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

For a company to be able to do business with people with different preferences. 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. 3.1. 9. habits. 4. 6. which includes door-to-door selling. 2. . 12. 11. catalogue selling and home party selling. 7. internet selling. Direct selling is one form of direct marketing. 8. 5.

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

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

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

and lotions. Scott Cook Launched intuit in 1984. including shaving preparations. hair preparations.The industry produces a vast array of products. perfumes. nail products. “SOME SELLING QOUTES” Scott Cook Starting his career at Procter & Grable. creams. mouthwashes. dentifrices. colognes. . lipsticks. 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. Scott thought there might be a market for basic software hat would help people pay their bills. 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 music will play. to their deaths. Introduction to direct marketing Direct marketing is a sub-discipline and type of marketing. the sun will break out. he smiles will return. . and confidence. There are two main definitional characteristics which distinguish it from other types of marketing or advertising. And if you’re ahead of the other guy understanding the customer. junk mail.A whole generation of Americans will retire in poverty instead of prosperity. strength. because they simply are not preparing for retirement now”. The second characteristic is that it is focused on driving purchases that can be attributed to a specific "call-to-action. The first is that it attempts to send its messages directly to consumers. 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. without the use of intervening media. This involves unsolicited commercial communication (spam. then they’re copying your old stuff.” At least if you buy a company’s stock. like Coca Cola.” 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. 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.” I find too many companies in our industry have focused on the competition." It is those who concentrate on but one thing at a time who advance in this world. etc. "Count your blessings. you kind of know what the company makes. and you will finally be able to move forward the life that God intended for you with grace." This aspect of direct marketing involves an emphasis on trackable. Once you realize how valuable you are and how much you have going for you. courage.) with consumers or businesses. particularly when it was Microsoft.

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

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

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

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

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

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

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

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

you can be assured the company has pledged to abide by and uphold the DSA Code of Ethics. with only 50-60% of recruits converting into active consultants USA has the highest number of direct sales people at 13. 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.Do not assume that "official looking" documents are accurate or complete or even produced by the company. the growth rate has been a higher 15% over the last 10 years and 9% over the last 5 years. Switzerland has the highest sales per person at US$51561. as opposed to the person trying to recruit you. India with about 1. The drop out rate however is quite high.3mn in 2003. China banned Direct Selling for a 7 year period in 1998.24mn direct sellers ranks 11th globally in terms of number of • • • • • . but productivity is low. Indonesia has the highest number of sales people in the world after US. 7. In terms of number of people joining the direct selling industry annually. Sales per person are the lowest in the world in Indonesia at US$109. If it is.Need help evaluating a company? Check to see if the company in which you're interested is a member of the Direct Selling Association.

Kolhapur. 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. We will be forming a new subsidiary. which are vying for a pie in the Rs 5. Image Lifestyle Private Ltd in April 2009 through whom we will launch new consumer promotions by partnering with various .000 crore market. "We plan to set up about 50 malls in the next three years at an initial investment of Rs 100 crore in Mumbai. more and more men are today directly or indirectly venturing into direct selling. accounting for almost 40% of product sales through direct selling. Mumbai. Ravindra Deshmukh. among others. Feb 1 The year 2009 is likely to witness intense competition among direct selling Companies in India. 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. and Jabalpur. Marketing of Services is likely to emerge as the next growth area. Traditionally considered as a profession for women. The men to women ratio in India is gradually changing. Further. Bhubaneshwar. chairman and managing director. Pune.• • • • people employed in the direct selling industry Sales in India through direct selling is estimated at Rs23bn (US$511mn) in 2003. Image Multitrade Private Ltd told FE. DIRECT SELLING -A GROWING INDUSTRY Direct selling companies to slug it out in Rs 5.000 crore segment. Bhopal. Nagpur. Health & Nutrition products has emerged as the fastest growing category in India.

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

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

3 million US dollar in 196364 and 25. Factors contributing to this steady growth include improvements in the global economy. Kum-Kum. and oral hygiene have steady growth rates of 4.586. growing at 5. Hair care products were worth more than $4 billion in 2008.6 % per year through 2012. growth in the segments for mascara and eye shadow will be remarkable. Talcum Powder.9 million in 2008 to $3. price and range.0 bil) in 2008. perfume. Bath/ shaving products.0 bil) in 2007 to 112. and is expected to increase to 509. In end-user segments. The market for body-care products will remain roughly flat: from 112.5 bil) in 2007. They will grow from $2.are generally low. There are traditional Toiletries items like Perfumes and Ethers. the market for makeup products reached 497. The Indian Cosmetics Industry can match International Standards when comes to quality.7 million US dollar in 1979-80 and touched 336 million US dollar during 2006-2007. The report also mentions that the segments for eye make-up products are expected to show steady growth. According to Global Cosmetic Industry Business Magazine.6 billion yen ($4.6 bil) in 2008.7 million in 2012.2 billion yen ($4. According to the report. Exports of Cosmetics & Toiletries from India was 1. In particular. Fuji Keizai Releases Report on Japanese Cosmetics Market. from 86.9 billion yen ($782.351.0 billion yen ($1. with growth of the ingredients expected to be around 5% per year through 2012. color cosmetics have the highest average annual growth rate. particularly in developing countries. • The Indian Cosmetic Industry continues a beautiful blend of traditional and the modern. • • • • • • • .1 billion yen ($1.8 mil) in 2007 to 88. in particular for raw materials originating in developing countries. Perfumed Hair Oil.0 mil) in 2008. The global market for cosmetics and toiletries ingredients is estimated to be around $14. by 2009.2 % per year. and will maintain the highest market value through the forecast period. Sindoor. and the introduction of new consumer-friendly products.7 billion in 2007. Kajol. the global market for natural beauty products will be worth more than $10 billion.9 billion yen ($801. Bindi and Herbal Cosmetics and Toiletries.

which accounts for 55. Japan is the second-largest cosmetics market in the world only after the U. As this statistic shows.7 billion (ex-factory) in 2006. and firms based in North America and in West Europe account for approximately 86% of sales: 43% for each region. 960 million US dollars. Firms in the largest five countries (USA.003 with 10.65 in other Asian countries. Current per capita expenditure on cosmetics is approximately $0. Western Japan is a large beauty market. and restore hydration have created an $83 billion worldwide market. minimize pores. as compared to $36. This low market penetration for cosmetics and personal care products in India can be viewed as an . • Further. Two West European cosmetics companies have the largest portion. France. the size of the Japanese cosmetics market reached a total of U5$12. 2500 crores in consumer price terms. UK. The personal care products industry in India is value at Rs. 50%.• China's cosmetic products market ranked the second largest in Asia. Firms based in Japan and South Korea also have substantial market share at 14%.A. The growth of health care products is about 20%. Germany and Japan) make up 93% of sales. Trade and Industry.057 of these being in Western Japan (the part of the country west of Nagoya). Products that claim to renew cells. According to statistics released by the Ministry of Economy.S.9 billion / Euro 10.68 cents. • • • Even with double-digit growth rates. in 2007 the number of esthetic salons in Japan reached 18. but their average sales are the smallest. in terms of number. the market penetration of cosmetics and toiletries products in India is very low. The cosmetics industry is regionally based.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.

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

They try to promote the concept that the bowl is worth the investment and offers value for money. The greatest growth was recorded in color cosmetics. THE GROWING COSMETICS INDUSTRY IN INDIA The sun and sales are rising on the Indian cosmetics market. 120 more than what is available in the market. a boom in the Indian fashion world has contributed to the rise in demand for professional beauty care products.1 %). Also. up 46. From concept to completion. the Indian cosmetics and personal care market has grown 62. Tupperware salespersons are trained on how to explain why a Tupperware plastic bowl costs Rs. According to Euro monitor. increased advertising in general. 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.obstacles they face in this country were explaining the concept and. For instance. the cosmetics industry is heading East . or a . where raw material sources. justifying the premium prices of their goods.to India. which has created a growing awareness of the western world. manufacturer I distributor expansions. followed far behind by increased sales in fragrance (18%).5%). and greater product choice and availability. sun care (13.3% from 2003-2004. Increased disposable income has led to growth in demand for premium products. and deodorants (10. The reasons for the growing demand for cosmetic products in India also include: greater access to television. retail store grand openings are the buzz words.6% from 1997-2004. 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 Indian Client is a demanding one and expects nothing less than a Versace. thereafter. Such concepts are alien to the conservative middleclass Indian households. Nevertheless.

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

Companies such as Tupperware expect an initial deposit which makes you eligible for credit for the value of products you buy. Merits Low start-up costs: The costs incurred in this business are minimal.What is the initial investment? Nothing at all. Costs incurred in travelling when meeting people can be avoided if you go to community meetings or gatherings or.Rs. Nothing is fixed except the selling price. It also differs from company to company. distributors are rarely left with unsold Products. There is . The only real costs are the initial joining fee . In the US and the UK. Product buy-back policy and low inventory: Another merit is that if you have a good relationship with your customers. give you credit once you reach a particular target level and are a priority distributor. Amway. where direct sellers such as Tupperware and Ann Summers hold parties to woo customers. insists that you pay for the goods when you collect them and not when you sell. even. One way of getting around this is to have a personal understanding with your customers. However. 100-300 and the initial deposit (in some companies. Rewards are directly proportionate to your efforts: So you can earn as much or as little as you want . 2. you need not hold stocks. You can collect the money from your customers and place an order thereby making instant profits as you only pay the cost price. they will buy-back products you cannot sell. that is. if you decide to use the credit facility). Flexibility The flexible nature of direct selling is one of the main reasons for its growth. Oriflame has a registration fee of Rs. if you wish. Most people know how to value and judge cosmetics and household cleaning items. Other companies. on the other hand. This credit would be settled once you sell the products. Most products involved in direct selling are easy to relate to and hence easy to sell. such as Oriflame. This system initially puts people off as they are scared of getting stuck with products they cannot sell.the more time you invest the greater the rewards. 3.250. Even if you do. But it is generally divided into two types. house parties. This requires building a relationship based on trust. most companies have product buy-back policies. companies Business Line spoke to said that due to the high levels of training given.

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

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

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

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

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

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

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

Provide better incentives to sales people to increase their motivational level and boost sales. • • • . Increase the awareness level among the non-users through extensive promotional methods. 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. They will help them to capture the untapped market.

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

ANNEXURE1: • SAMPLE QUESTIONNAIRE .

000 More then 1. Gender……………………………………….. Age…………………………………………… 3. 00. 4.000 50.. If yes. Have you ever purchased cosmetics through direct selling? Yes No 7.QUESTIONNAIRE 1.000 6. Occupation…………………………………… 5. then from where did you purchase your cosmetics? Internet Tele-Shopping Catalogue Door to Door . Income(Per Annual) Below 50. 00. 2. Name………………………………………….000-1.

. 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……………. Would you recommend this method of purchasing to your friends? .8. Are you satisfied with your purchase? Yes No 10. 9. How often you purchase your cosmetics through direct selling? Weekly Monthly Yearly 11.

If yes.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. Whether you like to go for schemes? Yes No 16. cost and time effective? Yes No 15. Did you find your purchase.

Any others. please specify .