Avon – Hello Tomorrow Campaign
Avon, the oldest cosmetics company in the United States and the world’s largest direct seller, received a much needed boost with Chief Executive Officer (CEO), Andrea Jung, at the helm (Creed and Laichas). Andrea became the company’s first female CEO in 1994, marking the beginning of a brand turnaround (“Avon Products, Inc. ”). From its humble beginning to becoming the cosmetic giant that it is now, Avon has had a number of trials and bounce backs. It’s most recent success, the Hello Tomorrow global campaign was launched in response to lacking sales in 2005 (Elliott).
The campaign goal was to restructure the company, reinvest in the brand as well as the sales representatives, all while spreading the word that Avon understands and empowers women all over the globe (Creed and Laichas, Elliott). Avon, originally named the California Perfume Company, was born in the 1880s, when David H. McConnell, a door-to-door book salesman, began to offer small bottles of perfume to the women who would allow him to come into their homes and talk about his books.
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It did not take him long to figure out that the women were more interested in the perfume than they were the books he was selling.
Taking a leap of faith, Mr. McConnell stopped selling books completely to focus on the perfumes. Working from home in New York City, he brewed five different scents which he named the “Little Dot Perfume Set,” consisting of heliotrope, hyacinth, lily of the valley, violet, and white rose. He intended to sell the perfumes directly to customers utilizing all of the contacts he had made during his time as a traveling door-to-door salesman (“Avon Products, Inc. ”). The first Avon Lady he recruited was the wife of a U. S. senator, Mrs. P. F. E.
Albee, of Winchester, New Hampshire. Mrs. Albee was able to recruit and train a sales team of one hundred within the first six months. That number continued to climb steady, to over five thousand after twelve years. The company, excited about the growth, wasted little time in offering new scents to the perfumes along with other products. Ten years after the company’s beginning the first catalog was made, complete with illustrations, and a new production facility was built in Suffern, New York. This is also when the first products bearing the Avon name were released.
Mr. McConnell was inspired by the landscape around their new facility, stating it reminded him of William Shakespeare’s home of Stratford-on-Avon, England. This product line consisted of cleanser, a toothbrush, and a vanity set (“Avon Products, Inc. ”). Avon’s sales suffered during the Depression and World War II, however after the war more women began to look for ways of making money that would not interrupt there family life, quadrupling the sales force. In 1954, Avon launched its first television advertisements with the famous, “Ding Dong, Avon Calling,” slogan.
They also jumped into the Latin American market by opening up offices in Puerto Rico and Venezuela. Three years later in 1957, the first office in the United Kingdom was opened with the name, Avon Cosmetics, Ltd. (“Avon Products, Inc. ”) Today, Avon is sold via direct sales by over five million independent sales representatives in one hundred forty three countries, to nearly three hundred million customers (Avon Products, Inc SWOT Analysis 2008). The year 2005 was described by Business Week magazine as a year of collapse for Avon, with the United States, Mexico, as well as Central and Eastern Europe sales less than expected.
CEO Andrea Jung stated that it was a tough year, but one that she would learn from. She learned a lot about both herself and the business. Publically making these statements were seen by many to be on of her defining moments, she practiced humility, which is one of Avon’s founding principles. The Hello Tomorrow campaign was a long time in the making, one that required changes not only in their marketing strategy, but also in the entire company’s way of operating (Creed and Laichas). Turing the company around was not an easy task.
The company had always been run according to its entrepreneurial beginning; it had to be transformed into a globally integrated and managed business. In order to accomplish this transformation and remain the top spots in both the direct selling and cosmetics industries would require a large monetary investment. CEO Andrea Jung stated, “We needed to sustain investment in the brand, step up investment in our channel, and continue to drive out costs and manage for the long term. ” Avon had to completely reorganize itself. CEO Jung believes that you have to base your organizational structure according to your strategy.
With Avon, the company had become too large to function properly on the way it had been organized (Creed and Laichas). The Avon management team decided to do what they could to free up just over seven million from restructuring and analyzing costs, along with other changes, and then reinvest the money back into the company through both representatives and the brand (Creed and Laichas). Avon hired the advertising firm, Soho Square in New York, to begin developing the creative aspect of this global campaign, set to launch in the spring of 2007.
Nicola Bell, a client services director for Soho Square, knew that the Avon name was a classic; they just needed a fresh jump start to firm the brand into the minds of consumers (Elliott). While analyzing costs, CEO Jung discovered that the current fifteen layers of management were no longer necessary. It could easily be cut back to eight layers, saving the company two million dollars. Four thousand five hundred, middle to senior management, representatives from all around the world would be removed from their positions.
CEO Jung went to meet with all members of management face-to-face to let them know about the “de-layering,” as she called it. This was done before any decisions on who would go and who would stay were made (Creed and Laichas). Holding true to the decision to invest in the representatives, Avon changed the compensation plan to a universal multilevel plan and also reevaluated the commission rates, which vary depending on the market. They also took a close look at the frequency of the advertising campaigns they ran in Central and Eastern Europe, deciding to put more into their marketing efforts there (Creed and Laichas).
One of the company’s biggest investments was in technology. A more user friendly website was created for representatives to use. It quickly became a much more efficient way for independent sales representatives to run their business. They can easily place orders, check product availability and process returns. Independent sales representatives even have the ability to generate prospective emails from the website. They can choose one for a given campaign or they can design their own.
This investment in technology proved to be one of the company’s strengths, making Avon’s SWOT Analysis, compiled by Datamonitor, in April of 2007 and June of 2008 (Avon Products, Inc. SWOT Analysis 2007, 2008). The company also invested over ninety million dollars on brand advertising. The Hello Tomorrow campaign integrated both brand and channel, another first for the company. CEO Jung was quoted as saying, “The channel or the brand, that’s a very deliberate and strategic question, and I think the power of Hello Tomorrow, and Avon in its second chapter, is we can do both,” when asked about the strategy.
She believes that by the company raising the brand so highly excites the representatives as much as it does the final customers, motivating them to drive their campaigns harder (Creed and Laichas). In yet another first for Avon, they made all prospecting and marketing materials around the globe look the same, from handouts, to television commercials, to the brochures. By using this massive, uniform, global campaign Avon hopes to portray the company’s enthusiasm for both the beauty industry and their channel onto others and building morale among the remaining workers (Elliott).
The first two commercials Avon launched for the Hello Tomorrow campaign were focused on recruiting more independent sales representatives. One was based primarily on the traditional sales techniques of door-to-door selling, emphasizing the excitement of the sale as well as the strength of the brand. The other commercial focused on the flexibility of running an online Avon business, thus allowing women who may not have enough time for traditional sales the option of sticking strictly to sales via the internet.
Avon is confident that the products will sell themselves once people try them, the more sales representatives they have pushing their product the better off they are (Elliott). Happy with the results of the campaign in Avon test markets, including Brazil and China the Hello Tomorrow campaign was officially launched. The company found that their two different advertising strategies would payoff by targeting women on an emotional level (Elliott).
Continuing to fulfill what Avon views as their social obligation to women, it was announced on August 1, 2007, that actress Reese Witherspoon had joined the Hello Tomorrow team as the first ever Avon Global Ambassador and honorary Chairman of the Avon Foundation. The Avon Foundation was developed to focuses on improving the lives of women, ending domestic violence, finding a cure for breast cancer, and instigating emergency relief standards. During her induction speech Reese said, “Avon is more than an iconic world class beauty leader. It is a company that is known the world over as a crusader for women’s causes. I’m] proud to be joining the great philanthropic work [that Avon has established],” (“Reese Witherspoon is An Avon Woman”). In addition to adding the fresh faced beauty on board, Avon also set up a global Hello Tomorrow Fund. In the United States, five thousand dollars is given out weekly to women who submit their name to Avon. The company chooses people with ideas, projects, or programs that empower women and improves society. Each country where funds are received have set up their own guidelines unique to their culture (“Avon Hello Tomorrow Fund”).
The re-branding strategy Avon used with the Hello Tomorrow campaign is listed as an opportunity on the company’s SWOT Analysis dated June 18, 2008. One of Avon’s biggest threats is their competition; L’Oreal, Revlon, Procter & Gamble and Estee Lauder are all waiting in the wings for Avon to stumble. From the time the Hello Tomorrow campaign rolled out until the time the 2008 SWOT analysis was compiled, Avon had a sixteen percent growth in profit from their Color Line and a twenty percent growth in their fragrance line (Avon Products, Inc. SWOT Analysis 2008).
Now that CEO Andrea Jung restructured the management team, those at the higher levels are closer to both representatives and the market; they believe that this will help them keep a handle on this ever changing business. Andrea stated that “We now manage this business for the long term and make the decisions not just for the next quarter but for what is good for the business in the long term,” (Creed and Laichas). Avon’s next global launch will be for a new fragrance, Bond Girl 007, which they have teamed up with James Bond entertainment franchise to develop, it will be released October of 2008 (Avon Products, Inc. SWOT Analysis 2008).