Page 289 - DMGT408DMGT203_Marketing Management

Marketing Management/Essentials of Marketing

Notes On the selling side, recruiting sales people had become problematic, much as it had for
other direct sellers like Mary Kay Cosmetics and Premark International’s Tupperware
division. To attract sales representatives and boost productivity, Avon improved incentive-
compensation plans and offered free training programmes for recruits. As a result, Avon’s
direct-sales business – which accounts for 70 per cent of sales and 85 per cent of operating
profits – experienced a dramatic turnaround. Within a year sales rose 17 per cent, to $2.9
billion, and profits jumped as much as 25 per cent.
Today more than 450,000 sales representatives work for Avon and fill out some 50,000
orders daily. Sales exceed $3.5 billion a year. Nonetheless, Avon estimates that at least ten
million women in the US who are interested in buying from Avon are unable because no
sales representative is calling. To win back some of the customers and attract new ones,
the company has begun mailing catalogues directly to potential customers nationwide.
The move represents growing concern at Avon that its core market has matured. The
growing number of women joining work force means that fewer of them have time to
meet with Avon representatives. Although Avon remains the nation’s largest direct seller
of beauty products, supermarkets and discount stores are stealing market share. Avon
hopes that mail-order catalogues will help to reach “stranded” customers.

The plan is to send catalogues to people who have moved or who no longer are active
buyers. They can then order directly through the company or through a salesperson.
Initial expectations are modest. Avon hopes catalogue sales will reach $25 million the first
year. In the long run, Avon hopes to penetrate major cities and suburbs, the places where
much of the female work force is absent at prime selling times. Avon is also increasing the
use of toll free numbers in conjunction with this strategy.
Questions

1. What are the significant issues in the case?
2. Do you think Avon’s approach in response for changing conditions is right for
products that need personal contact by saleswomen?

3. Suggest any other solution than what Avon is planning to do.
Source: Pat Sloan, “Avon Looks Beyond Direct Sales,” Advertising Age, February 22, 1993.

Selling Process

Personal selling has been around since ancient times. The objectives and the manner, it requires
to be implemented have evolved over the years. In today’s highly dynamic and competitive
market conditions, the role of a salesperson is not just limited to persuading customers to buy
products but also adopting ways to build long-term customer relationship.

Prospecting

The first requirement in personal selling is narrowing down the selling effort to the targeted
customers. Prospecting involves developing and following all the leads to identify potential
target customers and this requires hard work and proper time management.

Some companies provide prospect lists or customer relationship database to make it easier for
sales- people. Customer enquiries from different territories through various sources, including
company website can be passed along to salespersons. Companies can also acquire lists from
commercial sources providing this service. Other sources to generate leads can be current

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