In: Economics
Please create a response to the following discussion post form a student:
Avon had a business strategy that relied heavily on the international market, specifically in developing nations (Hill, 2015). The strategy may have continued to be successful had it not been for the sudden ban on direct sales marketing in China and the steadily declining economies of Russia, Mexico, and Eastern Europe (Hill, 2015). The reason the foreign market was so valuable to Avon is that when the company entered a market, they allowed the country managers a tremendous about of autonomy This approach was attractive to international market managers and resulted in an “army of 5 million Avon representatives around the world.” The sheer number of people involved in the management of the foreign markets under each of the Avon representatives was so great that it was nearly impossible for Avon to maintain and communicate for consistency (Hill, 2015).
I have had an experience similar to the Avon foreign market manager example from our text. I was part of an MLM group called Monat. When I joined the company as a consultant, Monat was less than a year old, and there weren’t very many representatives; it was an ideal time to join the company as I had the potential to be one of the six-figure earners because the market wasn’t flooded with representatives yet. However, the newness of the company presented problems as it grew. There was miscommunication as new representatives didn’t know who was their senior or mentor. The company was having trouble keeping up with the representatives and providing the newest and most accurate marketing tools and product information. Soon, representatives were making their own marketing materials and basing their product information on personal experience. I left the company when there started to be some controversy on a new formula that was released and lawsuits and damages claims were being made.
As Avon was relying heavily on international market for its growth especially on developing countries and got setback when China banned the direct sales marketing in its country and simultaneously a steady decline in other economies, i.e. Russia, Mexico and East Europe and also why its growth slowed down was also because of its very big team of 5 million of representatives around the world which was not easy to communicate with regarding consistency, consistency in strategy for to maintain consistent growth.
Reasons were like when Avon was not able to communicate its strategy to down the line to its representatives spread around the world and also Avon itself was also not getting the feedback about these economy's market condition from their representatives through to their country managers and especially country managers were not getting the market status and changing trends of markets of these country's and countries spread around the world and this can be due to they were having only one global headquarter and not regional headquarters, i.e. Headquarters for Asia situated in asian country, like in China then another regional headquarters for Eastern Europe, like in Russia and regional headquarters for South America in, like in Mexico since by having these regional headquarters Avon certainly can spread its consistent marketing strategy to its representatives spread around the world and its regional headquarters can also give inputs of changing market trends back to its global headquarters since this could have ensured the consistent marketing strategy for all the countries around the world and to achieve continuous growth.