Avon

Known  to many  as the  ding-dong company for its door-to-door sales approach, Avon began  as the California Perfume Company in 1886. Its founder, David  Hall McConnell, originally  a bookseller, started giving  out  perfume samples to  his book  costumers and  found that  they  thought the  samples were  more  attractive than the  literature. Avon’s products center on  fragrances, cosmetics, and  toiletries; they also sell some  specialty  items  such  as jewelry, clothing, and  toys. Today, the  Avon  company markets its products in over 100  countries, with  5.5 million sales  representatives and  42,000 corporate employees. No  longer  tied  to  marketing  door-to-door, Avon has  updated its company workforce, its management workforce, its corporate vision, and  its selling  models to effectively deal with the early 21st century.

History

For  most  of its  123-year history, the  company known as Avon  was  staffed  by women and  run  nearly  entirely  by men.  Founder McConnell marketed his  first five fragrances in  1886:  lily of the  valley, violet,  heliotrope, white  rose,  and  hyacinth. They  were  so  successful that  McConnell abandoned books in  1892  to concentrate on fragrances. Credited with much of the  early successful history of selling the California Perfume Company products was Mrs. P.F.E. Albee, who was not  only Avon’s first official salesperson, but  also began  the practice of recruiting other women to sell the  product. The  company honors her  memory today  with the  Albee  statuette for its top  sales  representatives. Shortly  after  perfumes took off, shampoo cream, witch hazel cream, almond cream balm, and small household items including toiletries were added  to the product lineup. By 1906, the first cosmetics  were added  with a rouge  in liquid  and powder form.

By 1920, the company had reached the $1 million  sales mark; during the Great Depression, the  company received  the  Good  Housekeeping Seal  of Approval, switched to a three-week sales cycle (rather than four  weeks),  and  created sales territories for its representatives to maximize  sales. In October 1939,  the California  Perfume Company ceased  to  exist and  was renamed Avon,  in honor of the founder’s liking  for Stratford-Upon-Avon, which  was already  one  of the  brand names of the company. As a public  corporation in 1946, Avon then expanded into international markets beyond Canada (which  it entered in  1914).  By 1972,  the door-to-door sales juggernaut began  to expand into  non-related endeavors, such as buying  Tiffany’s  in 1979.  This  also  initiated the  company’s financial  decline through the  1980s  until  1990.  The  company went  through hostile  takeover attempts by its chief rivals, Amway and Mary Kay.

At the  same  time  that  the  company was experiencing its most  traumatic economic decline, it was also trying to deal with a non-modern  workforce, as well as seemingly antiquated product lines and customer marketing. Well past the 1954to-1967 Ding  Dong advertising campaign, the  public  identified Avon  as solely a door-to-door selling company, and  during the  social changes of the  1970s  and 1980s, it fell behind the times. During the late 1980s and through the 1990s, Avon modernized its product lines, market distribution, and diversity of workforce, and finally broke  the gender barrier  in its management team. The  company of women working for  men  came  to  an  end  and  Avon  consciously redirected its mission toward the “World’s  Premier Company for Women.” The  company’s first female CEO  and president was Andrea  Jung, appointed in 1999.

Current Status

Today, Avon  is one  of the  international companies most  heavily  dependent on technology for sales, distribution, and  manufacturing. Because  its U.S.  catalog (new products) turns over every two weeks and the international catalogs  change every three  to four  weeks,  the  company’s research, production, and  distribution sectors are some of the most complex and active in the sales world. Approximately 70–75  percent of sales business is currently international, while the  U.S. market is handled by 650,000 sales representatives. The  company’s sales model  has been redefined, paralleling the  old  direct-sales with  a new  sales  leadership structure that  will, the  company hopes, be able to improve Avon’s dismal  retention rate in representatives by offering  women a career  choice  rather than a strictly  part-time supplemental income. Because  of the  negative  reputation of pyramid structures, Avon’s Sales Leadership program started small  in 1990,  and  is slowly being  expanded into  full integration into  the  U.S.  market and,  more  slowly, into  appropriate  international markets. This  is a three-tiered system  where  representatives recruit others to work  under them, while  they  work  under an upward management  layer. In  contrast to  some  of Avon’s  competitors, Avon  representatives in the  Sales  Leadership program must continue direct  selling  themselves, not  just living off their  downline commissions. Another difference between Avon’s selling methods and  those  of its competitors is that  sales representatives do not  have to purchase the  products in advance  of customers. Avon extends what  amounts to credit  to its representatives and waits for reimbursement from the customer once the product has been  delivered.

The  foundation of Avon’s  business today  remains the  top  three:  cosmetics, fragrances, and  toiletries. Avon’s  initial  reputation was made  and  is maintained through its  fragrance lines,  and  the  company strength is still  scents, although recent expansions have  changed the  look  of the  company. Today  its key brands are Anew skin care, Avon Color, Skin-So-Soft, Advance Techniques hair care, and Avon Wellness. Most  long-term successes have been  found among the skin-care products. Skin-So-Soft was launched in 1962 as a bath  oil, but has found its most loyal following  over the last 40 years as a bug repellant. In 2004, Avon recognized that the company was not fully accessing a fast-growing market, and launched M: The Men’s Catalog. Avon  is also  attempting to  more  fully recruit and  market to black  and  Hispanic women, as well as younger women, and  especially  to recruit college-age sales representatives to ensure the future of the sales force.

Avon  was  an  early  (1980s)  innovator in  adding  UVA/UVB  protection to  its moisturizers (often without labeling  it), came out with the retinol product BioAdvance in 1985  after learning how to stabilize  a pure  form  of vitamin A, patented its process for stabilizing vitamin  C, and launched anti-aging products in 1987. In 1992, Avon became the first mass producer of Alpha Hydroxy  products. While the company’s main research facility remains in Suffern, New York, it also has one in Europe, two in Asia, two in Latin America,  and one in Japan.

Philanthropic Endeavors

Like many  other beauty  companies, Avon contributes significant monies toward breast  cancer research and  treatment foundations. The  Avon Foundation (1955) is its main  avenue through which  to  fund  not  only  breast  cancer issues  (since 1995),  but  also  more  recently, an  anti–domestic violence  campaign. Because  of the breadth of Avon’s sales force and  market areas, these  campaigns are global in nature. In addition to health philanthropy, the  Edna  McConnell Clark  Foundation  funds educational and  developmental programs for young  people  from low-income backgrounds. At the same time, controversy has surrounded the company. For example,  during the  Campaign for Safe Cosmetics in California in 2005,  the company lobbied against  efforts to implement a regulatory framework for the use of chemicals in beauty  products that  would  require companies to report all toxic ingredients used  in their  products.