.

n+

iiKU705
.
:

*.sia,Case
Fc-ra+r,-h

f'en*.=

Fffi'f-d

Ti-lE UNIV,ERSily OF i-tONG iior\iC

r
*:
=')t^
^t'ls.1i\U

Pcc; .liari liai .Se;ies

-ri.{U-,

FUT'JRr *F A"f*FH 'Jr.IiiqA;

q.ri
i {

I;r;iiir{ LL.'#
i*t ! r#i*iL=*.=j,
3r E i*'q
ilr:

t:

1\ il q3,!+i_==
i+i* i: i".r.il*
i []i]
i-.L=

r*?;.-t j:i-..- L-:rt?L_r

i

=t.

]00i. s,'r':l -. e"rs ai::';1,: ::,:: .,.::. ,.1..:,-ri-'.=j- .'r.. i. 1,,-,,uu:ij i,r,-. ,,,---.rcrrr.,.,. rilc
ieaier oi rlireot saies in cosr:r:ric Lri,--)i-iucr:;, j-.ecane ...ir: firsi ic .r,,i,i a' :.r'io.\jei i-oiil
rire li'iinisn-w ciCoinmerce for-irs ii:-eit s:.ks c;;elaiions ir, Chr:r:r.
ijr: ai:u,-,;al i,,:rs c.,lrrrc
li: lr'l:l'Ia i:s: ill3 rlcst si:i:a-i;le i:f;^,::--:lli..r.
ftr:
iir=
L.ri,i.:.:,,,rarta..,
--io.i:-i
-,,a,"rii.a=*
i:l .r.i'irl': cio'\iiil.ss
Pei;iLig, Tiaiiiir ald,3,railgiililg
anil ,r.oi:lj *,,1o'.,S..;,f.L:;-;
,....^-.-.,..:"-.
.:-\!L-ll:rjL
\.-..-li-.-.
Jjl;lniL'iiijii-': a^-.
^ -.rCI'A.'-a'ir
io =.,.i,a-nit iL. i,-it,si:t:ss irt -rlitiit:_. Ci'jt-iit: p:::: Ler.., i,:cari:-s.
ilcr'fllia,r i:ao ihe iellar.i for' :rsl.t=-i::ia),aria::,ilii-." l-,;;r:1.: i-i:j-.c....ti1.j,-:; had
-,:.,i-g?-a ri-.
also become'Llre ll-''::si ii'j',ei- ':f
g-c,-n.fir';
A.i... ;i.,,o.*.- r;JJ*"i" tiris iar:
--,.,r,'s
,.':'llal-:-:il:l :l-:' -L-r o; ;,'as L ;t:-,ou-.
1..*.i;i:-.. ,,ti:::ll,:,. l_- ,.: o;,.,r,, ,.. -j, .a,,,a li. s:i:.
r'. s o u|ces ?.nt cri g irs i-nuiiipi : i isirii:lir t i] clt:iiir: i s ?
---1:p;1

2'jc"Dai

'

Ih* ceniect oidile;t seliing v,"as noi n3-i,,:ic Cirha as ii rr,as L.ri.:i,aj.:li eu:-irrg liic el:j-,. l99us.
i:l l90!- i:ai'ir: :rc:i:r.r u;;'-':; u. ::isrl:.:jin jur.i\1 :-.::r r:-.. ci,-i. r,-. ,1,.r-;irj;:r,
riig=ered b)' the coiiapse sf p-1;iarni,j sch::i:::.. ji. C[ir:.se
o.a.r]" , f-,an cn aii
alreci-seiiing scieme s. Thrls ri.as a jtuge jcrr ;,J _-\.,,,_,: '-. c,:.:;iiiolrs
"o.,..rir*ni
ll Cllla :r;lC ii ii,as ibrceo
;o fiiic ai: aiLeiuative business ,nodei Lixr ;iir:;'r,..., r,J=l rc'n--;:ar-ii,:s.
A'vcn elrcountered
some diifrculiies wiiet it fiisr s-ii;i'rlie,i ic r',:leil 5,,.1.,1s i';-,,
sei:l:rl lrr:r.iii-:.r.i:: ae
s1or.s a.c orening iis or.r,n bo.uriques. iio*-,
i,. ;J;;..';;r..a ;;;:,tl;irt;rr; ;";;:#
-*'as
L,':i''--''9.-

L,

",,
aireadi'opeiaring aboul 6.30C beau,.r,ocuiicu:s
and r:iois.ri,a' -"0r-r' ,=rrrnrr.rrr.r.n.r.,
l-t-r;rii-'r'i..-i-...ii"
.:.-r\ LiL rrrcS. i-he ijCiiti:ait) :lC;: a- ,:;]=;n'tia. C;: e,lr: ]tif ;. tit:;.:,ri.i.,la]
ii,i:C-. S:l:S
.
.---j..::-.,^'-_--.-:.
-'.-i;:- iiJ"li n.rri'.ii-J_: rn e ll,, fOi l-iit cOlni-ra:i-r, iCr a iCn.. tii-ne anC iit it;it;Si 3.il ir-i- liiiei. inarit:tS
iii
.,.: "r-'r-r"i. ;rir Llil iili ^;!-'4r inE -41:'---^;' 5ai-q ;roc:] haci ;;ro-r.ei
ic b: .'sliri:_+__;-.irl h ciiila.
-.,,'''.n .r"i ;;=.j;;;;;,
;;, ;.';.,, cr rbr rrs C:j::s_.: ir:r.li:r. r-ire i_s;,.re ,,.,as toirjrer.
..rr^-,i-._-. i l_.. ;-^^_
!-iiilr-':1-l:Li
D" racrSis suci as a Ei'Ori'iaq i:l::aic anc i:t:.-:ts: acilp:-::air.I: ir:,::: cnil"s:

ra.,- ,,.^-.:-:.
:^'- c-....

.j:......::...,_

1,::.

..',._- ,. - -:.t,' -

.t--:

-_..:j.._jr,:.-_

]:

.::j:.-;..

..-.:..

..:

.:.

.^.....- -i

Fuiure of Ai,on China: Direci

Avon's

Backgrounri

srt.:.!=Lg:f:g:gl

,,

of an irish immislaxt' in the

Ai,cn v,,e.s estabiished b), David liaii McCorrreil, descenciant
seliing boolis for moie than ton vears' In
iE80s. llefore -turt*g '^"*, h'IcConnell had been
cieveloped f,}' hrs ciremist friend' iogether"*"ith
1gE5, he staned giving out perf:me ,umpl*s,
objecti,e
business rvas ,leciining Tirgu'.n the.initial'
r-1-,e.bocks he soid since his book-seliing
more'for.the
so
books'jic
his
y,,as ro anpeal ro hor,r-.*,iu*s to buy his 6ooks, those rvho bougli
Compaii'v in i886' latet
Peifi:me
jr4cconnall
caiifornia
to
iauncn
sairiples. Tiris rnspii'ed
reir:;n"d 35 a\r,'on Products' inc' in i939'
b,v chalce' his sut--sequenr decisicns 'r'ere
:iltirlr-rgir lr:icCorrneli entereC the fragrance industry'r'ritii*i 1.], I{a.iing peiicllec his booiis ciccrpriiciples
sir-a,tegiJ of".",l"g
h4ccorurell -was rve11 aware

lsee
cf seliing cireitiv ic cusiomels Tiius it
i],e'ilenefits
of
tc-dooi^.
moile1 for sellmg cosneiics as ''r'eLl' H=
r-,,as onil,, ilatmai ibr iirm to aciopt -a direci saiss
ccmpail.v. I4r's .a'lbee, as die first
i-:cirlire,j cne cf his best salespeopie frcm ihe bookseiiing
lLn ii'n"" ireioed !i:e eompan"''s
c*--r,:iai saies aqeni ibi Caiifomia Perfutr'e Companv'
ug"trt ha'i exceeaed 5,cCC' B,v i900' the
b.lsiness ,Jrov,:. Bn,j b1,'189S, iiie rrumber of saies
a-r-'oul sales i:aCreache'iUSS2t)0-0C0''
eimpanr,,s saies lorce had g:lorr,,n to,5.i00 ug"nt, ar.J
offerings to include shampoo' 1;'iitch
In ti:e ireanrillre, iire coripan)/ had increaseiits p'odll"t
sucli as toothbr-Lrsl'es' tootii no-* cier
i,Iazel Cr.ear:-r. Almond C."r* Baim a,,d cther ttiistries
Efi939, the compaiil' r*"as seiiilig mo'e tlian 1CC pii;riiicis'

ali gLriilrd

i--,-r,

and cieansers.

ainosi
huider Avotl'S gror';'Ji' B-l' i943" irs saies *'-13
to e;'lz'nci 3iobai11'b-1'
icuiri; inl:,.- k i94i zt a-r:.:ui uss2i iniilicn. n lqi:, Avcn cesided iilo Pi;orio.-'Q.-ici'ii:i
ald
seili[g'ri'
firci ccinl.rljsi-.ins its La:i:r Ameiican ciivisicn "vili;il srr,;leci
:l
a'r',9o,i..rvcr.,
;ii;lli'r;;
;SSl:i
s saies a;,otriri;'d 'o
t
r;.;;-; ;,
i-..,e:i,.he s,:ccit,l

.,,-*,cric

Y,ar did

";rrl.-.',,,;i.t. "
0 reprrs
6i:eG 2

.*p

50-0 0

loi

rvorldrn'ioe'4

"ntuiives

iifesryle' ri'ith rtcre

-"vas gravel1" afieoted b,v
''voms:"s ?i]""g3'g
in ihe 19?0s aird i980s, Avon
To add io its r'"'ces' acquisition of
arrd irorr, of 'Lham tairi.g c;r tull-tiie. latbour-mark"i.;oU='
jn massive debrs foili'- gsm-Lrani''' B;v i98i' saies
heaiir]care c.cnlDai1l,. jrrrilir-nekrodt, resulted
,r? r.j1]icn. l8% do-.,1,n frcn-r its highest record riue*',uears agc (USS3'01 biilion)'
-1i11 rr,
LU riaq?
JTIU
and
1990s: li- alsc launched ne-;',, adveiiisiag programmes
r,vas revitalised as a resuit'
amons orirer measures. Its busfuress
L '
1.,,,,,"*ffi,,i;i""i"+;gs,
iulPr
i'uorid's ieaoi,g
prices grew steadii)'' By 2004' Avon became ihe
;5'ffi;;iJ;;tttock
US$7'7 biilion
anC
+.q iiliio, independent saies representarives

A-,^-- ,,.^- --.---,^-,-ed

ciir-eci-seiiing
"o*pur-o,
sales rerrenues.'

in -&e

,rill

"Let's Talk" CanrPaign

=I-ei's Talk"" iargeting oi'er l0

in 2ti00. Avon ialncherl its firsr globai aoyertising campaic'l1,
rere to U"uita a giobal sales iisf*'olk -iirrougil saies
inrenationai mar-kets. The objec.ti\:es l
icl cost-sairlng measures in an efiorc
biociiures, rl,'ebsrtes, saies incenti\ros, sample giyeaways
Siomen" The resuits vtore
ro i,,iifiit ir-s corooraie nission to become 'th" Compan-v for
respeslilze-li;' E-r''en. i';s sai"s
ouistariiirg. Glohai sales and orofits greu' b1,' i5yi zna il'%'
compan)"s grondr rates \"'ei'e even higirer in
represelitaii-,,es recorded a fio/o increase. lire
soiBe mai-k-eis. sucii as Brazil. I'fe:licc and Chila'

j'

I'bid.

r';cr

:.i005) ".ijl;luilr ?.ePci".

C7J3.1

lr-:iui= ;:Aycn Clin:: D;ie;: Sai=s. Reiat. Seies

3C

t:

Ecih

Giobaiisation
j-

;-q E.:1"

.r4ca:

11'..-

;-a;

. !i*

jr=.-]

-1.-;.!

^---=-;;-^

-^;-;.,

t^. I ^-i-

--;^-

the Uii and lri::-i:i. Ih: alnci;l-rnen: i:i James Piesion e-s CFC in 1993 narke.i e nev,'
:iraoter in ile cotilxar,':s histcir'. Prsstoil S3-.,,, air. i:rure of Avcrr ia1, in globalisation ald
ieiteialei ilrai Avor,',i-ouli b: -il:: ci)ni-oac\: iriar lesi unieisrccc 1,,u,m3n rr,oiiori-i,i.e ati
satisfrec lheir n:eos ir,.: seii iiiifrlirn-';rt throuoir its troiiucrs ano se.i-i;:s is:; E:rhit,it 1,. h,
oidei to betier ;orii'ci ;ls gitbai o:r.'raricns. A-r'ol appciate,: a manag3r to each courr:ra iri
rr.'hich it nai-l a Di:!ar3:. F:ci, c,-'u:rli-'' rrriiia-se.i ur,ouid haYe tc iie:t c:;-rah rel-ioi-r:lance
i:-i-s3ts ari',r'a-c Srailt.c cinslde;'abie autirorin'in inaliing iesisions. The ccurnp-n1,''s tea:ls oi

saiss iepreiertrati'i.3s !".r-e ]i-ia]ra[ei L-,r -ral::'ied si]es manageis. r'iic r.\'ele ncrrrlaiir' local
resi.jents. B;'' 20'l+. A-,o::'s,al:= .:rE;'atioas:or-erei.:it,:n :r,-utr-ries oi'r3trirot-iis acrcs-: roul
gec,ri'athlc regions
l{,-.t"rir .rilei ici, I-ai-iir Am::'iiri, Europe ano .rsia Pacirlc.

]ii-e:;.fale,s
iocr-:,:-oolr:ra:(ering l,i ,-riie:i-seiiitg ,1Dial \i'?,S [r,;:ii: it1lrr:L-^c i;1 --i'.,sr'-r .")a,]l-,:,illi.3
.!','ii 'i'1 a-i :lI ;:a:'i" .:.I,-l-iei- iir-.-[br]' ijf iilr, lrtaii,t;:iai Asso:larioit oi is3itci,
Ccnpalies. r:';'::;l=::;r.. -l'ir.-- 5-=;,;i,: -i.-.s-ra,l:ica,-: i:i;3:.ssc.;iaiic;t ii:;'oi:J t,:, hrlrl,l:
djiec:-s:ie.;lir;rali:-.. Jr ia:., jC ii:-it--,,Lrr-r::ri ir'.rs riii: ricd:l :c lt.'icC,;a;ieli i;rai L= ri,-r-r.i
l'ejec]" all 1r'.liiiri3: l't',.-,1-.1 r.i-',1?:,i:r;. rrai c.l ;:r r:rlil:rs i:.ci-;i.itr to seil iti; i,rrcd.uc:s -*.hii:
elCOUia,firig ii:e,i:r i,i t:ii'.. i,t-t-riU:i. i,:,1'i-ire';-it:.;ii:eS c.i r:'.ireCt iteif CUSiOjliriS iC A.,'r--;t'S:i:ia:,
1.he

cuit-Lile auii

iejl,isiailaiil'3S

S:i'"iai s:l:s

cii]1,.,s '.i'=t: :::,::r,ii::it:ri r:,r:;o-s--i rire laiicit Lc rgcruir ailC "i:'aii; r;aie-i aqcilt: ;,. iti-)
i',";iii,:i L-'l catitl--,;lisSirJ rtiiilii :r:;;;i:Sir rit=il 0i-,'i-, .ia.ies ijr A.,,c-r:.'-c r:r'udiicls. .,-,'ii: ocrLsiri:.,
r:ll'aild progianlm:S i,:l' t,:.;' .i-,]-S a_g.-lrts rlr.-, r;;tr,til:1. il-gr.i;3i:e1. 'riirl:ss -,roti icuiii i::

proinoleC iC itt:{ta.g::1tjel: iaii;1, r:rpr-rJ1L1tirj:r- io:- itiilel fievelocmeiii r,ri,es SCa1.ta. Alce,:.
Avcit's ill-<t sair:s itri'e::nr:.:.'i'.'.:. ir:c loi'ned rite :'ii,ia.l;elii:s ilioilar,ii-i.,-1,'i,-r]ran'' :u,tiir;
sille iile ci'trnilAil'''s .l;::,t,,:,;,. r--;;r-,n;-.rir,iri;s frl- -*,crilen i','cl-r irigit :ir a iiir:Le u'irel iai-.i-,iir;::,t']-::.i .i::, ,.,.a;; :'::.i ;^.,:' ,,,..,,i1 -l:. - ;:,:: .:;-. .,.,i:1.,,. l,ll i).]i.: .,l.a,i -,uU -:ti: ii::c. _l^i,.,;. ,".1.
"
sL?,[ec il ur': 1S8C,. iadi',,:,:uai e:,i,iiris i'c,il sai:s coitrirlisslorrs iii Alc;t irad -r:e.,n criii:
aL1r33ii]l3.

Saies Leadeishin Pro* ran:ni*

In tiie

1980s. riar-" it.\r,':aies r;r:iiroi:' rrir-i:: irrii-cciuced b,r, otiier cilr-cr-s.:jiing couti--.:lies.
inclilil,-:S nul:li:','el nar:lr-riitg. -.1ri;;, 1,r1;1r..iee,j 3 -.,41i;iy oiinoairiii;s-.o iis a:.=iirs iir ao,:iriOir
it, I'u[r.L:iissic ,*i, sulil as i]ralla3irlr.rr. al ilia u'atlltrs *rira,r.l*;=iorJb"r=" r]t saies ilao3 DJ
l;: I:-.li:l l'iJ:-Ji,:.: :;:1::: : :::-::.::.:::li:i.-. _:,.,,:;'-- lj::; ;, i:-..::: -,:itiili _,.'i;:.- :i;':li--.:iii;,_
,-,.---,1r.1-. -rrr,,.
i:., ,.. .;
r. ine
.r.- ci
-" a,ji;:.ct-sal:s
-," --;i:ei-!,i1i!Qi1v:.
^ .,-i-i;r:iie: l.l i,3:ii'ilc:ii;:e ils .aie,< an:i'ca;h -,riti:
consuiiaal. Join ]ti:litriro. .,','lic llr'af,-ras.a al: it::ior-ari-,.: seli!:g si'r-uJrjl'3 i.;orr'i as "Saie.s
l.-:ai:- s;:li !ii'-:' -;:.:r =-'.

L:lid:i'ti:e Saies l:aj:l--.i,,1! Pi1slani:-r,:. --..''f-rlt'c Sri3s i:;li-se1;aiiyes (irrsr-tiei sales a-?:t-t1s,r
\i:et'; uotrtl-::s:': j i:.' ::l-"'::,rS i.:i.
=:t:s :.;.:.-.,s 3ra l:a_-l:f J ::t=:: i: ?.:.it ll. tt llt3-.
ilu!iiior )aic-\ vvliriiit:)ivir.;ii>t-i]=i'>ai-s a.g3ll-Lj n,outc aisc 3a-trl Laonuses a-oi]] sales Diougill
l;i'aE=liis inei,i13s 1;c,lit-ii ii:- se;cao-,.i-.r sai:s ageals) anii b'.'-&ose ie;ir-.ile,j br, .-leir o\,,',.
;-oc;.:its ile. urr;i-ii:l' ag:il:s t. etio so oi..

uiu re er Avo n C irina:

irec!

Sai!:it3e

gLBl=iLE[
Leaciers'

Unit Leaders' Arivalced'Unit

There rvere four ieveis of leaiiers in this pl'ogramme:
Unit Loaders' (Figures gi,en i8 the example
Executive r..hit Lsaders ald Senic. E"*"o.i-L
:
o*io* pertain to Lhe eariy 1990s')6
sL -

*unitLeaders:Eachsalesrepresentativewasrequiredtorecruit-an*^Ti?1fi::::
personal saies talget oi USS250=pel campalgn
agents and achieye a minimum
saies

her recruits, total saies from her

(selling period).? In orcler r0 sarn "o*inissions f,crn
Commission rate from first-riei ren:uits
enrire ieam rvouid nesd to be above UiSf ;OO
fcr saies of uS5300-599 and
(saies agenrs) r.,,,as 5% iithea[io'trni *u"-u'ssrso -299,6%
tecei."e lo/o ci her second-tiei
1% -isales were uss600 0i rnoI.e. Each rvould also

agent'i;aies.
rhree
lTTeivs lecn-rils. sllloilg n'hor''r ar" l:asi
Ark,ancsfl Unit Leariei.s: Tnel, should h3,,;s
US$4'000
and
sales
acirie,e US3300 i" prrsoi.'a1
needed ro ire u*it ieaciers. Each had to
-wns 6]'o fbi
rare tiorn firsi-tier saies agslis
Ln ieam saies per campaign. The com[rission
aj1'l 30'i for saies vaiulngus$500
sales of uss L5{J-'29g^70,/o if saies v"ei'e IJSS300-5599
aisc iaceir.e 29,,., rroirr tiieir
r,,,ouicl
q,{dition. each a'rivarrced urrit ieacler
r.
uu
i jl
ul
:t tLtl i.
sesrind-tielagents ancl 102" fl-om tlie tlri:'d'
^r
under hsi'' ser-tn ci
Frecutive unit I-eeders: Each shouiri have iwen$/ Iepleseniaiives
*'ei: I Si--r5' r:i.il:ai 1lr- her c'ili'irc
\i,i.rorir rr'L:s'a'r,e unil lei,-ie;'s. Targe-i p:;-,ci:ai :ai's
t'ate i'on-i firsi-iier agenis was 8"/o
team was US$17,5C0 per camiraign' The colnmission
12% i:'; ii t'"'as IjS5625' Front
if saias r.i,ele US$1j A. n%if rhe an-lc'urtt v'as-ljS5315 e'nd
sa':s;;:ll: -"ai:= "'":: LiSSi5l'
hei second-iier agenrs. she coui,i also gain 37a oill,ei
The ci)i1iillissioil sire couii earn fi.cm
io/^ il it;r,.,eq TISS3 i 5 ar,c 5oh fot sales 'Jt'uS$62: '
ttriro-tier saies agenis t'tas 2oA of the laner-'s saies'
i'i i'':c'nlii 1rrv311i]' aoents' aaong v''[om
Senici. E:leeuti',,J U*ir -r*adei-s: TEe';' il:ade'j
pelscnal
inust be aiilr; t:v'acuiit'; uriir it-=vol' Theii
Sue-r/9fl 1lf1t3'i be iitiit ieaders a:r'i'r*'t--

-^r=rtorn::r''aqTT-lq4t'l0rnrirLlatoi-r:tniir:'slt':t\visl-lSi+C'Cii::-1ci'ceitt';izl'Jh:
i

!i

rr

'J

D J

t 1r'J

unit leaclers'' bui senici ieaders could

colnmission rates \\reio the saine as iha executir,rf
e"iectltive unit ieader at the frst-tier
ealn ar a,Jdirional 2'/o fram rui*, *rJ" bi' eacir
.a

J;1;)

er'

::

:1.

fcr A-"oil'S saies repleseni'ztir.res to expaad

Tnis plc.ga*a::le cieari-V provicied sirong iacelitives
1-5
8 r.. ?^^: a:rnn ha..l a 4 rilLiai represeniatil;s5 ii'sildrr"ide, ccmnarLld to
+r.-r-i^.L.1','.-''F'i
.ii
--!!
cLliirijiJi--.
-JrJ,

miilicn in i990.
F i r-sct

Saies VUoriera'ide

appl'v
ine-;itab1,v led its ualageme:rtto
The success oiArion's sales approach iil its honelanil
Avon
i9i0s'
ihs
Since its exoaesion io Laii-n America in
'U(
-he same rnodel to the other rnarkets.
Canaria'
more ooun:iies, such as the
had astablisl:red its direct-sel1ng nef;voiks m manli

Uk:'aine, Geiman.v and France'

Leadersliii: Pi'og'a:iriae io iis gicbal

After the success in the L'iS, Avon exporrei the Saies
to adapt io locai cultures' the Piocramme
;:rarkat. Alinotgh sonr" a,ijurl*ents hai beon made
*,as kepi as ctose to ils origilal blueprint as pcssibie'
je. PcianO' Ciriaa and Viemam' Ai'or' l:aC
into deveiouins ma-rkels.
&em' In fact' it rvas difficuit to entice
found its basic aoor-to-aloi'moi.ei q,rit* uJuftuUle to
-+rhjch ocirsuiliers in thsse inzi'ke'ts \l'ere not
ir-adirional reiaiicr-s io iiistlibute Avoil's products
flexibie and v'as
yei.
fq.rilirr...,,,ith
Tl'ith 1o,.r, fi>led ir-',est*.rr, irri iuti)', Avon became very
\\ \.\a
lJlllr]1L.f
) /v'

1r4n1s6r,?i. unon veniuring

I
l

t;rli'jll.,rt"q-...,1;;'-1,." it ,ii;:c r':ri:. ri.--3

ou:citasei

'.:i ' ,'r'

:l

.-l';i':;:

poreniiar c"ision:Is
io;ireir,lr-ll'lll:^::
iher distriuuied
"irem
:elrts3niaii'iesies
b-r'a
ic all cfier :gelts r:crui:ei

blv each saies repiesentative. \1jl.ro

f U.!*.l'.ill::fars

r',:;:l

"r:'

:ro'iu'cJ

'\'

r1'o: a1j

i'-:,--: c;^,.:r Ji:ia ;:::--: S:i;,:. A+rir, Sei:-q;- ;-.::-

'):,J):,.

aD13 ic nat.:: ;l;cirs i'3+' auickl-r'. Accorolng tc F-olt3ri Torh. execuli-,'e vi;s-f,1-3sioeni. "-e..,,3r,
cculc be,,-orne p, ofira-bi: ir a neir, i-tt-[i1-.- r';iihin ili.C \Jeais oi i.s iniresi;aeni" Cornparei to til:
ircrrai r-elioci of tl:-r:: i,: fir.e .,,ea:st".t

Av*n China
TI: C;rincss cosmetics i:is:i;e: i--:gaii rlounshie*c afiei Chila's sconor:i: leic::its be5ral
-;ii;
iai: i9,iis. Anizci,:d nv tii;,rrlaa: Lror3nrial of tile Chinese markel Fl-e:;icii. CE,*--, oiAio:r,
sil .riigi.', ba;ker A\:c1t'_; ac:is jorr rc enre: Clitna il the ear.l.,, i 990s.
Iir

r99'-1-

-lr'oi:

i-=acl::C

al

lr'.-,'ir.i conlllar\'. 1. :;L u:',

r-

ag:-;erlell,.',1'iiir Guangzhou Cosmeics Feciril,'. a goyernminl-i'--iru_-,':'rirLrrc

q'ith,:l iiritiai

ulvesimenr: oiI,SS:;.1?,i million-

ci

--"cii ltail 6ai;. ,r'i,uut-itril.,.l firii;-; ihis agi.eenelii- Aycil u,c,:ld jirelsr iis re:imoiur:-.
air,1 i-i'aci':i:-iaiii :r-ni proi'iile
,rr,r-ri., fomiuia.e. tecnnical :;1i--,:i-iis= al,l sai:.s
"r,i. r,. culd -lra
;i'r:i,:ii:. :, , ::1- :re'.-.' -i':i.,t r "gurrn..i'..r.
aoooi,':, . _":;.r:af ,,,=nia-.1-a- , ri-i; ;)rr,..
c...'-ll1rail-!' ::rc i: niairtr..:', :o",',r,,,,,.'
i:rir,:duct E0 rc 90 nicducls ilro rhe ma:liei irr ie initial sla.,=.
r',iri:i: ':ouiil be cia--:siiier ilto irriii c:ii:qL-,rtis, r'--iuui:i:i:=:ics. i:aii-r rrrc L;cc.,',-loc,.icr:.
i-.'iliclt

:litl:::.-

:-t,i: :=lii-ll:::.

*':
r.i'.^-;-:^;^;i;;'-- ili:1=5 iI:* '-,niila
irr ,--i-ii:r'li n:zi'ireL jl-s Llal,js 11 ::. irasa:ri1i iuuri:1,a:ro h a r:iacs -,,, llel.:
.,.,-::r;ai i,irl:
i_.::_;i-=
]'Lll,rii::t.-,',';rii il. l,.t'.l riuci.. r:r.,'Cii aal.,.C;:i;_;;,i heaviil,c;i ieievision alij h:iri riar-, Ll_iaiir,i
.-=;,tti,a,-: ,-. ,r,.t aiji.:iitila:j':.r:1i,.;lliiai Ji-tsi.oirei-s. Se.,r:ia] l,oat]laiic,ils !i -i.- lraai:. 1c -li:.:
1'lC::t'atilr:,; ia :i,t1 .i:.: itc:i ii:i.: l;;i:
t ;-:r:.,:':,,-'-' i";,-i;:-sL:ruii:1ir-,i trJl'css ire:rat:',rti i,- S31-r,o as gisn-ilt.",i.io.:l,i
treiirirr g aieit'Li-i
sh:. l'-,:i:;las aitc li'alsnu-lariiti s\.r_;iai-lls l\-el.e -r-rooi ar ihar r::le.
" -S:.:i:s rjtal:i:.:::i's ii':re inie-rendeli ,.uL.-celtl-aciors larhe, thal coiitc:i1,.. 3;i1pl;r e:s.
u lc.isu::r,:ls cr,i:lii clir-e,';iha:rg: unsari:facrci-li ilioducrs e-itc ligr.: g-rir--r.oi
seeLi iei,:itis.
.

,::rli;',-

i, o:ir:-,;t:i:.;:..

Sai:s ;ratra:,.:;'s :a:;r;i cci.itntissiolrs c,iili, crr rl=ir sajes anii tho,se cf riteir iti-sr-ti,:l-reciul.s. irr
l=:iir.,i,li iit. iilr=:i -,:'er: l:.-l-i9i cci:r;::ission Nid)4n

:-:.:

oirire:cnrinissicr citheii ir.s-

:i:. :'::;':i,:.

ir,;:i:li . -:,'. a-. ;';c.nit=i Sir0 sai:s n,ana.,:ls aird i.alchise ceaier-s (as --ii ou'! sai:s agelas
"'.':i:.;aiiec,l Ciri,;i,; li3:-r-,'L:air lc and -1,"0:r,-.rs old. )rrei.,i-rcruirs-\',,,-arc gj-.-irr rer lesscr:,.
si:-essi11!, !,. ,t:)t_.r.-r,riri. rri:',- _ri::1i: q,_-:l-=:-.,,iro r:,j i::::llI
::l:t:3 :i-.:.r: :il:i: :::.,
,

a:L1n

-iiiill

:.1-r

' iiic.
:a -.

,...,...
'.11i!

. l:-.:r:
.,,.-,'.1..

.!tl

-. ::.'.,:l: llsi;.t:,,, ,-;,r:.

rr.:. ;.-:a',- ::
i-,.,lil: i....,:::. : : j I I O ::c'a ;: I ii 0 j l.

...1.

F,.L'iui-=

of Avoa China: Direcr

S'iuirB:t=ii-S'E"

9l::ih

from
saies ruanagers coui'd eam commilsjons
and recn*ting nelr, saies replesenlaiives while
opened'
More branches r'vere
all the sales agents directi,v cr i'directiv l"r*i.*a by qP
u'adimproved' h4oreover' Avon began
iraining s,vsrern \\ras strengihened and cxstomei sen'ice
froml local, Chinese suppiiers'
to source ra*,materiais fol:ralufacruring irs proil'"rcts
j

and thl rrumber

By ihe end of 1996. it had establis nea ]] branches
cieaiers)'
(28
fi'aacirise
rieulers had nea.r1,r'tripied corapared ro i995

Ban on Direct $aies in 1998

Despite ihe high ievsl of ilteresi

pf Avon Ciiina fianchise

a hos'r of
cibert seliirg. r'his apprcach also geleirJed
ealTr
could
uy o-re conunissions they
unerpecred negative e.fiects. A 1or cf peopie, r.Jptrd
of
ior
a
.rhrough ihe nrulti-lwei ar:;arci s)'ster:ir, ior*a *"'e di-iect-saies oompanies and made
'v'icISE'
to seli tireir prcducis' To rnalis ma'ttel:s
puichases, but fburid oui tirat lirel' l\iel- not abie
W
,-e.r r.a" g*rr,, of riii'ect-sails cc""fu"i"', fcrcef-rhe;?Se-!r!- some unsc1upulous comoa.rries.
I'ioi c,ji=lEffisT;iilG
to stock up a'i tir*ii cirsapp?_4ig_lr lea'jr,g thei, iir irot srater.

ir

ffi'a;i..'-,.'1arsc.l..,uia1sr,causedsoiie]u.'iesi.

ciir.g;l-saies
Concel1.ec about.ril: rising so.ir,] pr.oIi:rirs associated'.,,.,iih

of

n |n*1*

?:.:::

conducieci severai t3t'te-\1's oii rne

S-rate Adminisrration iol iEcusirl: aad Coi:rmerce
cifioiai aifi:uiloemenr' "Iii is
21 aprii i998, the cirin"=tgorerilrleilI made.an

approach.

on

n393SSa.Ij,..CIop#:E'ee'.sir;e1hs1ha'vabagun,"h..1::::1i.rtabi1t4,
- S.nt: ,cl'1. .ii=cr-stli,ng conoetti:s ''r::: orierrrl to ;1ose
ar:ci e-crlrsffie-as..,:lcpm:ni".

-,,l

stafi'
;3-;,; i;r:;r,el;ot-i;', ;-ile iheir ie-Li:'; ::lli i-pi;l'lplialel.'' Ia?l]=qi 'h:l'

ii":ina'= ;*slt:eii*s

ci'e'

!;isi-i<s''

miiiion were ul'b'?x resirle.rs'

irs pcp*iaticn of around i-3'oiiiiorr- oi''".viricil nea::i-r,'502

Ciilnah.addrelarqeslauinberoipoter,-iiaiaosmericsCusi-oliielsintheil,orld.Cliires:p,:o|i.<;

in iricome leyi=is-aild bgEeL4vjug

had L.ecaine more fashion conscior:s.3*:-," tlie'iijnl-roase
CYil-.tA;A-;v oi Social S'6;;- ciairneC thar L:''ba'r
-

st,,.d,ai: :.f.- goo"r;nt-backed

r
defireci as irousehoids
resicienrs i,. Chila ha.d fcnneri a *e1 miciii'e ciass.
USS i 8.0u u-

6.0

q'iil: tcral

asseis

of

i;c.:'

Accordingtoarepori'o,vtlieChhaPaifuragsalrlCosnre.iicsAssociaticu,ilie,;clalsalesr,aiue
-"ea:'floin i982 tc 1998'
oi cosmetics Ln cirina had g-r-,wir by an average af 23.3% eacli 4Aoh a]rnualiy on average
b:'
peaking u 41o/r. Co="*ti"t p"rodu"rio" h ::1": ':Y: O"* ?'oll11
ihat of the national
irighei'thair
fi.om i990 b 2A()2,scaling a pee-k af ZAALA i:r 1993--ei'en
alo,Yld uss25
uan 29c
.1rotn
eccirolrv.r4 cosnietics s"1.1 fu- Chirra had gror','n more
':in.*t
i,dusLrry.
cos;netics
21104' China's
million n 1gg4to USSS biliion in 2004'i [sJe Erlribit 3]. in
after l:eai estale' automobiie al1d
rvas ra,ntried fourth in tei:ms of consumption e:;penciiturt,
i5
.-----:^..^
LLJLIr I5Li.l.

': (.121..t1a,,.1998) "China Sates Finns ii-eiliieci Sirairsr,' . i't;;tit::iai Vmes tsia Inteliigence li'ire'
i:Economisrlnrei,igenceUniif2;Cill;;o--''gof;r'lt..fui..:1i-.ii:'rtiiarCo;r'i:;:-'r::l':Ch:ra"'p' i2'
(daie ;ccess:d l1
Chirss3 Econonr"'' t:'-ui''r'crrelglisll coln
ra
Ch:-*, D, a,rd --:,ue, L. (7 Fe'r,iuaqv 2005) "Beauq:' S;croi Belefils
Octohoi 20C5),

"r5 Ci "'r.i

Cc

:t:aii: !:;ix:r:1" :{st:' Ytr!:: !-p: 7ai:4''j oi'

Chen- D. ard

X-ue.

L. (7 Fe''rr.ian'2005) op cit'

t7

2'

t )t

-..:::Despile rhese high firures,

ire ma::ket !i/as Ar from saru:'ation ooinr. in :004. Chrna,s pe:

:r.piil ir-";ual s:::nring cn ccsmetics ir",as onr) LISS4.:; ri jricl rilas fa; eehini .irr. il_ ;;;;

Accorriing to CAFFCI's'e esrimares, amuai Sales r,,,ere ey-oecled ro trii USS i O

br'2010-'?sr\'Ieaau'hiie- China's corimiimenr ro opsnine up its markei in
"odpiia:r"=
u'irh the \\'cr1ci Tiade Orgalization's ruies u,ouli fi::th=r .'.I-uiu,- m:rks: ,i=-#,i.
.,.liti,
s,reaiei patticiirsljs, *om bo-,i i:rt-=.rnaiionaj and dornesric piavers.'
llna-ior markets.rs

-biliion

Consurners
Ur-han Resicients

Lr l0Cl. lileie \','ere a rolai cf 550 cilies ii: r-lhina. oi rr.hicii dl i i,ad a oonuiarion e:rceeiiing
:iij-aiirli.rr '-iih;irgh cqiiLri:-U'r;i131s1i'.=1".' :,iiii ccnsiii:r3a es iururi:s l-.. rui-ai
resici:u:stil:-i' ..,,,..i-- .,,,,id:l,,, useil iir -,lrbal a:-eas, ,:auicLii:u.i1, h iarge anc ir:ec.iuur si;,_ed :illes. Tir:
l:a'jirr-c ma:'ii.:rs l'ct cosi:redc crcducis in ciruru .,"=r-= slra:l=*. ].,*-iin*n
aic Hargziroli in
e,asisilr Chu:a'_ Beiii:lg, Tia{iir aiio Daiiait m rhe ,icni-I,
..ajic:rl
jl-,r:s:
nuii
': =o eiici ),i,.i;i in i.e
:heizirei: ard G::an=zhc,,-r :r soutiem Clii;ra; and Chonesu,-: , Cher.du
-*,esie:::
Ciiii,"'.tt -'itlti, -iirt iiicrea,r: in ciisposable i,rcoi:re. urb.:r, :is,rsrrrs laii ir,:c,lne a
di,;.:a;i.ril

-.,',i.:-

:.ri:.,r

ir L-i ; rie r
=^!--n;^l

i, ;: il;;.;i:; ili;i:r:., ;,:.il:i.il; ti:ir.:,:L.

,^^,.^..*

uc ns u niers i i-i U ncj=i,:i gvgi cpec' ReS io ns

i:ricrlgir:,:ii ii;80s ali

i990-s, ,:csirr-rics :n:,:nuil,:,i.:r:is hac iir.,el,, iq:lcr.eo iir:

ui;iill'j.-;':i,Jr:r:i1 sil:ll ciri.--. alc ii,-,,,'.r,S :i: ol Lreio-r,,.. coL]nr: r-,-=i ilr..*" ,;r-i,';r,,..r=rr..
l,.rie,,;i:.1. -rr r=sLima-.:i -i0 1-il1l.,1 ir,ir::L,i::lris il e i ;;i _:1"..i_:_l li,.,,lsi,r"s :nc
local
!-J=c\it.l'i1:ilells in 20C1.2:in acioiiicr;. $e Cirin::r-Sr_,i.eru.t_-l^i
ir3c ad:r,::j a.:r,.:. oipciici=s
lu:': ilte Cieat \i'esiEt:r De-,'elcrll:l;i Pcli:... alc L]i-b:;i;lsai:cn Pcilc-.,-,o d.-,,.1c,. i.li:
l.i:;.al ai-eas'i'i,,icil ccllli'ibuted io dre gror'nir .ri iis;ro-.aole
hicne iirei:*. -iii:riiaiir.. i:r:r. cf li:: coasiaj
a)i.,:tt! ]: :a i::,:le l,'':aidli::.

'.r;::,. ':-. '-:- -;i:,: l[,:l;) "Ccsil=,j:s ::i l.;:r::l;:s ],,tllt::: i:t'; ir C::tia,,. Sr-l:,-::s
Ci::ii

:-ii::i!. l:

C,;':,:-.:r

lir!i'i

:::::

.
- -r L
t,t'

Saie: cr B-oiii
Future of Avon China: Dire:t Saies' Reiaii

arl? { on

Ccimpetition: Domestic anci Foreign Players

. ,
:
I'arirties oi
^. ^n.' ,,^;
producing 25'000
manufacturers
coSmetics
loca1
4,000
than
more
Thcie were
ol merliurrrsized' witii annual relrenues
cosmetigs' Hot""'"t, *cst companiesi"vers smali
some oi drem, .!i exarnpie Si:anghai iahn'aaveraeing less rhan ifi;j;iur"+o"iv
lai:ge, rt'ith each ,nging kt ar'nuai szte'
Beijing Dabao a:id Chongqing-Cii'e. rvere:;eiati,e11:
of over LrS560.2 miilion.
market' As a resuit' 80% of the
'uranos
,,,*i" po"t.t"a ir;'' intelnaticnal^brands e,en iirough local
cosmetics industrl,'3 ;r;il
tx' tire fact rirat totai saies rei'enues cf ail
hari a 50r,( rnarkei sirl,'e.t' Tliis ',.'as besi iilustrated.
coml.ined were less thail that oiI-'orJai's alone' "
ciomestic cosmeijcs
"orrrr"rri=,
a brand plesence in Chila at'l iraC
In contrasi, foreigl compalies Lrad sLiccessfull;i established
ri-re
past woo dsc'ades. Some of ";:e laigest ria-v'ers i:r
been ne,rtrng handsoi:re profits ovet the
Horve-veI: an ilcraaSilg- nurnber c'i
Chinese eOsmetios ilarkei l1ret.e ,lmoj:i"* "o,,1,*ies'
SviitzeiLa'*d"1tt:-1.T".::j::::jt" rr'ark=i'
non-US cotma::.ies, ncs'riy fi.oin France, -'up* u"a
experience in brand inlnagem:fil srenqtir
a,-.rrre,.l',.-rirh st-o1a fliraiicial oapaoiii-1',
"'a'.-*i"'t
sriaregios allo ionq-ternr
in produci ressarch and de-'e1opm=*t - ,or*r".i marketing
brands such as L'Creai' Avc'n ai]d -i';]1i;2r
cominttrrrent tc the Chilese ma,rkets, intet-i:ationai
i:r China lsol Exbibir 4l' -ware ci'iit"^
dr-,ininared ihe higii-s*J s'og;nenls ci lne i:rat'i,.'e'
cosr:letics' more a.C 1lr!-rle Cli1n3si
signiiicant noieniial anci urcieasj.s ilerna,,ds for high-end
iugh-end ccsnetic ptcdLtiis' -a'--'cil
cj:eiiiicals ani piiar-riiaceiitica'ls ;alufaciarus t''rireO ic
more intense'
cle''lelopmrnrs ha'J mi.de cornperirion in rhe industi',v

The iocal brands, ho\r/el,ei', targeted mosti.v the

1or''rer-enci

;irit=-:-;i=tive R*ed f*i=

Av*t'l in Chii-:a

lc
Ctiita -!Yas a huge biov" to Avcn r"'hich no-t' had
cievi;e araitei-na'ti-ie business strateg,' ior Chiiia'

The corrrpleie

ba,-r

oi] direci selling

first direct-seiiina companies authorised b1'rhe Chrn:s=

in riepa'ment siores ani to iraiie its o'ri'n fi-a;ichised
gol,erumei1t io sei up
""r,nr*r,
""a-Jt"
in Dcnqgle! in.Guane-{Sproritic='
bouriques. -i,,r,on sei up irs fir'st co,Lmtei rn rtday 1998
Jf*Guangtiong cioi'hce'r8 'A'vot
capitli
and its iust i:cutiqu" ir-, it4ur"h i999 rn C,,"n!ri""and counteis ac;-oss the
boi'itic'ues
then asiabiished iis cs,n disn'ibrtion "er,ir"=,-.nd irroie
AYon boutiques and
6,300
up n"u.i1''
counry,. \,1iithifl tire nert five io sir,vears- ,A-von had set

in

1998, Ar.,on n,as airiang the

'14
i,700 cieparll:ieni counteis acicss

ctttes'7e

criteiia:
Tire fiarchised bor:ticiues v\'ere required io i'rlfiil the ioiiorr,'ilg
n ldentiB,'stiih Avon's busiless piinciples

e
"

liarie a mhirnum LrSS3.600-4.800 ini'es'mient

\:o braad licence fees.

cent-es, Arron liad esraOiished

rrd*:: rc rr]anage its geograliricail), disnersec distribudou
monitoi its dailv operations ano
sr-rbsidia;-ies acros-c ile natjon io handie aroiications'
disr:'ibuteproducts'lhecoinpanl'e-\ieninh'od;cedaCirinese'\r/ebsitetoprovidoinformation

I11

2t

tt
t6

Chen. D. a::d

--Yi:re

Ibici.

L'ar:zl

coilr

\1,ra:

oilJ of

ie

in Paris. ii had subsidiaries

laigest cos;leiics coliioalies in tb: ii oild' Headola,-iered

-riie s.

:'.:. s. :oll, , r. ;::.

tt i.rcn ihiru*'e'csi-,e, r'"wt';'a'"cn-com crt iac::ssei l;i tl;i1i'-- lr-t;1;
., Cl.l -Cosne,iic. ,.Road oi Ai ol i,r ffins". ii t r',,.cr-cositlei c ioii.l (accssse

d2

Oc'rober 2C05)

'

il

c.''ei 100

io;- ccnsumers a-nd sales relreseniaiives.

in aridiriol. Avon

s coriicl aisc oe lurchased

ontln:.-'
Saies coniiirued ro i;icrease- as Ar,on had
expscred Liiai saies v,'ould e:tceeo USSI0C

!-lgv!Lvi.

ii

;riiilor

ieScltlilg u J-D 57 million in 2003.

ahr,/ ::

It

io-as

Suvout
'li,'e

ere iooi:iitg-for c sti'crc{t; rh,;: ileces

-

l:
a

Ci;int;it

Shou,i:a-n_e

ihe czttri.e cj

Gao. pi:sioeni

oir g-cu,r/.

oiAvol Chha"

lr'iar:ch 20C-. iYoii l-rloDosed io ac,:lurre ijr: rei::airiii:g sha-res ,-riAvoit Chila liorn l,,iasscii.
Gi-iulszitou--Lraseo Lrii',,aru Cu-rruprl-!. ai US:i:,,f rniiliut rilus l.ccuirirg itil oii,.rl-rshil-r of

Ai'on Ciriiia." The accursiricn

r,-r.s an

inii;ercr oiAvon's;ariii

u: ihe Ciihese rrarket.

Fur-ihel iy.nansion
,i'-e siii! i':cr,,e';i;stit' oiiier oritoi'rit,'tirie: it ,zt.iri'di? ;tiare citie ,: citd iitoi^e
iaiitti:. o:ttl ti,: t,,iii b.e u,rorrirrg ai i=:: i, jii, ite:tr bct,itit:ztts ti yect"-ior il.)e
"ior

zs e e

i e n;r is. e.

i.-

- -{lrrr:a .ir:r::,

;:::i,

a.ni Cl-,1

ci i-r.r:l3'

Fxilressilq cr--riirii--i.tc.: ii-, tii'. i;ctritriai oiCi:j:::l's tiiaiii::- j!.,o1 :,llc,-trtc:i,ts lial lit
ta-re lUu-'to aoc altoiiler i0t) ocuticries *ach le::r il ur: ii::.,i iei, i,3ili-< io its saies
Itcri:r'cr-k. ri,liicjt airi'i.,.j.",co:,3iiC alinost ail tit- {-l:itr:s: l-1r-o.,ijlc3s. i:tliiidit:r: Tit:1.
!'iJLrUil:

UU

(,

fh: lecisi';rr b-:'iiie Chiiiese sci-ernnreill rc iii i,.s b,-l oit A..'cl's tit::cr-::1iir:! oil.raricris
L.rc'igi:t 5o:ir oli;ci-lunities a.rii challeng,is io iire cli:ttnn-\.. -sDriiilii-, :1i a;iti'r,h=n iile ^.'
Ci.iit:::: ccsllteijcs maikeL ri';rs e.itaildir:g ralidi'... Cl iire ol., nalC. A-,:ol couii ailopt iis
rariirionai selii:tg nierlod again to nleei tije sroi:,iir-tg demaiics oi Ch:ne-.e ccnsrirners. flis
.,t'ouid be itloie r-roltcn:ical scrnpa:-ed ic ccrirli3i-: a:'l b':uiicu.:s .:.,jlch .*,c::li
iii'cile a lai'g:
ii:l'esiine;ti a-ld-a,giiel ir-r;Jd cosis. Cn th= othel hani iire cii'ect-seiiirc l:locei iirat r,,,ouitl De
iil-c-a rl Ltlr:r:',,.o':ii be':nsral-,1e. ii -.'.";,,rri be.:t a:'ial SliS3 c-,::-i'Ss3: i\,ihc Chi;-lsr:
so\isllliIletti. meauiirg Lhai ilur'-'ir.,i-rhl -;-,1,:d,:irii'r-,rtoihel blrtifr.I-1 :i'lto;'a. ado-.tii:g tiie''/
dooi-tc-icoi seiirng annroach asali i,,.oulc iir:145p1:i,_grr5rqjlaiia:ao-",ne!r's_. afi3nri,:ii and
iligtti ei';l :tiieci rite de-"eicnmeni oi ir...-'rn's i:-"aii
rF bu-.il:ss ria couiti.r's rind bouiiqu:s.
...;.i-.

.,:il

-.----,i

:...,-,..,,^._.....
,,

,.,-ii'l', :i].]arl1.

.{1-i:nar:lr'. A','oil'-i erisrirs Lreaun, bouti,:-,_re; --iulJ :t: i: :L-t-\ iJj ceirtaj ior ui' Jomrart\r
uird:: iit: c-un-:nL i:ouiarioirs: offrl aiter-s;rl3s ser,'ic:: ,i:, sal.r-; ispl-:srlliaiii-:s. ilclucit-rg
Jf u:r )l:r:-ups. -,riodu:t i'enr-lls. ct'eiiis- nrrduci niai-: arc riililr e.ssis:ailr:: :ltC l:'oviris
beaunl coi:sulru,an
\rrF,rlirlc

i'1-

er-,'i ces

ro aorrarro"ar.

n5i_

.-..i....
uii!14.

-,_-\

1!..,'t:l

l::;:;.:: ;. l'. ::: .,-.;:;:: i-';.

^ ir-,..-.
:,,:
' ,. t^ .--,-:__ _i

_-

or Boih
Fuiure ci Avon China: Direci Saie:' Retaii Sales

07/31 9C

EXHIBIT 1: DAVTD HALL TfiCCENNELL'S BUSINESS PRINCTPLLS

Eie v,ili provide individuais an opportunin, ro cie-',elop end

bette ment ald iraPPiness

e3r-E

in

si-pport

oi theii

q':alit-3" backerl
families tirroughout the worki t'ith proriucts oithe hrghsst
L-;y a guarantee of satisfaction.

\irie

wiil

\1,,e

wiil prot,ide service to

lielpiu

ser-,,e

Ln

ReDreseiltativ3s and Cusioi:ners thai

is outstanciing in

its

ess and courtss5''

drat our
x,ith fiili coniidence on ,{ssocia.tes ald Represeitiatives- recogn2ing
colporate success depencls on their indivirlual contriburioirs anci achievemerus'

[iie iviil

We il,iii shale r.','ith o&els the re';'arris of grcu'ih and sucoess'

S",e r,,,iii

iile rrrill oherish and mainrail the fiiendl.v sptir oiAvon'

re11i

io rhe u':il
honol the respoi-rsibiiiiies of coipoiaie crtizensirip bi' contiibuiing
bei:g of tJre socief in '-r'i.ricll r,ve i-lletion'

r P ';i'er-,D:n,*JUCl: Ciri:-rz 1.r-;^'. !.ic=crij

D..;-^ u,J.
i Q ^";
u'!'
ru.)
4uu ,':.,;

c^....^+. i:JiriJ.
:)iru;Jj:
!-.rtlti-Ul.).

10

.L;:Sii;esS CcSg"

i99!'
"rc'

il.l:ure c: i.vcit Cllina: Dire :l Sal=:. Reiail Sai:s c: 3;:;:

Cir'3'13C

=XHlSlT
The Global

2: AVOrr''S MISSION

::

Beaun'Learier

\\ie u'ili buiit a unicr-Ie

oi B:a,$,, aiid relareo biaao:- str-ivtlg to sui-Dass ou-r

ccinDsritors n quairri,- inlova:icii and t,alue. and eier,arrng'our iriac: ic 'n:;:n; tir:
B au-r', orrao urr-'. I *o s: lr'orii in tuin rc,.r.,oli cri,id :.
DC1-ifciin

"

Tire ii"orriel's Choice foi- Br:r-ing

\.ite

ir-ccilti iirs ,j:sthalion si,:re fo,:- ii,,;,1i13i.. oferin_q ihe cinv:ni-nce oi nulrilje
char,-leis. ald j;i'o-,,ic::r= e Der;olar iiigi, rcu;.n shcpr:i:rg e::--:rienc: tiat h:ri:=
c r33-Li-) iit ;iirit - ausL0ili
=i' i: i tiii oiisiiiu s.
i-,,i11

'l-rl'alds

:lc

?he Plemiei' Bii-e:i Seiler

i;: *'iil .=i.::&IlC ar'Lll cr3sSirce n dilec: :gli;_s til lelr ihe reini:enii,,r ;r iile cr-ri:r;::i.
oii':iilq aii :nirei-reneuial oroominiq' th;li iieii.,,eis sui:erio, -ilrililg!^ i=;,:,gni:ilrr.
se;--,'iie aa,-.- sulr-,ci'r, iiiailr.ig i, -*r.,anc rer,,'ardh.g ro be aiiiiiareal,,,io,r.,,ln a,ri
:i:.'.'aiin3 ir:-- rn]:,s:: o: oli: iii,ju..u.r
L

i-i

a Jcgi .-::te

lC ia Oi-i;

'.'rie r.'iil u. i;ir'ti-,.n il:-ri oui i;lor.rshil :no:. l'i,loush cur i:zssicn i,.-rr hi:h sl?.itc?ics.
. ,. i.t',
.::....-.:*
i::tJ.--r ra.i'
,'t'sir- al,:i ir,ia ca.l]lr:rtrlet:i ic cr33i'-, 3-r.;.tr9lli:,1*iri i_rDDal::-:i;lillas
gia',..-,jt
sc tii:.:, ,,..Saailtis ::: i:ilirlr :1:::l i:i:hes: cOle;:;ial.
i-iciessict'rzl

I'h e i,argesa'iiro*reE's

is

LrEI'

u:rd ::lii.) n

l\ii3 f-iri1l be a corri::itteC gi,:rai ci:anr:ii-l ic;' rhe heaiiir al,i ri,=ll-i,.erls :,r il ,rin:il
pililaaiil'cpic eiioris tiia, eli;niilai: L-.leas; c3"n.3:'l',.l:n rre face of tie e::-Lh. ani
ilia'i em cc'r..'.-i i1io,1ilt ic ach i : r,t e: o'o:nii: it.iail_.el l ietic3.
-i.h,'cugll

Tr,.. -ui^..

,;*";,.^J

f-^-.^^---

t1;: lliii rleiii'el'supeiioi i'aLur-i.ir ri'r cul sharehclc.l.,-r's bi ilrelessh'-o-r-r'suirrg n3i'.,{rro\i-,il

c:':'-,rl-.r-'iii=s
cci:iil:lalj..,irl;-c.,'iitq cu;- ,;r.,rita_,;iin. a socialii'l-r-srolsiljie, e-.ii;al
-.:l;.r;,'
Source: -.lr'0n

"'1tile

:],.- .-. i.*,'. .,:-] i:,.1 ;..r::,::.-L

-,;

j-- .. :t,.,,j--, .

bsiie. \51rft'.a\,0[corriD!r1-,..c0ril iaccessed

i't

::13;:.:.

]d Cciobe; :0,15),

c713'1

Saies
Fuiure oi Avon China: Direct Saies, F'etail

?C

IT'IDUSTR.Y
EXHtBIT 3: ANNUAL SA,LES GF CHINA'S GOSMETICS
.

Annual Sales
IUSS biliion)

L998

L999

20s0

3.3

3.6

1a

2fl01

7Afi?,

zat3

YO

5.5

o.u

Source: Straiegis Canada.

fXHltsiT4:Tt'iEi-*FS'*V'f-i{eOSIt'ifTiCSBRA|{ES
cl-ii[iE'
?s'+CS S*l'isutuitP's '3URV=YEI} ild MAli{LAf{D

r,,{-+5T OFTEII USFD

=Y

-.&{ar,,i;eiiii'e

i.88%

1i

2,10/-,

!j%
1-, a1a/-

Yue Sai

\t.
-:

:'i c
il.J I:'0

E-evion

8.b)94

S,.-rulce:
!

i-eiiing"'
-{uil+l l-iil!:noi','n"'Fciiur'e
r ,_'
,. l.I

ttilt.!,\tfl.'. l\o-!' :uui'

ul. i t' l" --"

tf

Giai;:ti Ct;snstict;

Scih