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AVON - THE COMPANY FOR WOMEN

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David H. McConnell founded Avon 115 years ago under the name California Perfume Company, and began selling fragrances door to door. Today, Andrea Jung is the face and brains behind the brand. She joined Avon in 1994, intrigued by a global company that was undergoing a turnaround. Over the last 7 years she climbed the corporate ladder, becoming chief executive in November, 1999.

Going door to door, Avon developed into one of the world's most recognizable names. But this direct seller of health and beauty products is not depending on a doorbell to take it through the 21st century. According to Jung, "We have a great core direct-selling business, but now we have a brand that can expand into new channels: new customer segments like teens, and new brand extensions like wellness." Avon is undergoing something of a makeover, with new products, high-powered advertising, and a move to sell retail.

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When asked how Avon came to the decision to enter retail stores, Jung said, "We've tested in the malls for two years in the U.S. The consumers in the malls were telling us that they wanted the Avon brand, but they didn't have access to direct selling and they preferred shopping in malls, smelling the fragrance, and actually trying on the shade." Continuing their expansion into the retail market, Avon is unveiling a new line called Becoming at JCPenney stores across the county this September. Avon plans to be in 75 JCPenney stores this year, and is looking for another retail partner. Although the decision to go retail has caused some concern from Avon reps, it is a different and more expensive line of products that will be sold in stores.

Behind the scenes, Avon is changing as well. Since 1997, customers have been able to order some products directly from the Internet. Avon is encouraging representatives such as Dawn Parrino to go online, both to streamline the ordering process and work with their customers. The company also created a leadership incentive program to jumpstart recruitment and compensation.

Dawn Parrino is a foot soldier in an army of 500,000 reps who sell Avon products around the country. Like decades of women before her, Parrino was drawn to the company because it lets her take care of her family while earning money at the same time. Parrino, an Avon group leader, says she feels "like the CEO of a company. I find people who are interested in selling Avon, and I mentor them. I offer them advice and tips and, in their first few campaigns, I guide them along. ... The more money they make, the more money I make."

For all the effort Avon is putting into the U.S., the most dynamic growth is taking place overseas. Jung claims, "One of our fastest-growing regions of the world has been the entire Eastern European region. We've grown at 43 percent in dollars compounded over the last several years, with 45 percent more reps every year. We call it Avon heaven. Down the road I think China's an enormous opportunity."

When asked what her biggest challenge as chief executive was, Jung replied by saying she couldn't create this company any better than David McConnell did. "I'm the type who wants to get it all done at once and wanted to get it all done in the first 12 months. ... How much can we do? What is the organizational capacity over two years, over three years? How many new initiatives can we take on? What's one too many for implementation? And those are the kind of things that sometimes I wake up in the middle of the night and I say to myself, 'Oh, we're not going fast enough.' And then I wake up the next night and say, 'Wait a minute. We just got to take one little step back to make sure that we do it flawlessly.'"




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