ankur nrhra | Direct Marketing | Survey Methodology


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)


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

In order to test the research work. The results were analyzed and interpreted. There are two main . MEANING 1. 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. The population consisted of people living in Faridabad.

television.definitional characteristics which distinguish it from other types of marketing or advertising. without the use of intervening media. measurable positive (but not negative) responses from consumers (known simply as "response" in the industry) regardless of medium. radio. magazines. billboards. internet banner ads. distributors or . Direct marketers also use media such as door hangers. newspapers.S. This aspect of direct marketing involves an emphasis on traceable. 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. U. and phone calls. This involves unsolicited commercial communication (spam. "In 2008. pay-per-click ads. junk mail. The first is that it attempts to send its messages directly to consumers.) 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. package inserts. demonstrations. transit ads. email. etc. It is sometimes also considered to be a sale that does not utilize a "middle man" such as a retail outlets. And according to Ad Age. (Citation needed) 2.

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

nail products. Scott Cook Launched intuit in 1984. lipsticks. . including shaving preparations. 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. creams. colognes. dentifrices. “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. and lotions. which today offers software and online products to help individuals and small companies manage their finances including the extremely popular Quicken and QuickBooks packages. mouthwashes. deodorants. hair preparations. perfumes.The industry produces a vast array of products.

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

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

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

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

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

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

Direct selling involves people and is a part of direct marketing which additionally involves the use of media. 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). Direct selling is a good way to own a business. The level of success you can achieve is limited only by your willingness to work hard. In Europe there are two supranational associations: the first one is the Federation of European Direct Selling Associations (FeDSA). Direct selling is a good way to earn extra income. Benefits of Direct Selling • • • • • Direct selling is a good way to meet and socialize with people. Direct selling offers flexible work schedules. Anyone can do it. which is founded in spring 2007. . There are prominent people in the society who started their careers in direct selling. Receive training and support from an established company. • • • • Set your own goals and determine yourself how to reach them. Earn in proportion to your own efforts. Earnings are in proportion to efforts. print etc. the second one is the Direct Selling Europe.

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

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

The drop out rate however is quite high. 7. 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. China banned Direct Selling for a 7 year period in 1998. but productivity is low.3mn in 2003.Need help evaluating a company? Check to see if the company in which you're interested is a member of the Direct Selling Association. India with about 1.Do not assume that "official looking" documents are accurate or complete or even produced by the company. Indonesia has the highest number of sales people in the world after US. Sales per person are the lowest in the world in Indonesia at US$109. as opposed to the person trying to recruit you. with only 50-60% of recruits converting into active consultants USA has the highest number of direct sales people at 13. If it is. 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$51561.24mn direct sellers ranks 11th globally in terms of number of • • • • • . In terms of number of people joining the direct selling industry annually. you can be assured the company has pledged to abide by and uphold the DSA Code of Ethics.

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

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

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

Hair care products were worth more than $4 billion in 2008. in particular for raw materials originating in developing countries. Fuji Keizai Releases Report on Japanese Cosmetics Market. Kajol. The Indian Cosmetics Industry can match International Standards when comes to quality. The market for body-care products will remain roughly flat: from 112. According to Global Cosmetic Industry Business Magazine.5 bil) in 2007.2 % per year. perfume. Talcum Powder. Perfumed Hair Oil. Bath/ shaving products. The global market for cosmetics and toiletries ingredients is estimated to be around $14.6 % per year through 2012.3 million US dollar in 196364 and 25. growing at 5. and will maintain the highest market value through the forecast period. the global market for natural beauty products will be worth more than $10 billion.0 bil) in 2008. Sindoor. with growth of the ingredients expected to be around 5% per year through 2012. There are traditional Toiletries items like Perfumes and Ethers.7 million in 2012. • The Indian Cosmetic Industry continues a beautiful blend of traditional and the modern.9 billion yen ($801. the market for makeup products reached 497.6 bil) in 2008.9 million in 2008 to $3.1 billion yen ($1. They will grow from $2.8 mil) in 2007 to 88. growth in the segments for mascara and eye shadow will be remarkable. According to the report.are generally low.0 billion yen ($1. particularly in developing countries.2 billion yen ($4.586. from 86.0 bil) in 2007 to 112. Exports of Cosmetics & Toiletries from India was 1. Kum-Kum. and oral hygiene have steady growth rates of 4.0 mil) in 2008.7 billion in 2007. by 2009.351.9 billion yen ($782. color cosmetics have the highest average annual growth rate.6 billion yen ($4. and the introduction of new consumer-friendly products. • • • • • • • . Factors contributing to this steady growth include improvements in the global economy. In end-user segments. Bindi and Herbal Cosmetics and Toiletries. In particular. and is expected to increase to 509.7 million US dollar in 1979-80 and touched 336 million US dollar during 2006-2007. price and range. The report also mentions that the segments for eye make-up products are expected to show steady growth.

which accounts for 55.9 billion / Euro 10. According to statistics released by the Ministry of Economy.A. the size of the Japanese cosmetics market reached a total of U5$12. minimize pores. • Further. the market penetration of cosmetics and toiletries products in India is very low. Current per capita expenditure on cosmetics is approximately $0.• China's cosmetic products market ranked the second largest in Asia. Trade and Industry. Western Japan is a large beauty market.65 in other Asian countries. The cosmetics industry is regionally based. in terms of number. in 2007 the number of esthetic salons in Japan reached 18. Germany and Japan) make up 93% of sales. Two West European cosmetics companies have the largest portion. as compared to $36. As this statistic shows. France. 50%.7 billion (ex-factory) in 2006. but their average sales are the smallest. • The herbal cosmetics industry is set for a significant growth depending on the capability of the manufacturers to market their products. The personal care products industry in India is value at Rs. Japan is the second-largest cosmetics market in the world only after the U. and restore hydration have created an $83 billion worldwide market.003 with 10.057 of these being in Western Japan (the part of the country west of Nagoya). Firms based in Japan and South Korea also have substantial market share at 14%. Products that claim to renew cells.S. This low market penetration for cosmetics and personal care products in India can be viewed as an . 960 million US dollars. Firms in the largest five countries (USA. The growth of health care products is about 20%. • • • Even with double-digit growth rates. 2500 crores in consumer price terms.8% of the total number of salons nationwide. and firms based in North America and in West Europe account for approximately 86% of sales: 43% for each region.68 cents. UK.

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

Such concepts are alien to the conservative middleclass Indian households. For instance. Nevertheless.5%).to India. The reasons for the growing demand for cosmetic products in India also include: greater access to television. followed far behind by increased sales in fragrance (18%). the Indian cosmetics and personal care market has grown 62. justifying the premium prices of their goods. retail store grand openings are the buzz words. 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. Tupperware salespersons are trained on how to explain why a Tupperware plastic bowl costs Rs. 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. or a . From concept to completion. increased advertising in general. THE GROWING COSMETICS INDUSTRY IN INDIA The sun and sales are rising on the Indian cosmetics market. and greater product choice and availability. the cosmetics industry is heading East . sun care (13.6% from 1997-2004. manufacturer I distributor expansions.obstacles they face in this country were explaining the concept and. Increased disposable income has led to growth in demand for premium products. According to Euro monitor.1 %). where raw material sources. and deodorants (10. The Indian Client is a demanding one and expects nothing less than a Versace. thereafter.3% from 2003-2004. The greatest growth was recorded in color cosmetics. Also. which has created a growing awareness of the western world. They try to promote the concept that the bowl is worth the investment and offers value for money. up 46. 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.

. This is awarded on a slab-basis over and above the basic commission. 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. you can start recruiting people yourself. At this point you will receive a percentage commission on the total of their sales value and. they concentrate more on recruiting people than on selling. As people go higher up the network pyramid. But to reach such levels. you have to dedicate yourself to creating a vast network of distributors and consumers and initially attain high levels of personal value. The margins here are generally quite high . Once you reach a particular target. There can be up to nine types of income when you direct-sell. This is where the real money is once you go higher up the ladder. The second is bonus commission.25-30 per cent. 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. This is called' pyramid selling.called your personal sales value. a significant proportion of their income is sourced from others' personal sales value commission. Therefore.Channel or a Lancome product. Rewards An inherent feature of direct selling is performance based rewards. awarded when you reach a sales target . Future trends in direct selling of cosmetics 1.

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

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

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

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

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

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

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

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

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


000 More then 1. 00. Name…………………………………………. Gender………………………………………..000-1. Occupation…………………………………… 5.000 6. Age…………………………………………… 3.000 50. Income(Per Annual) Below 50. then from where did you purchase your cosmetics? Internet Tele-Shopping Catalogue Door to Door . Have you ever purchased cosmetics through direct selling? Yes No 7.QUESTIONNAIRE 1. 4. 00. 2.. If yes.

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

Yes No 13. please mention? Cash Discount Free Gifts Coupons . Did you find your purchase. cost and time effective? Yes No 15. If yes. 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.

please specify .Any others.

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