Beauty Product Reviews and Consumer Behavior

This master's thesis investigates the impact of source characteristics and argument diversity on consumer responses to beauty product blog reviews. It explores how factors such as reviewer expertise, trustworthiness, and the presentation of diverse viewpoints affect consumers' perceptions and purchasing decisions regarding beauty products.

Running Head: Management
Management

Management
Table of Contents
Introduction.................................................................................................................................................2
Strategic opportunities and threats...............................................................................................................2
PEST.......................................................................................................................................................2
Political Factors...................................................................................................................................2
Economic Factors................................................................................................................................3
Social factors.......................................................................................................................................3
Technological factors..........................................................................................................................4
Strength and weaknesses of Avon...............................................................................................................4
Strength...................................................................................................................................................4
Weaknesses.............................................................................................................................................5
Internal analysis...........................................................................................................................................5
Competencies and Resources of Avon.....................................................................................................5
Porter's Five Forces Model..........................................................................................................................6
Threat of new entry.................................................................................................................................7
Bargaining Power of Customers..............................................................................................................7
Bargaining Power of Supplier..................................................................................................................8
Threat of substitutes................................................................................................................................8
Rivalry among the existing firms.............................................................................................................8
Porter Generic Strategies............................................................................................................................9
Cost leadership........................................................................................................................................9
Differentiation.........................................................................................................................................9
Focus.......................................................................................................................................................9
Ansoff's Strategies.......................................................................................................................................9
Market penetration...................................................................................................................................9
Product development.............................................................................................................................10
Market development..............................................................................................................................10
Diversification.......................................................................................................................................10
Conclusion.................................................................................................................................................10
References.................................................................................................................................................11

Management
Introduction
Avon is an American company that manufactures and sells beauty products globally. The
company started the operations in 1886. The products of the company are categorized into
beauty, fashion, and in the household sector. The beauty division has categories related to skin
care, color cosmetics and also fragrances. Fashion consists of footwear, accessories, Jewelry and
children products. In the category of the household products, the company offers decorative
products, gifts and also nutritional products. The company conducts the operations in 65
countries and also offers products in 42 countries. In the first phase of the report, the main
focus is given on the PEST analysis and also on the competencies of the Avon Company.
Pest analysis elaborates about the political, economic, social and technological factors.
In this report, the discussion will be made on the strength and weakness of Avon
Company and also Porter's five forces Model will be explained. In the last phase of the report,
the focus will be given on the strategies of growth that should be taken into consideration by
Avon to survive in the competitive market. Ansoff’s strategies like market penetration,
product development and market development are also taken into consideration.
Strategic opportunities and threats
In the beauty industry there are various opportunities that are available for the company.
Avon has an opportunity to restructure the initiatives for attaining the effectiveness. Innovation is
considered as an important aspect that helps the company to enhance the products and
profitability of the organization. The new and effective products should be invented by the
company. Avon has the opportunity to develop more natural products and also to acquire large
market that enhances the profitability of the organization (Burkhart, 2014). The pest analysis is
conducted to analyze the threats and opportunities that the industry is facing:
PEST
Political Factors
Political factors play an important role in conducting the day to day operations of the company.
Avon conducts the activities that are related to the personal and beauty products. To attain

Management
success in the industry of personal products it is essential to consider the political factors that can
enhance the smooth working pattern of the organization. The company has used the website for
marketing its products globally and also it has followed the copyright policy of the United
Kingdom. There are many regulations that are applied on online purchasing and also that have no
control with the seller. There are various regulations that are applied when the purchase is made
by the consumers from the business (Wolf, 2013).The company also has a trademark that needs
legal documents which gives permission to conduct the activities of the organization. Avon has
also protected the trademark so that the consumers can buy without any difficulty and with
proper safety. The product of the company covers many countries and also gives many
approaches to women, to achieve financial independence and good performance. The products
are provided at low cost and also various discounts are offered by the company. If political
differences are taken into consideration among the countries, then it can give direct influence on
the corporate strategy of the company (Rothaermel, 2015).
Economic Factors
It is one of the dominant factors that give direct impact on the buying behavior of the
customers for Avon products. The economic condition, inflation and also interest rate are taken
into consideration at this point. The company is also affected by the fluctuation in the currency
rate. This is considered as one of the important factors that give direct impact on the operations
of the company (Fayol, 2016).There are 5.3 million representatives employed by the company
and it offers products to sell in the market. The demands of the products are also affected by the
economic ups and down. For example: In U.K the demand for the cosmetic products has
increased. It clearly shows that at the time of recession the demand for the products increases. In
this, the labor cost and productivity are also taken into consideration by the company (Vega and
Fuks, 2013). In this factor, the impact is also given on the economic growth rate and on the
unemployment rate. Economic factors take into consideration inflation rate, interest rate
and the cost of labor and productivity in the economy.
Social factors
The taste and preferences of the consumers keep on changing from time to time and also
they are concerned with the local culture and personal working conditions. In different countries,
just because of climate and environmental circumstances the need of the product also goes on

Management
changing. The company offers different cosmetic products for the consumers and this is one of
the big concerns for the company to attain the goal that not only contains the similarities among
various customers but also value the differences of their needs.
The main objective of the company is to serve women all over the world by offering
products that enhance the satisfaction level. Shared beliefs and attitude of the individual plays a
great role to enhance the productivity and profitability of the company. In this factor, the focus is
on the interest of the consumers. If the product satisfies the needs of the consumer, then it can be
easily accessed, that the profitability can be enhanced in an effective manner (Daniels and
Ganitsky, 2014).
Technological factors
The revolution and innovation of the technology give direct influence on the individuals.
In the process of creating and developing the product the cosmetic industry always offers new
products to the consumers. The strategy of the company is to increase the competitiveness of the
brand by giving focus on developing the products. To enhance the success, the company also
gives many advertisements of its products by using various channels of media. Technology also
gives impact on the products that are offered to the consumers. If the latest technologies are used
by the company, then it can be very easy to enhance the productivity and profitability of the
company. For example: Earlier if the company produces 10 products in an hour. Now with
the use of latest technology the company can easily produce 20 products in an hour. So, the
latest technology has given positive impact on the productivity level. With the use of latest
technology, the direct impact is given on the value chain structure in consumer sector goods
(Jordan, Hewitt and Beech, 2016). With the use of the latest technology like internet, it is easy
for the business to conduct their activities in a proper manner. The company has an
opportunity to reach a large audience with the help of the internet facility.
If skincare products are considered of Avon, then it is seen that the company has a
high market demand .To maintain the leadership position, Avon has introduced the
radiance range in the market. In the hair care segment it has also developed the technology
through which the consumers will get vibrant colors without damaging the health of the
hair. The company understands the research that is required to be a leader of the industry.

Management
Strength and weaknesses of Avon
Strength
Strength is one of the important aspects of the organization, to survive in the competitive
environment. Avon is considered as one of the largest company in the cosmetic industry. It
offers quality products to the consumers that give direct impact on the satisfaction level of the
customer’s. The company is present in 100 countries and it covers a large geographical coverage.
The company gives the main emphasis on individual branding that assists the consumers about
the product in the market. The company also has an effective distribution channel that helps the
customers to buy the products and services in a proper manner. Avon has a differentiated
business model that emerges as a prominent player in the market. The company gives support to
the sales activities by having the proper understanding of the customer needs and wants
(Meihami and Meihami, 2014).
The main benefit to the organization is that it has a large workforce that helps to conduct
the day to day operations of the business in a proper manner. The workforce is considered as an
essential element for conducting the activities of the organization. The company also has a strong
brand image in the market that induces customers to buy the products. Financial stability is also
one of the strengths of the Avon Company through which the activities can be smoothly
conducted.
Weaknesses
It is evaluated that every organization consists of the weaknesses. By taking into
consideration the Avon Company it is evaluated that the organization gives various products that
come under the same group. It creates a huge problem for the organization to manage the
products in an effective manner. Next weakness that is evaluated is related to the market share of
the company. The company has a small market share in many areas that gives direct impact on
the profitability of the organization (Yeon Kim, and Chung, 2011). The company should give
focus on attaining the large market share in some areas so that the growth and profitability can be
attained in a proper way. The cosmetic industry is also lucrative and innovative that has a short
product life cycle for the Avon make up. The safety related with the cosmetic products is always
under the scrutiny and it gives focus on the higher standards. The company should also give

Management
focus on eliminating confusing promotions, outdated catalogs and also the complaints of the
customers should be resolved on the highest priority (Rani, 2014).
Internal analysis
Competencies and Resources of Avon
Core competencies are considered as the resources and also the capability that gives
competitive benefit to the organization. It is evaluated that in many cases the competencies of the
company are compromised. Like manufacturing, financing, and marketing. The competency
values of Avon consist of trust, respect, belief and also integrity. This is one of the mission
statements to become the leader globally in the distribution of beauty products. The customers
trust the products that the company offers and it is one of the core competencies of the company.
As the company uses a door to door services, it has given a great advantage and benefit to
survive in the competitive environment (Vega and Fuks, 2014).The company trusts the products
that are offered in the market (Caldwell, Floyd, Taylor and Woodard, 2014).
The company attains the sustainable competitive advantage, as it is evaluated that the
customers give more preference to the Avon products as compared to other brands. The VRIN
model is used by the company in which the resources of the company are used in an effective
manner. The capability of the organization is related with enhancing the trust between the
customers. Just because of the trust and believe the organization has attained growth and
profitability. The positive impact is given on the operations of the organization. It is evaluated
that the wise management and allocation of resources gives focus on attaining the high
performance. It also asserts the significant role of the internal capabilities of the organization in
creating a strategy. The strategy helps to attain the sustainable and competitive advantage
(Huang, Dyerson, Wu and Harindranath, 2015).

Management
Resources and
competencies
Valuable Rarity Inimitability Non
Substitutable
Value
creation
Brand and
reputation
Yes
Strengthen
perception
Yes Unique
brand
Yes good
effort to
develop
Yes enhances
the value
Sustainable
competitive
advantage
Organizational
culture
Yes Yes Yes Yes Sustainable
competitive
advantage
Human
resources
Yes No Yes Yes Sustainable
competitive
advantage
Capital
resources
Yes Yes Yes Yes Competitive
parity
Distribution
network
Yes Yes Yes Yes Sustainable
competitive
advantage
Leadership Yes Yes Yes Yes Sustainable
competitive
advantage
Technology Yes No No Yes Sustainable
competitive
advantage
Physical
resources
Yes Yes Yes Yes Temporary
competitive
advantage
a.) Brand name: Avon build good image in the market, so it is difficult to imitate the
goods with the other products. It gives competitive advantage to Avon.
b.) Organizational culture: Company gives proper care to its customers by giving
emphasis on enhancing the satisfaction level of the customers. So the culture of the
company provides competitive advantage.

Management
c.) Human resources: The population increases and also the company require employees
to conduct the activities. The training is given to maintain competitive advantage.
d.) Capital resource: Avon conducting the activities in the market since long time and
also the strong financial position is enhanced. The image of the company has
enhanced the relations with various agencies. Avon capability is very rare and also
the company has a sustainable competitive advantage.
e.) Distribution network: Avon has built huge distribution channels and also there are
many offices globally. The resource of the company is valuable and also the company
has sustainable competitive advantage.
f.) Leadership: There is a proper leadership in the organization and also the company has
attained success in the market.
g.) Technology: The Company takes into consideration latest technology and also the
products that are offered are safe for use. The resources are made by considering thee
competitive parity.
h.) Physical resources: The Company has a large building and there are many offices. For
conducting production the company has huge number of machines. The company has
temporary competitive advantage.
Porter's Five Forces Model
(Source: Strategic management insight, 2017).

Management
Threat of new entry
The competitive industry gives direct focus on attracting consumers towards the company
and also gives emphasis on capturing the large market share. By this, the impact is on the
profitability of the company which is present in the industry. If the firm attains the customer
loyalty, then it will not give effect on the entry of new firms. The company should give focus on
enhancing the customer loyalty by innovating new products that meet the needs and wants of the
customers (Brown and Gillespie, 2016).
In the cosmetic industry, the main threat is due to the new entry of the firms. The first
factor is related to the huge cost of entry. It covers a huge cost as it requires a lot of resources to
develop different cosmetic products. There are few firms that have enough funds and experts to
conduct the operations of the organization. The second factor that reduces the entry of new firms
in the industry is related to the high level of competition. Like Revlon, Lakme is the competitors
that have a large market share and also gives direct impact on the profitability of other
companies (Scranton, 2014).
Bargaining Power of Customers
The bargaining power of the consumers evaluates the power that the customers possess. It is
concerned with the prices that keep on changing. The factor evaluates the power that the
customers possess in considering the change in price level due to the change in the demand.
When the consumer has a high bargaining power, then the manufacturer and seller cannot predict
the future demand. It can create problem to attain long-term profits due to the unpredictable
demand patterns. Cosmetic products have a high bargaining power of the consumers. This is only
due to the enhancement in the rivalry of the cosmetic products from various manufacturers.
These are the products that have a high substitute, so by this, the manufacturers keep the price of
the product by evaluating the prices of the competitors. This is the major challenge that is faced
by the manufacturers dealing in the cosmetic products (Johnston and Marshall, 2016).
Bargaining Power of Supplier
This factor evaluates the control possessed by the suppliers. It is related to the change in
the price of the products. Suppliers who have a high bargaining power do not influence the
change in the price by using the techniques like hoarding and restraining supply. There are many
strategies that are not legal in many countries but the suppliers still considers it, when they want

Management
to give direct impact on the change in the price level. The cosmetic industry is considered as an
industry that has a low bargaining power of suppliers. This is just because of the reason that the
number of players is high in the market and there is a large supply of the various products. There
are various cosmetic products that are introduced by both the small and large manufacturers. Just
because of the high supply, the consumers have the power to consider the prices of the market
that are opposed to the suppliers (Racolta-Paina and Luncasu, 2014).
Threat of substitutes
This factor arises when the products are similar in nature and are introduced by the
competitor that enhances the satisfaction of the customer needs. When the customers have
substitute products that satisfy the needs and wants, then the manufacturers and suppliers lose
their bargaining power. The customers purchase the competitor product when they are not
satisfied with the products that are offered by the company. To manage the challenge of the
threat to substitute, the organization has to give focus on enhancing the innovative products that
fulfill the needs and wants of the target market segments. In the cosmetic industry, there are a
huge number of competitors that are present in the market (Cervellon and Carey, 2011).
The high level of threat is analyzed in the substitute products. If the producers offer their
products at high price or the product of the quality is low then the consumer will get attracted
towards the substitute products that are available in the market. So it is important for the market
players to be innovative so that they can survive in the market in an effective manner (Maurino,
Reason, Johnston and Lee, 2017).
Rivalry among the existing firms
This factor is connected to the challenges that are faced by the firms. In this industry, the
huge cost is associated. It consists of the costs for developing the products and also the research
costs. There are many rivals who minimize the overall profits of the industry that makes a barrier
to the entry. Due to the high cost that is related with developing the cost of production. There are
various machines and equipment that are considered for developing the cosmetic products. The
competition level is high, so to sustain in the market the company should adopt effective
strategies (Hill, Jones and Schilling, 2014).

Management
Porter Generic Strategies
Cost leadership
Due to increase in the competition level in the cosmetic industry, it is essential to
apply a cost leadership strategy. It consists of pricing of cosmetic products that are lower
than the competitors. The cost leadership strategy will give focus on ensuring the cosmetic
products that are cheaper than the competitors' products (Kaur, Arumugam and Yunus,
2013).
Differentiation
In this strategy, the company can easily introduce innovative products by considering the
dimensions that gives value to the buyers. It considers various features that the buyers can
perceive as essential and unique to meet the requirements. It is concerned with uniqueness
with a premium price.
Focus
This strategy should be taken into consideration by the company so that the cost focus that
seeks an advantage of cost in the target segment can be attained. Next is differentiation
focus that the company should consider to differentiate in the target segment.
Ansoff's Strategies
Market penetration
The strategy of market penetration gives focus on the customer base of the company.
The company gives focus in enhancing the sales performance by taking into consideration
various strategies like direct selling, internet marketing. By using these strategies the company
competes in an effective manner in the existing market by using the products. The company also
uses this strategy to enhance the sales without any shift in the original product market. Avon also
gives emphasis on maintaining the quality of the products and also to attract the open market of
non-users (Daniluk, 2016).
Product development
It is one of the essential elements of the company's natural growth. By considering the
recent scenario, innovation is the important aspect that helps the organization to sustain in the

Management
competitive environment. Avon introduced many products like lipsticks and also many
skincare products, so that the large market share can be achieved. The company innovative
products enhance the satisfaction level of the customers. Product development strategy is also
taken into consideration by the company so that the customers get attracted towards the products.
The company considers the strategy so that the market share can be protected and also the image
can be maintained in the market (Jaiswal and Gupta, 2015).
Market development
Avon gives focus on identifying the new market for the existing market so that the
growth can be attained in a proper way. The strategy gives direct impact on exploring the new
use of the products and also adds customer base.
Diversification
The company is trying to move into new territories so that the profitability can be
enhanced. Avon has taken into consideration many strategies and the present strategy is
related to direct marketing and internet marketing. The expansion will also be analyzed in
the product offering and in the market segment of the company. The company moved the
jewelry of the market through its door to door sales force that is engaged in marketing of new
products through the use of existing channels of distribution.
Conclusion
By examining the report, it is concluded that Avon is one of the largest industry that gives
various products to the customers. The industry competitiveness is evaluated by using porter five
force model and also the strategies related with the company is studied by considering Ansoff's
Model. It is also evaluated the company should give focus on enhancing the satisfaction level of
the customers and also introduce innovative products in the market. It is essential to implement
effective strategies, so that the company can easily attain the goals and objectives. To survive in
the competitive background the company should give emphasis on introducing new products in
the market.

Management
References
Brown, J. and Gillespie, D., 2016. Ladies, Lipstick, and Liberty: Beauty Trends Within
Women’s Social Movements in 1960s America.
Burkhart, H., 2014. Methods, Systems, and Media for Marketing Beauty Products and Services.
U.S. Patent Application 14/282,384.

Management
Caldwell, C., Floyd, L., Taylor, J. and Woodard, B., 2014. Beneficence as a source of
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Cervellon, M.C. and Carey, L., 2011. Consumers' perceptions of'green': Why and how
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Daniels, J. and Ganitsky, J., 2014. Beauty Competition in Central America: Zermat vs Avon.
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ugly.
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Safety in high technology systems. Routledge.

Management
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