about the producer’s values. Avon brand stands for high class and high performance products.

Culture: The brand may represent a certain cultural values. Avon represents United Sates fashion culture, how people take care of themselves.

Personality: The brand can project a certain personality. Like Avon represents fashionable personality.

User: The brand suggests the kind of consumer who buys or uses the product. Avon attracts girls and women with its offered products and now they are also focusing on men products too.

Building the brand identity requires additional decisions on the brand’s name, logo, colours, tagline and symbol. These are marketing tools and tactics. A brand is essentially a marketer’s promise to deliver a specific set of features, benefits, and services consistently to the buyers. The marketer must establish a mission for the brand and a vision of what the brand must be. The marketer must think that he is offering a contract to the customer regarding how the brand will perform. He brand contract must be honest.

Product Life Cycle

Most product life-cycle curves are portrayed as bell shaped. This curve is typically divided into four stages; introduction, growth, maturity and decline.

Introduction: A period of slow sales growth as the product is introduced in the market. Profits are nonexistent because of the heavy expenses incurred with product introduction.

Growth: A period of rapid market acceptance and substantial profit improvement.

Maturity: A period of a slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits stabilize or decline because of increased competition.

Decline: The period when sales show a downward drift and profits erode.

http://www.eauc.hk/show.asp?id=125 [Accessed 25 March 2010]

Market Modification

The company try to expand or retain its market when it experiences decline in their sales and market share. It can try to expand the number of brands users by a) converting nonusers b) entering new market segments c) winning competitors customers.

Product Modification

Marketers also try to stimulate sales by modifying the product’s characteristics through quality improvement, feature improvement, or style improvement.

Quality improvement aims at increasing the products functional performance. A manufacturer can often overtake its competition by launching a ‘new and improved’ product.

Strategic Business Unit

Strategic planning calls for action in three key areas: The first is managing the company’s businesses as an investment portfolio. The second involves assessing each business’s strength by considering the market’s growth rate and the company’s position and fit in that market. The third is establishing a strategy. For each business, the company must develop a game plan for achieving its long-run objectives.

The marketing plan is the central instrument for directing and coordinating the marketing effort. Today, the marketing department does not set the marketing plan by itself. Plans are developed by teams, with inputs and sign-offs from every important function. These plans are then implemented at the appropriate levels of the organisation. Results are monitored, and corrective action is taken when necessary.

http://www.eauc.hk/show.asp?id=124 [Accessed 20 March 2010]

Avon Marketing Strategies

Price

Avon adopts penetrating price strategy for its United Kingdom market, they want to sell their products in bulk amount so that every single person could reach to their products. This pricing strategy works very well for Avon, because customers can get high class products within the reasonable price brackets.

Promotion

Avon follows direct marketing and words of mouth marketing strategy, Avon has established such an organised tree structure marketing strategy in which they spread their products through streets and to every individual house through catalogue distribution. This distribution strategy plays vey vital role in increasing Avon’s sales.

Differentiation

Avon did not want to cannibalize Avon ladies who had close relations with customers. Fortunately, Avon’s research showed little overlap between existing customers and potential web customers, so Avon went ahead. They differentiated themselves from others by introducing unique direct marketing strategy which their competitors are not following currently.

Product Range

Avon offers very wide range of products, they were specialised in producing cosmetic products range for girls and women, now they are also entering into men range also they have diversified their product range by adding electric products for men and undergarments fitting outfits for women too.

Evolution of E-Marketing

E-business describes the use of electronic means and platforms to conduct a company’s business. The advent of the internet has greatly increased the ability of companies to conduct their business faster, more accurately, over a wider range of time and space, at reduced cost, and with the ability to customise and personalise customer offerings.

E-commerce is more specific than e-business, it means that in addition to providing information to visitors about the company, its history, policies, products, and job opportunities, the company or site offers to transact or facilitate the selling of products and services online. E-commerce has given rise in turn to e-purchasing and e-marketing. E-purchasing means companies decide to purchase goods, services, and information from various online suppliers.

Company purchasing agents initially favoured shifting their commodity purchases to digital marketplaces that bring together many buyers and sellers in one place. However, they have been reluctant to finalise online transactions with companies they never heard of, do not know well, or have not done business with in the past. They prefer to identify a promising seller online and then go into offline negotiation rather than place an order online. Most purchasing groups prefer to set up their own portal with extranet connections to favoured and trusted suppliers.

Consumers are also finding it easier to communicate with companies. Companies often encourage communication by inviting prospects and customers to send in questions, suggestions, and even complaints via email. Some sites even include a call-me button, the customers clicks on it and his or her phone rings with a customer representative ready to answer a question. Customer service representatives can in principle respond quickly to these messages. Yet many online merchants are guilty of considerable slow responses to consumer mail. Smart online marketers will answer quickly, by sending out newsletter, special product or promotion offers based on purchase histories, reminders of service requirements or warranty renewals, or announcements of special events.

http://www.blogcatalog.com/blogs/how-marketing-practices-are-changing-ebusiness-by-moses-isaac.html [Accessed 25 March 2010]

Customer Databases and Database Marketing

A customer database is an organised collection of comprehensive information about individual customers or prospects that is current, accessible, and actionable for such marketing purposes as lead generation, lead qualification, sale of a product or service, or maintenance of customer relationships. Database marketing is the process of building, maintaining, and using customer databases and other databases (products, suppliers, resellers) for the purpose of contacting, transacting and building relationships.

A customer database ideally would contain the consumer’s past purchases, demographics (age, income, family members, birthdays), psychographics (activities, interests, and opinions), mediagraphics (preferred media) and other useful information.

Data Warehousing and Datamining

Through datamining, marketing statisticians can extract useful information about individuals, trends, and segments from the mass of data. Datamining involves the use of sophisticated statistical and mathematical techniques such as cluster analysis, automatic interaction detection, predictive modelling, and neural networking. A company that wants to learn the most from its database needs to engage the services of a person or company skilled in datamining.

(Kotler)