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Last Updated: Thursday, 2 November 2006, 18:35 GMT
Avon is still calling
By Rob Neil
BBC Money Programme

Can Avon's future be painted as a rosy picture?

The modern day Avon lady still goes from door to door just as the first rep did 120 years ago.

In the UK alone, Avon's army of 160,000 sales reps has an estimated eight million customers and one in three women have bought an Avon product.

But the growth that the company enjoyed has ground to a halt.

The value of the shares in the company has fallen by 30% over the last year and a half and Avon's chief executive, Andrea Jung, has called for the company's very own make-over.

Women's opportunities

Women selling cosmetics to women directly in their home has been a winning formula that has resulted in the present day Avon having a presence in more than 100 countries with a total revenue of $8.1bn (4.2bn) and more than 5.1 million reps worldwide.

This unique way of selling cosmetics came about by chance.

In 1886 a book salesman David Hall McConnell was giving out free perfume to housewives to encourage them to buy more books.

However, his customers were more interested in the perfume than the books so Mr McConnell decided to forget about the books and concentrate on making and selling his own perfume.

His eureka moment came when he decided to use women to sell to women at a time when they did not even have the right to vote.

Tired image

Although the Avon Lady and her brochure offers a unique personal service direct to your home, in this age of instant gratification why wait 3 weeks for your Avon lady's return visit when you can easily get similar products from a high street store with more razzmatazz?

Avon relies too much on the direct selling channel
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In the UK in particular, it seems that the company is trapped by one of the most memorable but dated advertising campaigns.

With a non-existent high street presence and no sustained advertising since the 1960s, Avon is struggling to tap into the youth market that is so dominated by glamour and celebrity.

Brendan Martin, a brand expert from Identica, is concerned that while "most cosmetic firms are reinventing themselves every four or five years in terms of their packaging design and their advertising, Avon has lost all that because it is out of the media arena".

Avon Man

To sort it out, Avon is committed to doubling its global advertising budget and Andrea Slater, Avon's president in the UK and Republic of Ireland says the UK "is certainly going to get their fair share of that".

Avon is gearing up its advertising efforts

Ms Slater also now feels that Avon is at a stage when it has to "step it up a level and really focus on the brand building pieces".

While one in three women in the UK are regular customers, Andrea is keen to ensure they "spread the word to the two in three that perhaps don't know Avon that well".

The company has spent 100m on their a new research and development laboratory in the US where it develops more than 1,000 new products a year.

This is to ensure that Avon keeps up in the ever-changing game of beauty and ensures that an Avon lipstick is still sold every three seconds somewhere in the world.

In the US, Avon has developed a range of products specifically aimed at the 18 to 24-year-olds and Ms Slater is very excited about its imminent arrival in the UK where she hopes it will "create additional energy and perhaps pull even more younger customers into the Avon pool".

In the UK a new network marketing initiative has resulted in a revised company motto.

Avon is now a company for women with a few good men.

This new big money making opportunity has resulted in the Avon Men making up 5% of the total workforce.

Ross Craig from Sunderland found the first couple of weeks as an Avon Man "a bit daunting" in what had been "predominantly a woman's business".

But Mr Craig can easily make enough money to sell Avon products full-time and because of this new initiative he could potentially have an annual income of 90 000 from the business.

The Money Programme - Avon's still calling. BBC2 at 1900 BST on Friday 3 November.

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