New York — Just a month into the New Year, Avon has launched a critical phase of its previously announced restructuring plan. The effort, which was first introduced in late 2005 by Avon chairman and chief executive officer Andrea Jung, relies on a strong product pipeline backed by amplified advertising support.
In keeping with Jung's promise to double advertising spending by 2008, Avon will quadruple its advertising frequency in 2006, investing primarily in skin care and cosmetics in the first half of the year, said Jill Scalamandre, senior vice president of global beauty brands for Avon Products.
This year's mantra, noted Scalamandre, is to step up brand competitiveness. The first salvo against its mass market and department store peers is a trimmed slate of product launches, most of which seek to build existing brands into franchises.
The lineup for the first half of the year includes Ultra Moisture Rich Lipstick SPF 15, Anew Alternative Intensive Age Treatment SPF 25 Day, Anew Clinical Eye Lift, Daring Definition Mousse Mascara and Instant Manicure, billed as the first dry nail enamel.
Avon executives would not comment on sales, but industry sources forecast the five products could reap $140 million in first-year sales.
With less, more impactful launches planned, Avon can devote more resources to each, explained Scalamandre. "The tactic is staying in front of the consumer," she added. "Each new launch will have a halo effect on the entire brand."
The marketing ramp up includes increasing Avon's TV advertising from 11 weeks in 2005 to 42 weeks this year. On the print side, Avon will run magazine ads nine months out of the year, up from four months last year.
The company said it is also pursuing a more analytical approach to marketing. "There's a more objective lens being applied to advertising to understand the investment," said Vanessa Reggiardo, vice president of U.S. beauty marketing for Avon.
Many of the new entries carry a more premium price point, and all carry clinically tested claims.
"Where we think we have a competitive edge, we will price competitively," said Reggiardo.
Tapping into the capabilities of the company's newly opened global research and development center in Suffern, N.Y., Avon will measure the benefits of each of its future launches, including color cosmetics, said Scalamandre.
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