Avon 2009 Annual Report Download - page 9

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• We have a stronger brand.
Avon’s iconic brand has 90% awareness across the globe and we sell four
lipsticks every single second of the day. To maintain our advantage, we have
elevated our focus on innovation and sustained our advertising investment at
almost triple the rate of 2005, even in the face of macroeconomic challenges.
With Reese Witherspoon continuing in her role as Avon’s Global Brand
Ambassador, we have repackaged and relaunched our flagship Avon Color
brand. We have attracted new celebrity partners to our fragrance franchise,
including Courteney Cox, Fergie, and Zoë Saldana. We have continued to
innovate in our Anew skincare brand, which remains the number one anti-
aging skincare brand in the world. And in personal care, we have expanded
our Advance Techniques hair care brand with the introduction of a new hair
color line which launched initially in Latin America in 2009.
• We have a stronger channel.
Since 2005 we have incrementally invested more than $250 million to improve
Representative earnings and make it easier to do business with Avon. Avon
Sales Leadership — through which Representatives earn by both selling and
recruiting — has been rolled out to approximately 50 countries worldwide.
We have also launched our global Internet platform to help Representatives
manage their business online. In 2010 we will continue to add new functionality
with the introduction of our eSales Suite, including our new eBrochure and
eMobile ordering capability, so that ordering Avon is only a click away
anywhere, anytime. In addition, we will begin the global rollout of Avon
Leadership Manager, a new tool that allows Avon Sales Leaders to track the
performance of their business units in real time.
• We have stronger cost management.
With our restructuring and cost transformation programs delivering well ahead
of initial expectations, and a constant turnaround mentality now fully embedded
in our organization, we have laid the groundwork for operating margin
improvement in 2010, with the goal of improving operating margin to the mid-
teens level by 2013. We have no plans to conduct any additional restructuring
programs beyond the ongoing 2005 and 2009 programs. As we continue to
transform the business, we will do so as part of ordinary operations.
• We have a stronger organization.
The company has made significant progress in its evolution from a confederation
of local businesses to a fully integrated matrix of global and commercial
business units. We effectively leverage our global strength in marketing, sales
and supply chain, while also remaining flexible and responsive to our local
consumers and Representatives. Four years ago we also began measuring
employee engagement and holding our managers accountable for their
scores. Since then, engagement has increased an exceptional 11 points,
including a four point increase in 2009, bringing Avon’s employee engagement
to 71%, which we believe is considered world-class.
2009 Annual Report
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