Under the Supervision of Mr. Anil Kumar



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


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.


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)


12. 8. 4. habits. internet selling. 6. 3. 9. 2. . 11. Direct selling is one form of direct marketing. 5. 7. 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.1. For a company to be able to do business with people with different preferences. which includes door-to-door selling. 10. catalogue selling and home party selling.

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

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

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

dentifrices. perfumes. hair preparations. and lotions. 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.The industry produces a vast array of products. . Scott Cook Launched intuit in 1984. including shaving preparations. colognes. nail products. “SOME SELLING QOUTES” Scott Cook Starting his career at Procter & Grable. Scott thought there might be a market for basic software hat would help people pay their bills. deodorants. lipsticks. mouthwashes. 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.

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

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

pre-approved credit card applications. Direct mail Any medium that can be used to deliver a communication to a customer can be employed in direct marketing. Channels The most common form of direct marketing is direct mail. direct mail that is irrelevant to the recipient is considered junk mail. Consumers are demanding an end to direct marketing. including spam may have passed telemarketing in frequency at this point. which may also be referred to as admail and may involve bulk mail.{[fact}} in which marketers contact consumers by phone.. and is a third type of direct marketing. A fourth type of direct marketing. in which marketing communications are sent to customers using the postal service. send paper mail to all postal customers in an area or all customers on a list. A related form of marketing is infomercials. and unwanted email messages are considered spam. Yet since the start of the Internet age the challenges of Chief Marketing Executives (CMOs) are tracking direct marketing responses and measuring results. free trial CDs. some direct marketing efforts using particular media have been criticized for generating unwanted solicitations. is now less common than the other forms. While many marketers like this form of marketing. The term direct mail is used in the direct marketing industry to refer to junk mail. 1. Junk mail includes advertising circulars. commonly called junk mail. 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. 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. This is partly due to laws in the United States and elsewhere which make it greater detail elsewhere in this article. For example. and other unsolicited merchandising invitations delivered by mail or to homes and businesses. Probably the most commonly used medium for direct marketing is junk mail. The second most. but viewers respond directly via telephone or internet. Email Marketing. broadcast faxing. common form of direct marketing is telemarketing. Bulk mailings are a particularly popular method of promotion for businesses operating in the . or delivered to consumers' mailboxes by delivery services other than the Post Office. which some advertising agencies are able to provide by using variable data printing and targeted mailing lists.

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

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

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

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

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

Get copies of all company literature. You should also believe in the products or services you'll be selling. average earnings of distributors. and anything else you're concerned about. 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. Think longterm 3.Investigate and verify all information. 3. 2. Check to see if the products or services are actually being sold to consumers. Beware of any business that claims you can get rich by solely using their products or by recruiting new people into the business. realistic costs of doing business. 4. Identify a company and product that appeal to you.unreturnable products to reach achievement levels or receive a "special" or larger "discounted" price. like other methods of retailing. About the company. Take your time deciding." This is a key element of a legitimate business. . This requires quality products and services sold at competitive prices. Direct selling. return policies. Ask questions.Consult with others who have had experiences with the company and its products. the products or services. its leadership. Is the money you'll earn based on the sale of products or services? The answer should be "absolutely. start-up fees. 6. How to Get Started: 1. depends on selling to customers who use and/or consume the product. Check our list of member companies or look in your local phonebook. And read it! 5.

Sales per person are the lowest in the world in Indonesia at US$109. 7. If it is. Indonesia has the highest number of sales people in the world after US. with only 50-60% of recruits converting into active consultants USA has the highest number of direct sales people at 13. the growth rate has been a higher 15% over the last 10 years and 9% over the last 5 years. China banned Direct Selling for a 7 year period in 1998. Switzerland has the highest sales per person at US$51561. India with about 1.24mn direct sellers ranks 11th globally in terms of number of • • • • • .3mn in 2003. 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. as opposed to the person trying to recruit you. but productivity is low. The drop out rate however is quite high. you can be assured the company has pledged to abide by and uphold the DSA Code of Ethics.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. In terms of number of people joining the direct selling industry annually.

Bhubaneshwar. Ravindra Deshmukh. We will be forming a new subsidiary. Mumbai.000 crore segment. which are vying for a pie in the Rs 5.000 crore market. Image Lifestyle Private Ltd in April 2009 through whom we will launch new consumer promotions by partnering with various . and Jabalpur. 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. 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. Marketing of Services is likely to emerge as the next growth area. Image Multitrade Private Ltd told FE. more and more men are today directly or indirectly venturing into direct selling. Traditionally considered as a profession for women. among others. Feb 1 The year 2009 is likely to witness intense competition among direct selling Companies in India. Pune. 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. Bhopal. Further. chairman and managing director. Kolhapur. accounting for almost 40% of product sales through direct selling. "We plan to set up about 50 malls in the next three years at an initial investment of Rs 100 crore in Mumbai. Health & Nutrition products has emerged as the fastest growing category in India.• • • • people employed in the direct selling industry Sales in India through direct selling is estimated at Rs23bn (US$511mn) in 2003. Nagpur.

6) Then it comes to retail seller.. 5) Then it comes to whole seller." The company also plans to expand its distributors from 1. 1) Factory manufactures a product. apart from planning to start its training centre either in Mumbai or in Lonavala. are taking money from consumer for just providing the product to the consumer.retailers to generate repayment of incomes for our distributors. In DIRECT SELLING SYSTEM company provide the product straight to the ..5 lakh to about 50 lakh for its existing B2B business in the next few years. 7) Then consumer buys the product from retailer. we are in the process of in talking LG Electronics India and Subhiksha. Though people from 2 to 6 in above procedure. 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. For the purpose. he added. 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. among others. 2) Advertisement of the product. (So that people know about the product) 3) Product goes to C & F agents. are not improving the quality of the product in anyway.

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

by 2009.1 billion yen ($1. price and range. • The Indian Cosmetic Industry continues a beautiful blend of traditional and the modern. Sindoor. perfume.6 billion yen ($4. Hair care products were worth more than $4 billion in 2008. Bindi and Herbal Cosmetics and Toiletries.9 billion yen ($801. There are traditional Toiletries items like Perfumes and Ethers. Kajol.0 billion yen ($1. and the introduction of new consumer-friendly products. According to the report.0 bil) in 2008.0 bil) in 2007 to 112. from 86. Fuji Keizai Releases Report on Japanese Cosmetics Market. color cosmetics have the highest average annual growth rate. • • • • • • • . The market for body-care products will remain roughly flat: from 112.7 million in 2012. with growth of the ingredients expected to be around 5% per year through 2012. They will grow from $2. and is expected to increase to 509. particularly in developing countries.are generally low. The Indian Cosmetics Industry can match International Standards when comes to quality. Factors contributing to this steady growth include improvements in the global economy.9 million in 2008 to $3.3 million US dollar in 196364 and 25. growing at 5.0 mil) in 2008. growth in the segments for mascara and eye shadow will be remarkable.9 billion yen ($782. Exports of Cosmetics & Toiletries from India was 1. Talcum Powder. The report also mentions that the segments for eye make-up products are expected to show steady growth. Bath/ shaving products. and will maintain the highest market value through the forecast period. In particular.351.6 bil) in 2008. the market for makeup products reached 497. According to Global Cosmetic Industry Business Magazine.7 million US dollar in 1979-80 and touched 336 million US dollar during 2006-2007. The global market for cosmetics and toiletries ingredients is estimated to be around $14.2 % per year.7 billion in 2007.586. and oral hygiene have steady growth rates of 4. the global market for natural beauty products will be worth more than $10 billion.2 billion yen ($4.8 mil) in 2007 to 88. Kum-Kum.5 bil) in 2007.6 % per year through 2012. in particular for raw materials originating in developing countries. Perfumed Hair Oil. In end-user segments.

Western Japan is a large beauty market. Japan is the second-largest cosmetics market in the world only after the U. The cosmetics industry is regionally based.7 billion (ex-factory) in 2006. Two West European cosmetics companies have the largest portion. Germany and Japan) make up 93% of sales. the market penetration of cosmetics and toiletries products in India is very low. Products that claim to renew cells. Current per capita expenditure on cosmetics is approximately $0. This low market penetration for cosmetics and personal care products in India can be viewed as an . 960 million US dollars. Firms based in Japan and South Korea also have substantial market share at 14%. UK.• China's cosmetic products market ranked the second largest in Asia. Firms in the largest five countries (USA. Trade and Industry. in terms of number.65 in other Asian countries. • Further. France. as compared to $36. As this statistic shows.003 with 10. in 2007 the number of esthetic salons in Japan reached 18. • • • Even with double-digit growth rates.S. which accounts for 55.8% of the total number of salons nationwide. • The herbal cosmetics industry is set for a significant growth depending on the capability of the manufacturers to market their products.057 of these being in Western Japan (the part of the country west of Nagoya). 50%. According to statistics released by the Ministry of Economy.9 billion / Euro 10. and restore hydration have created an $83 billion worldwide market.68 cents. the size of the Japanese cosmetics market reached a total of U5$12. The growth of health care products is about 20%.A. 2500 crores in consumer price terms. The personal care products industry in India is value at Rs. and firms based in North America and in West Europe account for approximately 86% of sales: 43% for each region. but their average sales are the smallest. minimize pores.

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

Increased disposable income has led to growth in demand for premium products. Also. up 46. 120 more than what is available in the market. sun care (13. thereafter. increased advertising in general.6% from 1997-2004. retail store grand openings are the buzz words.obstacles they face in this country were explaining the concept and. and greater product choice and availability. which has created a growing awareness of the western world. According to Euro monitor.5%). Tupperware salespersons are trained on how to explain why a Tupperware plastic bowl costs Rs. justifying the premium prices of their goods. or a . Nevertheless. the Indian cosmetics and personal care market has grown 62. They try to promote the concept that the bowl is worth the investment and offers value for money. a boom in the Indian fashion world has contributed to the rise in demand for professional beauty care products. The Indian Client is a demanding one and expects nothing less than a Versace.3% from 2003-2004. The reasons for the growing demand for cosmetic products in India also include: greater access to television. where raw material sources. For India. manufacturer I distributor expansions.1 %). the cosmetics industry is heading East . and deodorants (10. 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. The greatest growth was recorded in color cosmetics. From concept to completion. THE GROWING COSMETICS INDUSTRY IN INDIA The sun and sales are rising on the Indian cosmetics market. Such concepts are alien to the conservative middleclass Indian households. followed far behind by increased sales in fragrance (18%). 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.

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

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

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

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

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

averages and other statistical calculations. accurate and systematic. the research cannot describe what caused a situation. • What is descriptive research? Descriptive research. what. when and how. is to conduct a survey investigation. 2. The description is used for frequencies. Descriptive research answers the questions who. 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:- . prior to writing descriptive research.e. RESEARCH DESIGN: In this research work descriptive studies are undertaken to conduct the survey. also known as statistical research. describes data and characteristics about the population or phenomenon being studied. where one variable affects another. descriptive research cannot be used to create a causal relationship. where.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. descriptive research can be said to have a low requirement for internal validity. Often the best approach. In other words. 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. Thus.

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

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

lack of trust on the salesperson and inadequacy of information about the company or the products. bad rapport of the salesperson. Also the relationship they get with the seller through traditional shopping is also perceived to be shallower as compared to direct selling. since the consumers are provided with various schemes and discounts. this increases their shopping effort whereas in direct selling one often finds sellers easily and conveniently located. At the same time the price can be perceived as lower in direct selling because the buyer is willing to pay more. 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. 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. not all the customers are 100% satisfied customers. This can be due to a bad shopping experience. So some respondents believe that direct selling does not provide them with adequate information and is more stressful compared to traditional selling.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. On the other hand. providing door-to-door service which reduces the whole shopping effort. 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. . when the sales person is already in one's home. Shopping at home is much more convenient and is less expensive.

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

directmarketingmag..wisegeek.htm www.BIBLIOGRAPHY Website • • • • • • • • Journals and Magazines • House Keeping • Femina • Cosmopolitan .org/dm_report_outline.html • www.asp www../


000 6.QUESTIONNAIRE 1. Occupation…………………………………… 5. then from where did you purchase your cosmetics? Internet Tele-Shopping Catalogue Door to Door .. Gender……………………………………….. Income(Per Annual) Below 50.000-1. If yes. Name…………………………………………. 00. Have you ever purchased cosmetics through direct selling? Yes No 7. 4. Age…………………………………………… 3.000 More then 1.000 50. 00. 2.

Would you recommend this method of purchasing to your friends? . Are you satisfied with your purchase? Yes No 10. How often you purchase your cosmetics through direct selling? Weekly Monthly Yearly 11. 9..8. Which brand of cosmetics you prefer? Avon Amway Oriflamme Boutique Wellness Any others please specify……………. In future would you prefer purchasing cosmetics through direct selling? Yes No 12.

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

Any others. please specify .

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