Avon Products Inc.

, a cosmetics company that aims to be the top Global Beauty Leader, has been experiencing a decline in growth of their
profits despite its efforts to reduce costs through ways such as cutting jobs and shutting down unprofitable operations. An analysis of the
cosmetic industry has shown that it has been and will remain constant amidst economic conditions, making the 2009 economic recession
not a factor for the diminishing revenues. Furthermore, studies have shown that Avon has been lagging behind other cosmetic companies
in terms of customer loyalty, which we believe is also the root cause of the decline in revenues. Despite the company being able to meet
market standards in terms of quality, innovation, and variety, customer loyalty is still low because of 1) Avon lacking a strong brand image
and 2) Avon being viewed as more of a commodity that does not represent or stand for anything. Considering the declining profits due to
low customer loyalty, Avon should focus its efforts in building a stronger brand image, creating value in its products, and giving essence to
the company as a whole. ​More specifically, the company must revamp its marketing and branding strategy to better fit industry trends
and factors, increase its investment in organic products, and leverage its Corporate Social Responsibility (CSR) programs towards local
and community outreach.

THIS IS THE ANSWER TO THE PROBLEM, and we know this will be effective because of the following reasons (​see Figure 1​):
(1) The marketing campaign should be revamped from an ineffective strategy, towards one that puts greater focus towards the
core advocacy of Avon, which is women empowerment. The new messaging, “Women Empowerment Through Beauty,” will be
clearer and more targeted than “Beauty with a Purpose.” In doing so, advertising expenditures would be reduced through
increased efficiency leading to less spending, and increased revenues through higher customer loyalty due to better branding.
(2) While other companies are dissuaded from doing so due to economic conditions, increasing investments in organic products
would greatly improve natural product offerings relative to competitors. In turn, this would improve sales and customer loyalty,
due to increased product distribution in retail chains and high customer loyalty associated with sellers of organic products
resulting from customer appreciation of shared values.
(3) A stronger focus on company CSR towards local and community outreach would help in increasing customers’ awareness of
company values/initiatives. This increases loyalty, which would consequently increase sales through its direct representatives.
How will Avon alleviate low customer loyalty of its company relative to its competitors in order to ultimately increase the market share
and revenues?​ This is the problem, and these are the things considered in order to solve it:
● A revamp of marketing and branding strategy to be more in line with industry preferences and trends ​should be done
through crafting a campaign message that focuses on company commitments towards women empowerment through beauty.
This aims to give women the opportunity to shine and feel beautiful and confident. At the same time, expenditures on soliciting
unneeded brand ambassadors and creating expensive yet unrelated marketing campaigns should be removed.
● Increasing investment in organic products ​through R&D in order to create product lines that are more organic and
environmentally-friendly. All-natural and non-toxic products can be explored by the company to achieve this.
● Leveraging on its Corporate Social Responsibility (CSR) programs towards local and community outreach ​through training
Avon sales representatives and employees to perform CSR-aligned local outreaches to communities. Avon will also collaborate
with the locals in producing their products, which would give the latter an additional source of income. This would help increase
awareness for the company mission statement on the consumer level.
To solve the problem, we took insights and learnings from the following:
● In spite of growing advertising expenses, Avon still fails to increase customer loyalty and is last in rankings of such among
competitors. This likely stems from an unclear brand image. Therefore, clarifying the company branding (i.e. “Women
Empowerment Through Beauty” vs. their current strategy, “Beauty with a Purpose”) through a more focused campaign will
consequently result to higher loyalty.
● Considering the shift in consumer preferences and retailer requirements towards more organic and environmentally-friendly
products, there is a need for the company to conduct more research in order to produce goods and services that would meet
the customers’ demands and expectations, as this would give them a competitive advantage over the other cosmetics
companies who may likely tighten up R&D expenditures due to poor global economic conditions.
● As the company is committed to promoting its advocacies, particularly empowering women to achieve economic freedom, this
could be a possible avenue for it to further strengthen its CSR program, as customers tend to prefer brands with the better CSR
perception. If CSR efforts of Avon are effectively communicated, then customer acquisition will increase remarkably.
As such, this is our solution. You’ll see it is correct because Reasons 1, 2, and 3 lead us to believe so. Further,
● Launching a revamped marketing campaign would allow Avon to send across a clearer, more defined image, which would
feature its support for women empowerment. For customers who prefer cause-oriented companies, this would produce higher
sales and increase customer loyalty as a whole.
● Allotting a higher budget for research and development of Avon’s products and services would lead to the production of a
wider variety of goods aligned with industry trends and encourage company growth. This would give the company an edge in
penetrating markets faster and in building stronger connections with its consumers. Moreover, expanding the company’s
offerings can cater to different demands of customers, thus encouraging them to buy from this Avon more often.
● Strengthening the CSR program of Avon in cooperation with its employees would make the consumers see the company in a
better light, as this not only promotes its values to its target market, but within the organization as well. Aside from improving
the company’s public image, having an effective CSR program can boost employee engagement and attract productive
employees who share the same values.
With solving the company’s issues on brand image, we expect to see a significant increase on its customer loyalty, alongside with the
improvement on the company’s profitability. With the company being able to meet the consumer’s changing preferences and go along
with the trend of the cosmetic industry, we forecast a greater control on market share in the long run.
 APPENDIX
Figure 1: Minto Case Pyramid
(Situational Analysis of Avon)