analysis of marketing mix on cosmetics products case study
analysis of marketing mix on cosmetics products case study
analysis of marketing mix on cosmetics products case study
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Annals <str<strong>on</strong>g>of</str<strong>on</strong>g> the University <str<strong>on</strong>g>of</str<strong>on</strong>g> Petroşani, Ec<strong>on</strong>omics, 11(4), 2011, 233-244 233<br />
ANALYSIS OF MARKETING MIX ON COSMETICS<br />
PRODUCTS<br />
CASE STUDY: AVON COMPANY<br />
ALEXANDRA PALADE *<br />
ABSTRACT: This paper c<strong>on</strong>tains an <str<strong>on</strong>g>analysis</str<strong>on</strong>g> <str<strong>on</strong>g>of</str<strong>on</strong>g> the <str<strong>on</strong>g>marketing</str<strong>on</strong>g> <str<strong>on</strong>g>mix</str<strong>on</strong>g> followed by a<br />
Swot <str<strong>on</strong>g>analysis</str<strong>on</strong>g> <str<strong>on</strong>g>of</str<strong>on</strong>g> company Av<strong>on</strong>. It c<strong>on</strong>tinues with a market research c<strong>on</strong>ducted am<strong>on</strong>g women<br />
in Brasov highlighting the attitudes, opini<strong>on</strong>s and behaviour <str<strong>on</strong>g>of</str<strong>on</strong>g> women in Brasov <strong>on</strong> the<br />
acquisiti<strong>on</strong> and use <str<strong>on</strong>g>of</str<strong>on</strong>g> <strong>cosmetics</strong> product. The present paper analyzes the <strong>cosmetics</strong> market, the<br />
company Av<strong>on</strong> positi<strong>on</strong> in Brasov’s market, identifying the company’s main competitors,<br />
populati<strong>on</strong> segmentati<strong>on</strong>. After analyzing data from market research shows that most women<br />
acquires cosmetic <strong>products</strong> from Av<strong>on</strong> company, the representatives role being extremely<br />
important. Most women buy <strong>products</strong> through the catalogue, 77% <str<strong>on</strong>g>of</str<strong>on</strong>g> them using the <strong>products</strong><br />
every day, <str<strong>on</strong>g>of</str<strong>on</strong>g>ten buying the pers<strong>on</strong>al care <strong>products</strong>.<br />
KEY WORDS: <str<strong>on</strong>g>marketing</str<strong>on</strong>g> <str<strong>on</strong>g>mix</str<strong>on</strong>g>; pers<strong>on</strong>al sale; market research.<br />
JEL CLASSIFICATION: M31; L10; D40.<br />
1. INTRODUCTION<br />
This paper is making the <str<strong>on</strong>g>analysis</str<strong>on</strong>g> <str<strong>on</strong>g>of</str<strong>on</strong>g> the <str<strong>on</strong>g>marketing</str<strong>on</strong>g> <str<strong>on</strong>g>mix</str<strong>on</strong>g> <str<strong>on</strong>g>of</str<strong>on</strong>g> the company which is<br />
active <strong>on</strong> the <strong>cosmetics</strong> market. I have realized the <strong>case</strong> <strong>study</strong> about the company Av<strong>on</strong><br />
Cosmetics Romania. I chose this company because it is <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> the largest and well<br />
known <strong>cosmetics</strong> producers in the world, operating in direct sales system.<br />
It is therefore, extremely important the role <str<strong>on</strong>g>of</str<strong>on</strong>g> the representatives, the way they<br />
act and persuade potential customers. Also the rapid growth and company’s image <strong>on</strong><br />
the market impressed me and made me tackle this topic.<br />
In this paper I want to determine the positi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> the company in the Brasov<br />
market, to show the influence <str<strong>on</strong>g>of</str<strong>on</strong>g> the brand over the buying decisi<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> the local women<br />
and to show the importance <str<strong>on</strong>g>of</str<strong>on</strong>g> the company’s representatives. These are some <str<strong>on</strong>g>of</str<strong>on</strong>g> the<br />
objectives that I want to reach by realizing this scientific project.<br />
* Student, “Transilvania” University <str<strong>on</strong>g>of</str<strong>on</strong>g> Brasov, Romania
234 Palade, A.<br />
Av<strong>on</strong> Company is present in whole world, in over 143 countries and it has over<br />
3.7 milli<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> representatives. The company respects the internati<strong>on</strong>al standards for<br />
the envir<strong>on</strong>ment, so that its activity is not harmful for the envir<strong>on</strong>ment. It was the first<br />
company that eliminated from its product’s compositi<strong>on</strong> the CFC gases<br />
(chlor<str<strong>on</strong>g>of</str<strong>on</strong>g>luorocarb<strong>on</strong>s) – gases which are harmful for oz<strong>on</strong>e blanket. Almost all<br />
packaging is recyclable.<br />
The market target for Av<strong>on</strong> Company is situated in urban area and is<br />
represented by pers<strong>on</strong>s aged between 35 and 45 years old, with higher educati<strong>on</strong>, who<br />
are interested in <strong>cosmetics</strong> and who have medium and big incomes. They are str<strong>on</strong>g,<br />
pr<str<strong>on</strong>g>of</str<strong>on</strong>g>essi<strong>on</strong>al women, educated, independent, and interested in the way they look. These<br />
are pers<strong>on</strong>s who can appreciate better the <strong>products</strong> and are attentive to every detail.<br />
Another aim <str<strong>on</strong>g>of</str<strong>on</strong>g> this paper is to reveal the main competitors and to point out the clients’<br />
satisfacti<strong>on</strong> degree regarding product range complexity and product distributi<strong>on</strong><br />
process.<br />
2. THEORETICAL ASPECTS REGARDING MARKETING MIX<br />
2.1. Marketing c<strong>on</strong>cept<br />
Marketing c<strong>on</strong>cept was founded in 1957 by Jh<strong>on</strong> B. Mc. Kitterick (CEO<br />
General Electric): „<str<strong>on</strong>g>marketing</str<strong>on</strong>g> c<strong>on</strong>cept is the philosophy <str<strong>on</strong>g>of</str<strong>on</strong>g> c<strong>on</strong>sumer orientati<strong>on</strong>,<br />
philosophy which implies integral and coordinated acti<strong>on</strong>s and reaching a certain goal<br />
(Lefter, et al., 2006, p. 25)”. The most basic c<strong>on</strong>cept underlying <str<strong>on</strong>g>marketing</str<strong>on</strong>g> is that <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
human needs.<br />
Human needs are states <str<strong>on</strong>g>of</str<strong>on</strong>g> felt deprivati<strong>on</strong>. Wants are the form human needs<br />
take as they are shaped by culture and individual pers<strong>on</strong>ality. When wants are backed<br />
by buying power they become demands.<br />
Marketing definiti<strong>on</strong> is based <strong>on</strong> the following c<strong>on</strong>cepts: needs, wants,<br />
demands, markets, change, transacti<strong>on</strong> and relati<strong>on</strong>s, satisfacti<strong>on</strong> and value, <strong>products</strong>,<br />
services and experiences (Kotler & Armstr<strong>on</strong>g, 2004, p.8).<br />
2.2. Marketing <str<strong>on</strong>g>mix</str<strong>on</strong>g><br />
Marketing is the art and science <str<strong>on</strong>g>of</str<strong>on</strong>g> selling. Ingredients for a good <str<strong>on</strong>g>marketing</str<strong>on</strong>g><br />
(according to Philip Kotler) are the 4P’s: product, price, promoti<strong>on</strong> and placement. An<br />
effective <str<strong>on</strong>g>marketing</str<strong>on</strong>g> program combines harm<strong>on</strong>iously all elements <str<strong>on</strong>g>of</str<strong>on</strong>g> the <str<strong>on</strong>g>marketing</str<strong>on</strong>g><br />
<str<strong>on</strong>g>mix</str<strong>on</strong>g>. Marketing <str<strong>on</strong>g>mix</str<strong>on</strong>g> is the main instrument <str<strong>on</strong>g>of</str<strong>on</strong>g> the company for obtaining str<strong>on</strong>g<br />
positi<strong>on</strong>ing <strong>on</strong> the c<strong>on</strong>cerned markets.<br />
Product policy. The authors <str<strong>on</strong>g>of</str<strong>on</strong>g> the paper: “Marketing. Explanatory<br />
Dicti<strong>on</strong>ary” (Florescu, et al., 2003, p.537) define product policy as a decisi<strong>on</strong> adopted<br />
by manufacturing or commercial companies regarding the size, structure and evoluti<strong>on</strong><br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> the range <str<strong>on</strong>g>of</str<strong>on</strong>g> goods and services (Lefter, et al., 2006, p.375, 405). Product policy is<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g>ten compared with “the heart <str<strong>on</strong>g>of</str<strong>on</strong>g> <str<strong>on</strong>g>marketing</str<strong>on</strong>g>”. It has a direct c<strong>on</strong>necti<strong>on</strong> with the other<br />
elements <str<strong>on</strong>g>of</str<strong>on</strong>g> the <str<strong>on</strong>g>marketing</str<strong>on</strong>g> <str<strong>on</strong>g>mix</str<strong>on</strong>g>.
Analysis <str<strong>on</strong>g>of</str<strong>on</strong>g> Marketing Mix <strong>on</strong> Cosmetics Products. Case Study … 235<br />
Price policy. Price is a market instrument and an index <str<strong>on</strong>g>of</str<strong>on</strong>g> the ec<strong>on</strong>omic and<br />
social reality (Lefter, et al., 2006, p.449). Price is the <strong>on</strong>ly <str<strong>on</strong>g>marketing</str<strong>on</strong>g> <str<strong>on</strong>g>mix</str<strong>on</strong>g> variable<br />
which leads to pr<str<strong>on</strong>g>of</str<strong>on</strong>g>its, the others are generating <strong>on</strong>ly expenses and investments. Price<br />
is a very flexible element <str<strong>on</strong>g>of</str<strong>on</strong>g> the <str<strong>on</strong>g>mix</str<strong>on</strong>g> and it can be changed rapidly, unlike the product<br />
characteristics and the placement activity.<br />
Placement policy. Placement’s role is to assure the necessary balance in the<br />
market primarily between demand and supply and between producers and c<strong>on</strong>sumers.<br />
Another role <str<strong>on</strong>g>of</str<strong>on</strong>g> the distributi<strong>on</strong> is to streamline the buying – selling processes.<br />
The advantages <str<strong>on</strong>g>of</str<strong>on</strong>g> custom sales are:<br />
it allows maintaining c<strong>on</strong>trol over the entire <str<strong>on</strong>g>marketing</str<strong>on</strong>g> process;<br />
it reduces distributi<strong>on</strong> expenses;<br />
direct c<strong>on</strong>tact <str<strong>on</strong>g>of</str<strong>on</strong>g> the manufacturer with the c<strong>on</strong>sumer, it facilitates<br />
market knowing;<br />
supporting the factory brand;<br />
c<strong>on</strong>trolling the price;<br />
guaranteeing the quality <str<strong>on</strong>g>of</str<strong>on</strong>g> the sold <strong>products</strong>;<br />
quality services.<br />
The disadvantages <str<strong>on</strong>g>of</str<strong>on</strong>g> this type <str<strong>on</strong>g>of</str<strong>on</strong>g> sale are: usage <str<strong>on</strong>g>of</str<strong>on</strong>g> man y financial resources<br />
for trainings, human resources.<br />
Promoti<strong>on</strong> policy. Promoti<strong>on</strong> should be seen as a key tool <str<strong>on</strong>g>of</str<strong>on</strong>g> the <str<strong>on</strong>g>marketing</str<strong>on</strong>g><br />
<str<strong>on</strong>g>mix</str<strong>on</strong>g>. The way how the company combines the various promoti<strong>on</strong> comp<strong>on</strong>ents in order<br />
to achieve goals, rises the promoti<strong>on</strong>al <str<strong>on</strong>g>mix</str<strong>on</strong>g>.<br />
Pers<strong>on</strong>al promoti<strong>on</strong> is a form <str<strong>on</strong>g>of</str<strong>on</strong>g> communicati<strong>on</strong>. This is defined as being: “o<br />
form <str<strong>on</strong>g>of</str<strong>on</strong>g> communicati<strong>on</strong> from <strong>on</strong>e pers<strong>on</strong> to another, in which the seller persuades the<br />
potential buyer to buy the <strong>products</strong> and services <str<strong>on</strong>g>of</str<strong>on</strong>g> the company” (Lefter, et al., 2006,<br />
p.562).<br />
3. ABOUT AVON COSMETICS COMPANY<br />
3.1. Presenting the company<br />
Av<strong>on</strong> Cosmetics is <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> the largest and well known companies producing<br />
<strong>cosmetics</strong> in the world and operating in direct sales system. The company was founded<br />
in America in 1886, by David McC<strong>on</strong>nell, a book seller who was <str<strong>on</strong>g>of</str<strong>on</strong>g>fering samples <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
perfume with his books.<br />
Av<strong>on</strong> Cosmetics Romania SRL was founded in 1997 and then were registered<br />
the first 6 Av<strong>on</strong> representatives, who were the first sales directors in Romania.<br />
Av<strong>on</strong> is the largest company <str<strong>on</strong>g>of</str<strong>on</strong>g> <strong>cosmetics</strong>, operating in direct sales system and its<br />
achievements in the world are:<br />
‣ Over 3.7 milli<strong>on</strong> representatives in entire world<br />
‣ Over 143 countries in which is operating
236 Palade, A.<br />
3.2 Av<strong>on</strong> Cosmetics – market<br />
Av<strong>on</strong> Cosmetics is a company whose activity involves producing and selling<br />
cosmetic <strong>products</strong>. The company operates in direct sales system. Thus, the market in<br />
which c<strong>on</strong>sumers demand is expressed, in their capacity as individuals, is known as the<br />
c<strong>on</strong>sumer market.<br />
Av<strong>on</strong> Cosmetics is a company that operates in direct sales system and it has<br />
attributi<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g> a producing and commercial company.<br />
Besides the importance <str<strong>on</strong>g>of</str<strong>on</strong>g> the supply structure, logistics and organizati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
storage areas, the company must pay attenti<strong>on</strong> to sales, particularly to train the<br />
representatives. They are very important for Av<strong>on</strong> Cosmetics Company because they<br />
are the <strong>on</strong>es through which the company sells its <strong>products</strong> through the work they<br />
perform, they assure the creati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> a good image <str<strong>on</strong>g>of</str<strong>on</strong>g> the company, they present the<br />
<strong>products</strong> to actual and potential c<strong>on</strong>sumers, they <str<strong>on</strong>g>of</str<strong>on</strong>g>fer new informati<strong>on</strong> about the<br />
company and its <strong>products</strong> and they are recruiting the new representatives.<br />
From the point <str<strong>on</strong>g>of</str<strong>on</strong>g> view <str<strong>on</strong>g>of</str<strong>on</strong>g> ec<strong>on</strong>omic- geographic space, Av<strong>on</strong> Cosmetics<br />
Romania is operating <strong>on</strong> the entire Romanian territory, but mostly in urban areas. The<br />
actual space where demand meets the supply is created and covered by the company<br />
representatives and the distance between producer and c<strong>on</strong>sumer is minimal in direct<br />
sales.<br />
3.3. Av<strong>on</strong> Cosmetics Competiti<strong>on</strong><br />
In Romania, Av<strong>on</strong> Cosmetics is operating in a market ec<strong>on</strong>omy. A basic<br />
characteristic <str<strong>on</strong>g>of</str<strong>on</strong>g> market ec<strong>on</strong>omy is the competiti<strong>on</strong>, reas<strong>on</strong> for which this is also<br />
known as competitive ec<strong>on</strong>omy. In market ec<strong>on</strong>omy, the success or failure <str<strong>on</strong>g>of</str<strong>on</strong>g> a<br />
company’s acti<strong>on</strong>s is not determined <strong>on</strong>ly by strategies, methods and tools that the<br />
company owns, or by the pr<str<strong>on</strong>g>of</str<strong>on</strong>g>essi<strong>on</strong>alism with which they are handled, but also by the<br />
moves <str<strong>on</strong>g>of</str<strong>on</strong>g> the competitors. In decisi<strong>on</strong> making process regarding market acti<strong>on</strong>s, should<br />
be given importance to the activities <str<strong>on</strong>g>of</str<strong>on</strong>g> the other participants with which the company<br />
is in direct or indirect competiti<strong>on</strong>.<br />
For Av<strong>on</strong> Cosmetics Romania, any cosmetic product existent <strong>on</strong> Romanian<br />
market represents a competitive product. Of course there are some criteria that<br />
differentiate the competitors. The most important competitors <str<strong>on</strong>g>of</str<strong>on</strong>g> the company are those<br />
who operate <strong>on</strong> the same target market and utilize the same strategy. The process <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
identifying the competitors is very important for the company. The main competitors<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> Av<strong>on</strong> Cosmetics Company are: Oriflame, Nivea, L’Oreal and Maybelline.<br />
3.4. Av<strong>on</strong> Cosmetics’ clients<br />
Av<strong>on</strong> Cosmetics addresses its <strong>products</strong> to all Romanian women, but not<br />
exclusively, the assortment range <str<strong>on</strong>g>of</str<strong>on</strong>g>fers cosmetic <strong>products</strong> designed for satisfying<br />
hygiene needs <str<strong>on</strong>g>of</str<strong>on</strong>g> men.<br />
Av<strong>on</strong> Cosmetics Romania attempt to cover cosmetic satisfacti<strong>on</strong> (which might<br />
have specific requirements for each age), so necessary <strong>cosmetics</strong> are <str<strong>on</strong>g>of</str<strong>on</strong>g>fered for sale to
Analysis <str<strong>on</strong>g>of</str<strong>on</strong>g> Marketing Mix <strong>on</strong> Cosmetics Products. Case Study … 237<br />
c<strong>on</strong>sumers who may be either children over 3 years old but also teenagers, young<br />
women, mature women or elderly women.<br />
In additi<strong>on</strong> to the c<strong>on</strong>sumer’s differentiati<strong>on</strong> based <strong>on</strong> age and sex, Av<strong>on</strong><br />
Cosmetics Romania has in mind the criteri<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> financial resources that each c<strong>on</strong>sumer<br />
has for purchasing <strong>cosmetics</strong>. According to c<strong>on</strong>sumer’s incomes, Av<strong>on</strong> Cosmetics<br />
addresses to the following categories: clients with low budget (budget), clients with<br />
medium incomes (mass), clients with high incomes (mass premium), and luxury clients<br />
(prestige). The main characteristics <str<strong>on</strong>g>of</str<strong>on</strong>g> various c<strong>on</strong>sumer categories are presented in<br />
table 1.<br />
Table 1. Main characteristics <str<strong>on</strong>g>of</str<strong>on</strong>g> c<strong>on</strong>sumer categories<br />
Clients with low budget<br />
-price is important in buying<br />
decisi<strong>on</strong>;<br />
-easy use;<br />
-less experienced c<strong>on</strong>sumers;<br />
-buying decisi<strong>on</strong> is taken<br />
according to volume and<br />
prices<br />
Clients with medium and<br />
high income<br />
-quality package;<br />
-values and aspirati<strong>on</strong>s;<br />
-image;<br />
-price is still important;<br />
-more sophisticated<br />
c<strong>on</strong>sumers<br />
Luxury clients<br />
-image;<br />
-aspirati<strong>on</strong>s;<br />
-sophisticated packaging;<br />
-innovati<strong>on</strong>.<br />
4. MARKETING MIX OF AVON COSMETICS ROMANIA COMPANY<br />
4.1. Av<strong>on</strong> Cosmetics Romania – product policy<br />
Av<strong>on</strong> Cosmetics Company adopts the following strategies for product policy:<br />
size growth <str<strong>on</strong>g>of</str<strong>on</strong>g> product range, quality differentiati<strong>on</strong> strategy and assortment renewal<br />
strategy.<br />
For a permanent satisfacti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> c<strong>on</strong>sumers needs, Av<strong>on</strong> Cosmetics has to<br />
c<strong>on</strong>tinue the horiz<strong>on</strong>tal assortment range diversificati<strong>on</strong> strategy. Av<strong>on</strong> Cosmetics<br />
is a company which produces and sells a complex and modern range <str<strong>on</strong>g>of</str<strong>on</strong>g> cosmetic<br />
<strong>products</strong>, even for the most demanding tastes. That’s why the company should adapt<br />
c<strong>on</strong>stantly to the market requirements regarding the product novelty, make-up colors<br />
diversificati<strong>on</strong>, packaging methods, product manufacturing technology.<br />
The quality differentiati<strong>on</strong> strategy should be maintained. It is very<br />
important to <str<strong>on</strong>g>of</str<strong>on</strong>g>fer superior <strong>products</strong> that will satisfy all c<strong>on</strong>sumers’ categories, from<br />
those who want to use qualitative <strong>products</strong> at affordable prices to those who would<br />
spend anything for purchasing a prestigious product that will satisfy the most<br />
demanding wishes.<br />
The assortment renewal strategy is the most complex and dynamic strategy.<br />
The renewal assortment leads to the creati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> new product lines within the existing<br />
range, for <str<strong>on</strong>g>of</str<strong>on</strong>g>fering <strong>products</strong> that meet new demands <str<strong>on</strong>g>of</str<strong>on</strong>g> fashi<strong>on</strong> and technology.
238 Palade, A.<br />
4.2. Price policy <str<strong>on</strong>g>of</str<strong>on</strong>g> Av<strong>on</strong> Cosmetics Company<br />
The company Av<strong>on</strong> Cosmetics Romania approaches three aspects: the prices<br />
level, the degree <str<strong>on</strong>g>of</str<strong>on</strong>g> the prices diversificati<strong>on</strong> and the <str<strong>on</strong>g>of</str<strong>on</strong>g> prices mobility.<br />
Based <strong>on</strong> each product category, their characteristics and targeted c<strong>on</strong>sumer<br />
category, the company may adopt a strategy <str<strong>on</strong>g>of</str<strong>on</strong>g> moderate prices. Thus, prices can vary<br />
depending <strong>on</strong> the criteri<strong>on</strong> that was the basis for its establishment.<br />
For price policy it is beneficial the maintaining <str<strong>on</strong>g>of</str<strong>on</strong>g> practices prices. From this<br />
point <str<strong>on</strong>g>of</str<strong>on</strong>g> view Av<strong>on</strong> is situated over the medium price <str<strong>on</strong>g>of</str<strong>on</strong>g> <strong>cosmetics</strong> manufactured and<br />
commercialized in Romania. This price level is justified by the quality <str<strong>on</strong>g>of</str<strong>on</strong>g> the <strong>products</strong>.<br />
Prices applied by the company for its <strong>products</strong> reflect the quality and the positi<strong>on</strong> <strong>on</strong><br />
the market.<br />
4.3. Placement policy <str<strong>on</strong>g>of</str<strong>on</strong>g> Av<strong>on</strong> Cosmetics Romania<br />
The main criteria underlying the distributi<strong>on</strong> strategies are: the dimensi<strong>on</strong>s <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
the distributi<strong>on</strong> channel, the size <str<strong>on</strong>g>of</str<strong>on</strong>g> the distributi<strong>on</strong>, the degree <str<strong>on</strong>g>of</str<strong>on</strong>g> company’s<br />
participati<strong>on</strong>, c<strong>on</strong>trol degree, elasticity degree and the logistics <str<strong>on</strong>g>of</str<strong>on</strong>g> goods. Av<strong>on</strong> applies<br />
the following strategies: direct distributi<strong>on</strong>, distributi<strong>on</strong> through pers<strong>on</strong>al device and<br />
high level <str<strong>on</strong>g>of</str<strong>on</strong>g> c<strong>on</strong>trol.<br />
An advantage for Av<strong>on</strong> Company is the reduced time that passes since the<br />
order was placed by the representative until the ordered <strong>products</strong> are delivered to the<br />
representative’s residence.<br />
4.4. Promoti<strong>on</strong> policy adopted by Av<strong>on</strong> Cosmetics Company<br />
The suggesti<strong>on</strong>s regarding promoti<strong>on</strong> policy <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
Av<strong>on</strong> Cosmetics are: promoti<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> the global image –<br />
image expansi<strong>on</strong> strategy, c<strong>on</strong>ducting <strong>on</strong>going<br />
promoti<strong>on</strong>al activities, <str<strong>on</strong>g>of</str<strong>on</strong>g>fensive promoti<strong>on</strong>al strategy,<br />
undifferentiated strategy, organizing promoti<strong>on</strong>al<br />
activities with the help <str<strong>on</strong>g>of</str<strong>on</strong>g> specialized instituti<strong>on</strong>s.<br />
Image expansi<strong>on</strong> strategy could be adopted by<br />
Av<strong>on</strong> because is not <strong>on</strong>ly the <strong>case</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> promoting the<br />
image <str<strong>on</strong>g>of</str<strong>on</strong>g> the company, c<strong>on</strong>sumers being already aware<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> its existence from the promoti<strong>on</strong>al activities carried<br />
out previously.<br />
Undifferentiated strategy permits Av<strong>on</strong> to<br />
address to entire market, to all potential c<strong>on</strong>sumers.<br />
Organizing promoti<strong>on</strong>al activities by appealing<br />
at specialized instituti<strong>on</strong>s is advantageous for the<br />
company because <str<strong>on</strong>g>of</str<strong>on</strong>g> the pr<str<strong>on</strong>g>of</str<strong>on</strong>g>essi<strong>on</strong>alism and high soluti<strong>on</strong>s which are guaranteed by<br />
these instituti<strong>on</strong>s.<br />
A promoti<strong>on</strong>al mean used by Av<strong>on</strong> is the catalogue. On the cover <str<strong>on</strong>g>of</str<strong>on</strong>g> these<br />
catalogues is used an associati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> the company’s image with various pers<strong>on</strong>alities.
Analysis <str<strong>on</strong>g>of</str<strong>on</strong>g> Marketing Mix <strong>on</strong> Cosmetics Products. Case Study … 239<br />
For example, <strong>on</strong> the cover <str<strong>on</strong>g>of</str<strong>on</strong>g> Christmas editi<strong>on</strong> catalogue we find Andreea Raicu. This<br />
type <str<strong>on</strong>g>of</str<strong>on</strong>g> associati<strong>on</strong>s is used also for <strong>products</strong>. For the launching <str<strong>on</strong>g>of</str<strong>on</strong>g> Eternal Magic<br />
Perfume, Andreea Raicu declares that: “Eternal Magic perfume speaks about the<br />
feminine delicacy, about the magic that every women bears in her”. Av<strong>on</strong> Company is<br />
involving in various programs and campaigns. The most known campaign realized By<br />
Av<strong>on</strong> is the <strong>on</strong>e against breast cancer. This was founded in 2002. In every catalogue<br />
you can find <strong>products</strong> with the well known pink ribb<strong>on</strong>. The funds raised are d<strong>on</strong>ated<br />
for the purchase <str<strong>on</strong>g>of</str<strong>on</strong>g> medical equipment and for women educati<strong>on</strong>.<br />
5. SWOT ANALYSIS OF AVON COMPANY<br />
One <str<strong>on</strong>g>of</str<strong>on</strong>g> the highlighted strengths <str<strong>on</strong>g>of</str<strong>on</strong>g> the company is the fact that Av<strong>on</strong> is the<br />
most popular brand <str<strong>on</strong>g>of</str<strong>on</strong>g> beauty. This thing <str<strong>on</strong>g>of</str<strong>on</strong>g>fers the necessary notoriety and c<strong>on</strong>fidence<br />
to the company. Also the expanded number <str<strong>on</strong>g>of</str<strong>on</strong>g> representatives is an important strength.<br />
Av<strong>on</strong> has over 3.7 milli<strong>on</strong> representatives in the entire world and over 100000 in<br />
Romania. With such a big number <str<strong>on</strong>g>of</str<strong>on</strong>g> representatives it is a certainty that the company<br />
reaches the ears <str<strong>on</strong>g>of</str<strong>on</strong>g> every woman. The intense promoti<strong>on</strong> realized by the company can’t<br />
pass unobserved. In the last year the TV advertising and the internet promoti<strong>on</strong><br />
increased c<strong>on</strong>siderably. Client’s loyalty is achieved through a variety <str<strong>on</strong>g>of</str<strong>on</strong>g> successful<br />
promoti<strong>on</strong>al campaigns realized by Av<strong>on</strong> Cosmetics Company. Also a strength is the<br />
promptly resp<strong>on</strong>se <str<strong>on</strong>g>of</str<strong>on</strong>g> the company to its orders and the reliability <str<strong>on</strong>g>of</str<strong>on</strong>g> the delivery in<br />
best c<strong>on</strong>diti<strong>on</strong>s.<br />
I c<strong>on</strong>sider that the main weak point is represented by the differences between<br />
the nuances <str<strong>on</strong>g>of</str<strong>on</strong>g> the <strong>products</strong> shown in catalogs and the product itself. Also Av<strong>on</strong><br />
Cosmetics Romania doesn’t update the brochures in the same time with those from<br />
outside the country. The possibility to return the <strong>products</strong> is a weakness because the<br />
procedure is very complicated. You have to wait an extended period <str<strong>on</strong>g>of</str<strong>on</strong>g> time, and<br />
instead <str<strong>on</strong>g>of</str<strong>on</strong>g> returning the m<strong>on</strong>ey, they are deducted from the next order <str<strong>on</strong>g>of</str<strong>on</strong>g> the<br />
representative.<br />
Am<strong>on</strong>g the opportunities <str<strong>on</strong>g>of</str<strong>on</strong>g> the company we menti<strong>on</strong>: c<strong>on</strong>venient quality –<br />
price ratio, all Av<strong>on</strong> <strong>products</strong> presenting the benefit <str<strong>on</strong>g>of</str<strong>on</strong>g>: “100% guarantee”. Also there<br />
is the chance to develop your own business and to earn extra incomes. An extremely<br />
important opportunity is to support various social campaigns: breast cancer, violence in<br />
family etc. Also the company can improve its knowledge in beauty domain and not<br />
<strong>on</strong>ly. Another opportunity is to launch <strong>on</strong> the market qualitative <strong>products</strong> with an<br />
advanced technology.<br />
The threats <str<strong>on</strong>g>of</str<strong>on</strong>g> the company are firstly c<strong>on</strong>nected with the competiti<strong>on</strong>, with<br />
the increased number <str<strong>on</strong>g>of</str<strong>on</strong>g> suppliers. The technology used by the competitors may<br />
represent a threat, the company being in a c<strong>on</strong>tinuous development.
240 Palade, A.<br />
6. MARKETING RESEARCH REGARDING THE USE OF AVON PRODUCTS<br />
6.1. Research methodology<br />
For this chapter I have realized a <str<strong>on</strong>g>marketing</str<strong>on</strong>g> research with the theme: attitudes,<br />
opini<strong>on</strong>s and behaviors <str<strong>on</strong>g>of</str<strong>on</strong>g> Brasov women regarding the purchase and use <str<strong>on</strong>g>of</str<strong>on</strong>g> cosmetic<br />
<strong>products</strong>. The objectives <str<strong>on</strong>g>of</str<strong>on</strong>g> this research include:<br />
1. Identifying the main behaviors <str<strong>on</strong>g>of</str<strong>on</strong>g> Brasov women regarding the purchase <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
cosmetic <strong>products</strong><br />
2. Identifying the attitudes <str<strong>on</strong>g>of</str<strong>on</strong>g> Brasov women regarding the used <strong>products</strong><br />
3. Identifying the opini<strong>on</strong>s about used cosmetic <strong>products</strong><br />
In this research I used the random sampling method, according to which, all<br />
individuals that are part <str<strong>on</strong>g>of</str<strong>on</strong>g> the studied populati<strong>on</strong> have the same probability to be<br />
sampled. Because it is very difficult to obtain a list with the entire female populati<strong>on</strong> I<br />
chose to make a stratified sampling. The researched populati<strong>on</strong> for this <str<strong>on</strong>g>marketing</str<strong>on</strong>g><br />
research is Brasov female populati<strong>on</strong> aged 18 and over. From the 15 districts <str<strong>on</strong>g>of</str<strong>on</strong>g> Brasov<br />
I randomly picked up 3. At this level I have created a list with all buildings and<br />
households. The research was realized <strong>on</strong> a sample <str<strong>on</strong>g>of</str<strong>on</strong>g> 100 pers<strong>on</strong>s and it has a<br />
maximum error <str<strong>on</strong>g>of</str<strong>on</strong>g> 9.8%. The questi<strong>on</strong>er includes 26 questi<strong>on</strong>s from which 5 serve for<br />
identificati<strong>on</strong>.<br />
6.2. Research results<br />
Firstly I used a filter questi<strong>on</strong> to split up the sample in 2 groups and to focus <strong>on</strong><br />
the researched segment. At the questi<strong>on</strong> “Do you use cosmetic <strong>products</strong>”100% <str<strong>on</strong>g>of</str<strong>on</strong>g> the<br />
resp<strong>on</strong>dents answered with yes.<br />
For the next questi<strong>on</strong> “how <str<strong>on</strong>g>of</str<strong>on</strong>g>ten do you use cosmetic <strong>products</strong>” 77% <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
resp<strong>on</strong>dents use cosmetic <strong>products</strong> daily, 12% weekly and the other 4% <strong>on</strong>ly few times<br />
per year. We can reach the c<strong>on</strong>clusi<strong>on</strong> that the majority <str<strong>on</strong>g>of</str<strong>on</strong>g> Brasov women use cosmetic<br />
<strong>products</strong> daily.<br />
daily weekly several times a year<br />
77%<br />
12%<br />
4%<br />
The frequency <str<strong>on</strong>g>of</str<strong>on</strong>g> use <str<strong>on</strong>g>of</str<strong>on</strong>g> cosmetic <strong>products</strong><br />
Figure 1. The frequency <str<strong>on</strong>g>of</str<strong>on</strong>g> use <str<strong>on</strong>g>of</str<strong>on</strong>g> cosmetic <strong>products</strong>
Analysis <str<strong>on</strong>g>of</str<strong>on</strong>g> Marketing Mix <strong>on</strong> Cosmetics Products. Case Study … 241<br />
At the questi<strong>on</strong> “what range <str<strong>on</strong>g>of</str<strong>on</strong>g> <strong>products</strong> do you buy more <str<strong>on</strong>g>of</str<strong>on</strong>g>ten” – 57% from<br />
the resp<strong>on</strong>dents purchase pers<strong>on</strong>al care <strong>products</strong>, 23% makeup, 17% perfumes and 3%<br />
accessories. It results that the resp<strong>on</strong>dents buy mostly pers<strong>on</strong>al care <strong>products</strong> and<br />
<strong>cosmetics</strong>. Perfumes and accessories can’t be neglected. This result was expected<br />
because pers<strong>on</strong>al care <strong>products</strong> are use daily, <strong>cosmetics</strong> are indispensable to any<br />
women and the accessories and perfumes have a extended usage.<br />
The predominant acquired<br />
range <str<strong>on</strong>g>of</str<strong>on</strong>g> <strong>products</strong><br />
17%<br />
3%<br />
pers<strong>on</strong>al<br />
care<br />
<strong>products</strong><br />
<strong>cosmetics</strong><br />
23%<br />
57%<br />
perfumery<br />
accessories<br />
Figure 2. The predominant acquired range <str<strong>on</strong>g>of</str<strong>on</strong>g> <strong>products</strong><br />
After analyzing the answer <str<strong>on</strong>g>of</str<strong>on</strong>g> the questi<strong>on</strong> “classify the following 5 cosmetic<br />
brands in your preference order”, we noticed that <strong>on</strong> the first place in the c<strong>on</strong>sumer’s<br />
preferences is Av<strong>on</strong> Company followed by Nivea. Next <strong>on</strong> top are: L’Oreal, Oriflame,<br />
Maybelline. These brands were classified with a medium score. Is a well known fact<br />
that Av<strong>on</strong> is in direct competiti<strong>on</strong> with these companies. That’s why the differentiati<strong>on</strong><br />
<strong>on</strong> the market is very important. I c<strong>on</strong>sider that Av<strong>on</strong> has the advantages: the existence<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> the catalogs, direct sales which give c<strong>on</strong>fidence to the c<strong>on</strong>sumer and the most<br />
important characteristic is the quality <str<strong>on</strong>g>of</str<strong>on</strong>g> the <str<strong>on</strong>g>of</str<strong>on</strong>g>fered <strong>products</strong>.<br />
Brands classificati<strong>on</strong> according to preferes:<br />
N Minimum Maximum Mean<br />
AVON 100 1.00 5.00 2.4300<br />
NIVEA 100 1.00 5.00 2.6000<br />
L'OREAL 100 1.00 5.00 2.8200<br />
ORIFLAME 100 1.00 5.00 3.2100<br />
MAYBELLINE 100 1.00 5.00 3.9400<br />
Figure 3. Brands classificati<strong>on</strong> according to preferences
242 Palade, A.<br />
It is important to know how Av<strong>on</strong> clients acquire the <strong>products</strong>. That’s why we<br />
introduced the questi<strong>on</strong>: “how you purchase <strong>products</strong> form Av<strong>on</strong>” 73% said that they<br />
buy the <strong>products</strong> with the help <str<strong>on</strong>g>of</str<strong>on</strong>g> the catalog, 10% <strong>on</strong>line and 2 % from company<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g>fice. As expected the majority <str<strong>on</strong>g>of</str<strong>on</strong>g> women purchase the <strong>products</strong> with the help <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
representatives after seeing a brochure. However, I c<strong>on</strong>sider that the existence <str<strong>on</strong>g>of</str<strong>on</strong>g> more<br />
purchasing modalities it would be a str<strong>on</strong>g point for the company. I c<strong>on</strong>sider that so<strong>on</strong><br />
the <strong>on</strong>line order will increase in Romania due to the internet development. Anyway,<br />
the company representatives are and will remain the pillars <str<strong>on</strong>g>of</str<strong>on</strong>g> the company.<br />
Valid<br />
Frequency Percent Valid Percent Cumulative Percent<br />
CATALOG 73 73.0 85.9 85.9<br />
ON-LINE 10 10.0 11.8 97.6<br />
OFFICE 2 2.0 2.4 100.0<br />
Total 85 85.0 100.0<br />
Missing System 15 15.0<br />
Total 100 100.0<br />
Figure 4. Modalities <str<strong>on</strong>g>of</str<strong>on</strong>g> purchasing Av<strong>on</strong> <strong>products</strong><br />
Starting from the fact that more than half <str<strong>on</strong>g>of</str<strong>on</strong>g> women but <strong>products</strong> with the help<br />
<str<strong>on</strong>g>of</str<strong>on</strong>g> representatives we c<strong>on</strong>sidered that is extremely important to know the clients<br />
opini<strong>on</strong> regarding the role <str<strong>on</strong>g>of</str<strong>on</strong>g> the representatives. At this questi<strong>on</strong> have been 13 n<strong>on</strong><br />
answers and 87 valid answers. From these 45% c<strong>on</strong>sider that the role <str<strong>on</strong>g>of</str<strong>on</strong>g> the<br />
representatives is very important when buying a product and <strong>on</strong>ly 4% c<strong>on</strong>sidered that<br />
he is unimportant.<br />
For establishing the c<strong>on</strong>necti<strong>on</strong> between the age and the most <str<strong>on</strong>g>of</str<strong>on</strong>g>ten purchased<br />
<strong>products</strong> we c<strong>on</strong>sidered the following hypotheses:<br />
H 0 : There is no c<strong>on</strong>necti<strong>on</strong> between the purchased product range <str<strong>on</strong>g>of</str<strong>on</strong>g> Av<strong>on</strong><br />
Company and the age category in which resp<strong>on</strong>dent falls<br />
H 1 : There is c<strong>on</strong>necti<strong>on</strong> between the purchased product range <str<strong>on</strong>g>of</str<strong>on</strong>g> Av<strong>on</strong><br />
Company and the age category in which resp<strong>on</strong>dent falls<br />
In figure 6 we can observe that 87% from answers were valid and 13% from<br />
the resp<strong>on</strong>dents didn’t resp<strong>on</strong>ded at this questi<strong>on</strong>. This thing happened because before<br />
this questi<strong>on</strong> it was a filter questi<strong>on</strong> that would let the company’s clients to answer.<br />
By applying the chi-square test and comparing calculated significance level<br />
0.02 with the theoretical <strong>on</strong>e <str<strong>on</strong>g>of</str<strong>on</strong>g> 0.05 we can observe that the first significance level is<br />
lower; so the hypotheses H1 (according to which it is a c<strong>on</strong>necti<strong>on</strong> between purchased<br />
range <str<strong>on</strong>g>of</str<strong>on</strong>g> <strong>products</strong> and the resp<strong>on</strong>dents age ) is accepted. This thing is possible because<br />
<strong>products</strong> are intended for a certain age. So the pers<strong>on</strong>al care <strong>products</strong> are purchased by<br />
approximately all pers<strong>on</strong>s, but the perfumes and accessories are intended especially to<br />
young women.<br />
For establishing if exists any c<strong>on</strong>necti<strong>on</strong> between the purchase modality and<br />
the occupati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> the resp<strong>on</strong>dents we c<strong>on</strong>sidered the hypotheses:
Analysis <str<strong>on</strong>g>of</str<strong>on</strong>g> Marketing Mix <strong>on</strong> Cosmetics Products. Case Study … 243<br />
H 0 : Is no c<strong>on</strong>necti<strong>on</strong> between the purchase modality and the resp<strong>on</strong>dent’s<br />
occupati<strong>on</strong><br />
H 1 : There is c<strong>on</strong>necti<strong>on</strong> between the purchase modality and the resp<strong>on</strong>dent’s<br />
occupati<strong>on</strong><br />
If we compare the calculated significance level (0.33) with the theoretical <strong>on</strong>e<br />
(0.05) we observe that the calculated level is higher than the theoretical <strong>on</strong>e; it results<br />
that we take into c<strong>on</strong>siderati<strong>on</strong> hypothesis H0.<br />
We can c<strong>on</strong>clude that there is no c<strong>on</strong>necti<strong>on</strong> between the modality <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
purchasing the <strong>products</strong> and the resp<strong>on</strong>dent’s occupati<strong>on</strong>. This is because any pers<strong>on</strong>,<br />
whether it is an employee with sec<strong>on</strong>dary or higher educati<strong>on</strong>, student or unemployed<br />
can order <strong>products</strong> from the representatives, form the company <str<strong>on</strong>g>of</str<strong>on</strong>g>fices or from internet.<br />
The company is available to everybody and is not important the occupati<strong>on</strong> <str<strong>on</strong>g>of</str<strong>on</strong>g> the<br />
clients.<br />
7. CONCLUSIONS AND PROPOSALS<br />
Company’s positi<strong>on</strong> <strong>on</strong> the market must always be improved, Av<strong>on</strong> being<br />
currently c<strong>on</strong>sidered a str<strong>on</strong>g and modern company, c<strong>on</strong>cerned to improve itself. It<br />
must be maintained the quality differentiati<strong>on</strong> strategy in order to <str<strong>on</strong>g>of</str<strong>on</strong>g>fer superior<br />
<strong>products</strong> and to thank all c<strong>on</strong>sumers’ categories.<br />
The renewal assortment strategy is beneficial for Av<strong>on</strong>, which is a modern<br />
company and wishes to corresp<strong>on</strong>d to the new requirements <str<strong>on</strong>g>of</str<strong>on</strong>g> the fashi<strong>on</strong> and<br />
technology. From the prices point <str<strong>on</strong>g>of</str<strong>on</strong>g> view, Av<strong>on</strong> is above the medium price <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
cosmetic <strong>products</strong> from Romania, but the level <str<strong>on</strong>g>of</str<strong>on</strong>g> price is justified by the quality <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
sold <strong>products</strong>.<br />
From the <str<strong>on</strong>g>marketing</str<strong>on</strong>g> research we noticed that the majority <str<strong>on</strong>g>of</str<strong>on</strong>g> Brasov women<br />
purchase <strong>products</strong> from Av<strong>on</strong> Company. The frequency <str<strong>on</strong>g>of</str<strong>on</strong>g> use is important, 77% <str<strong>on</strong>g>of</str<strong>on</strong>g> the<br />
resp<strong>on</strong>dents use cosmetic <strong>products</strong> daily and 12% weekly. Another important element<br />
is the competiti<strong>on</strong>. After analyzing data about Av<strong>on</strong> Company and its competitors we<br />
observed that the first company in c<strong>on</strong>sumer preferences is Av<strong>on</strong>, followed by Nivea<br />
Company.<br />
For seeing if it exist any c<strong>on</strong>necti<strong>on</strong> between the purchasing modality and<br />
resp<strong>on</strong>dent occupati<strong>on</strong> we used the Chi Square test. Following this test it was<br />
c<strong>on</strong>cluded that there is no link between these two variables. This is because Av<strong>on</strong><br />
addresses it <strong>products</strong> to all women.<br />
To establish the link between age category <str<strong>on</strong>g>of</str<strong>on</strong>g> the resp<strong>on</strong>dents and the range <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
<strong>products</strong> they buy most <str<strong>on</strong>g>of</str<strong>on</strong>g>ten, by using Chi-square test we determined that there is<br />
c<strong>on</strong>necti<strong>on</strong> between the range <str<strong>on</strong>g>of</str<strong>on</strong>g> <strong>products</strong> bought from Av<strong>on</strong> and the age <str<strong>on</strong>g>of</str<strong>on</strong>g><br />
resp<strong>on</strong>dents. It is known that perfumes and accessories specifically are addressed to<br />
young women.<br />
As a suggesti<strong>on</strong> for Av<strong>on</strong> Company I c<strong>on</strong>sider that it would be an advantage if<br />
the time between the moment when the order was launched and the moment when the<br />
product was delivered would be diminished. Also I c<strong>on</strong>sider that there should run more<br />
advertising spots <strong>on</strong> televisi<strong>on</strong> channels at times with high ratings.
244 Palade, A.<br />
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Marketing, vol. 1, Ed Universităţii Transilvania, Braşov<br />
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