"Avon Calling"

Avon, at one time perhaps the best known of the direct-sales companies, has fallen on hard times.

According to one article:

Avon Products Inc reported weaker-than-expected fourth-quarter results as sales slid in every market except Latin America and the company saw a 3 percent drop in the number of representatives who sell its cosmetics directly to consumers.

This reflects drops in sales overall.  Of interest is that only about 20% of their sales (per the 2010 annual report) are from North America.  Two of their biggest markets -- Brazil and Russia (as per the annual report) are markets where Avon has taken a hit.

In the case of Brazil, Avon claims that computer problems (specifically, a "legacy system") are the reason for the sales drop there.  Shouldn't Avon have anticipated problems with an outdated computer system and addressed that much earlier?

In the case of Russia, Avon blames "agressive pricing" from competitors.  Ok.  You compete on one of two things -- price or quality.  If Avon isn't the cheapest brand, should they not position themselves as at least a brand of choice?  Could be on product quality, customer service, whatever, but something that will convince Russian women that, while Avon may not be the least expensive, it's the best value for the money.

It's something to remember.  A company can make a lot of mistakes in going international -- ignoring cultural differences, etc. -- but it's also possible to do things right in the international sense and still just not do a good job of running a business.

Maybe this is why Avon CEO Andrea Jung is looking for a new job.