[continued,Avon...]
This has resulted in declining sales for Avon representatives we have spoken with. Certainly, with heavy promotional spending and effective targeting behind the Avon brand, it is also likely that this will help bolster Avon's overall image -- both in the stores and through catalog/representative sales.
Avon has said that this new line of Avon Gold will sell at a 30-50% premium over regular Avon goods sold through catalogs to reach a more upscale target. However, we question their choice of retail outlets. The typical shopper at Sears and Penny is not consistent with Avon's intended, more upscale target market.
The company is reported as saying that direct selling will ``always be its principal sales channel,'' but that expanding access to new customers will help accelerate sales growth.
We expect this move to be good for Avon Corporate, but will have to wait and see its impact on Avon's core business foundation, their sales representatives.
Avon is the world's leading direct seller of beauty and related products, with annual revenues of US$5.3 billion. Avon presently reaches women in 137 countries through its network of three million independent sales representatives around the world.
Reader's Comments
(Source: YOUR LINK HERE)
US DEPARTMENT STORE CUSTOMERS ARE LEAVING
USA -- US department store sales have been declining in the past year. This decline is attributed to the burgeoning consumer who has less time on her hands to shop through cluttered aisles -- she is looking for simplicity, convenience and the ability to get in and out of a store with the assistance of friendly customer service, when needed. Department stores today are described as overwhelming, time-consuming and unfriendly.
With apparel representing 75% of department stores' inventory, customers complain about too much "sameness" from season to season and from store to store. In an effort to combat this, some department stores have begun to promote their own brands. Others have started carrying trendier fashions and updating the store image to attract a younger teen or pre-teen customer.
Department stores in the US have become more of a commodity. The primary reasons why consumers used to shop at department stores was for merchandise selection and service. Now, they choose them for convenience and price -- the same reasons they choose mass merchants. Department stores need to put more emphasis on merchandising.
US department stores seemed plagued for extinction after several high-profile leveraged buyouts collapsed in the mid-1980s and early 1990s. From 1997 - summer of 1999, they experienced a resurgence. While department stores offer the convenience of one-stop shopping, they have become complacent and need to play catch-up with their current time-pressed customer.
(Source: YOUR LINK HERE)
USA TRADE IMBALANCE GROWS TO RECORD LEVELS
WASHINGTON, D.C., USA -- The US Trade imbalance reached record levels with a deficit of US$106.1 billion in the 2nd quarter of 2000. Some officials view this as a sign of economic strength because the US economy is growing faster than its trading partners' economies. However, others, including Federal Reserve Chairman Alan Greenspan disagree and expect this imbalance to weaken the dollar, potentially trigger inflation in the USA and scare investors away from US stocks and bonds. These economists say that the imbalance may also lead to job losses in the US.
While the deficit continues to widen among traded goods, there was, in fact, a trade surplus in the services industries.
(Source: YOUR LINK HERE)
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FOREIGN FOOD PRODUCTS EXPANDING GLOBALLY TO BECOME MAINSTREAM ABROAD
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[continued, Foreign Food...]
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SHANGHAI, China; BUDAPEST, Hungary and BANGKOK, Thailand -- Companies today are expanding beyond their borders as a matter of course. Products and brands are finding their way into foreign territories. And many are taking on the US and other markets with greater enthusiasm.
For example, new fast food restaurant chains have plans to expand worldwide from Thailand and Hungary. Whether these chains can become mainstream is a matter of execution, types of foods served and countries selected, among other things.
Thailand's Department of Export Promotions is discussing partnering with US hotel groups Mariott and Starwood to introduce Thai food franchises abroad. The hotel groups would work with the Department of Export
Promotions to launch three Thai food franchises called Golden Leaf, Cool Basil and Elephant Jump.
"The franchise system will let us expand the number of Thai restaurant outlets in the same way that McDonalds and KFC expand their outlets in the international market," according to Charin Hansuesai, deputy director of the Department of Export Promotions.
From Hungary, the National Image Centre plans to open franchise restaurants worldwide offering traditional Hungarian food in an effort to boost its country's image.
China's largest food distributor, Shanghai Jie Qiang Tobacco, Sugar, and Wine Co., Ltd., with headquarters in Shanghai, just signed an exclusive agreement with Premium Food Corp. to distribute China Premium's Looney TunesTM
brand of regular and flavored western-quality milk products beginning next month.
[continued]
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Shanghai Jie Qiang reports annual sales of more than US$500 million and has extensive distribution channels throughout the nation, including 1,674 hypermarkets and supermarkets in Shanghai. Their reach includes more than 10,000 distribution points through local jobbers and local stores.
In addition, Jie Qiang has its own network of 120 stores and distributes a broad inventory of 10,000 products throughout China. Many of these products are from international giants such as Heinz (baby food), Nestle, Maxwell House (coffee), Coke, Pepsi, Kodak, Gillette and Hall's (lozenges).
China Premium has a master license in China with Warner Bros., and they developed this cartoon-labeled line of flavored milk products in an effort to increase China's children's dairy consumption.
There are seven milk flavors: whole and low-fat, chocolate, strawberry, banana, orange and vanilla. The specific cartoon characters include: Taz, Lola, Bugs Bunny,
Sylvester and Tweety.
This deal enables China Premium to achieve the most effective market
penetration possible in China through this distribution network partnership.
China Premium has formed a new USA subsidiary as well called, Bravo! Foods, Inc. Through Bravo!, they have begun rolling out Looney Tunes flavored milk products in select areas of the US. They plan to sell nationally in the USA by the end of 2001.
(Source: YOUR LINK HERE)
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Founder, Beth Stone Kim, as interviewed by Fox News on 9/18/2000
