PREPARED BY Leo Burnett - GUANGZHOU July 2002,AVON Brand Review,Table of Contents,Company Background Operation Outlook Structure Avon Shops Product Offers Media Spend Communication Means PR/Event Activities The Discovery Road of Avon The Discovery Road of Amway,Company Background,A global beauty company,Founded in 1886 in New York, Avon was named by Mr. David McConnell who paid tribute to his favorite playwright, William Shakespeare (Avon is the name of a river in the hometown of Shakespeare). Since then, Avon has created career opportunities for millions of women around the world.,Today, Avon is a leader in beauty and a trusted name in direct selling. She has grown into a global corporation, a Fortune 500 company, with SR numbering three and a half million and products sold in 143 countries around the world.,Operation Outlook in China,Operation Outlook in China,Amway has offered products and services since 1995,Avon started to offer products and services to consumers in 1990,Avons factory is located in Guangdong Chonghua Industrial Area, covering 80,000sq meters with annual production capacity of 120 million units of products,Amways factory is located in Guangzhou Economic Technological Development Zone, covering 91,000sq meters with annual production capacity of 3 billion units of products,77 branches 5,000 outlets 20,000 SRs,Main outlets focus around coastal areas. Over 100 outlets in every main cities ( BJ, SH, GZ, CQ ) Franchise business to expand business,Operation Outlook in China,Outlets are mainly Avon direct selling as well as franchise shops,Outlets are all Amway direct selling stores,77 branches, over 5,000 outlets and 20,000 SRs,58 stores and 130,000 SRs,Maintained network in the main cities, while expanding in 2nd and 3rd cities.,Mainly in relatively developed cities,Operation Outlook in China,“Work along both lines” strategy (双管齐下）,Definition - Beauty counter: Opened by Avon company. Unique area/counter inside the merchandise store or hypermarket - Chain store: Include Avon direct shop and franchise shop (1) normal : no need to sell all categories, but skin care and cosmetics are required (2) flagship: model shop with standard design for other shops -Concept store: Avon direct shop. Self-serving style, for consumers to enjoy free trial and to choose wide range of products,Retail,SR,+,Beauty Counter,Concept Store,Chain Store,Market penetration,Market coverage,role,Franchise “0” fee to encourage more people to devote into Avons business,Operation Outlook in China,Avon retail channel + SRs,Amway shop + SRs,Key role to build up business,Supporting role,To expand market coverage,To increase market penetration,Main role,Supporting role,Stores operation in accordance with government policy,Strengthen relationship with consumers and ensure personal service,Market size,Quality service,Operation Outlook in China,Avon Shops,Window display dressing changes by monthly with different theme.,Average store space is no more than 40m2 Standard deco applied in every shop.,Avon Shops - Overview,One of the shop entrance view,Avon Shops - Overview,Generally all shops are located along row of shop lots with high residential traffic. Location is usually at the ground floor with high visibility and easy accessibility.,In GZ, there are more than 100 shops, however, the surrounding environment is beyond control which at times affect the Avon premium image which it tries to project.,Avon Shops - Service,Only 2-3 persons are in duty per store. Overall responsibilities include Sales, Cashier & Merchandising All salesperson are in uniform. Services include: Personal beauty consultant Offer (free/partial payment) Facial Care if purchase is accumulated to a certain amount. Offer special discounts to Club Members.,Avon frequently holds booth promotion to interact with consumers and attract impulse purchase.,Outdoor Promotion,Product Offers,Product Offers - Global,Cosmetic,Fragrance,1,2,Gifts,3,undergarments,5,Jewelry,4,Health supplement,Skin Care lines,Series of products for women and people around them,6,7,8,Kids product,Mens product,Others,Cosmetic,Fragrance,1,2,Gifts,3,undergarments,5,Jewelry,4,Health supplement,Series of products mainly to fulfill womens needs,Skin Care lines,With the worldwide famous partners. Avon is strategically expanding business into the health supplement field,Product Offers - China,Globally, offers over 450 with concentration on narrower target group and specific category i.e. healthcare, household and personal care products,Globally, offers more than 20,000 products generally concentrate on wider product range and target group,Target mainly women Offer wide range to create affordability for different age group.,Target to satisfy family needs Mainly offer to people who pursue for high quality lifestyle,Product Offers - Overview,Operation Outlook Implication,Operation Outl