Avon Final Presentation
Transcript: Beauty Related Products = 73% of Revenue 1,154,059,200 SWOT Assessment Cut costs through creating new efficiency by eliminating duplicated work, streamline processes, improve cash flows and working capital. Price Target Market, Puts more effort into protecting kids Brand does not provide enough differentiation between other repellents to specifically seek out Skin So Soft Bug Guard Avon Discussion: Plus Skin Based on the information presented; what should we do? With Children 3.59 Average Household consumption per year 86.16 units per year 39,177,996 single units and 77,538,296 household units. Cap of 70% for urban households unlikely to buy product. Short Term Objectives: 12 1 Segments Considered (cont.) Natural Mothers will buy since product will, Fulfill the need to protect her family Provide 36 hours of water proof protection Protect from insects and bug bites Prove to be convenient Assuming: 6 Ounce Spray with 24 Servings 6 15 Product Overview Fridays, 2:25 "That is a deal breaker" The Few Positives Market Share Assessment Unit Justification for Product Pricing Features, Works for 36 hours Healthy for the skin (aloe) Water resistant Deet free Market Demand & Potential $1.00 per patch Lack of retail presence High saturation of market Lack of distinction between competition Low probability of obtaining a 5% market share Shrinking market by 19% by 2015 Justification For Pricing, Differentiation, Aloe property Brand recognition and loyalty Due to representative selling at a 35% commission there is a need for a higher price than The Bug Patch All 3 4 Guard 18 14 Average Number of Units Purchased Per Year Per Consuming Unit Decision Criteria No Go 16 Segments Considered Skin So Soft Bug Patch Skin nurturing attribute Capability to leverage strong Avon reputation 9 This represents 35.8% of the total retail pest control product market. The market is expected to shrink 19% through 2015. 8 To Be Successful, Product would have to be sold through a retailer Product Pricing Bug Average Score: 18.5/35 = 52.8 10 Per Adding Retail Channels, Beneficial for this product Overall too costly for the company Total Number of Consuming Units Jordan Teschendorf Luke Will Katherine Hale Stephen Amend 11 Target = 66.43% of Entire Market 17 Mothers, Avon is a woman focused company Product distribution methods Bug repellent is purchased by those with children 77,538,296 households with children 19 21 So Retail Distribution Competitive Assessment Our pricing is set to, $1 per unit which is a 20% mark-up from The Bug Patch and cheaper than the OFF! Clip-on. This is an assuming 50% mark-up on a a cost of $0.50 per unit. Additionally there is a commission of $0.35 per unit When product is sold through commission the total cost is $1.01 per unit. Our calculations show that this product could be absorbed into the market. Our market has the potential to purchase roughly 80 units per household. Achieving 0.063 units per household with the introduction of this product will be very difficult. A lack of big-box retail presence, strong substitutes, a lack of strong differentiation and a saturated market are large challenges which this product will need to face in its launch Without Children: 2.87 Average Household consumption per year 68.88 units per year Total Market Demand in Retail Sales Dollars 13 Market Demand = 160 Million Avon Products Inc. Average Avon's current channels include ONLINE and SALE REPRESENTATIVES 5 Skin-So-Soft is a beloved brand with a dedicated following. Introduced 50 years ago, it comes in a variety of body lotions, washes, scrubs and shower gels. Team Members Retail Sales Requirement: $7,372,800 Number of Units to be Sold: 7,372800 Avg. Number of Units Purchased Per Capita for the Target Segment: 0.063 Households: 0.021 units per household Households with Children: 0.042 units per household A V O N 2 Patch Deal Breakers Preferred Segment Chosen 7 Soft 20 86.16(0.661) + 68.88(0.336) = 80.10 22 11/30/12