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What is direct selling ?

Definition, perspectives, and research agenda


Peterson, Robert A Wotruba, Thomas R

: 8941812

Content
1. 2. 3. 4. 5. A Definition of Direct Selling Operational Perspective Tactical Perspective Strategic Perspective A research Agenda for Direct Selling
Scope of Direct Selling Practice of Direct Selling

. Concl!sions

A Definition of Direct Selling


A Method of distribution of consumer goods and services through personal (sell to buyer) contract away from fixed business locations, primarily in a home. ---- Industry Trade Association in Washington DC A form of selling without retail outlets, distributors, wholesalers or any type of middlemen.-- Baker (1984 The marketing of consumer goods and services directly to consumers in their homes by way of explanation and/or demonstration through a salesperson The location can also be a friend!s home, the workplace of the customer during breaks or other places away from shops ! "ederation of #uropean $irect
%elling Association ("#$%A)

&perational 'erspective

1. "ace-to-#ace se$$ing %. A&ay #ro' a #i(ed retai$ $ocation


Direct se$$ing is distinct #ro' direct 'arketing in that at an o)erationa$ $e*e$ it does not in*o$*e 'ai$ed cata$ogs+ te$e'arketing+ direct res)onse ad*ertising+ in#o'ercia$s+ or the $ike.

Tactical 'erspective $irect %elling can be characteri(ed by


The type of salesperson used )hether selling agents are part*time or fulltime )hether the selling effort occurs in a home or elsewhere )hether it is transaction*oriented or relationship*oriented )hether it follows a party plan format )hether personification is used )hether it is multi*level The extent to which selling agents are customers )hether selling agents take physical possession of products The manner in which purchases are delivered and payment is obtained

Strategic Perspective
$irect %elling as a $istribution +hannel

Strategic Perspective
$irect %elling as a Means of ,aining Access to a Market
"

$irect selling is a push marketing strategy

$irect %elling as a )ay of $oing -usiness


$irect selling is the preferred channel of distribution because it is . invisible/ There are no products on shelves that competitors can monitor " $irect selling can be undertaken by a firm with relatively little start*up capital, especially capital for marketing and distribution purposes
"

What can be sold through Direct Selling ?


"ac!!# cleaners $nc%clopedias Cos#etics &!tritional ite#s 'itchen(are

Who buys from Direct Sellers ?


n the !nited States are more li"ely to be female, younger, and possess more education and higher incomes than individuals #ho have not purchased from a direct selling company $

)hat are the characteristics of Direct Sellers *


%&' of direct salespeople are married ()' are #omen$ *'are under age &+$ ,-' bet#een &+ and .. and &.'bet#een .+ and ,.$ To be a successful direct selling agent, an individual must be a good communicator and be highly motivated$ Sales performance and /ob satisfaction #ere independent but higher levels of effort led to higher levels of performance and satisfaction$ Persistence and initiative are ma/or characteristics of success in direct selling$

research Agenda for Direct Selling

Scope of Direct Selling0


1$Selling revenues is probably significantly underestimated$ &$ There is a need for basis research on direct selling salespeople and consumers #ho purchase through direct selling$ -$ The motivations of direct salespeople and customers #ould appear to be a fertile area for research$ .$ nternational and 2omparative Analyses of Direct Selling$

research Agenda for Direct Selling

Scope of Direct Selling0 1$3perational Perspective Research should focus on direct selling as a communication process$ 4ypotheses involving adapt ability, negotiation, listening, trust5building, and various rhetorical and persuasive device could be tested in a direct selling setting$ &$Tactical Perspective !nder #hat condition 6e$g$ products or services sold, mar"et targeted, competitive conditions faced7 are the various tactical combinations most effective ? telemar"eting , catalogs, electron merchandising$ -$Strategic Perspective What about #ith direct selling in the future ? s direct selling emerging as the mar"eting strategy best suited to succeed #ith micro5mar"et segmentation ?

research Agenda for Direct Selling

ssues0
1$Are there some principles regarding direct selling that have universal application? &$ s there a relationship bet#een a country8s e9tent of economic development and the relative success of direct selling vis5:5vis other distribution method ? -$Direct selling firms are e9panding internationally at an increasing place$ .$Success in such operations #ould be aided by research in the macro conditions 6i$e$, infrastructure, economic, political, cultural7 that foster or inhibit direct selling success at both the industry and business unit level$

2onclusions
,*en though &ide$y discussed+ direct se$$ing is not &e$$ understood+ and the ter' itse$# is o#ten a-used and 'isused. This research shou$d address issues re$ating to 'oti*ations o# direct sa$es)eo)$e and their custo'ers as &e$$ as the 'acro conditions conduci*e to direct se$$ing success. .se#u$ research issues
1. Co''unication e##ecti*eness in the direct se$$ing )rocess %. Direct se$$ing as an e##ecti*e 'arket entry strategy

/. strategy choices 4. B$ends in*o$*ing direct se$$ing and other 'arketing 'ethods

#$ %&