AVON/MARY KAY “KNOCK-OFF”› SELL MAKEUP/COSMETIC PRODUCTS

SALESWOMEN› WOMEN BUY A SALES-KIT› SELL DOOR-TO-DOOR

TRADITIONALLY HIGH PROFIT MARGIN

DECLINING REVENUE 3 STRAIGHT YEARS› NET SALES DECLINING YEARLY

DEFINITION OF CUSTOMER BASE› CHANGING OF THE CUSTOMER?

RECOMMENDATIONS - WHAT TO DO?

“IF THEY DON’T BUY FROM US THEY’RE BUYING FROM SOMEONE ELSE”› WOMEN WILL BUY COSMETICS

REGARDLESS AGE 27-44 NOT EMPLOYED “LOVE ATTENTION”

2004 CUSTOMER PURCHASE PRICE $11.05 # CONTACTS 1.94 TIME OF DAY (SALE) 1.5

› (1=MORNING, 2 = AFTERNOON, 3 = EVENING) EMPLOYED 0.26

› (1=EMPLOYED, 0=NOT EMPLOYED) AGE 34.53 YRS CHILDREN 2.17

2006 CUSTOMER PURCHASE PRICE $18.93 # CONTACTS 4.1 TIME OF DAY (SALE) 2.34

› (1=MORNING, 2=AFTERNOON, 3=EVENING) EMPLOYED 0.64

› (1=EMPLOYED, 0=NOT EMPLOYED) AGE 35.4 YRS CHILDREN 2.26

INCREASING YEARLY;› PURCHASE PRICE› EMPLOYMENT› NUMBER OF CONTACTS PRIOR TO SALES

VISIT› TIME OF DAY FOR A VISIT

YR 2006 > 2005 > 2004 ALL SIGNIFICANT MEAN YEARLY DIFFERENCES @ ALPHA LEVEL OF 0.05

TIME OF DAY OF A SALES VISIT› 3 (EVENING) > 1 (MORNING)

NUMBER OF CHILDREN› 0 >1=2=3=4

NUMBER OF CONTACTS PRIOR TO A SALES VISIT› 6=5>4=3=2>1

AS EMPLOYMENT ↑ CONTACTS ↑› KNOWING THAT, NEED TO REALIZE CUSTOMER-BASE IS

WORKING AND MAKE ATTEMPTS LATER IN THE DAY› LOWERING ATTEMPTS AND MAKING IT EASIER TO REACH A

WIDER CUSTOMER-BASE AS CONTACTS ↑ PURCHASE PRICE ↑…..BUT…

› THIS IS ONLY A RESULT OF AVALON ATTEMPTING TO CONTACT INCREASINGLY-EMPLOYED CUSTOMER-BASE

› EMPLOYMENT ≠ CORRELATE WITH PURCHASE PRICE…BUT….IT DOES CORRELATE WITH TIME OF DAY OF A SALES VISIT

› TIME OF DAY OF A SALES VISIT DOES CORRELATE W/ PURCHASE PRICE (MORE LIKELY TO BE EMPLOYED =LIKELY LATER TIME OF DAY ON AVERAGE OF SALES VISITS = HIGHER PURCHASE PRICE)

SUMMATION TARGET EMPLOYED CUSTOMERS TO :› WIDEN CUSTOMER BASE (INCREASING NET # OF SALES)

BY LOWERING NUMBER OF CONTACTS NEEDED (BECAUSE YOU NOW KNOW CUSTOMERS ARE EMPLOYED)

LESS CONTACTS NEEDED ALLOWS FOR ABILITY TO INTERACT W/ MORE CLIENTS

› FOCUS ON PURCHASE PRICE SALES BY TARGETING EMPLOYED CUSTOMERS AS EMPLOYMENT ↑ CONTACTS AND TIME OF DAY OF SALES

VISIT↑ AS TIME OF DAY OF SALES VISIT ↑PURCHASE PRICE ↑

(BECAUSE THESE WOMEN TEND TO BE WORKING AND HAVE MORE DISPOSABLE INCOME)

TARGET NEW, YOUNGER CUSTOMERS› LESS LIKELY TO HAVE FAMILIES› CUSTOMERS WITH 0 CHILDREN >

PURCHASE PRICE VS. CUSTOMERS WITH 4 CHILDREN

› WIDENS CUSTOMER-BASE

ADVERTISEMENTS SUGGESTED BY COMPANY CEO TO

ADVERTISE DURING DAYTIME TV/SOAP OPERAS› THIS IS NOT AN EFFECTIVE SOLUTION› WHY?

ON AVERAGE THE MAJORITY OF THE AVALON CUSTOMER BASE (64%) ARE EMPLOYED

ADVERTISE DURING LATE LOCAL NEWS OR NETWORK SITCOMS

OVERALL GOAL = WIDEN CUSTOMER-BASE› HOW?› ADVERTISING DURING LATER HOURS

CONDUCIVE TO EMPLOYED

› IMPROVED KNOWLEDGE OF CUSTOMER ADAPT TO THE EVOLVING AVALON CUSTOMER EMPLOYMENT IS GOING UP

LEADS TO: TIME OF DAY OF SALES ↑ AND NUMBER OF CONTACTS PRIOR TO SALES VISIT ↑

TIME OF DAY SALES ↑ LEADS TO PURCHASE PRICE ↑