For Avon, the microenvironment is somewhat different than for a traditional firm.

Indeed, since it sells its products through direct selling, there are no marketing
intermediaries. This aspect gives the firm more freedom in putting its strategy in
action. However, like all other companies, Avon must take into consideration the
following factors of their microenvironment. For more than a century, the Avon
company has been known for the direct-selling approach it uses to sell its cosmetics
and toiletry products. In short, Avon employed women, called "Avon Ladies", to
demonstrate products to customers in their own homes. By 2001, Avon was the
world's largest direct-selling company, employing 3.4 million sales representatives in
139 countries around the world (2 percent of whom are male), and with total sales
revenues of $5.7 billion.
- Suppliers: Suppliers play in important role in Avon's strategy. The main supplier of
Avon Cosmetics is the parent company, Avon Products Incorporated. This selects
carefully the suppliers of goods, having a special program created for choosing them,
named Avon Supplier Diversity Program. In order to become an Avon supplier, one
should follow next steps:
1. the potential supplier calls, by phone or e-mail the department responsible for
suppliers, named Supplier Diversity
2. this department conducts him to the site in order to register them by completing an
electronic form
3. after registering, the supplier receives by e-mail a confirmation that contains an
user ID and password
4. the Supplier Diversity Department is looking for other suppliers
5. the suppliers are selected based on good determined criteria
6. the suppliers are asked to participate in the production process.
Also, it should be mentioned that the company has a large range of service providers,
including telephone services, in collaboration with Moldtelecom, Internet services, by
collaborating with various firms responsible for maintaining the site and for
developing the system of online reservations, as well as post offices responsible for
distributing the Avon products on the territory of the country.
- Customers: the majority of companys consumers are women, the range of products
serving this segment of populations. However there exists a small number of men,
their percentage increasing in the last years. The companys products are designed
for a large diversity of ages, having different products for children, teenagers, young
people and adults. Instead of looking for expansion in the fast growing market of
beauty products for me, like many of its competitors, Avon has chosen to focus only
on women and keeping the slogan "the company for women". Also, instead of
distributing in department stores, Avon has increased the number of its independent
sales representatives because women appreciate having advice on beauty products.
- competitors. Avon Cosmetics has a big number of competitors, which offer similar or
substitute products. However, the main competitor remains Oriflame Cosmetics, a
firm with similar products offering goods for the same segment of consumers.

- publics. Another component of the microenvironment is represented by the

publics, which are legal entities having a direct relationship with the firm, for different
purposes, such as information (ex: mass-media), for paying taxes, for obtaining
authorizations (ex: financial bodies, customs bodies, juridical bodies or state bodies).
B. The forces in the macroenvironment
Macromediul, cealalt component a mediului de marketing extern, este format din din
ansamblul factorilor sociali care acioneaz asupra micromediului firmei. Acetia sunt
demografici, economici, naturali, tehnologici, politici i culturali.
Prima for care trebuie urmrit este populaia, deoarece oamenii sunt cei care formeaz
pieele. n prezent putem spune c piaa duce lips de cerere deoarece aria de aciune a
firmei este restrinsa, piaa pe care acioneaz fiind ntins preponderent in zonele urbane, in
special Chisinau. Astfel, trebuie analizat repartiia populaiei pe zona urban sau rural,
grupa de vrst i de sex, categoria profesional i altele. n anul 2006, mediul rural a generat
38% din vnzrile Avon, iar din punct de vedere al tipului de client, cosmeticele pentru femei
ocupau primul loc, cu o pondere de 93%, restul fiind contribuia produselor pentru brbai.
Alturi de popuplaie, pieele au nevoie i de puterea de cumprare a acesteia. Puterea de
cumprare depinde de veniturile curente, preuri, mrimea economiilor, a datoriilor i de
posibilitile de creditare n vederea cumprri. Atenia cade n special pe tendinele mrimii
veniturilor i structurii cheltuielilor de consum ale populaei. Ca urmare a scderii puterii de
cumprare a popu1aiei, putem spune c Avon are de a face cu o problem destul de grav,
cu influene majore asupra activitii firmei.
Mediul politic are o mare influen asupra deciziilor de marketing. Acesta se compune din
legii date de organismele guvemamentale i care influeneaz i limiteaz aciunile firmei.
Mediul tehnologic trebuie analizat pentru a afla informaii despre nivelul tehnic i calitativ al
echipamentelor necesare desfurrii activitii firmei, nivelul cheltuielilor de cercetaredezvoltare i altele.

- Demographic Forces Demography has played an important role in Avon's marketing

strategy. In fact, they have sometimes forced the firm to make some changes in its
approach of the market. Two players have been influenced by these changes in
demography: the sales force and the customers.
The sales force When Avon first began its direct selling strategy, its sales force was
composed of women who were generally homemakers who needed extra money, but
didn't want a full-time job. However, in the 70's and 80's, Avon ladies desired more
than just a part time job, due to the liberalization of women. Furthermore, the
increasing mobility of the American population made it difficult for Avon to keep a
steady sales force and lead to sales force turnovers close to 200%. Consequently,

over 10 million customers were marooned because they didn't have any sales person
to contact to place orders.
The customers As they did for the sales force, the 70's and 80's created many
changes in the customer's lifestyle. Women no longer wanted to stay home; they
wanted to work outside of their residence. Consequently, when Avon ladies came to
ring the doorbell, nobody answered. In addition, 15% of women in the US did not want
to buy products from a sales representative. For a direct sales firm, this was a great
problem, so the company had to react in consequence. Avon decided to create a
catalog as well as a toll-free number, which was names "Avon Select", to reach these
customers.
-Economic Forces The economic forces are what define a population's purchasing
power, but also the way it spends its income. Through out the century, these aspects
of the American population have evolved dramatically. Indeed, the American
population is a consumer population, which does not hesitate to get into debt in order
to fulfill its consumerist desires. Consequently, this leaves more room for companies
like Avon to promote and sell their products to men and women all over the country.
Since the 1950's the average American has seen his income increase considerably. As
Ernest Engel has proven, as income augments, the percentage of income spent of
food diminishes and shifts to consumption categories such as entertainment, clothing,
etc. For a company that sells cosmetics and toiletry such as Avon, this evolution has
been truly beneficial. It is important to notice that one of the reasons that women
wanted to work in the 70's and the 80's was due to the oil crises of '72 and '79.
Indeed, these crises had dramatic effects on the global economy and the United
States were not an exception to the rule. This economic force played as significant in
shaping the firm's strategy during that period because women had to work to counter
the downfall of the global economy.
-Political Forces Since the 1970's, the USA have had a majority of Republican
presidents. As we know, Republicans have a tendency to promote business and try to
give firms the possibility to develop quickly. It can be guessed that this one of the
reasons why Avon developed to the extent of becoming one of the largest direct
selling firms in the world.
-Natural Forces For a company such as Avon, natural resources have not yet played
an important role in defining its marketing strategy.
-Technological Forces The technology has had a dramatic effect on companies using a
sales force for direct selling. Indeed, the internet has revived direct selling and
changed the structure of the market. Due to disintermediation, Avon saw the number
its competitors increase drastically. Furthermore, companies who opted for a direct
sales force became less competitive because they had to pay their salaries whereas
companies who only used the internet as a means of distribution saw their fixed costs
reduce considerably. Avon needs to consider finding a way to cut its fixed costs if it
wants to remain competitive in a market where the internet penetration rate is
relatively high.
-Cultural Forces Considering that Avon is an American company, it seems obvious
that this aspect of the microenvironment should not cause many problems for the

firm. With the experience the company has in the country, it is unlikely that Avon will
make cultural faux pas in its home market.