P. 1
ankur nrhra

ankur nrhra

|Views: 2,453|Likes:
Published by Mystic Shawal Kumar

More info:

Published by: Mystic Shawal Kumar on Mar 02, 2011
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as DOC, PDF, TXT or read online from Scribd
See more
See less

12/29/2012

pdf

text

original

Sections

  • THE ROLE OF DIRECT SELLING
  • IN RELATION TO COSMETIC PRODUCTS
  • Under the Supervision of Mr. Anil Kumar
  • SUBMITTED BY: ANKUR NEHRA ROLL NO. A-68 M&S ENRL No.: A3914708072
  • DECLARATION
  • ACKNOWLEDGEMENT
  • CERTIFICATE
  • TABLE OF CONTENETS
  • ABSTRACT
  • MEANING
  • 1.DIRECT MARKETING
  • 2.DIRECT SELLING
  • 3. COSMETICS INDUSTRY
  • “SOME SELLING QOUTES”
  • Og Mandino
  • Introduction to direct marketing
  • Benefits and drawbacks
  • Channels
  • 1.Direct mail
  • 2. Telemarketing
  • 3. Couponing
  • 4. Direct response television marketing
  • Introduction to Direct Selling
  • THE STRONGEST GROWING SECTOR
  • DIRECT SELLING
  • Benefits of Direct Selling
  • Anyone can do it
  • People like to shop through direct selling
  • Considering an opportunity?
  • How to Get Started:
  • Overview of the direct selling industry
  • DIRECT SELLING -A GROWING INDUSTRY
  • Direct selling companies to slug it out in Rs 5,000 crore market
  • Traditional System v/s Direct Selling system?
  • AN OVERVIEW OF THE COSMETICS INDUSTRY
  • TRENDS IN INDIA
  • THE GROWING COSMETICS INDUSTRY IN INDIA
  • Future trends in direct selling of cosmetics
  • 1. Rewards
  • 2.Merits
  • 3. Flexibility
  • 4. Critical success factors
  • REASEARCH METHOLOGY
  • 1.RESEARCH OBJECTIVE
  • 2.RESEARCH DESIGN:
  • 3. SAMPLING TECHINQUES
  • LIMITATION OF RESEARCH
  • CONCLUSION AND RECOMMENDATIONS
  • CONCLUSION
  • RECOMMENDATIONS
  • BIBLIOGRAPHY
  • Website
  • Journals and Magazines
  • ANNEXURE1:
  • QUESTIONNAIRE

THE ROLE OF DIRECT SELLING IN RELATION TO COSMETIC PRODUCTS

Under the Supervision of Mr. Anil Kumar

SUBMITTED BY: ANKUR NEHRA ROLL NO. A-68 M&S ENRL No.: A3914708072

DECLARATION

I here by declare that this dissertation report entitled “THE ROLE OF DIRECT SELLING IN RELATION OF COSMETIC PRODUCTS” has been carried out by me, Ankur nehra, a student of BBA (Mktg & Sales) in Amity School of business, Amity University, holding Enrollment Number A3914708072. The research confirms to course regulations regarding cheating and plagiarism. I declare that no material contained within this assignment has been used in any other submission, by the author, for an academic award. I further declare that the information presented in this project is true and original to the best of my knowledge.

Ankur nehra

ACKNOWLEDGEMENT

Above all I want to express my gratitude to the God Almighty, who gave me life. , Amity School of Business, the place where I have spent most memorable days of my life, the place that has always inspired to deliver my best, I owe all my motivation and success. I am not the most popular names of this institution, but I want to be the most motivated and most inspired person from this place.

It has been a great learning experience working on this project entitled “THE ROLL OF DIRECT SELLING IN RELATION TO THE COSMETICS INDUSTRY”. I would like to express my heartiest gratitude to Mr. Anil Kumar who is my faculty guide, for giving me an opportunity to work under guidance. I would like to thank her for support and guidance which was a source of encouragement for me throughout this project. The staffs in Amity Business School, especially in the academic section, which were always around me, always there to help me in need, my friends, who taught me a lot of things, they all deserve a word of honor.

CERTIFICATE

This dissertation on “Role of direct selling in relation to cosmetics industry”-is submitted in partial fulfillment of the requirement Bachelor of business Administration (BBA), of Amity School of Business, Amity University Uttar Pradesh. This is a bonafide work conducted by Ankur Nehra ENRL No.: A3914708072 of BBA batch of 2008- 2011; Guidance of Mr. Anil Kumar (faculty guide).

(Signature of the Student)

(Signature of the Faculty Guide)

TABLE OF CONTENETS

12. catalogue selling and home party selling. 4. 10. Abstract Meaning of Direct Marketing and Direct Selling Introduction to Direct Marketing and Direct Selling Overview of cosmetics industry Future trends in Cosmetics Industry Research methodology Research Objective Research Design Data Collection Method Sampling technology Analysis & interpretation Limitations Conclusions Recommendation Bibliography Annexure ABSTRACT The dissertation aims to identity and investigate the factors involved in direct selling in relation to cosmetics industry. . 9. internet selling. 5. habits. 2. 3. 11. 6. For a company to be able to do business with people with different preferences. Direct selling is one form of direct marketing. which includes door-to-door selling.1. 8. 7.

There are two main . DIRECT MARKETING Direct marketing is a sub-discipline and type of marketing. The results were analyzed and interpreted. In order to test the research work. a survey was conducted and questionnaire was prepared. The population consisted of people living in Faridabad. MEANING 1.tastes and expectations it must continuously monitor their expectation level and increase it's efficiency and effectiveness.

distributors or . This aspect of direct marketing involves an emphasis on traceable.definitional characteristics which distinguish it from other types of marketing or advertising. package inserts. transit ads. etc. And according to Ad Age.) with consumers or businesses. pay-per-click ads. The second characteristic is that it is focused on driving purchases that can be attributed to a specific call-to-action. radio. This involves unsolicited commercial communication (spam. television. Direct marketers also use media such as door hangers. It is sometimes also considered to be a sale that does not utilize a "middle man" such as a retail outlets.DIRECT SELLING Direct selling is the marketing of products or services to consumers through sales tactics including presentations. demonstrations. The first is that it attempts to send its messages directly to consumers. (Citation needed) 2. "In 2008. U.S. measurable positive (but not negative) responses from consumers (known simply as "response" in the industry) regardless of medium. without the use of intervening media. and phone calls. magazines. billboards. agencies generated more revenue from marketing services than from traditional advertising and media. newspapers. internet banner ads. junk mail. email.

They are required to be effective.brokers. COSMETICS INDUSTRY Cosmetics are mixtures of surfactants. New brands of cosmetics to appeal to various population sectors are constantly being developed. express their entrepreneurial talents and gain financial independence. stable and last not least safe to human use. print which is handled by the business. The cosmetics industry is a multi-billion dollar industry. Direct selling involves people and is a part of direct marketing which additionally involves the use of media. direct selling can be an opportunity for individuals to find fulfillment. long lasting. oils and other ingredients. 3. At its best. . This is needed where the products value needs more explanation and cannot be purchased off the shelf.

. lipsticks. Scott Cook Launched intuit in 1984. Scott Cook soon began using the insights he was learning to develop an idea for his own company with computers just coming out at the time. nail products. including shaving preparations. deodorants. which today offers software and online products to help individuals and small companies manage their finances including the extremely popular Quicken and QuickBooks packages. creams. Scott thought there might be a market for basic software hat would help people pay their bills. “SOME SELLING QOUTES” Scott Cook Starting his career at Procter & Grable. and lotions. dentifrices. colognes. mouthwashes. perfumes. hair preparations.The industry produces a vast array of products.

A whole generation of Americans will retire in poverty instead of prosperity.) with consumers or businesses. strength. he smiles will return. The second characteristic is that it is focused on driving purchases that can be attributed to a specific "call-to-action." This aspect of direct marketing involves an emphasis on trackable. and you will finally be able to move forward the life that God intended for you with grace." "Failure will never overtake me if my determination to succeed is strong enough.” Og Mandino Og Mandino has been called the sales mans sales men and is considered one of the classic reads in the sales persons arsenal of learning. And if you’re ahead of the other guy understanding the customer. and if you’re bringing to market the stuff that the other companies just haven’t figured out because you’re ahead in understanding and delivering for the customer. "Count your blessings. to their deaths. the music will play. This involves unsolicited commercial communication (spam. like Coca Cola. Once you realize how valuable you are and how much you have going for you." It is those who concentrate on but one thing at a time who advance in this world. Introduction to direct marketing Direct marketing is a sub-discipline and type of marketing. The first is that it attempts to send its messages directly to consumers. etc. courage. then they’re copying your old stuff. There are two main definitional characteristics which distinguish it from other types of marketing or advertising. . you kind of know what the company makes. junk mail.” At least if you buy a company’s stock. particularly when it was Microsoft. The great man or woman is the one who never steps outside his or her specialty or foolishly dissipates his or her individuality. the sun will break out. and confidence. because they simply are not preparing for retirement now”.” I find too many companies in our industry have focused on the competition. without the use of intervening media.

measurement of other media must often be indirect. because in many cases its positive effect (but not negative results) can be measured directly. the marketer can say with some confidence that the campaign led directly to the responses. The term junk mail. can be traced back to 1954. pay-per-click ads. who pioneered direct marketing techniques with brands such as American Express and Columbia Records. Benefits and drawbacks Direct marketing is attractive to many marketers. since there is no direct response from a consumers Measurement of results. if a marketer sends out one million solicitations by mail. billboards. 1993. can be traced back to March 31. The term spam. referring to unsolicited commercial ads delivered via post office or directly deposited in consumers' mail boxes.measurable positive (but not negative) responses from consumers (known simply as "response" in the industry) regardless of medium. magazines. The number of recipients who are offended by the junk mail/spam. package inserts. newspapers. is explored . email. internet banner ads. transit ads. radio. For example. meaning "unsolicited commercial email". By contrast. a fundamental element in successful direct marketing. is not easily measured. and ten thousand customers can be tracked as having responded to the promotion. television. Although in its first few months it merely referred to inadvertently posting a message so many times on UseNet that the repetitions effectively drowned out the normal flow of conversation. however. The term direct marketing is believed to have been first used in 1961 in a speech by Lester Wunderman. Direct marketers also use media such as door hangers.

They are typically called direct response marketing rather than direct marketing because they try to achieve a direct response via broadcast on a third party's medium. is now less common than the other forms. A fourth type of direct marketing. some direct marketing efforts using particular media have been criticized for generating unwanted solicitations. Junk mail includes advertising circulars. direct mail that is irrelevant to the recipient is considered junk mail.. free trial CDs. A related form of marketing is infomercials. Channels The most common form of direct marketing is direct mail. common form of direct marketing is telemarketing. but viewers respond directly via telephone or internet. This is partly due to laws in the United States and elsewhere which make it illegal. Probably the most commonly used medium for direct marketing is junk mail. send paper mail to all postal customers in an area or all customers on a list. including spam may have passed telemarketing in frequency at this point. or delivered to consumers' mailboxes by delivery services other than the Post Office. broadcast faxing. Direct mail Any medium that can be used to deliver a communication to a customer can be employed in direct marketing. Bulk mailings are a particularly popular method of promotion for businesses operating in the . and unwanted email messages are considered spam.in greater detail elsewhere in this article. Consumers are demanding an end to direct marketing. which some advertising agencies are able to provide by using variable data printing and targeted mailing lists.{[fact}} in which marketers contact consumers by phone. in which marketing communications are sent to customers using the postal service. For example. 1. While many marketers like this form of marketing. The unpopularity of cold call telemarketing (in which the consumer does not expect or invite the sales call) has led some US states and the US federal government to create "no-call lists" and legislation including heavy fines. which may also be referred to as admail and may involve bulk mail. Email Marketing. The term direct mail is used in the direct marketing industry to refer to junk mail. commonly called junk mail. The second most. pre-approved credit card applications. and is a third type of direct marketing. Yet since the start of the Internet age the challenges of Chief Marketing Executives (CMOs) are tracking direct marketing responses and measuring results. and other unsolicited merchandising invitations delivered by mail or to homes and businesses.

Direct selling . This process may be outsourced to specialist call centres. the marketer would be exempt from Do-Not-Call List restrictions for a period of time due to having a prior business relationship with the caller. In many developed countries. 4. The agents sit at computerised work-stations and try to sell the products of the clients. since the marketer incurs the cost of supporting a third-party medium (the newspaper or magazine). An example is a coupon which the reader cuts out and presents to a super-store check-out counter to avail of a discount. Couponing Couponing is used in print media to elicit a response from the reader. Coupons in newspapers and magazines cannot be considered direct marketing. This both allows marketers to reasonably conclude that the calls are due to a particular campaign. 2. Major players are firms like avc. Direct response television marketing TV-response marketing-Le infomercials-can be considered a form of direct marketing. home computer. Thane Direct. paring the costs down to solely delivering their unsolicited sales message to the consumer. and allows the marketers to obtain customers' phone numbers as targets for telemarketing. 5. if the caller buys anything. and travel and tourism industries. and Interwood Marketing Group then cross-sell. Telemarketing Marketers call telephone numbers. 3. direct mail represents such a significant amount of the total volume of mail that special rate classes have been established. without supporting the newspaper that the consumer seeks and welcomes. and up-sell to these respondents. since responses are in the form of calls to telephone numbers given on-air. Under the Federal Do-Not-Call List rules in the US. direct marketing aims to circumvent that balance.financial services.

innovative products such as vacuum cleaners or washing machines were first marketed through direct selling because these revolutionary products required a demonstration that only a direct seller could offer. In the first part of the 20th century. In the Middle Age. It is part of the man's basic need to exchange goods and to communicate. Today at the beginning of the 21st century. either by having salespeople approach potential customers in person. vibrant and growing sector of activity providing earning opportunities to millions of salespeople all over the world. direct sellers were called "peddlers" who contributed to the development of trade by bringing novelties from large cities to little villages. Direct selling can be considered as the oldest distribution channel in history. Rural areas and small towns were supplied with basic goods only through the travelling salesmen. Introduction to Direct Selling. through indirect means such as Tupperware parties.Direct selling is the sale of products by face-to-face contact with the customer. direct selling is a dynamic. .

They invest heavily in research.THE STRONGEST GROWING SECTOR Direct selling suits the sale of almost every category of goods that can be found in traditional retail locations and in department stores. Some direct selling associations. Yves Rocher. Some companies operate in just a few countries. jewellery and clothes. Bertelsmann. At its worst. Virgin Companies. Citigroup. Cosmetic and personal care products. and phone calls. distributors or brokers. it can become a kind of pyramid scheme. home improvement products. training and marketing but are also socially responsible companies involved in community programs at local and international levels. for example the Bundesverband Direktvertrieb Deutschland. demonstrations. direct selling can be an opportunity for individuals to find fulfillment. Unilever. This is needed where the products value like in Insurance. Several well known multinational corporations have adopted direct selling as channel of distribution for some of their brands (Loreal. some even on a worldwide basis but many more are national or often locally based. nutritional products. express their entrepreneurial talents and gain financial independence. the direct selling association of Germany. Time Life. It is sometimes also considered to be a sale that does not utilize a "middle man" such as a retail outlets. A majority of direct selling companies manufacture and control the production of their goods. have given themselves codes of conduct which lead to a fair partnership both with customers and salesmen. DIRECT SELLING Direct selling is the marketing of products or services to consumers through sales tactics including presentations. books. etc. toys and game. etc. needs more explanation and cannot be purchased off the shelf. At its best. household items and wellness are the strongest sectors in direct selling. Other products categories include food and beverages. . gas and electricity supplies. Reader's Digest.). Direct selling companies range from those with smaller than 1 million € annual turnover to medium size and large firms with turnovers above 1 billion €. It is also very convenient for the sales of services such as telecoms.

• • • • Set your own goals and determine yourself how to reach them. the second one is the Direct Selling Europe. There are prominent people in the society who started their careers in direct selling. print etc. The level of success you can achieve is limited only by your willingness to work hard.Most of the national direct selling associations are represented in the World Federation of Direct Selling Associations (WFDSA). Own a business of your own with very little or no capital investment. Anyone can do it. Earnings are in proportion to efforts. . which is founded in spring 2007. Direct selling is a good way to earn extra income. Earn in proportion to your own efforts. Benefits of Direct Selling • • • • • Direct selling is a good way to meet and socialize with people. In Europe there are two supranational associations: the first one is the Federation of European Direct Selling Associations (FeDSA). Direct selling offers flexible work schedules. Direct selling involves people and is a part of direct marketing which additionally involves the use of media. Direct selling is a good way to own a business. Receive training and support from an established company.

usually the cost of a sales kit. for 90 percent of the price you paid for them. 74 percent of Americans have purchased goods or services through direct sales. Companies want to make it easy and inexpensive for you to start. Beware of opportunities that encourage "front end loading. DIRECT SELLING Considering an opportunity? Here's how to identify legitimate direct selling opportunities: 1. People value the products available through direct selling and 45 percent of Americans want to buy from direct sellers." or buying large inventories of . Pyramid schemes make their money through fees paid by new recruits or by loading inventory or training aids on them.People like to shop through direct selling According to recent surveys. That's more than the number who have purchased through television shopping and on-line computer services combined. The DSA Code of Ethics requires that member companies do this. 2. You should be able to return unsold inventory. The start up fees in direct selling companies are generally modest . Companies belonging to the Direct Selling Association "buy back" unsold marketable products purchased within the prior 12 months if you decide to quit the business. High entry fees should be a warning sign. Start up costs should be minimal.

6. Does" getting in on the ground floor" mean that everyone joining after you will be less satisfied or happy? A legitimate opportunity won't disappear overnight. depends on selling to customers who use and/or consume the product. the products or services. Check our list of member companies or look in your local phonebook. This requires quality products and services sold at competitive prices. . 4. You should also believe in the products or services you'll be selling.unreturnable products to reach achievement levels or receive a "special" or larger "discounted" price." This is a key element of a legitimate business. 2. How to Get Started: 1. Beware of any business that claims you can get rich by solely using their products or by recruiting new people into the business. and anything else you're concerned about. average earnings of distributors. Direct selling. realistic costs of doing business. About the company.Get copies of all company literature. And read it! 5. 3. like other methods of retailing.Consult with others who have had experiences with the company and its products. Identify a company and product that appeal to you. Is the money you'll earn based on the sale of products or services? The answer should be "absolutely. Check to see if the products or services are actually being sold to consumers. Take your time deciding. Ask questions.Investigate and verify all information. return policies. Think longterm 3. start-up fees. its leadership.

Do not assume that "official looking" documents are accurate or complete or even produced by the company.Need help evaluating a company? Check to see if the company in which you're interested is a member of the Direct Selling Association. with only 50-60% of recruits converting into active consultants USA has the highest number of direct sales people at 13. but productivity is low. India with about 1. 7. In terms of number of people joining the direct selling industry annually. as opposed to the person trying to recruit you.3mn in 2003. The drop out rate however is quite high. Switzerland has the highest sales per person at US$51561. Sales per person are the lowest in the world in Indonesia at US$109. If it is. China banned Direct Selling for a 7 year period in 1998. Indonesia has the highest number of sales people in the world after US. you can be assured the company has pledged to abide by and uphold the DSA Code of Ethics. the growth rate has been a higher 15% over the last 10 years and 9% over the last 5 years.24mn direct sellers ranks 11th globally in terms of number of • • • • • . Overview of the direct selling industry • • • The direct selling industry does an estimated sales of over US$88 billion worldwide Almost 49 million people all over the world are engaged in direct selling.

• • • • people employed in the direct selling industry Sales in India through direct selling is estimated at Rs23bn (US$511mn) in 2003. Health & Nutrition products has emerged as the fastest growing category in India. We will be forming a new subsidiary. among others. Image Multitrade Private Ltd told FE.000 crore market. Further. Bhubaneshwar. Traditionally considered as a profession for women.000 crore segment. Ravindra Deshmukh. Mumbai-based Image Multitrade Private Ltd is planning to launch new corporate initiatives through a subsidiary called Image Lifestyle to foray into the retail mall segment. Mumbai. chairman and managing director. more and more men are today directly or indirectly venturing into direct selling. and Jabalpur. Bhopal. Feb 1 The year 2009 is likely to witness intense competition among direct selling Companies in India. Image Lifestyle Private Ltd in April 2009 through whom we will launch new consumer promotions by partnering with various . plans are also on the anvil to tie up with retail majors such as LG Electronics and Subhiksha to provide 10% discounts on cash coupons to its distributors. which are vying for a pie in the Rs 5. Pune. Marketing of Services is likely to emerge as the next growth area. Kolhapur. Nagpur. The men to women ratio in India is gradually changing. DIRECT SELLING -A GROWING INDUSTRY Direct selling companies to slug it out in Rs 5. "We plan to set up about 50 malls in the next three years at an initial investment of Rs 100 crore in Mumbai. accounting for almost 40% of product sales through direct selling.

he added.5 lakh to about 50 lakh for its existing B2B business in the next few years. Though people from 2 to 6 in above procedure.. apart from planning to start its training centre either in Mumbai or in Lonavala. among others. are not improving the quality of the product in anyway. 5) Then it comes to whole seller." The company also plans to expand its distributors from 1. In DIRECT SELLING SYSTEM company provide the product straight to the .. 2) Advertisement of the product. 4) Product goes to District Distributor. This way a product manufactured @ Rupees 5-6 in the factory is reached to the consumer purchasing it @ Rupees 10. 1) Factory manufactures a product. (So that people know about the product) 3) Product goes to C & F agents. are taking money from consumer for just providing the product to the consumer.retailers to generate repayment of incomes for our distributors. For the purpose. 7) Then consumer buys the product from retailer. we are in the process of in talking LG Electronics India and Subhiksha. 6) Then it comes to retail seller. Traditional System v/s Direct Selling system? As we all know that in TRADITIONAL SYSTEM of business a product reaches to the consumer through following procedure.

lipsticks. including shaving preparations. The cosmetics industry is a multi-billion dollar industry. 1) Factory 2) Consumer This way company returns the money back to the consumer. mouthwashes. perfumes. long lasting.consumer. Tariffs on raw materials . nail products. colognes. New brands of cosmetics to appeal to various population sectors are constantly being developed. hair preparations. creams. They are required to be effective. AN OVERVIEW OF THE COSMETICS INDUSTRY • Cosmetics are mixtures of surfactants. stable and last not least safe to human use. so there are only two people in the whole transaction. deodorants. oils and other ingredients. dentifrices. and lotions. The industry produces a vast array of products. • • • Metal dyes are used in finger nail polish and also the use and concentration of heavy metals play an important role in cosmetics production. which it saved by not paying money the people from step 2 to 6 in traditional system. Standards for the materials used in these products have been upgraded and many are now equal to the material specifications for the pharmaceutical industry.

0 bil) in 2007 to 112.7 million in 2012.1 billion yen ($1. Factors contributing to this steady growth include improvements in the global economy.6 bil) in 2008. particularly in developing countries.9 billion yen ($782.586.0 mil) in 2008.351.7 billion in 2007. The market for body-care products will remain roughly flat: from 112. growing at 5. In end-user segments. price and range.9 billion yen ($801.0 billion yen ($1. and will maintain the highest market value through the forecast period. There are traditional Toiletries items like Perfumes and Ethers. Perfumed Hair Oil. and is expected to increase to 509. Fuji Keizai Releases Report on Japanese Cosmetics Market.2 billion yen ($4. The Indian Cosmetics Industry can match International Standards when comes to quality. and oral hygiene have steady growth rates of 4. the global market for natural beauty products will be worth more than $10 billion. Bath/ shaving products. The global market for cosmetics and toiletries ingredients is estimated to be around $14.6 billion yen ($4. They will grow from $2. with growth of the ingredients expected to be around 5% per year through 2012. color cosmetics have the highest average annual growth rate. According to the report. perfume. growth in the segments for mascara and eye shadow will be remarkable.5 bil) in 2007. by 2009.9 million in 2008 to $3. the market for makeup products reached 497. The report also mentions that the segments for eye make-up products are expected to show steady growth. Sindoor. Hair care products were worth more than $4 billion in 2008. • • • • • • • . Bindi and Herbal Cosmetics and Toiletries.are generally low. Kajol. In particular. According to Global Cosmetic Industry Business Magazine.8 mil) in 2007 to 88.0 bil) in 2008. Kum-Kum.2 % per year. • The Indian Cosmetic Industry continues a beautiful blend of traditional and the modern.3 million US dollar in 196364 and 25. Talcum Powder. from 86.7 million US dollar in 1979-80 and touched 336 million US dollar during 2006-2007.6 % per year through 2012. in particular for raw materials originating in developing countries. and the introduction of new consumer-friendly products. Exports of Cosmetics & Toiletries from India was 1.

the market penetration of cosmetics and toiletries products in India is very low. Two West European cosmetics companies have the largest portion. Western Japan is a large beauty market. the size of the Japanese cosmetics market reached a total of U5$12.65 in other Asian countries.9 billion / Euro 10. Germany and Japan) make up 93% of sales. which accounts for 55. and restore hydration have created an $83 billion worldwide market. The personal care products industry in India is value at Rs. • • • Even with double-digit growth rates. UK. Current per capita expenditure on cosmetics is approximately $0. France.S. Firms based in Japan and South Korea also have substantial market share at 14%. The growth of health care products is about 20%. but their average sales are the smallest. The cosmetics industry is regionally based. • The herbal cosmetics industry is set for a significant growth depending on the capability of the manufacturers to market their products.A. Firms in the largest five countries (USA. and firms based in North America and in West Europe account for approximately 86% of sales: 43% for each region. 50%. As this statistic shows. 2500 crores in consumer price terms. Japan is the second-largest cosmetics market in the world only after the U. This low market penetration for cosmetics and personal care products in India can be viewed as an .68 cents. in terms of number.003 with 10. • Further.8% of the total number of salons nationwide. 960 million US dollars. According to statistics released by the Ministry of Economy. minimize pores. as compared to $36. in 2007 the number of esthetic salons in Japan reached 18. Products that claim to renew cells.• China's cosmetic products market ranked the second largest in Asia. Trade and Industry.057 of these being in Western Japan (the part of the country west of Nagoya).7 billion (ex-factory) in 2006.

Its flashy prices did not convince the consumers about the quality of the products. This seems to have been the trend with all the major direct sellers. with total recorded sales of Rs. a direct selling pioneer. It is a market of great interest to international companies. 2. The Salon industry is estimated at USD. Amway estimates its turnover at Rs. 312 crores in 1997-98 and Rs. 1 .000 crores in 2004. 520 crores in 1998-99. The Beauty Business has another parallel with the growth of Indian economy . ADEX India.claims to have done similarly.it has it's own service sector that is growing as fast as the market for products. 1. they saw but will they conquer? There are about seven-eight companies involved in direct selling in India. The market for beauty in India has been booming and it's a prime playing field for beauty majors across the globe.6 billion and that should reach $4. a Division of TAM Media research shows there has been 49% increase in commercial time for Beauty product on TV in 2008.opportunity for more significant growth down the road in this country of 1 billion people. 200 crores -. 620 crores now. targeting lower prices.Amway. In its second year of operations (1999-2000). pumped in over Rs. The two biggest . Oriflame-.a 100 per cent increase. 115 crores as foreign direct investment. TRENDS IN INDIA HOW have the companies that have touted the benefits of direct selling to the individual fared? They came. The figure is about Rs.4 billion by 2012. Television soaps & Magazines and largely Mumbai based. Euro monitor estimates that the Industry for products alone minus services to be $ 3. For the beauty industry the reference points are largely Bollywood (the Indian Film Industry). 375 Million and is growing at rate of 30 to 40 %. Amway expects its business to touch Rs. This change in strategy helped it reap rewards and stage a turnaround.a Swedish direct selling company involved in cosmetics -. It has since re-positioned itself to a broader market.

justifying the premium prices of their goods. manufacturer I distributor expansions.to India. The reasons for the growing demand for cosmetic products in India also include: greater access to television. From concept to completion. They try to promote the concept that the bowl is worth the investment and offers value for money.1 %). which has created a growing awareness of the western world. 120 more than what is available in the market. and greater product choice and availability. The success of contestants from India at various well known international beauty pageants in the last few years has also contributed to making Indian women more conscious of their appearance and more aware of western cosmetic products and brands. The Indian Client is a demanding one and expects nothing less than a Versace. Also. Nevertheless. sun care (13. the cosmetics industry is heading East . thereafter. and deodorants (10. retail store grand openings are the buzz words. or a .5%).obstacles they face in this country were explaining the concept and. there is much to be said for the tremendous potential for direct selling in India if the companies play their cards right and adapt to the Indian conditions. up 46.6% from 1997-2004.3% from 2003-2004. increased advertising in general. Increased disposable income has led to growth in demand for premium products. THE GROWING COSMETICS INDUSTRY IN INDIA The sun and sales are rising on the Indian cosmetics market. the Indian cosmetics and personal care market has grown 62. where raw material sources. For instance. Such concepts are alien to the conservative middleclass Indian households. Tupperware salespersons are trained on how to explain why a Tupperware plastic bowl costs Rs. a boom in the Indian fashion world has contributed to the rise in demand for professional beauty care products. According to Euro monitor. The greatest growth was recorded in color cosmetics. followed far behind by increased sales in fragrance (18%).

you can start recruiting people yourself. of everyone who they recruit. you have to dedicate yourself to creating a vast network of distributors and consumers and initially attain high levels of personal value. This is called' pyramid selling. Rewards An inherent feature of direct selling is performance based rewards. This is where the real money is once you go higher up the ladder. At this point you will receive a percentage commission on the total of their sales value and.25-30 per cent. consequently. Once you reach a particular target. It comes as no surprise therefore that they expect nothing less than a luxurious experience at an equally prestigious Salon or Spa. a significant proportion of their income is sourced from others' personal sales value commission. But to reach such levels. The most basic form of income is the margin at which you buy the product and the retail price (MRP) at which you sell it. As people go higher up the network pyramid.Channel or a Lancome product. they concentrate more on recruiting people than on selling. . awarded when you reach a sales target . This is awarded on a slab-basis over and above the basic commission. The second is bonus commission.called your personal sales value. The margins here are generally quite high . Therefore. There can be up to nine types of income when you direct-sell. Future trends in direct selling of cosmetics 1.

distributors are rarely left with unsold Products.250. give you credit once you reach a particular target level and are a priority distributor. that is. There is . Rewards are directly proportionate to your efforts: So you can earn as much or as little as you want . if you wish. One way of getting around this is to have a personal understanding with your customers. Product buy-back policy and low inventory: Another merit is that if you have a good relationship with your customers. Most people know how to value and judge cosmetics and household cleaning items. Other companies. This requires building a relationship based on trust. This system initially puts people off as they are scared of getting stuck with products they cannot sell. But it is generally divided into two types. In the US and the UK. 100-300 and the initial deposit (in some companies. It also differs from company to company. Companies such as Tupperware expect an initial deposit which makes you eligible for credit for the value of products you buy.Rs.What is the initial investment? Nothing at all. companies Business Line spoke to said that due to the high levels of training given. Merits Low start-up costs: The costs incurred in this business are minimal. Amway. house parties. if you decide to use the credit facility). even. This credit would be settled once you sell the products. on the other hand. Oriflame has a registration fee of Rs. Costs incurred in travelling when meeting people can be avoided if you go to community meetings or gatherings or. 2. insists that you pay for the goods when you collect them and not when you sell. where direct sellers such as Tupperware and Ann Summers hold parties to woo customers. You can collect the money from your customers and place an order thereby making instant profits as you only pay the cost price. most companies have product buy-back policies. they will buy-back products you cannot sell. Most products involved in direct selling are easy to relate to and hence easy to sell. Flexibility The flexible nature of direct selling is one of the main reasons for its growth. such as Oriflame. However. you need not hold stocks. The only real costs are the initial joining fee . Even if you do.the more time you invest the greater the rewards. Nothing is fixed except the selling price. 3.

Be sure of your customers. Mr. with total recorded sales of Rs. Your customer will appreciate such honesty. It takes a while to develop good relationships and a network. Direct selling might be a good option if you want to earn some extra money in your own time. 620 crores now. 4. But there are some points to be wary of: Make sure you understand the policies of the company on payment of commission and product buy-back. finally. Once you have convinced the customer to at least try it. be patient. You do not want to be stuck with expensive cosmetics and plastic bottles you cannot sell. Your business thrives on repeat-customers and the focus should be on inducing trial. 520 crores in 1998-99. But it is not secure as the main source of income. According to Tupperware India managing director. One distributor Business Line spoke to says she does not recommend products that she believes do not offer value for money." Your success ultimately depends on the relationship you develop with your customer. And. For instance.comfort in familiarity. they saw but will they conquer? There are about seven-eight companies involved in direct selling in India. Be assertive but not pushy. . It is a new concept and needs explaining. the product will speak for itself. Indian experience HOW have the companies that have touted the benefits of direct selling to the individual fared? They came. 312 crores in 1997-98 and Rs. she does not recommend the nail polish her firm sells as she believes it is too expensive. the bigger your business. Critical success factors The critical success factor is your ability to sell and interact with people. They might ask you to order a product and later change their mind. The figure is about Rs. The more people selling or buying your products. Worth the while? It is not a bad way of making money and meeting people at the same time. Pradeep Mathur: "Direct selling works by introducing new people into the business. Be honest.

. Its flashy prices did not convince the consumers about the quality of the products. Amway expects its business to touch Rs.Amway. thereafter. justifying the premium prices of their goods. pumped in over Rs. Tupperware salespersons are trained on how to explain why a Tupperware plastic bowl costs Rs. a direct selling pioneer. It has since re-positioned itself to a broader market. targeting lower prices. 200 crores -.a Swedish direct selling company involved in cosmetics -. They try to promote the concept that the bowl is worth the investment and offers value for money. The two biggest obstacles they face in this country were explaining the concept and. For instance. Such concepts are alien to the conservative middleclass Indian households. This seems to have been the trend with all the major direct sellers.000 crores in 2002 Oriflame -. 120 more than what is available in the market.a 100 percent increase. 115 crores as foreign direct investment. there is much to be said for the tremendous potential for direct selling in India if the companies play their cards right and adapt to the Indian conditions. Nevertheless. Amway estimates its turnover at Rs. In its second year of operations (1999-2000).claims to have done similarly. 1. This change in strategy helped it reap rewards and stage a turnaround.

And this focuses on the same. RESEARCH OBJECTIVE Marketing is a shared interest among us. . So. Companies using direct marketing will not use any intermediary between its organization and its customers. rather than shops or agents'. I believe that marketing will be more and more important for companies when trying to build strong relationships with customers. it can include door-to-door. home party selling. Messages can be developed and adapted quickly to facilitate one to one relationship with customers. it is one-twoone relationship. office-to-office. One thing that is the prime concern for companies today in direct selling is to constantly monitor and measure customer satisfaction level. therefore this research focuses on use of direct selling techniques in cosmetics industry. It aims to achieve an immediate quantifiable response and build long-term relationship with customers. Direct marketing often consists of interactive communication and has the being customized to match the needs of specific target markets. Direct selling is one form of direct marketing. It is an effective for company to build up customer relationship in new markets. which is the reason why we chose to examine this area.REASEARCH METHOLOGY 1. When it comes to direct selling then cosmetics industry is the most lucrative industry to study. etc. Successful marketers need to be aware of the different characteristics that affect consumer behavior. Direct is defined as any form of marketing in which the seller communicates response & to build long-term relationship directly with the possible customers.

RESEARCH DESIGN: In this research work descriptive studies are undertaken to conduct the survey. what. In other words. descriptive research can be said to have a low requirement for internal validity. 2. accurate and systematic. Often the best approach. averages and other statistical calculations. questionnaires. Although the data description is factual. I designed a questionnaire consisting of 17 questions related to the main topic and then I interviewed 100 responded be sure of getting a high response rare the survey was conducted on one to one basis. The description is used for frequencies. the research cannot describe what caused a situation. prior to writing descriptive research. describes data and characteristics about the population or phenomenon being studied. Descriptive research answers the questions who.This Report provides insight into the effectiveness of direct selling techniques on the cosmetics industry and also measures the satisfaction level of consumers through the use of quantitative method of data collection i. is to conduct a survey investigation. descriptive research cannot be used to create a causal relationship. • What is descriptive research? Descriptive research.e. Qualitative research often has the aim of description and researchers may follow-up with examinations of why the observations exist and what the implications of the findings are:- . when and how. where one variable affects another. where. Thus. also known as statistical research.

Data collection method 1. Primary data: A survey was conducted by using a questionnaire answered by 100 respondents living in Faridabad. Questionnaires have advantages over some other types of surveys in that they are cheap. for some demographic groups conducting a survey by questionnaire may not be practical. For this reason there exists many .strategy for more than 100's of years. 3. Although they are often designed for statistical analysis of the responses. such standardized answers may frustrate users. However.What is a questionnaire? A questionnaire is a research instrument consisting of a series of questions and other prompts for the purpose of gathering information from respondents. Questionnaires are also sharply limited by the fact that respondents must be able to read the questions and respond to them. The aim of the survey was to study the role of direct selling in relation to cosmetics industry. 2. Thus. Secondary data: Direct selling is a part of direct marketing and has existed as a marketing. do not require as much effort from the questioner as verbal or telephone surveys. this is not always the case. The questionnaire was invented by Sir Francis Galton. As a type of survey. and I often have standardized answers that make it simple to compile data. questionnaires also have many of the same problems relating to question construction and wording that exist in other types of opinion polls.

LIMITATION OF RESEARCH 1. 4. Some questions were incorrectly completed. Furthermore. 3.research materials on this subject and therefore a literature view was conducted to learn more about the subject also a cosmetics industry was studied and particularly those involved in direct selling of cosmetics. all alternatives seemed equally attractive or logically. The respondents had limited knowledge. Therefore there are two main sources of data -primary and secondary. To some respondents. Eg. 5. has a known probability of occurring. • In random sampling. Some respondents were ignoring some questions. . once the sample has been taken the sampling error associated with the measured results can be computed. Primary research is conducted from a scratch whereas secondary research also known as desk research already exists. every combination of items from the frame. 7. 2.There is no point asking respondents questions about a particular product they do not use. Some respondents were not motivated to respond. Random sampling is the method of sampling which has been used in this research work. 6. but these probabilities are not necessarily equal. 3. as the information is collected for other purposes. 3. Since respondents were ignorant and were not ready to answer. SAMPLING TECHINQUES 1. especially for the purposes of statistical inference. or stratum. SAMPLE POPULATION: Consists of the total population living in Faridabad. With any form of sampling there is a risk that the sample may not adequately represent the population but with random sampling there is a large body of statistical theory which quantifies the risk and thus enables an appropriate sample size to be chosen. Since the research was conducted on one to one basis so the cost of conduction the research was high.:. also known as probability sampling. 2. • Sampling is that part of statistical practice concerned with the selection of individual observations intended to yield some knowledge about a population of concern. SAMPLE SIZE: A sample size of 100 people is drawn randomly from the sample population.

Most consumers find traditional shopping is more time consuming since they usually go to more than one shop in order to be satisfied and therefore. On the other hand. So some respondents believe that direct selling does not provide them with adequate information and is more stressful compared to traditional selling. since the consumers are provided with various schemes and discounts. when the sales person is already in one's home. Also the relationship they get with the seller through traditional shopping is also perceived to be shallower as compared to direct selling. Through direct selling the customer will probably get in contact with the same sales person more than once and therefore a deeper relationship is created between the buyer and the seller. bad rapport of the salesperson. At the same time the price can be perceived as lower in direct selling because the buyer is willing to pay more. Some customers might feel that since they have invited the salesperson at their place so they are required to buy something from him or her. Shopping at home is much more convenient and is less expensive. This can be due to a bad shopping experience.CONCLUSION AND RECOMMENDATIONS CONCLUSION Most of the people believe that shopping in shops and malls is much more time consuming and expensive than shopping at home. lack of trust on the salesperson and inadequacy of information about the company or the products. . this increases their shopping effort whereas in direct selling one often finds sellers easily and conveniently located. not all the customers are 100% satisfied customers. providing door-to-door service which reduces the whole shopping effort.

They should add new distribution channels or should increase the intensity of distribution in each channel.RECOMMENDATIONS • The direct selling cosmetics product quality on a continuous basis and provide better offerings to the consumers. Increase the awareness level among the non-users through extensive promotional methods. • • • . They will help them to capture the untapped market. Provide better incentives to sales people to increase their motivational level and boost sales.

wikipedia.htm www.BIBLIOGRAPHY Website • www.org/wiki/Direct_marketing www.org/dm_report_outline.asp www.direct-marketing-association-india.direct-marketing.com/lesson.com/ Journals and Magazines • House Keeping • Femina • Cosmopolitan .net/ www.co.in • www./lesson-direct-marketing.html www.com/ www..oriflamme.wisegeek.marketingteacher.rdmipl.co.in • • • • • • • en..com/what-is-direct-marketing.directmarketingmag.avon.

ANNEXURE1: • SAMPLE QUESTIONNAIRE .

Income(Per Annual) Below 50. 4. Occupation…………………………………… 5.000 6.000-1. 00. Have you ever purchased cosmetics through direct selling? Yes No 7. Gender………………………………………. Age…………………………………………… 3. 2. If yes...000 More then 1.000 50. 00. Name………………………………………….QUESTIONNAIRE 1. then from where did you purchase your cosmetics? Internet Tele-Shopping Catalogue Door to Door .

. 9. In future would you prefer purchasing cosmetics through direct selling? Yes No 12. Which brand of cosmetics you prefer? Avon Amway Oriflamme Boutique Wellness Any others please specify……………. Are you satisfied with your purchase? Yes No 10.8. How often you purchase your cosmetics through direct selling? Weekly Monthly Yearly 11. Would you recommend this method of purchasing to your friends? .

Yes No 13. please mention? Cash Discount Free Gifts Coupons . What was the range of personal care products you purchased? Very Expensive Expensive Marginally Expensive Not Very Expensive 14. If yes. Did you find your purchase. Whether you like to go for schemes? Yes No 16. cost and time effective? Yes No 15.

please specify .Any others.

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->