Sales and Distribution

TEAM 5 Tarun Gupta (12MBA0058) Pushkar sinha(12MBA0116) Samrat Dasgupta(12MBA0029) Gaurav Sharma(12MBA0039) Sandeep (12mba0087) Kavi Arunchalam(12MBA0123)

Introduction
Formed by David McConnell in 1886 as the California Perfume Company. Avon is the Worlds largest seller of beauty products and 5th largest company overall sales of $5 billion. Having 2.8 million sales representative worldwide and .5 million in US Avon Promoted representatives with other job to sell the product at work. These sales work accounted for 25-30% of all Avons sales.

CHALLENGES
Strengthening and enhancing AVONs beauty image around the world. Leveraging the equity of AVON brand in new market. Building new products and new channel. Accelerating top line growth. Enhancing the experience of representatives.

ANALYSIS
Direct selling by women sales representative. The leadership program allowed a rep to earn additional money by encouraging other women to become AVON sales rep. The beauty advisor program. Avon ran 26 two weeks selling campaigns. Avon provides 100% customer satisfaction.

Issues
How Avon would utilize the web in its B2C and B2B relationships.????

Solution
B2B strategy It make easy for the representatives to place there orders online. Fully functional online ordering would cost in access of $60 million over 3 to 5 years. Cost of labor $3million to $5 million to update the 1997 version of avon.com to make it online store.

B2B option
Cost of updating avon.com= $5 million. Cost of online ordering system= $60 million for 3 to 5 years. Total cost= $65 million for 5 years. Cost of processing orders= $1 for each order. No of sales representative= 0.5 million Sales campaign= 12 per year

 Total customer= 15 per represenative Total customer order per year= 0.5*12*15 is equal to 90 million. Cost of processing= 90 million orders *$1 is equal to $90 million per year. Total processing cost(5 years) =$90* 5million is equal $450 million.

conclusion
If avon goes with the same plan of making it a complete online store Therefore, $450- $65 is equal to $385 million

Suggestions
The website must be more attractive so that both representative can discuss their issues. Filling 18% gap should be accompanied by B2C method where users can buy independently. Filling 70% gap should be accompanied by sales representative to ease ordering style and will be easy for representatives.