Reema Mehta

Introduction

In this assignment I will be marketing a product for a business that will appeal to a wide market segment. The business I have chosen is Avon, to market the product I will need effective marketing to achieve the business objectives. To carry this out many factors will have to be considered such as; target markets and delivering the desired goods/services more effectively and efficiently than its competitors. Avon will decide upon what it is they are selling, its price, who they are selling to, where it is being sold and why people buy that type of product.

The following section will be covered fully with significant detail to points in the following sections:

Assessment Evident (a) Marketing aims and objectives, target markets and segmentation – An understanding of Avon’s products, and why I chose to use the

company in depth and knowledge– A descriptions of their aims and objectives– Show links between marketing aim and objectives with market

segmentation and their target market

Assessment Evident (b) Marketing Research – Use of primary and secondary research from a wide range of

sources to produce the products marketing research– Analyse how the research relates to may product

Assessment Evident (c) The Marketing Mix– Create a detailed and developed, in dept marketing mix for my

product, I must then clearly link this to the research and segmentation evidence

Assessment Evident (d) Full justification of the marketing mix – A justified account of my selected marketing mix with the use of

original ideas

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Assessment Evident (a) Marketing aims and objectives, target markets and segmentation

Description of my chosen product

For this assignment I will be selecting a product which is targeted at a range of user across a specific market segment. The company I have chosen to base this product for is Avon Inc. I will be focusing on Avon Inc’s hair care range and have decided to specifically focus on their hair styling products.The product I am going to market for Avon Inc will be men’s hair dye. In order for this product to be a success I will use sufficient information, which provides an understanding of the market share.

I chose to look at the hair care range for several reasons, even though it is not one of Avon’s original products that started up the business, but it is still a major sector in the Avon Company, in addition to the fact that it is largely influenced by customer demands. As well this, it is based in an extremely competitive market, which is influenced by consumers’ preferences.

Secondly, the hair care range provides a wide collection of products that are designed to be attractive to many different Market segmentations, which includes teenagers as well as men. I have chosen to focus on hair care range due to the fact that Avon has become a major participant in the hair care business, as more people are now becoming more conscious of their appearance.

Form of ownership and background to the company

Avon is a PLC as well as a leading global beauty company, with $10 billion in annual revenue. As the world's largest direct seller, Avon markets to women in more than 100 countries through 5.4 million independent Avon Sales Representatives. With its foundation going back to over 100 years, today Avon's product line includes beauty products, fashion jewellery and apparel, and features such well-recognized brand names as Avon Color, Anew, Skin-So-Soft, Advance Techniques, Avon Naturals, and Mark.

Avon has a line of clothing, accessories, perfumes and cosmetics. It was founded in 1886 by David H Mconnell.

Throughout the years the Avon brand diversified its activities. In 1964 Avon Inc enters the area of men’s perfume, with the launch of the "Tribute for Men". The brand also expands its distribution network internationally to many countries, in particular to the Far East and to Canada.

I have chosen Avon as the company I will be focusing on. This is because I personally feel that they are the number one hair care brand, and have diversified into many sections of the of the fashion industry, and within this sector they have created a wide array of products that are well established

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and successful. This will mean that Avon would need a high quality marketing scheme which will enable them to stay at the top.

I have chosen to venture into the consumer products as I would like to target this particular sector, due to the fact that it has the largest target market, which is the general public. I have chosen the hair care range as it is a major contributor of the Avon turnover making it the company’s largest division in the UK. This will allow me to look at the marketing strategies, as well as the aims and objectives of the business.

Avon has a high brand pressure with frequent advertisements throughout many mediums, including newspapers, television and magazines to advertise their products.

Avon is also supportive of the community by not testing their products on animals, as well as being environmentally friendly.

Mission Statement:

“We will build a unique portfolio of Beauty and related brands, striving to surpass our competitors in quality, innovation and value, and elevating our image to become the Beauty Company most women turn to worldwide.”

They aim to discover:

To provide individuals an opportunity to earn in support of their well-being and happiness.

To serve families throughout the world with products of the highest quality backed by a guarantee of satisfaction.

To render a service to customers that is outstanding in its helpfulness and courtesy.

To give full recognition to employees and Representatives, on whose contributions Avon depends.

To share with others the rewards of growth and success To meet fully the obligations of corporate citizenship by contributing

to the well-being of society and the environment in which it functions.

Avon Inc shows an understanding of their own level of standards they wish to set, with the above aims and objectives. From these set of aims and objectives Avon Inc can work harder to increase their standard and performance so that the customers are more satisfied with the products that they buy.

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Competitors

Avon’s competitors are in a hurry to catch up and to even possibly take their place as leaders in the industry.

In terms of the hair care products Avon provides L’Oreal is its main competitor. This also included the fact that both businesses have similar marketing strategies. This can be seen as both companies use celebrity endorsement as their unique selling point.

Competitors marketing strategies will also have an effect on the marketing strategy objectives. This is due to the fact that both Avon and L’Oreal have similar cosmetic products, so it is clearer to identify their marketing.

Avon needs to ensure that their marketing objectives as well as marketing strategies are effective, which will help them to gain a competitive advantage which will result in them getting a better corporate image.

Avon’s competitors include:

o L’Orealo Mac Cosmeticso Maybelline o Max Factoro Neutrogenao Revlono Bobbi Browno Ralph Laureno Estee Laudero Elizabeth Arden

Avon’s main target market is women of ages of 18-50, and is starting to aim at men between the ages of 30-40. They target cosmetic but over years Avon has targeted other markets, with the production of products such as jewellery box and dressing gowns aimed at children.

The main competitor for Avon is L’Oreal. Both companies are similar in structure, and have a worldwide presence in the beauty and cosmetics industry. In this highly competitive market, both companies are increasing their leads by buying up smaller hair care companies. However they are using different tactics in order to combat competitions.

Avon uses an extensive amount of promotion for their products. Avon will have to find different tactics to help themselves beat the competition, with the shadow of L’Oreal behind them, eager to catch up.

The trends of the hair care products have changed during year. In order to be able to cater for the growth and profitability made by consumers Avon will

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have to detect these trends earlier. They will need to venture into new markets, in order to do this.

Avon has introduced a range of men’s products but still haven’t target men for their hair care products. Below there are two example of the types of products created for men.

As mentioned above we can see that the male market is growing as more men are now becoming more conscious of their appearance. This is a contributing factor to why Avon’s product sales were at their highest during 2006.

Diversification

Avon has diversified into numerous different market segments since it began and has managed to branch out into many different areas of the health and beauty market. Avon expanded worldwide in perfume and cosmetics since the mid 1950’s. Avon acquired Tiffany Jewellery in 1979; other acquisitions included health care companies such as Foster Medical and the Mediplex Group. Later, the company launched Women fashion, which was proven to be a success as customers responded with orders surpassing $125 million, which was developed with designer Diane Von Furstenberg Avon’s. With this being a success, it led to the launch of Men’s clothing and Children’s clothing.

By diversifying into different sectors of the cosmetics market, which allows them to achieve growth and increase profitability, which allows Avon to generate the most amount of profit that any of its competitors.

Product Range

Avon has a vast range of products, all of which can help to get a better overall image of the different segmentations their products are aimed at as well as how the products differentiate.

By looking at Avon’s existing product range, we will be able to see the various segments the products are aimed at as well as the difference between certain product ranges.

The Avon product range can be fitted under the following categories.

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Cosmetics – Make- Up

1. color trend multistick lip - This is Avon’s latest product from the cosmetic lips range. This was due to consumer segmentation, as they felt it was needed to vary the product to match consumer groups. This product would be segmented due to geographical, demographical and psychographical factors, as it would be aimed at women in their early 20’s, especially those from a well off background e.g. in the social economical group A, B or possibly C1.

2. Avon Uplifting Mascara -This is Avon’s new mascara; this was due to consumer segmentation. This product would also be aimed at women in their early 20’s as well as aiming at women in the social economical group of A, B or possibly even C1.

3. Avon Nailwear Nail Enamel - this is Avon's nail varnish introduced due to homogenous preferences, as well as competition. This product would be aimed at 25 – 50 year old women, as well as aiming at women in the social economical group of A or B or C1. This product would be segmented due to geographical, demographical and psychographical factors.

I will be focusing on the following range of products with regards to the coursework

Cosmetics – Hair Care

1. Advance Techniques Mega Deal - This is Avon’s hair care product introduced to the market. It was aimed at women between the ages of 27-50, as well as aiming at women in the social economical group of A, B or C1.This product introduced a new dimension to Avon which helped to promote its business too many different types of segmentation, which may be geographical or demographical or psychographic.

2. Advance Techniques Super Straight Smoothing Balm - This is Avon’s latest product from the hair care range. This was due to consumer segmentation, as they felt it was needed to vary the product to match consumer groups. This product would be segmented due to geographical, demographical and psychographical factors, as it would be aimed at women in their late teens as well as aiming at women in the social economical group of A, B or C1.

Over time Avon’s products will change due to homogeneous preferences, as well as technology and other dependant factors may change. For example, hair care products were for every day wear, but as people are now getting more conscious of their appearance, especially men, these products are now becoming more popular through many different segments of the market.

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In addition their aim to maximise market share by maintaining customer loyalty, this helps them to venture out into new markets as well as preventing them from allowing economies of scale. By doing this, this will help to increase the Avon’s profitability.

There is a wide range of different qualities the product range of Avon’s and must have in order to carter to everyone’s individual needs. These may be geographical, demographical or even psycho graphical factors. Therefore the products that Avon sells are all targeted at satisfying the different needs of their market segment. This is done by altering the brand image to fit into the desired market. For example Avon’s men’s aftershave and Avon’s Eau De Porfame, cater the needs of both men and women.

Market in which Avon operates in

Avon operates in a mass market, as well as being an international company. This can be seen through the several product ranges they carry as well as focusing on various sectors of the market rather than focusing on a particular area and running a niche market, but operate in the tertiary sector. Avon is influenced by competitors as well as social and economical trends.

Avon is influenced by consumers, because consumers are becoming more and more conscious of their appearance.

On the other hand, Avon still creates products for niche markets. This can be seen through the products created in the accessories range. These products are of a higher quality, and a reasonable price. Consumers are less likely to buy this product unless from a well know retailer. People who have a reasonable wage package are also able to afford these goods.

Avon’s hair care range is aimed at anyone who would like to take care of their physical appearance, but with its reasonable price ranges, it mainly targets people between the ages of 18-50. In addition this product is not as easily obtained as some of the other product in the market and mainly be found at retail stores such as Debenhams and Boots.

Avon’s hair care range is classed as a luxury product, resulting in it being aimed at A B, C1 of the social economic groups ranging from A to E, as their products are usually aimed at middle income groups. One of the reasons why Avon is able to place themselves in this social economic group is that they provide products for a specific range of people. For example, Avon is known all around the world, but many people cannot afford to buy their products.

The marketing objectives Avon follow needs to be specific to the type of market they follow in order to meet their needs and requirements of the consumers, and in order to be effective as well as having maximum results.

Nevertheless they will need to increase marketing activity to ensure effective marketing for the diverse range of products.

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Another reason why Avon is able to place its products in this section is due to the fact that Avon operates in an A-list world. This is due to promotion carried out by celebrities who give the company high prestige and status. This would mean that it would allow Avon to have control over price, as there would be a higher demand for this product due to the fact that it has been advertised by celebrities. Therefore unskilled workers and unemployed people are less likely to buy the products due to the high prices in comparison to some of Avon other competitors.

Avon operates in the secondary sector this includes those economical sectors that create a finished product with the use of scientific technology.

Business Activity

Avon, the company for women, is a leading global beauty company, with $10 billion in annual revenue. As the world's largest direct seller, Avon markets to women in more than 100 countries through 5.4 million independent Avon Sales Representatives. Avon's product line includes beauty products, fashion jewellery and apparel, and features such well-recognized brand names as Avon Color, Anew, Skin-So-Soft, Advance Techniques, Avon Naturals, and Mark.http://www.avoncompany.com/investor/businessnews/index.html

In 2005 Avon’s expectations when they managed to not only improve the value of their share for their shareholders. The following figures are from their annual report.(Taken from the www.avon.com)

In millions, except per share data 2007 2006 Net sales $ 2,163.3 $ 1,982.4 Other revenue 22.0 20.8

Total revenue 2,185.3 2,003.2 Costs, expenses and other: Cost of sales 836.7 779.7 Selling, general and administrative expenses 1,110.8 1,137.3

Operating profit 237.8 86.2

Interest expense (26.5 ) (26.5 ) Interest income 12.3 13.2 Other expense, net (0.6 ) (1.6 )

Total other expenses (14.8 ) (14.9 )

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Income before taxes and minority interest 223.0 71.3 Income taxes 72.4 ) (14.5 )

Income before minority interest 150.6 56.8 Minority interest (0.6 ) (0.6 )

Net income $150.0 $56.2

Earnings per share: Basic $.34 $.12 Diluted $.34 $.12

Weighted-average shares outstanding: Basic 440.61 450.75 Diluted 443.76 452.62

Cash dividends per common share $.185 $.175

As you can see from the table above, Avon has managed to not only improve profits but also increase sales and earnings per share. This shows that Avon is growing successfully.

By looking at Avon’s revenue by region, we can see how much revenue Avon has in each region. The graph shows that most of Avon’s revenue comes from Latin and North America

Taken from www.wikinvest.com/stock/Avon_Products_(AVP)

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Avon differentiates themselves from competitors

Avon prides itself with the fact that they use cutting edge technology to in order to research better and improved product for the consumer, in order for them to get the best possible results from Avon’s products.

The use of science and technology is Avon’s weapon against their competitors, making it their unique selling point. This is due to the fact that there is no other cosmetics company which emphasises the fact of the use of new technology to help them create better products.

Avon is a house brand that has been sold around the world for over a century. The life of Avon products has been long and therefore consumers can see that the product has a long life cycle and therefore the quality of the product has to be of a high standard. This will enable Avon to differentiate themselves as a consumer think that they are a long lasting reliable company for the reason that they have a good corporate image. This is important as if the products are successful and fulfil the needs of the market and the consumers, it is likely that they will continue to buy the products and possibly venture into other areas of Avon’s products.

The ways that Avon are able to differentiate themselves from their competitors as the allow them to create brand loyalty which overall will increase revenue and profit helping to achieve the aims and objectives of the company. As part of Avon’s strategy to increase their market share and maintain customer loyalty, may be one of the main reasons as to why they have an ever increasing product range.

Throughout the years Avon has had strong investments in scientific research in order to create a better range of products. By continuing this, Avon can sell a wider range of products by creating new and innovative products. Due to investments in computer-technology, the company will be able to produce more products they are selling. This will ensure that the consumers will have lead to a change and more opportunity to sell new and existing product to a large customer base, with the help of promotion which will in turn increase the market share and help them to maintain a large sector of the market.

Another method used by Avon is to use celebrity endorsement to gain a competitive advantage. Avon is able to use celebrity endorsement to grab the attention of potential customers. This enables them to have a competitive

Looking at the above article extract, this article is an extract from a newspaper illustrating the development of the research into their product.

Looking at Avon’s competitors and their emphasis on the use of science and technology in order to improve their products

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edge against their rivals, which in the long run helps them to generate more profitability across the globe.

However the use of celebrity endorsement will have a big effect on the overall capital produced by the business. This is because everything comes at a price. This can be seen through their multi year contract with Reese Witherspoon. Nevertheless the use of celebrity endorsement seems to be working, as they are able to reach new audiences worldwide, with the help of celebrity endorsement.

Avon are an important brand as they are prominent in the cosmetics industry as they are leaders which it comes to the cutting edge technology as well as making competitors such as L’Oreal egger to catch them up.

The Product Life Cycle

Like all products Avon’s products go through a product life cycle. Therefore it is important to analyse which position each product is in, to inform the manufacturer, on what option and actions they should take, in order to benefit the company overall.

For example if a certain cosmetics products life cycle is in maturity, it would highlight the need for the business to start developing new ideas and looking for new products, in order for them to continue making a profit and not to lose out on the potential revenue which is available to them.

A products life cycle can be divided into several stages characterized by the revenue generated by the product, as shown below.

Introduction Stage

In the introduction stage, sales will be low until customers become aware of the product. Advertising costs are high during this stage in order to swiftly increase customer awareness of the product.

Avon will be introducing new products onto the market, which will be a hair care range for men. There previous products that

have been launched are the men’s fragrances ranges. The hair care products will be different from their previous hair care range as they will be aimed at a different target audience, which will be men. This product has not been previously addressed by Avon, which will mean that the products are at a unstable stage as it is crucial for the sales of the product to be high in order

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for them to succeed, as the primary goal during the introduction stage is to establish a market and build up a primary demand for the product class.The following are some of the market mix implication which are apart of the introduction stage.

Product - Avon will need to produce one product which is moderately different. As they will be producing a hair care range for men which is a product not yet used by the company

Price - The price will be generally high, assuming a skim pricing strategy for a high profit margin, as well as the fact that the company target the better off, who are usually in A, B and C1 of the social groups.

Promotion - Promotion is aimed at building brand awareness, and to encourage potential retailers to carry the product. This is important, as we want the product to be successful so that Avon will produce a higher revenue

Growth Stage

In the growth stage, there is a period of rapid revenue growth. Sales increase as more customers become aware of the product and additional market segments are targeted. Once the product has been proven a success and customers begin asking for it, sales will increase further as more retailers become interested in carrying it out.

In this stage we can see that Avon hair care for women grows steadily over a certain time period so it can be assumed that the same products for men will also be successful. This is due to the fact that Avon has been able to succeed in creating popular products for its consumers.

The following are some of the market mix implication which are apart of the growth stage.

Product - New product features and packaging options means that there is improvement of quality products. This can be seen from the transition between Avon’s hair care ranges for women to men.

Price - Maintained at a high level, if demand is high to reduce to capture additional customers

Promotion - Increased advertising to build brand preference, as they have identified their target market

Maturity stage

The maturity stage is the most profitable. As sales continue to increase, they do so at slower pace. This is because the brand awareness is strong, as well as advertising expenditures will be reduced. Competition may result in decrease market share. The competing products may be very similar at this point.

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When the Avon hair care products are in their maturity stage they have reached their saturation. This would also mean that their sales are currently still quite high and they still have a lot of buyers who consistently purchase the product. Their cosmetics are an example of this, as they are still being bought on a regular basis.

The following are some of the market mix implication which are apart of the maturity stage.

Product - Modifications are made and features are added, in order to differentiate the product from competing products that may have been introduced, especially when competitors such as L’Oreal catch up with Avon.

Price - Possible price reductions in response to competition while avoiding a price war. This could be due to the fact that competitors are lowering their prices or there is a lower demand for that product.

Promotion - emphasis on differentiation and building brand loyalty incentives to get competitions’ customers to switch which will help build up a good customer base

Decline stage

Eventually sales being to decline as the market become saturated, the product become technologically outdated, or customer tastes change. The profitability may be maintained longer if the product has developed brand loyalty. Unit costs may increase with the declining production quantity and ultimately no more profit can be made.

This is when the products do not have a sufficient number of potential customers who are willing to purchase the product, as the market is saturated and demand for some items are decreasing. Currently there are no products which have entered this stage of the product life cycle. This shows me that their products are usually successful which makes it easier for me to launch a new product with them.

The following are some of the market mix implication which are apart of the decline stage.

Product - the amount of products in the line may be reduced or surviving products may be revitalized to make them appeal to the market again.

Price - prices may be lowered to settle the inventory of discounted products, or prices may be maintained for continued products serving a niche market

Promotion - Expenditures are low and aimed to reinforce the brand image for continued products.

Extension StrategiesAvon has used many different types of extension Strategies in order to maintain an increase sale of products.

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- Product Development - Avon has redesigned many product packages. The cosmetic range has changed their packaging to emphasis more on the target market.

- Market Development - Avon has been able to find a new market for their cosmetics. This was done by opening up their market to men. Previously their products were primarily aimed at women however they have opened up their markets due to a demand for men’s products in the market.

My interest in the product

I am interested in this product as Avon cosmetics is somewhat a long and establish brand that caters for both male and female customers and has a wide selection of products to suit its target audience whether its from aftershave to jewellery. Avon cosmetic has a wide selection to suit all its male customers. New men’s range products do not do well in the market as the brand is not familiar in the market. For this reason, Avon could use their strengths as a developed brand to produce another product for the men’s range, if they are able to identify a gap in the market. Avon’s products are affordable, which is a major advantage to its competitors. Also, due to the fact that Avon has frequent advertisements on television, this makes their products more appealing and attractive and in turn enticing individuals to buy their products. The way in which the product is advertised is portrayed to be of very high quality.

Marketing Aims and Objectives

Avon operates in an increasingly competitive market, and therefore must create objectives that will help them remain at the top of their market, and aim not to let anyone else, take their position of market leaders. Some of Avon’s main aims are stated below:

- Growth in market share- Maximising consumer needs- Meeting consumer needs

If Avon is able to aim in this overall direction, they are more likely to succeed. In order to fulfil their aim they must look to achieve the following objectives.

- Increasing brand awareness- Developing new products- Maximising sales and profits

To maximise the sales and profitBy maximising the Avon’s capital, they will be able to carry on to be more influential market leader, and gain market share and improve profitability overall. In order to fulfil this objective, Avon must look at their other objectives and fulfil them as well. If they are accomplished, they will allow there to be increased sales and profit maximisation. By increasing awareness of their

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product range, it will become more likely that customers will buy the product, which will ultimately turn into maximising sales and profit. Furthermore by creating new products there will be a wider variety of products to sell, making it more likely that the customers will buy the products. Avon needs to maximise sales whilst at the same time keep the marketing costs within the company budgets in order to get profit maximisation.

To Increase the brand imageBy increasing the companies’ corporate image, Avon will be more likely to fulfil their aims of staying market leader. Avon is already a world known company, but potential customers need more information about the specific products to buy, as the wide range of products can be quite difficult to choose from. For this reason it is essential to increase brand awareness, and well as awareness of specific products. This can be achieved through a selection of factors such as imaginative product design, good advertising, good publicity as well as sponsorship to increase brand awareness.

All of the methods above have been previously used to promote products, but in order to retain market leaders; Avon must explore more and new imaginative ways of promoting and promoting techniques. However, the process of researching ways of promotion and the change of improving the liquidity remain same or even have exceeded expectations.

By fulfilling the objective listed above, Avon will need to be able to continue to their market leader status as well as gaining a larger proportion of the market.

Potential customers would want to buy products, which are of high quality as well as being good value for money. These two factors will help Avon to get the result which they have predicted.

Consumers are easily persuaded when it comes to trying new products in the cosmetics industry, as market trends change rapidly.Avon will need to be able to target different cultural groups as they need different qualities from their products. They will need to address this matter as this will have an effect in their product production as well as saving them money, as they are conducting more focused advertising. Their objectives must stem from the customers needs and wants in order for them to exceed.

Avon’s market objectives are to develop new products as well as diversifying into new market and gain large market shares abroad. Avon can keep up-to-date with the needs and wants of customers, by fulfilling this certain objective. Also by conducting market research and gathering market data. This factor will also help contribute to the deigns of the new products. This will mean that Avon will need to continue to invest money into the research and development of new products.

By diversifying, Avon will be able to venture into new segment of the market. By doing this, it will ensure that they will have a more reliable status of company, as they have many other products to fall back on. Avon has already ventured into many other segmentation of the market ranging form fashion to

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toiletries. This will enable them to achieve growth and improve their market share, as well as improving the companies overall image.

Avon must also improve their marketing position in many countries. They have already started by increasing brand awareness in many other international countries where the presence of Avon was minimal. Due to the increase in promotion and advertising, they were able to achieve growth in those areas throughout the past few years. Now Avon must achieve a greater presence in major countries.

Avon should be able to specifically target their market, and aim to sell more of their product, gain more loyal customers in order to improve their position in international markets.

Market Segmentation

It is important for Avon to identify who their target market is. By doing this is saves them time and money, as well as making it more efficient for them to aim the product at a smaller precise market, than one large one, but it may be a vague market.

Avon’s target market are women (and men for some of their products), who live in more developed countries. As women are the largest target market in the beauty industry, it is natural for Avon to aim products at them, as this will increase the prospect of profit. It is aimed at women in developed countries, as it is unlikely that people in un-developed countries are more likely to care about their appearance and spend money on beauty products as well as the fact that hair care products and perfumes are a luxury item.It is better that Avon find their target market, as they could waste lots of money on advertising campaigns to places where hair care produce are unnecessary. Also they must look at the different places that they will place their advertising campaigns.

Although the market segmentation is primarily with women, there are also other markets which Avon targets. When it comes to cosmetics the segmentation used there are both gender and age, which are expenditure variables.

When Avon first started to sell cosmetics there target market were women aged 25+. They were the target marker, as they seemed to be the most conscious of beauty, and were willing to spend money on making themselves look better.

Avon is a house brand that has been sold around the world for over a century. The life of Avon products has been long and therefore consumers can see that the product has a long life cycle and therefore the quality of the product has to be of a high standard. This will enable Avon to differentiate themselves as a consumer think that they are a long lasting reliable company for the reason that they have a good corporate image. This is important as if the products are successful and fulfil the needs of the market and the consumers,

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it is likely that they will continue to buy the products and possibly venture into other areas of Avon’s products.

The ways that Avon is able to differentiate themselves from their competitors allows them to create brand loyalty which overall will increase revenue and profit helping to achieve the aims and objectives of the company.

The following chart shows us the different age and gender segments Avon has created their products for in order to target different markets.

Many surveys have shown men between the ages of 35 to 50 have started becoming more conscious of their appearance. For this reason, there is greater incentive for males to use hair care products. This would mean that Avon would have a new target market to increase the possible profit they could make. By having men as a new target market Avon could not only obtain new consumers, they would also gain profitability from these new consumers, which in the long run would increase market share.

From the chart we can see that there is an empty market for men. Therefore it is a good opportunity to expand into different target markets.

Men have recently started to shows an increasing interest in their physical appearance. Ageing in increasingly unfashionable in men and many companies have launched an advertising push to get the word out. Television and adverts aimed at getting men to start buying hair care products have tripled over the last few years, in line with an explosion in hair care sales.

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How Avon’s marketing aims and objectives, target market and segmentation are all connected

Avon’s marketing aims are closely linked together with their target markets. By identifying a target market they will be able to define how they will be able to differentiate themselves from competitors which will be able to create more capital for the company, in the long run.

Moreover, by expanding the business into new target markets they will be able to fulfil two of their major aims of achieving growth, as well as gaining a better brand image.

Avon would need to carry out extensive market research in order to identify their target market as well as finding out what they require. Doing market research would mean that they would be able to achieve their objective of creating more innovative products, which would help them to diversify into new market segments, nevertheless would be a very costly process at the start.

In addition the production of new products will help to balance their product range, as it means that they can replace older products which may be in their maturity stage of their product life cycle, nevertheless with cosmetic products people tend to stick with them for longer, than other product on the market.

Through careful analysis of market trends Avon can highlight their competitors who already cater for the target market, e.g. Just for Men, which in this case are men’s hair care products. By doing this Avon will be able to look at their products quality, as well as their unique selling point and possibly incorporate this into their new product. This will also help them to identify a unique selling point which would mean that Avon would have a competitive advantage.

This would also allow Avon to differentiate themselves from competitors, as new products would already have the branding of Avon who already provides certain other products from men such as skin care, so it will be more likely for the products for the new target market to succeed, as well as the fact that Avon may not need to do too much advertising to promote the new product, as they are already a well known company with a strong customer base.

In order to target the market effectively Avon must provide for the target market effectively. In order to do this they need to adapt to a marketing strategy. Avon must consider which segment of the market they would like to enter, and as they have already targeted the female market it is important they target the male market as well, nonetheless only a small proportion of Avon’s current products are aimed at men, and by growing into this market it would mean that they will be able to fulfil their major aims of achieving growth, as well as gaining a better brand image, and grow as a company, rather than working in a niche market.

There are many links between Avon’s aims and objectives and the different target markets. However there are other market segments within these. Age is

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Gender

Men

Age

Women

Old

Young

Old

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important segments as older men would probably require different qualities in a product as younger men would require.

The table below shows that links between Avon’s aims and objectives as well as various target markets.

Maximise the sales and profit - Avon’s main objective is to maximise sales and profits, in order to maintain a steady growth of the business. This enable them to cater to the need of different segments of the market, which will result in them gaining a larger customer base, which in turn will help them to generate more revenue. By moving into different market they will gain a larger market share, as the size of their customer base is comparative to the profit they will make.

Increase the brand image - In order to increase the brand image, Avon will need to look at the different segmentation of the market, for example, demographical segmentation, geographical segmentation and finally psychological segmentation. By focusing on these Avon will be able to make their products to cater to the needs of the entire market, so people will be more likely to buy the product as it has been catered for their needs. This will help to increase sales, as the amount of sales is proportional to the amount of business awareness they will receive.

Develop new products - Avon is already a well known business; however, in order for them to succeed they need to create a larger product portfolio. As Avon has already been focused on advertising their products to the female population, it is important that they target new products to different segmentation of the market, e.g. men. This will also help them to create a

Objectives1. Maximise sales and

profits2. Increase the brand

image3. Developing new

products

Aims4. Growth in market

share5. meeting consumer

needs

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larger customer base, as they will have the potential to take in customers from a wide range of market segmentations.

Growth in market share - Avon is already a will established business in the cosmetics industry. It order to increase their market share Avon must in new products, which will aid to increase their market share. They must also cater for all ages and in turn, it will enable Avon to achieve a wider customer base to buy their products thus, help them generate more revenue and staying as the market leaders.

Meeting consumer needs - By meeting consumer needs, this shows that Avon caters for all consumer needs. At the same time Avon aim to concentrate on age groups; this is because different age groups require different needs. This will ultimately increase brand loyalty and brand awareness.

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Assessment evidence B:Market research

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Market Research

Finding out what the customer wants lies at the core of market research. Many organisations think, or rather assume that they know how their customers perceive their products and services. All too often their ideas about what the customer wants are wide of the mark.

The purpose of market research includes finding out and analysing the market which the business wishes to venture its products into. Market research is carried out using various techniques, which all benefit the business in the long run. The different techniques used in market research help to:-

o Identify a target market to launch you product ato Identify the size as well as structure of the market, which will give you

an idea of how it workso Identifying potential competition, as well as analysing their market

trends.o Help you to identify gaps in the market, which will mean that you now

which product should be produced to fill the needo User testing and feedback can be used, so the company knows how

successful the product will be, once it has been introduced into the market.

o Monitors market trends as well as monitoring the performance of the product on the market.

Market research provides data which can be used to help make potential difficult decisions, in all areas of the planning of the marketing activities, as well as the marketing mix which is made up of the 7 P’s.

As Avon is already a well established company, and has a loyal customer based from marketing their previous products, it would be easier to a certain extent to venture into the male hair care market. As this is a relatively new market for Avon, as Avon has not got a wide portfolio of products for this market, it is important that a significant amount of research is carried out about this market, to find out what appeals to the consumers and whether there is sufficient number of customers who would be interested in the products, to make it worthwhile for Avon to launch it into the market.

It is imperative to identify the size and structure of the market, to see if products have already been introduced for this market, as well as identify which stage they are in of the product life cycle e.g. maturity. This is important as if the product was in its growth stage, there would be a significant amount of work that would need to be undertaken in order to try and get this particular product at the same stage as the competitors.

In addition, we can also identify the unique selling point of the product, by looking at the market. This is an efficient way of making the product successful as it would only require the company to work on the negative factors to make it more of a popular product.

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As previously mentioned the competition is also an aspect that needs to be investigated, so the business has more knowledge on what the company provides, so they can compare their prototype to it, and identify a way in which it could be altered in order to make their product more appealing to the market. In addition looking at the competitors will also help to identify the market trend, which will allow Avon to respond to the market effectively and fulfil the needs of the consumers

Target MarketAs Avon is a large company and has a clear target market more its products. As mentioned before, it is now clear that more men are becoming conscious of their appearance and by Avon expanding into this product range will help to maximise their capital.

The market Avon targets is the older and people from a fairly high income group. It is therefore important that research is done in order to find out what appeals to the target market as well as the number of potential customers.

Identifying the Target MarketIt is important that the size as well as he structure of the market is researched upon. This will help represent the several types of potential consumers that will be interested in the product

Identifying the competitionIn order to make sure a product is successful it is essential to investigate the potential competition. This will help the company to work out what is necessary in order to succeed. It will also help us to identify how well the product will do when put up against the rivals products.

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(b) Primary and Secondary Research

The two main types of research that can be used are primary and secondary research. Both types of research have their advantages and disadvantages but both of them will benefit a company in many different ways.

The most common primary research resources used are surveys e.g. questionnaires and surveys as well as informal or structured interviews. Also gaining information through observations overt or covertly is another method of primary research.

The advantages of Primary research are:-o It is quick and cheap to conduct primary research if the sample is smallo Allows generalization to a larger population

Avon like many other organisations may undertake test marketing. This is where a new product is tested on a certain region, and then they can investigate the market trends and sales. From this they can decide weather or not to launch the product in the rest of the country.

Like all types of research it is impossible to ask all the potential customers views on the product they are planning to launch. In order to get an overall idea, Avon must use the results taken by certain groups of the population to make a prediction about the rest of the market.

Primary data is essential to find out what potential customers think of certain products within the company. Secondary data cannot be used in this occasion as there will not be enough data available about the new product.

An advantage for Avon that comes from using primary data is that the information collected will be specific for the needs and purpose of the company. Nonetheless with secondary data the information received can be too broad and not precise enough for the product.

Primary research is always up to date, as well as the fact that there is no danger in using out of date data that may not be useful to the business at the present moment in time. This is a common problem with secondary data; therefore it would be essential for Avon to make reliable decisions using primary data.

Like all data types, primary data does have its disadvantages. The main downfall of secondary data is that it is labour intensive, as well as being a slow and expensive process. Primary data also has limitation when it comes to the market in general. This is because it can help Avon to identify customer’s needs; by they may not be from new market segments.

Identifying the customer’s needs would mean that Avon is fulfilling their aim of growth, as well as remaining market leaders. In conclusion primary research is essential for Avon to succeed with their new target market, men.

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Secondary research allows Avon to gather and analyse research which is already available on the market. There are two types of secondary research, which are internal sources which include feedback from companies’ sales department and careful analysis of reports as well as financial accounts.

External sources include Government publications as well as marketing agencies reports. Other sources include results from pressure groups and trade magazines.

Secondary data is usually a more popular way of gathering information, as it is more efficient as well as being more cost effective. Also Secondary data is easier to get hold of compared to primary data.

On the other hand, secondary data that may have been collected for other products within the company may not be suitable for this purpose, as it may only cover a small area of what the company needs.

Therefore it is crucial that whilst carrying out secondary research many sources are included so all questions are answered when undertaking research. Another problem for Avon with secondary data is that they may be unsuitable, e.g. it may contain errors, or even be out of date.

Secondary data is mainly used to help Avon to get an initial understanding of a certain market. Avon will then be able to carry out primary research on problems or issues that have show up whilst using the secondary data. Secondary data also allows Avon to recognize market trends and illustrate product life cycles of certain products. This will help Avon’s new products to succeed, which will help towards the, marketing objective of creating new and innovative products.

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1(a) Primary Research

I have undertaken a questionnaire for my primary research about new types of hair care products aimed at men between the ages of 30+. For this reason the questions that have been included in my questionnaire are all specifically intended to aim at all of the areas of the product mix (4 P’s). I have decided to use a quota sample to find people who I feel their contribution will be valid. This is why I have not included any women in the questionnaire as it would not be appropriate for a woman to answer questions about men’s hair care products, if they will not be using it themselves. The information that has been collected is therefore specific to the product, as well as the information used will be targeted at the right audience.

I have therefore decided to ask the following questions as it will allow me to perform up to date market research for the new product that Avon would like to launch, targeting men. It will also possibly help me to make informed decisions such as the pricing of the product, based on consumers needs.

The questionnaire was carried out in hotels, this is due to the fact that there are a wide range of people located in nearby areas, also in a hotel many people come from different countries, which would allow me to ask a wide range of men who are likely to know about Avon and who are willing to consider using men’s hair care products.

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Questionnaire

1. How much would you be willing to spend on hair care products?

£20 - £25 £26 - £30 £31 - £40 £41 – Other

2. When purchasing a hair care product what qualities would you look for?

Product Itself Quality Brand Price Other

3. Where would you most likely buy hair care products?

Chemists Supermarkets Department Stores Internet Other

4. Which medium of advertising appeals to you when it comes to buying hair care products?

Television Radio Magazines Flyers Internet Other

Questionnaire Results

QuestionFrequency Percentage

Please take a few minutes of your time to complete this questionnaire. We are currently undertaking research on men’s hair care products, and would appreciate your input. The information collected in this questionnaire will be anonymous, and will not be passed on to third party businesses.

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   How much would you be willing to spend on hair dye?    £3.00 - £5.00 25 50%£6.00 - £8.00 19 38%£9.00 - £10.00 3 6%£10.00 + 3 6%Other  0  0%   When purchasing a hair dye product what qualities would you look for?    Quality 20 40%Packaging 12 24%Brand 7 14%Price 11 22%Other  0%  0%   Where would you most likely buy hair care products?    Chemists 1 2%Supermarket 10 20%Department Stores 10 20%Internet 20 40%Other 9 18%   Which medium of advertising appeals to you when it comes to buying hair care products?    Television 16 32%Radio 10 20%Magazines 12 24%Flyers 2 4%Internet 5 10%Other 5 10%

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Questionnaire Result Analysis

All the questions that I have asked in my questionnaire will contribute to the decisions made when it come to the marketing mix. Each of the questions can fit less than one of the heading of Price, Product, Place and Promotion.

PriceQuestion: How much would you be willing to spend on hair care products?

This question will help directly with the pricing of the product. By asking this question, it will help to reduce the risk of overpricing the product, as well as the fact that if the product is under priced it may not help Avon to overcome all production and research costs. In addition, potential customers may think that the product is of a poor quality, which is shown on its price. This could have the opposite effect when attracting potential customers.

Pricing products highly, could also have a negative effect on Avon. This is due to the fact that customers may be deferred from buying the product as they feel the price is too expensive and not enough value. However, Avon must find a price where customers feel that the quality of the product is good, as well as a price that reflects the quality of the product.

By asking what price the consumer is willing to pay, Avon can identify a price band for which consumers are willing to pay for the product. This would also aid Avon to stand out from their competitors as they would be charging a more reasonable price for their products.

Also, it would help Avon determine price elasticity by identifying how much the company is willing to stretch their prices before the sales start to decrease. This will help fulfil the objective of maximising the companies’ capital as the sale for the product would increase.

How much would you be willing to spend on hair dye?

50%

38%

6%6%

£3.00 - £5.00£6.00 - £8.00 £9.00 - £10.00£10.00 +

Looking at the results we can see that 50% of people are willing to pay between £3.00 - £5.00, with 38% of people willing to pay between £6.00 -

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£8.00 and finally 6% of people willing to pay both £9.00 - £10.00 and £10+. Therefore 88% of people are willing to pay between £3.00 - £8.00.

PlaceQuestion: Where would you most likely buy hair care products?

This question asks people about the place section of the marketing mix. By finding out preference people have, Avon could decide where to sell their new product. Although Avon sell a large amount of women’s hair care products, they have a good idea and means to finding out where products are sold the most. This product has a different target market, so they may have different preferences when they would like to purchase their hair care products compared to women.

Where would you most likely buy hair care products?

2%20%

20%

40%

18%

ChemistsSupermarketDepartment StoresInternetOther

Looking at the results we can see that people prefer to by hair care products in department stores, supermarkets and the internet, with the most popular being the internet with 40% of people selecting it.

By finding out where people have purchased hair care products in the past, it helps Avon to find out where to sell their products and also helps Avon to identify where their competitors products are sold. By doing this it shows Avon where people know to buy hair care products as well as where people will not consider buying hair care products.

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Product + PriceQuestion: Which qualities would interest you when purchasing a hair care product?

This question asks about the ways in which Avon could alter their product to increase their overall sales. By asking what one would look for in a product, it would help identify what the consumer really wants. This question also finds out about the price elasticity, as by incorporating the qualities within the product ad differentiating Avon from their competitors with these qualities, there is a possibility that Avon can increase the price of their hair care products.

When purchasing a hair dye product what qualities would you look for?

40%

24%

14%

22%

QualityPackagingBrandPrice

By looking at the results we can see that the main qualities people are willing to buy products based on the quality of the product as well as the price.

Therefore Avon must integrate this within their products. By doing this they will be able to attract more customers who will be willing to pay more for the product. Also with 14% of the people saying that they look at the brand of the product means that Avon must make sure that extensive adverting is used to tell people about the product.

Promotion Question: Which medium of advertising do you find most effective when it come to buying hair care products?

This question asks what type of advertising entices people to buy hair care products. By asking this question it enable Avon to know what mediums of advertising will be the most effective which will help to save a lot of time and money.

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Looking at the results we can see that 32% of people prefer television with 24% of people preferring magazines. Therefore television and magazines could be the medium type of advertising used by Avon.

Conclusion of Primary Research

My overall results show that my research of primary research has narrowed down the decision to be made in the marketing mix for my 4 P’s. My new product range produced through the marketing mix has showed through the results of the questionnaire that it will be a success. Each of the questions on the questionnaire show that the results have been a benefit to Avon, and gives me an opportunity to create a success from its new product range of men’s hair care products.

My results show me that the idea of a men’s hair care product will be successful once the other factors are taken into account.

Looking at the results we can see that 50% of people are willing to pay between £3.00 - £5.00, with 38% of people willing to pay between £6.00 - £8.00 and finally 6% of people willing to pay both £9.00 - £10.00 and £10+. Therefore 88% of people are willing to pay between £3.00 - £8.00.

Looking at the results we can see that people prefer to by hair care products in department stores, supermarkets and the internet, with the most popular being the internet with 40% of people selecting it.

By looking at the results for the 3rd question we can see that the main qualities people are willing to buy products based on the quality of the product itself as well as the price.

Therefore Avon must integrate this within their products. By doing this they will be able to attract more customers who will be willing to pay more for the

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product. Also with 14% of the people saying that they look at the brand of the product means that Avon must make sure that extensive adverting is used to tell people about the product.

Finally by looking at the results from the last question we can see that 32% of people prefer television with 24% of people preferring magazines. Therefore television and magazines could be the medium type of advertising used by Avon.

(2) Secondary Research

Secondary research must be undertaken in order to identify the trends of the potential market. By identifying information about them, we can adapt the product to the customers needs. In addition, we could also find out if there is a market for the product. If not, Avon could stop investing in the product and move to another.

Secondary research could also help identify the size and structure of the market and the way in which it works. Also it could also be used to identify the competition.

Swot Analysis

SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and threats are external factors.

Strengthso Avon’s Corporation is a very profitable organization, earning in excess

$8.1 billion worldwide as of 2005. o It is a global cosmetics and fashion brand built upon a reputation for

excellent products and services. It has markets in over 135 countries. o Avon has strong ethical values and an ethical mission statement as

follows, ‘to meet fully the obligations of corporate citizenship by

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contributing to the well-being of society and the environment in which it functions.’

Weaknesseso Avon has strong competitors who have been selling products for years.

For this reason, they already have brand loyalty towards them, and consumers may no be willing to try new products.

Opportunitieso Avon is very good at taking advantage of opportunities. o New products and services that can be retailed on their website, such as

the new hair care products

Threatso Who knows if the market for cosmetics will grow and stay in favor with

customers, or whether advancements in technology will wipe out the cosmetics market

Competitor Analysis

Competitors Name:o Just for Men

Competitive products/ services and price range:o Just for Men - Just For Men Hair Colourant Just for Men - £5.69o Just for Men - Just For Men Beard & Moustache Gel - £7.29o Just for Men - Just for Men Shampoo-in Hair Colour - £7.99

Strengths:o Just for Men have a wide portfolio of products for meno Just for Men have a wide target marketo Just for Men is a well established brand in the men’s cosmetics industryo Just for Men has a well established reputation

Weaknesses:o Just for Men is not the leading brand

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SLEPT Analysis

Before creating business plans or when evaluating existing ones it is important to 'scan' the external environment. This takes the form of a SLEPT analysis, i.e. an investigation of the Social, Legal, Economic, Political, and Technological influences on a business.

Factory Category Description Impact

Social

This means how well Avon deals with customers. This may allow Avon to increase prices as they have a loyal customer base.

Attracting new customers, which will allow Avon to have a wider target market, resulting in an increase of sales and more brand awareness.

Legal

This involves where and how Avon produces their products. This can be social or geographical factors, as well as child labour.

This also increase brand loyalty and may force pressure groups to make good impressions. As well as giving the company a better reputation and image.

Economical

Where Avon distributes their products, as well as which market they are aiming/ targeting their products at.

Increasing brand awareness giving Avon a competitive advantage over less successful brands such as Just For Men.

Political

Avon would not want to be seen in a militant camp, as well as being involved in other political issues such as child/ cheap labour.

Giving them low public relations, decreasing sales and giving out a bad image and reputation.

Technological

Research and development of new and innovative technology, to be able to produced a wide portfolio of products, which will benefit the company.

Introducing a wider range of products allowing existing products make way for new products in order to reach maturity.

o Article One.Taken From The U.S Market For Men

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Male grooming market in the UK over the review period has been driven by a range of factors, some demographic and some socio-cultural. While the population as a whole is ageing and the number of 15-24-year-olds, who constitute a key target group for grooming products, is contracting, consumer expenditure remains buoyant. Attitudes have changed in the 1990s, with consumers becoming more value-conscious. Younger men may be declining in number, but they appear to be far more interested in personal appearance and grooming than were previous generations of teenagers. Awareness has filtered down to the pre-teens, with boys as young as ten beginning to use fragranced bodysprays and hair gel, for example. While older men tend to be less adventurous, habits acquired in their younger days are likely to accompany them into mid-life, which bodes well for the future of the market.(http://www.marketresearch.com/product/display.asp?productid=939858&SID=11319663-406492276-412495131&kw=men%09hair%09care)

o Article Two.Men's hair care products market risesThe hair coloring category has experienced the fastest growth among male-specific hair care categories, according to a recent report from the Packaged Facts Inc. publishing division of MarketResearch.com.

The report--"The U.S. Market for Hair Care Products"--found that sales of men's hair color products rose from $93.6 million in 1999 to $107.8 million in 2003, for a compounded annual growth rate of 3.6%.

(http://findarticles.com/p/articles/mi_hb3007/is_200509/ai_n18817291)

From the two articles above we can see that there is increases in the number of men who are know becoming more conscious of their appearance. This will then mean that there is a higher demand for men hair care products, as well as the fact that it will product a very competitive market, as these products are being launched into the market for the first time.

o Table One

 Revenue

Revenue Per Share

Gross Profi

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t04/22/08 5.53B 14.36

2.97B

03/20/08 5.53B 14.36

2.97B

02/29/08 5.53B 14.36

2.97B

01/21/08 5.42B 13.76

2.97B

12/21/07 5.42B 13.76

2.66B

11/20/07 5.42B 13.76

2.66B

10/26/07 5.30B 13.17

2.66B

09/21/07 5.30B 13.17

2.66B

08/28/07 5.30B 13.17

2.66B

07/24/07 5.17B 12.68

2.66B

06/29/07 5.17B 12.68

2.66B

05/30/07 5.17B 12.68

2.66B

04/30/07 5.09B 12.28

2.66B

03/23/07 5.09B 12.28

2.66B

02/26/07 5.09B 12.28

2.66B

01/26/07 4.97B 11.54

2.66B

12/29/06 4.97B 11.54

2.66B

11/22/06 4.97B 11.53

2.52B

10/26/06 5.63B 12.41

2.52B

09/29/06 5.63B 12.41

2.52B

08/31/ 5.63B 12.41 2.52

From the data in the table above we can see that Avon profit is increasing over the years.

The table also shows that Avon’s revenue per share is increasing steadily over the years. This shows that Avon is achieving brand loyalty, giving them more publicity.

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06 B07/26/06 5.42B 11.41

2.52B

06/29/06 5.42B 11.41

2.52B

05/30/06 5.42B 11.41

2.52B

04/24/06 5.26B 10.75

2.52B

03/30/06 5.26B 10.75

2.52B

02/27/06 5.26B 10.75

2.52B

(http://www.goldmood.com/cosmos/hs/A.html)

Chart One

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(www.goldmood.com)

Article Three.

Just for Men are Avon’s biggest competitors when it comes to men’s hair care products. They provide product of the exact or similar specification. They trade competitive products, which create a demand for hair care products.

From the data in the chart above we can see that Avon has taken in the most closing price over the years.

The chart also shows that Avon’s share turnover has increased over the last 2-3 years. This shows us that Avon is achieving their aims and objectives, as they are gaining the business more profit.

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Secondary Research Conclusion

From the research that has been collected, I have found out a lot about the lifestyle of the target market. Men are now becoming more willing to buy hair care products on a regular basis. Therefore the product that Avon, launches need to focus on the idea that It promotes covers grey hair. In addition men, are now beginning to feel that using hair care products, makes them more confident around women.

Not only do men feel that they have a better lifestyle with coloured grey hair, but they feel looking younger is important for an advancement and promotion. Avon can fulfil the needs of customers and differentiate themselves from competitors who have not, by identifying customer’s needs in the secondary research.

It is now more than acceptable for men to take care of their physical appearance, and we can tell that there has been a growing market for male grooming; with around 2/3 men are having used hair care products on a regular basis. This means that the male cosmetics industry is growing at a steady rate.

Also men are now becoming more willing to buy cosmetic products. Avon has the chance now to achieve the marketing aim of its growth in their company and remain market leaders. This can be done by creating new and innovative products which will help the marketing objectives of increasing sales and profit, by selling new products to a new segment of the market.

The size of male hair care products market is steadily increasing. It is still not as large as the female market, but is on its way, making up to 74.1 million products in a year alone.

Also yearly, the amount of products brought in the UK, is also steadily increasing, and identifying market trends helps Avon to respond to the market in a direct way, and tell Avon more about the target market they plan to operate in.

The level of competition in the male hair care market is relatively low compared to the female hair care market, but it is steadily increasing. Also in the UK, the amount of males’ hair care products readily available is lower than of countries such as America and Canada. Therefore the market for UK hair care is relatively small.

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Conclusion

The data that I have collected on a whole has been useful to me in finding information about the trends, and other elements of the marketing mix. The data I have collected is relevant to my needs and therefore will later help me to make an informed decision about price, place, promotion and product. Combined with the primary research, it will help to minimise the risk of the product falling, as they product will be based on the research gathered, showing the importance research.

I tried to avoid biased research which only spoke about the positive/ negative effects. This is due to the fact that if there ate any problem I found out in my research Avon must try to combat this, instead of ignoring it. As a result I used articles and data which aren’t from any type of business, but from marketing research.

On the other hand, there were certain weaknesses and opportunities found in the research. Weaknesses include the fact that Avon has strong competitors who have been selling products for years. For this reason, they already have brand loyalty towards them, and consumers may no be willing to try new products.

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Assessment Evidence C:The Marketing Mix

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The marketing mix is made up of the 4 Ps: Product, Price, Promotion, and Place. They are known as the marketing mix as they provide a structure for a successful marketing campaign. Different aspects of the marketing mix need to be considered, in order for the marketing to be successful. In addition, the marketing mix will be constrained through budgeting available for the marketing activity.

Avon will meet the needs and wants of it new potential market of males from the age of 30+ in A, B and C1 of the social economical spectrum. These potential customers will generate sales so the product will become known as a premium product.

The primary and secondary research distinguishes the type of people that the Avon hair care products will be aimed at. The marketing mix will vary according to the size and objectives of Avon. Theses include:-

o Producing maximum capital for the companyo Satisfying the stakeholder, through dividendso Becoming a household name, by promotion and advertisingo Become more aware of the environment, to stops pressure groups

from giving the company negative publicity.

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Product

Product is one of the 4 P’s and is the most important aspect of the marketing mix. Products have both tangible and intangible benefits. Tangible benefits include benefits which can be measured such and intangible benefits are benefits that cannot be measured. It is important that the product is changed as necessary to bring it up to date and prevent it from being overtaken by competitors, as well as central to the marketing planning of a business.

The new Avon hair care product will be associated with the growing rate of men who are known becoming more aware of their physical appearance.

Currently, Avon does not offer a hair dye products for men, and by targeting the number of men who are getting more concerned about their physical appearance, it will make the product more successful in the market.

Designing a new product especially for men will help to attract a whole new customer base, which will help add value to the product through the promotion of it being a premium product.

I have researched into the different types of products that men are looking for; and I have designed a name and logo for this brand image primarily focusing on a simple product which will attract the new range of customers. My new product will be positioned as a premium product in the hair care market, targeting only men between the ages of 30+. Associating my new product with this market trend will help to add value to Avon’s business overall.

When conducting my market research, I have identified that through celebrity endorsement, it gave the company high prestige and status. This would mean that it would allow Avon to have control over price and inelastic, as there would be a higher demand for this product due to the fact that it has been advertised by celebrities.

A product can be differentiated from the competitor by creative advertising and promotion, even if the competing products are physically identical.Avon’s new product range targeted at males will increase brand awareness, and as well as being a competitive product in the market which competes with many of its biggest competitors e.g. Just for Men.

As you can see below, I have designed the brand image for one of the product of the new range of products: -

Logo

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Avon’s Hair Care Range for men shows that it is a premium product, due to the fact that it is a luxury item, of high quality compared against all its potential competitors. As I have identified through research Avon is seen at the top range of Cosmetics Products, and by offering a hair care product for men it will help to achieve one of their objectives of becoming a household brand name at the luxury end of the consumer spectrum. This approach of market mapping has identified the potential market segments of a luxury cosmetics item for the consumers, which Avon can expand into for the future.

Avon’s hair care range is classed as a luxury product, resulting in it being aimed at A B and C1 of the social economic groups as their products are usually aimed at medium income groups, and is unlikely to be bought by people who are unemployed. As Avon creates premium products, so it is likely that people are willing to pay more than the economy price to purchase the good. Avon operates in the lower end of the premium spectrum, and therefore most people will buy this product compared to products on the top end of the premium spectrum due to the high price comparison.

Swot Analysis

SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and threats are external factors.

Strengthso Avon’s Corporation is a very profitable organization, earning in excess

$8.1 billion worldwide as of 2005. o It is a global cosmetics and fashion brand built upon a reputation for

excellent products and services. It has markets in over 135 countries. o Avon has strong ethical values and an ethical mission statement as

follows, ‘to meet fully the obligations of corporate citizenship by contributing to the well-being of society and the environment in which it functions.’

Weaknesseso Avon has strong competitors who have been selling products for years.

For this reason, they already have brand loyalty towards them, and consumers may no be willing to try new products.

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Opportunitieso Avon is very good at taking advantage of opportunities. o New products and services that can be retailed on their website, such as

the new hair care products

Threatso Who knows if the market for cosmetics will grow and stay in favor with

customers, or whether advancements in technology will wipe out the cosmetics market

Product Life Cycle

The life of a product is the period over which it appeals to customers. The sales performance of any product rises from nothing when the product is introduced to the market, and reaches a peak and then declines to nothing again.

The life cycle is broken down into different stages. During the introduction stage, sales grow slowly as a product is new on the market and there is only limited amount of awareness of its existence. Sales then grow rapidly during the period of growth. During this stage, the competitors enter the market and promote their own products. This will reduce the rate of growth of sales, which is known as maturity and it is at this time that the market becomes saturated as there are too many firms competing for customers.

The diagram below shows the product life cycle

Development StageAvon has created a new product using research and development to create a men hair care product. It has gained a larger possible customer base, as it is growing into new segments of the market.

Nonetheless, the decline stage does have a high failure rate. This is because there may not be a high enough demand for the product, as the market may become saturated with competitors selling the same products at different prices.

Introduction Stage

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In the introduction stage Avon’s new product range will have moved up a stage.

This product has not been previously addressed by Avon, which will mean that the products are at an unstable stage as it is critical for the sales of the product to be high in order for them to succeed. As the main goal during the introduction stage is to establish a market and build up a primary demand for the product class. This can be done through promotion to increase product awareness.

Growth StageThe growth stage is a period of rapid revenue growth. Once the product has been established a success and there is a demand for it, sales will increase further as more retailers become interested in carrying it.

In this stage we can see that Avon hair care for women grows steadily over a certain time period so it can be assumed that the same products for men we also be successful. This is due to the fact that Avon has been able to succeed in creating popular products for its consumers.

This needs to be conducted through aggressive promotion in order to attract more customers.

Maturity StageThe maturity stage is the most profitable. Whilst sales continue to increase into this stage, they do so at slower pace. This is because the brand awareness is strong, as well as advertising expenses will be reduced.

Decline StageSales being to decline eventually, as the market become saturated, the product becomes technologically obsolete, or customer’s tastes change. It is likely that prices will decrease in order to maximise sales, until it reaches the bottom of the recession stage, and will have to be taken off the market.

Boston Matrix

Boston Matrix is the Product Life Cycle concept, which states that business opportunities move through 'life-cycle' phases of introduction, growth, maturity and decline. These phases are typically represented by an anti-clockwise movement around the Boston Matrix quadrants in the following order:

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The Boston Matrix compares the market growth with the market share. Avon’s new product lies between the high growth in the cosmetics industry and high share in the in raising the product to star.

I will be analysing each quadrant of the matrix.

DogProducts in this area are in a market with low growth and the individual product has a low market share, for instance, supermarkets own brand products.

Question MarkProducts in this area are in a market with high market growth, but they have failed to establish a significant market share. The product may be inferior to that of competitors or the businesses’ marketing may be inferior.

StarProducts in this area are in a market with high market growth and they have a high share of the market. These are usually highly successful products, such as Avon.

Cash CowProducts in this area are in a market with low market growth and they have a high market share. These tend to be mature products in mature markets that provide companies with solid profits year in and year out.

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Ansoff’s Matrix

Ansoff’s Matrix can also be used to indicate new product development, as well as indicating strategic direction.

The table below shows the matrix.

Old New

Old Market penetration(Low Risk)

Product Development

New Market Development Diversification(High Risk)

1. Market Penetration - this is where the company will market existing products to existing customers. This will mean increasing the revenue, for example by promoting the product and repositioning the brand. In the penetration stage Avon’s products are maintained through their existing products to their existing customers

2. Market Development - This is where the company markets their existing product range into new markets. This means that the product remains the same, but is marketed to a new audience, for example exporting the product or marketing it in new regions. Here Avon will market their existing products to a new market.

3. Product Development - This is where the company markets new products to existing customers. This is where they develop and innovate, new product offerings to replace existing ones. For example Avon can target their hair care product at men who already buy their hair care products.

4. Diversification - This is where the company markets completely new products to new customers. There are two types of diversification. Related diversification, which means that the company will remain in a market or industry which the company in know for, an unrelated diversification is where the company has not previous experience in.

The product that I will be marketing will be launched in related diversification as Avon is familiar with the hair care range, and will only be altering it for a different audience.

Market

Product

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Ansoff’s Matrix’s shows the least risky strategy is market penetration. Only the market is known to Avon so there is a risk as they move into a new area of the market.

Diversification is seen as the most risky strategy as Avon’s new product range and the market are new to the business. This will mean that Avon’s marketing aims of gaining market share, development of products as well as increasing brand loyalty through re-launching existing products to different markets.

Legal Constraints

Sales Good Act 1979This Act gives consumers protection against faulty or unreliable goods. At the time of sale, the product must fit its description, be fit for its purpose and be of satisfactory quality. If a product is faulty at the time of sale or shortly afterwards, the customer has a right to return the product and claim a refund.

Trade descriptions act 1968This Act makes it a criminal offence to apply a false trade description to goods. The Act covers descriptions given both verbally and in writing. It covers any factual statement about the physical qualities of the product, e.g. size, performance, place of manufacture and previous history. For Avon it is significantly important to ensure that it has a procedure in place, in a fast changing market, to ensure that new products are accurately described when they are put on sale.

The Weight and measures act 1986This act sets out to make sure that consumers get the weight or measure (e.g. for liquids) that they are offered.

If Avon fail to meet these acts there is a possibility that they may loose public creditability and may lose loyal customer, who feel they have been cheated. This could have reverse effects of achieving Avon’s market aims and objectives by loosing sales and profit.

Finally the branding of the company would also be damaged, as some may feel they do not trust Avon’s products.

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Quality

LOW HIGH

Economy Penetration

Skimming Premium

LOW

Pricing

HIGH

Reema Mehta

Price

The customer's perception of value is an important determinant of the price charged. Customers draw their own mental picture of what a product is worth, based on the price. A product is more than a physical item; it also has psychological connotations for the customer.

The danger of using low price as is that the customer may feel that quality is being compromised. It is important when deciding on price to be fully aware of the brand. A further consequence of price reduction is that competitors match prices resulting in no extra demand. This means the profit margin has been reduced without increasing sales.

There are many pricing policies available for businesses to choose from. The possible pricing strategies are listed below:

Price Skimming - Price skimming is a pricing strategy in which a marketer sets a relatively high price for a product or service at first, and then lowers the price over time. Nevertheless it is only effective when the business is facing an inelastic demand curve.

However, skimming encourages the entry of competitors. When other firms see the high margins available in the industry, they will quickly enter, as well as the fact that the manufacturer could develop negative publicity if they lower the price too fast and without significant product changes.

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Penetration Pricing - Penetration Pricing is a form of market-based cost. As Avon is a large company, it has the means of producing a product with the revenue they generate from other products in their portfolio. Therefore they can start off selling their products relatively low.

With penetration pricing, over time the product will slowly increase in cost as they demand for it will get bigger.

This will not affect the amount of sales that the business will have, as from my questionnaire I have noticed that people are will to pay a high price for the product.

As Avon is a popular brand there is a chance that people would be willing to pay for this product. I have therefore decided to choose the starting price of £4.99. This is slightly lower than the average price from my research being £6.29. I have chosen to sell the product for £4.99 rather than £5.00, as this is psychological pricing, so it makes it seem much cheaper than that of other products, even through it may be a couple of pence cheaper.

By making the price cheaper consumers will think they are getting more value for their money which will make them more likely to buy the product.

On the other hand, this pricing policy does have its weaknesses. The main disadvantage with penetration pricing is that it establishes long term price expectations for the product, and image pre-conceptions for the brand and company. This makes it difficult to eventually raise prices.

The advantages of penetration pricing to the business are: It can achieve high market penetration rates quickly. This can take the

competition by surprise, not giving them time to react. It can create e valuable word of mouth. It creates cost control and cost reduction pressures from the start,

leading to greater efficiency. It discourages the entry of competitors - Low prices act as a barrier to

entry It can create high stock turnover throughout the distribution channel.

Predator Pricing - Predatory pricing (also known as Destroyer pricing) is the practice of a firm selling a product at very low price with the intent of driving competitors out of the market, or create a barrier to entry into the market for potential new competitors. The other firms go out of business if they cannot sustain equal or lower prices without losing money. The predatory pricing then has fewer competitors or even a monopoly, allowing it to raise prices above what the market would otherwise bear.

Nonetheless in many countries, legal restrictions may preclude this pricing strategy, which may be deemed anti-competitive.

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Place

Place just refers to how you will sell your products to your customers. Depending on what it is you are selling will directly influence how you distribute it, and it affects mainly those businesses that are in production. There are two possible ways that Avon could conduct the sales proportion of the new product. These are direct sales methods and indirect sales methods.

Direct selling involves selling directly to your customer; retailing, door-to-door, mail order and ecommerce all directly sell to customers.  The advantage of deciding to directly sell would mean you are in direct contact will your customers and can easily detect the subtle changes which are occurring and adapt to the changes; i.e. demand for price changes or overall demand for your products.  You also have complete control over your product range, how it is sold and at what price.

However, direct sales can come at a price; you will need storage facilities or retail premises to sell your products directly.

If Avon were to use indirect sales methods, it would mean that Avon would be using an intermediary such as retailers to sell to the consumer. This process is Manufacturer - Retailer - Consumer.

Retails chains such as boots could use direct distribution to retailer. There are also mail order catalogues that could also use this method.

The advantages of using direct sales include It is a traditional method that Avon has used in the past with their

products. The product can reach a wider customer base It would cost Avon more money to have shares with profit

intermediaries.

It is highly likely that Avon would use the indirect sales method. This is due to the fact that Avon has used this in the past and it shows that this method works. In addition Avon is planning to sell to a mass audience, and it could mean that they would take in a larger amount of profit as they are more likely to sell their products online.

The product will be sold online. This is due to the fact that they can sell their products in large quantities which will benefit from economies of scale.

Avon’s hair care product should be sold near to their other products has it will help to fulfil one of their main objectives of brand awareness and brand loyalty. In addition the product will be easy to access and then the consumer will have no problem purchasing the item; therefore stratifying the customers’ needs and wants.

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Promotion

The promotions aspect of the marketing mix covers all types of marketing communications. The methods include advertising, sometimes known as 'above the line' activity. Advertising is conducted on TV, radio, online, poster sites and in the press (newspapers, magazines).Other promotional methods include:

Sales promotions Point of sale display Merchandising Direct mail Telemarketing and Demonstrations.

Looking back at the questionnaire, I can see that there are certain methods of advertising that are more effective than other. Avon is a well known brand, therefore the brand of the product will be stressed when promoting.

During promotion, Avon needs to focus on their main aims and objectives, as well as the fact that they use new innovative technology to create their products. This would be an advantage to them as the consumer would feel they are buying a product that no other one is like. Nevertheless the disadvantage with this is that some consumers may prefer natural products.

The cost associated with promotion or advertising goods and services often represents a sizeable proportion of the overall cost of producing an item. However, successful promotion increases sales so that advertising and other costs are spread over a larger output.

However, when it comes to celebrity endorsement they have to be careful when choosing the celebrity as an inappropriate choice many defer people from buying the product.

Good quality packaging could also be used to attract potential customers to buy the products. Nevertheless, the packaging must state all the benefit of the products. By doing this the product will automatically be targeting people who may not have seen the advert before.

In addition, by putting the product qualities onto the packaging, it will help people to identify a certain quality they are looking for in a product. Finally by using the Avon brand image it will give potential customers an incentive to buy the product, due to the corporate image.

A common method that Avon uses to promote their products is through the use of celebrity endorsement, it give the company high prestige and status. This would mean that it would allow Avon to have control over price and inelastic, as there would be a higher demand for this product due to the fact that it has been advertised by celebrities.

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Also another disadvantage of using this method is that it costs a large amount of money. However, Avon has the means to advertise and also has proven in the past to be an effective way of promoting a product.

Avon will not be using consumer sale promotions. This is due to the fact that I feel that due to Avon’s corporate image, it is possible that consumers will buy the product without the use of this method of promotion.

Advertising

As Avon’s prices are suitable and affordable, the company has a loyal customer base. This is a good opportunity to maximise profits by maximising the demand for each product.

In order for Avon to create a successful advertising campaign they need to follow the following three stages:

There are numerous ways to advertise Avon’s products. These included above and below the line promotion.

The main types are stated below:-o Vision - This is done through the use of TV’s, radios and the cinema.o Paper based advertising - This is done through the use of magazines

and newspaperso Leaflets and Catalogues - this is done through the use of main order and

door to door sales Branding

Branding is the method of identifying a product by a certain name or logo, which is unique to that product. Branding also helps to create a unique image that fixes the product in the consumers mind as well as making it different in the minds of the competitors.

The Advantage of branding is that it will establish the brand name which will save on future advertising cost as it will gain brand awareness. To consumers the brand name shows its quality and as Avon has already established a good brand image and reputation, consumers will automatically think of excellent quality.

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This will also gain brand loyalty which will attract potential customers.

There are four types of brands. These are:- Individual Brand Family Brand Multi Brand Strategy Housing branding

Avon uses a multi-brand strategy. This involves the use of more than one band in the same market segment to increase the chance of the companies’ product being successful.

Publicity/ Public Relations Publicity is gained by a product being quoted in the media. Publicity is never under the control of the marketing team, but depends on their decisions. It is therefore necessary to find research in order to meet the customers’ requirements and make use of advertising effectively.

Public relations are similar to publicity but are an extensive to publicity. PR aims are used to safeguard and promote their image of the entire organisation as well as the individual product. It consists of the press release about the organisation such as new product concepts, technological and political factors.

MerchandisingMerchandising is displaying a product at the point of sales in an attractive manner in order to encourage customers to buy. Merchandising is an integral part of product presentation, which combines the skills of packaging and display which are make to make the consumer visit the outlet and buy the products.

Merchandising depends on the psychology of advertising in its research into what motivates the consumer. It can be anything from emotive messages, package design and publicity.

Sales PolicySales policy is a further aspect of promotion as it brings the attention of the customers and persuades them to buy the product.

A sales campaign is a range of selling activities taking place within a specific time period to achieve a specific level of sales.

In the selling process, numerous skills are required. These are: Research and development for making contact with potential

customers Establishing the customers needs through market research Presenting the product to the customer by explaining its features and

highlighting its benefits

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Other Factors Influencing the Marketing MixEconomic Factors

The marketing mix will be affected in many different ways. Avon’s new product range will affect the economic cycle that moves from a boom to a recession in a continuous cycle. Avon has a history of success in profit and sales, which creates a demand for its products, which show that its new product for men will also create an international demand.

Avon will stay in the boom economy as it will continue to make profit and create sales through its new products.

Secondly, promotion would increase due to the fact that more people will have to spend money, and therefore Avon must make the most of that and try to get as many potential customers to buy the product.

Place would not change as must, due to the fact that Avon sells its products on the mass market, so it is unlikely that this will change to any other markets e.g. Niche Markets.

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Finally the product would not change to the fact that many people are buying the product. If they are gaining enough revenue Avon could develop the product later on in the maturity stage of the product life cycle.

If the economy is in recession it will be the opposite, where there will be low sales, increase in demand and low employment. This is a negative fact or as it will result in low revenue, making it harder for Avon’s new product to break even.

Therefore I have decided that Avon should consider launching their new product where their will be a suitable demand at the start, as well as where the demand can be maximised to maximise profits.

Political Factors

If the level of demand of Avon’s product and they way in which their business operate may affect Avon. A high rate of income tax will reduce the level of consumer demand affecting the profit and sales of Avon’s new product range, the value added tax will affect the price to the final consumer, as it will increase the selling, which will in turn effect the revenue generated by the company.

A guaranteed minimum wage will also give employees, more buying power, but in turn may result in a decrease of employment levels due to the costs to the employers.

The rate of interest will affect the levels of consumer demand as well as business investment for Avon’s new product range.

Technological Factors

The advancement of the internet would be a factor that could potentially change the marketing mix.

If Avon was to sell their products on the internet, it would change the place aspect of the marketing mix. It is not only that they were able to sell products over the internet, then the price would also be lower as they would be able to cut out the intermediary sellers and therefore profit would not have to be shared.

Promotion would also change as the Avon website would be able to help promote the product for a relatively small price. In addition by advertising on popular search engines it would help reach millions of people who visit that site.

Environmental Changes

This includes packaging and materials used in Avon’s products. This factor can be overlooked by using recycled materials, which will shift pressure groups focus off Avon.

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Also the implications of this change on the marketing mix are relatively small, so money will not be lost.

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Assessment Evidence D:Justification of the marketing mix

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Assessment objective D Justification of the Marketing Mix

The product that I have research and developed with regards to the marketing mix was a hair care products, aimed at a new target of men, product under the company of Avon.

I felt that I have been able to improve whilst developing the product through careful analysis of the marketing mix, whilst conducting market research.

Using Avon’s previous marketing aims and objective, as well as their corporate ones, as a base for their success for the marketing of that product, I have come to many decisions based on the likelihood of fulfilling these aims and objectives.

I feel that after exploring all the aspects of the marketing mix, I can see that the product is likely to be successful, as I have identified that there is a growing market for the product. Therefore the product is likely to be successful, if all the areas of the marketing mix are considered.

I have also identified a unique selling point for the product. This will be the fact that Avon will be selling a premium product at a reasonable price compared to its competitors. This unique selling point will be likely to help the product to be successful as it most effective product on the market for men. Finally it will also help to increase the product life cycle as this quality will be likely that more people will buy the product and it will stimulate the demand for the product.

Pricing is another major factor in the marketing mix, which is likely to make the product successful. The price in the marketing mix is used to obtain competitive advantage through aggressive marketing for market share from the marketing objectives of maximising the level of sales.

Using pricing strategies, with special offers such as ‘buy one get one half price’ will attract a wider target market to buy Avon’s hair care products to make an immense amount of sales and return across the world.

The place of which I will be selling my hair care product will be internationally .All the places will help to make an immense amount of sales with a huge amount of profit. I will be selling my product online. I have mainly targeted all aspects of the internet to distribute my new product range and cannot improve any further with new places to market hair care range. I think selling my products worldwide will make enough profit to cover the costs of the production.

Avon’s main objective is to maximising the amount profit through the level of sales, growing into other segments of the industry. The marketing objectives will be fulfilled by Avon will help them to become a secure household name for its products in a highly completive lucrative market.

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