In this case, I don't think Avon is sacrificing their own profit margin because according to Andrea Jung, the CEO of the company, Avon has cut down cost of production recently by cutting down the number of suppliers. This is a good promotional strategy because, if there are more things that you can get for the price of one, customers will tend to buy more. And there is a possibility that they will give out the other item either to their relatives or friends, therefore, this strategy increase customers' awareness of Avon.
Rebates.
Avon does not apply rebates because a rebate is usually for high end items, such as cars and household appliances. I do not think that a rebate is cost effective for Avon because Avon's prices are relatively cheap.
Premiums.
Premium is one of the sales promotions that Avon takes advantage of even up to this day. Avon offers free tote with some goodies in it with certain amount of purchase. Currently on Avon's website (www.avon.com), they offer free summer fun beauty bonus that consists of goodies that customers will find useful during Summer, like sheer lipstick with SPF and smudge-free water proof eyeliner for those who are into sports with $40 purchase and if they buy more than $60, they will get free shipping as well. This is a good way to attract customers to shop online because most of customers hesitate to shop online due to the high shipping charges. Even though it is convenient that people can shop from home, but they are still getting the same item but they have to pay more due to the shipping charges. One of the upscale makeup company, Sephora(www.sephora.com), is doing the same thing as well. But for Sephora, customers have to spend at least $75 and it is easy to spend $75 at Sephora since all their items' prices are really high. But for Avon, they are not trying to take the business away from the sales representatives, so customers tend to get better deal if they buy it from the sales representatives.
