The Hindu Business Line : Beauty business with the Bard's touch

HOW does the beauty business operate? It is notorious for its love affair with products, writes Laura Klepacki in Avon: Building the World's Premier Company for Women, from Wiley (www.wiley.com) . A feverish love affair, you'd say if told that a typical department store cosmetics brand may contain some 800 items — despite seasonal `resets' that retailers do, rearranging the store's beauty department "to allow new products in, push poor sellers out, and add new touches to freshen the ambience."

And, hold your breath, Avon introduces 1,000 products a year, achieving a `newness' of 40 per cent, compared to the competition's 15 per cent. This is in addition to 800 items introduced annually in other product areas such as "toys, videos, clothing, gifts, jewellery, and home decorations that are sourced through outside suppliers and licensing deals."

It all started back in 1886, recounts Andrea Jung, Chairman and CEO of Avon, in the foreword, about David McConnell's experiment of recruiting women to sell perfume door-to-door, 34 years ahead of their winning the right to vote. "Today, Avon is a $7.7 billion company with almost 5 million representatives in over 100 countries ... Each year, women earn close to $3 billion selling Avon."

Laura writes that the founder McConnell favoured the person-to-person sales method because it is "the most economical way" to get products into the hands of consumers. The first product from the original California Perfume Company was the `Little Dot Perfume Set' containing a selection of five scents — lily of the valley, violet, heliotrope, white rose and hyacinth. During a trip to England in 1928, McConnell was taken by the beauty of Stratford-Upon-Avon, home of William Shakespeare, informs the book. After the founder's death, his son thought that the attachment to California was just too limiting, even as the product sold across the country. He changed the company's name to Avon Products Inc in 1939, "recalling his father's affection for Avon, and believing the name exotic."

In a section on how the company fended off suitors, you'd read about how Mary Kay and Amway made unsuccessful bids to buy Avon. As for the latter, Avon published an open letter pointing out to "a history of legal problems at Amway and a likely clash of cultures between the two companies." Amway withdrew, but tussles continued with Mary Kay and Chartwell till 1991.

For the first 113 years, even as 99 per cent of the company's sales force consisted of women, Avon had a man at the top running the organisation. A turning point came in the mid-'70s, when Patricia Neighbors, "a former model with a persuasive disposition," managed to get permission from James Preston, the vice-president of sales and marketing, to make the opening remarks at a meeting he was holding of Avon's regional sales managers. "Not willing to disclose to Preston what her topic was, she simply asked him to `trust her'." What happened, then?

"That daring woman proceeded to go around the room addressing each of the some 20 men and complimenting them on their hair, suits, ties, and other personal appearance details. The men were getting embarrassed and red-faced." What was her idea? "She proceeded to explain that, `This is the way 75 (male) district sales managers (who report to the regional managers) start meetings every month with the (female) sales associates. Don't think for a moment that the emotions you just experienced aren't experienced by these women every month." Two years later, Neighbors became the company's first woman vice-president.

When Preston became the CEO in 1988, he declared that his objective to have at least 50 per cent of the management team filled with women. He captures the company's culture in five words: "Trust, Respect, Belief, Humility, and Integrity." If you trust people to do the right thing, and they understand the underlying reasoning and philosophy, they won't disappoint you, he'd explain. "Humility simply means you're not always right. You don't have all the answers, and you know it."

A `tinge of humility' pervades the organisation, he'd say, because "a fundamental truth about Avon's structure is that the sales representatives are independent contractors, and therefore cannot be ordered to do anything." They have to want to do it!

A book that can make you doubt that old saying of beauty being just skin deep.

BookMark@thehindu.co.in

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