Avon Sunscreen Lotion

April 24, 2018 | Author: farazalam08 | Category: Cosmetics, Retail, Strategic Management, Marketing Strategy, Economic Growth
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Homework Title / No. : FARAZ ALAM

Course Code : MGT-514

Course Instructor : MR. MANISH RAJPUT

Course Tutor (if applicable) : __ 

Date of Allotment : OCTOBER

Date of submission : 12-12-2009

Student’s Roll No._____ B35______

Section No. : RS 1901


I declare that this assignment is my individual work. I have not copied from any other  student’s work or from any other source except where due acknowledgment is made explicitly in the text, nor has any part been written for me by another person. Student’s Signature : FARAZ ALAM

Evaluator’s comments:  _________________________  ________________________________________ ____________________________ ___________________________  ______________   __  Marks obtained : ___________ out of ______________________  Content of Homework should start from this page only

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Submitted in the partial fulfillment of the Degree of masters of business administration





Regd. No : 10906032 Roll No : RS1901 B35

SUBMITTED TO Department of Management Management Lovely Professional Professional University Phagwra .


I take this opportunity to present my votes of thanks to all those guidepost who really acted as lightening pillars to enlighten our way throughout this project that has led to successful and satisfactory completion of this thi s study. We are really grateful to our COD Mr.Devdhar shetty for providing us with an opportunity to undertake this project in this university and providing us with all the facilities. We are highly thankful to Mr. Manish Rajput for his active support, valua valuable ble time time and advic advice, e, wholewhole-hea hearte rted d guidan guidance, ce, since sincere re cooper cooperatio ation n and pains-taking involvement during the study and in completing the assignment of  preparing the said project within the time stipulated. Lastly, We are thankful to all those, particularly the various friends , who have been instrumental in creating proper, healthy and conductive environment and including new and fresh innovative ideas for us during the project, their help, it would have been extremely difficult for us to prepare the project in a time bound framework.

Name : FARAZ ALAM Regd.No : 10906032 Roll no : RS1901 B35


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Executive Summary Company Description Business Mission Marketing Objective Situation Analysis Industry Analysis •



Customer Profile


SWOT Analysis

Marketing Strategy •

Target Market Strategy

Marketing Mix

Implementation, Evaluation and Control •

Marketing Research


End Notes


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EXECUTIVE SUMMARY The project is to find appropriate customer base to launch and establish new skin care product (Sunscreen Lotion). So the various steps involved are to be covered in the report. The various aspects to be covered incl includ ude e a stra strate tegy gy buil buildi ding ng for for mark market et rese resear arch ch,, to find find appr approp opri riat ate e customer base and location from where we will be able to capture maximum area and seek our requirements: man power, raw material, land, equipment, future diversification needs, etc, and also steps like pricing, product design, supply chain selection etc. I am developing a marketing plan for the introduction of a new skin care (Sunscreen Lotion) product for women in the Indian market. It will be targeting the age group between 18-25 years, in a medium-high level price bracket. 1. So, I am providing information on successful marketing strategies which are used by me to launch the product in the market. 2. I am also also prov proviiding ding deta detailils s abou aboutt indu indust stry ry grow growth th tren trends ds,, key key competitors, segmentation strategies, distribution strategies/channels. Page | 6

Company Description Avon is a US cosmetics, perfume and toy seller with markets in over 

140 countries across the world and sales of $9.9 billion worldwide as of  2007. ‘Avon Products’ is a multi-level marketing company. Traditionally a direct marketing company, Avon’s fastest growing markets today are in China and Russia. The company’s chairman and CEO is Andrea Jung, who was promoted to the position in 1999. Avon uses both door-to-door  sales people ("Avon ladies," primarily and a growing number of men) and catalogs to advertise its products. In some markets (most notably China, which had banned all door-to-door selling before mid-December  2006) Avon products are sold primarily in retail stores. Avon’s product lines lines inclu include de lipsti lipsticks, cks, founda foundatio tions, ns, bath bath and skin skin lotion lotions, s, anti-a anti-agin ging g crea cream, m, perf perfum umes es,, as well well as jewe jewellller ery y and and clot clothi hing ng.. Alth Althou ough gh the the company has always been more directed toward female customers, Avon’s line of male products continues to expand, and its children’s products (such as shampoos and toys) have also proved successful. Two brand diversifications, "MARK." (targeted to younger, college-aged wome women) n) and and "M" "M" (an (an Avon Avon cata catalo logu gue e for for men) men),, have have help helped ed the the company reach out into markets it has not serviced. Mark proved to be successful in reaching a new generation of recruits, primarily young women ages 18-25, with a monthly "magalog" featuring award-winning products. In 2007, Reese Witherspoon signed a multiyear agreement to serv serve e as Avon Avon’s ’s glob global al amba ambass ssad ador or.. The The actr actres ess s was was invo involv lved ed in product development, appeared in advertisements, and served as the honorary chairman of the Avon Foundation. Sales leadership was established by Avon in the United Kingdom in 2004 2004.. It is a netw networ ork k mark market etin ing g sche scheme me that that pays pays sale sales s lead leader ers s a percentage of their down lines team sales. Sales leadership is open to any new and existing Avon representatives. In addition to its corporate corporate pursuits, pursuits, the Avon Corporation Corporation is involved involved in philanthr philanthropic opic causes. The Avon Foundation Foundation is an accredited 501(c) (3) public charity founded in 1955 to improve the lives of women and their  families. The Avon Foundation is currently focused on two key causes: Page | 7

breast cancer and domestic violence. Through 2007, Avon raised and awarded $580 million worldwide. History

The The comp compan any y was was foun founde ded d in 1886 1886 by then then 28-y 28-yea earr-ol old d Davi David d H. McConnell who sold books door-to-door and gave out perfume to entice women men to buy his his book books. s. His perf perfum ume e beca became me so popul opular ar that that eventually that is all the women wanted. He then founded the California Perfume Company (CPC) in New York, New York in a 500-square-foot manu manufa fact ctur urin ing g and and ship shippi ping ng offi office ce at 126 Cham Chambe bers rs Stre Street et.. As the the company grew, he hired his first representative, Mrs. P.F.E. Albee. In 1897, McConnell built a small (3000 square foot) laboratory in Suffern, New New York York.. In 1906 1906,, the the West West Coas Coastt offi office ce in San San Fran Franci cisc sco o was was destroyed in the Great Earthquake. In 1914 the first non-US office was opened in the Canadian province of Quebec. The California Perfume Company was incorporated on January 28, 1916 by David H. McConnell and Alexander D. Henderson (businessman) in Suffern, New York. By 1918, five million units were sold in North America, and by 1928, sales reached $2 million. In October 1939, the name was changed to Avon Products, Inc. The company was taken public in 1946. By 1954, sales reached $55 million, and the "Avon Calling" advertising campaign introduced. By 1971 the lab would grow into the Avon Suffern Research and Development facility. By 1979, sales reached $3 billion, with one million direct sales agents. Today sales exceed $8 billion worldwide. In 2005 they opened a $100 million dollar 225,000-square-foot (20,900 m2) R&D facility to house its over 300 research and development scientists on the original site in Suffern, NY. Avon also has offices in Luzerne, Pennsylvania and Davenport, Iowa.

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In order to achieve our Vision, Avon, commits to the following: Avon mission is to provide glamour, excitement, and innovation to consumers throug through h high-q high-qual uality ity produc products ts at afford affordabl able e prices prices.. The compan company y is moving into an era of "transforming the beauty industry". Avon aims to emerge as the dominant cosmetics and personal care firm through the twenty-fi twenty-first rst century. Avon continues continues to focus on developing developing products to reach existing customers and to attract new customer groups in both domes omesti tic c and int interna ernattiona ionall mark arkets. ets. Avon Avon also also stri strive ves s to treat eat employee’s equal, fair, honest and with integrity.


1. To valorize valorize the brand brand to occupy occupy a premium premium position position in the the market

By taking big price leaps of their existing range: Avg MRP up from Rs. 250 to Rs. 400 post 2007 By launching more and more high value, latest international products. E.g. colour stay soft & smooth (Rs 575); mineral foundation (Rs 900), limited editions (Rs 600-1000) as well as skin care products

2. Focus on strengtheni strengthening ng Modern Modern retail retail operati operations ons 3. New internati international onal imagery imagery in in modern modern retail retail

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Factor which always affect every product whether that is old or new:There are two kind of environment in the market which affects the new as well as old product. That is:

Macro Environment

Micro Environment

Macro Environment: - which is not controllable. 

Demography Environment

Economic Environment

Culture Environment

Natural Environment

Political Environment

Technological Environment

Micro Environment: - which is controllable

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When we launch something in the market. We have to make some strat strategi egies es for that partic particula ularr product. product. First, First, we have to look for the substitutes of that product. Because in this huge market every single product has a number of competitors. We should look proper  environment for that product. Like now a days many companies are competing in the field of skin care because now a day’s people are more concern about their skin or beauty. Secondly, Secondly, we have to develop our product, and then we have to launch launch that product in the market. We have to fix a perfect price for that product. Thirdly, advertisements are necess essary now-a-days. advertisement people cannot be made aware of that product.


Fourthly, we also have to take into account about the supply of that product. Controlling and evaluating are the last steps in the product development.

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According to growth rate, the market provides wide opportunities to local and and glob global al play player ers. s. Even Even with with two two time times s grow growth th rate rate,, the mark market et penetr penetrati ation on of beauti beautific ficati ation on produc products ts and toilet toiletrie ries s produc products ts in our  coun countr try y is low. low. This This low low mark market et pene penetr trat atio ion n for for beau beauti tifi fica cati tion on and and personal care commodities in India gives an opportunity for aditional important growth down the road in India of 1.2 billion populations .



L’oreal Revlon Mary Kay Inc Estee Lauder companies



   

Strong Retail presence Attractive counters Multiple product category High quality


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  


Need to fill the gap of well informed new product launches. Small market High prices

First mover advantage as it has presence in fragrance and experience in the price range category Has Has a lage lagerr port portfo folilio o in orde orderr givi giving ng high high dist distri ribu buti tion on capacity.


 

Low media spends may make the brand weak over period of  time resulting to death. Other players Huge no. of substitutes



Target market of Avon for its sunscreen lotion will be the upper class and the womens of metropolitan cities mainly.


Marketing mix of any company involves 4P’s of the company. These are as given below: Page | 13

   

Product Price Place Promotion

For the sun screen Avon, these are as discussed below:


This is the very first p of the marketing. For knowing about this, we will be studying product description, segmentation for Avon’s new sunscreen and what will be the positioning and product differentiation.

Product Description:

There will be 4 main products in the clinic: •

Avon Gold Avon Premium Avon Platinum Avon Pearl

Product Segmentation:

These all products will be segmented on the basis of the following factors:

1. Demo Demogr grap aphi hics cs:: Page | 14

• •


on the basis of age - 18 to 40 years on the basis of sex – women only on the basis of income – higher income group

Geographic: On the basis of social class – upper class On the basis of region – metropolitans and big cities • •

3. Psyc Psycho hogr graph aphic ics: s: Lifestyle Personality • •

Product Differentiation:

Products under sunscreen will be different from the competitors under  following ways: • • • •

High quality products Give softness to skin Reduce dryness Keep the skin shining


The products will be positioned as follow: • • •

Only for elite and upper class High quality products Good for skin

Branding strategy:

The branding strategy for products will be umbrella branding such as: • •

Avon Gold Avon Premium

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• •

Avon Platinum Avon Pearl


This is the second marketing mix and place for the Avon sunscreen is as follows:

Metros: Delhi , Mumbai , Chennai , Bangalore and Kolkata.

Other cities: Pune , Meerut , Chandigarh, , Kanpur, Moradabad , Surat ,

Ahemdabad etc.

Distribution channel:

A three tier distribution channel will be followed for the products distribution: • • • •

Manufacturer  Distributor  Stockist Retailor and salon


• •

Market skimming will be there for all the products under sun screen High quality- high price High price to target niche market

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There are three categories of channels of distribution •

Prestige - Department stores, specialty stores and chain

department stores, such as Macy's, Neiman-Marcus and J.C. Penney (internationally) and Shoppers’ Stop, VAMA, Westside, and Bombay Stores etc (nationally). •

Broad - Drug stores, food stores, cosmetic discounters,

warehouse clubs, and mass merchandisers. Such as Eckerd, Pathmark, Cosmetic Center, Sam's Price Club and Wal-Mart (internationally) and Satyam, Haiko, Sahkari Bhandar, Beauty Center etc. (nationally) •

Alternative - is identified by five different marketing methods: o Direct Sales o Direct Mail/TV/Print  o Salons


Sourcing: Imported and Local manufacturing. (AC Neilsen)

Promotion: Promotional pricing: Marketing pricing: We will merge with famous existing shops, so that

customer can buy directly from the dealer and hence the element of  middleman is not there. Here the retailer in this category buys watches for lesser than MRP and hence they are able to get the profit margin on sales. Price discount and allowances: We will give price discount sale on the

MRP MRP of the the sun sun scre screen en at init initia ialllly. y. The The allo allowa wanc nce e vari varies es from from one one segment to another. Page | 17

Our ads ads will will be clea clean, n, well well made made,, touc touch h on Type Type of adverti advertisin sing: g: Our emotional chord. As our company will use superstar Katrina Kaif. As here we can say that the Katrina Kaif would be more effective for the promotional purpose. It can be Katrina Kaif, as now she is one of the popular actresses in Bollywood. A.

Promotion Promotion on occasion: occasion: Our Company will also promote the

product on the famous occasion & festival depends upon time, place and culture.

POSITIONING STATEMENT AVON approached AVON SUNSCR SUNSCREAM EAM LOTION LOTION in 2009. approached with AVON 009. It promoted as “SHEILD SHEILD AGAINS AGAINST T SUN ” . This positioning statement

demonstrated young girls who anticipated the image of trying to be unusual and "cool".


Area: Metropolitan cities and town Company has targeted metropolitan cities and town because of  population, consumer knowledge about the product is considerable and towns are upcoming business places.


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Occasions: Going out regularly (schools, college and parties) User status: Regular usage Attitude towards the product: necessary part of everyday accessories. Benefits: develops beauty, exceptional colors, good quality ingredients, atmosphere friendly packaging.

Demographics •

Age: 18-40 They targeted age 18 TO 40 and product launched to cover  teenagers.

Education: Students or graduates. Students and graduates have more knowledge about the product.

Sex: female. Product was launched only for female.

Occupation: students and working women Company has targeted students and working women, because basically Redwood was to cover students and working women.

Life cycle: young, single and married. When it comes to Life Cycle Stage Company targeted to young, single single and married, married, because they have more influence influence to buy the products.

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Social class: Middle and lower class people People have enough money to afford the product.

PEST ANAL AN ALYSIS YSIS P for political factors E for economic factors S for socioculture factors T for Technological factors

Pest analysis is to summaries the legal and external environment for the business. It should be done in consideration of influence and responses to the business. These are the pest analysis of Redwood nail enamel.


Indi Indian an cosm cosmet etic ic indus industr trie ies s is leas leastt affe affect cted ed when when comp compar are e to othe other  r  developed economy and Indian cosmetic industry developed by 7.5%, which attributed to our policy frame work with respect to capital and liquidity. liquidity. Avon sunscreen lotion have built strong links with trade based on mutuality in support of Indian government. Page | 20


Indian economy registered a growth of more than 9 % for last three year years s and and it main mainta tain ined ed robus obustt grow growth th rate rate as comp compar are e to othe other  r  coun countr trie ies s whic which h are are deve develo lope ped d and and deve develo lopi ping ng,, so Indi Indian an cosm cosmet etic ic industry is directly related growth of economy, which is highly support cosmetic industry.


Avon have loyalty factor as compared to counter part in other  countries. They are strong in organizing social and promotion events events and other other fashion fashion events, events, which which build build huge reputat reputation ion among the people .


Tech Techno nolo logy gy adva advanc ncem emen entt chan change ges s the the face face of trad tradit itio iona nall Indi Indian an cosm cosmet etic ic mark market et.. It is givi giving ng fast faster er and and secu secure red d serv servic ice, e, stro strong ng cons consum umer er unde unders rsta tand ndin ing g and and techn echnol olog ogy y of comp compan any y has has been been delivered world class product. Company also introducing new innovating techno technolog logy y due to advanc advanceme ement nt in techno technolog logy, y, Hence Hence techno technolog logies ies continue to evolve and it will meet consumer expectations and habitats.


Since, industry grows at 12.5% per annum, and there is considerable income growth of middle class people is an opportunity to develop the business. Hence beautification is fast growing segment in the market, more number of women becoming awake of looking better through the Page | 21

use use of bea beautif utific icat atio ion n produ roduct cts. s. This This low marke arkett pene penettrat ration ion for  beautification and personal care commodities in India offers a chance for  more considerable increase, in this country of 1.2 billion people. Company targeted only younger age people to sell their products, and targeted only middle class and lower class people. Tupperware can introduce new products to cover upper end of the market. Company already built a brand image among middle class. So it will help them to capture the upper class market very soon. Since the customers are able to pay for better products which makes them happy and looks better. So Avon Avon suns sunscr crea eam m loti lotion on can can conc concen entr trat ate e to init initia iate te prod produc uctt line lines s on prem premiu ium m rang range. e. Avon Avon comp compet etit itor or Revl Revlon on laun launch ched ed stre street et wear wear to compete with Avonsuns cream lotion, so company can consider to more depth in product range and to influence new innovation technology. Now company targeting only 18 to 40 age people and they can spread their segmentation level from age 10 to 24. They can advertise to cover  school students. Company should be very sensitivity about price of the product; they should not increase the price of the product because low price is the major strength for Avon sunscreen lotion. Avon sunscreen lotion have good distribution channel in metro politic cities and towns, beautification products has less penetration in rural area so Tupperware can improve their distribution channel in rural market. Company can offer combo set of products to the consumers and if they give nail enamel remover along with the product it will help them to increase the sales. Company has to advertise to create more awareness about the product.

Bibliography Marketing Management – Philip Kotler  Marketing Plan Provided by Manish Rajput Sir  www.avon.com

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