DIRECT MARKETING VS DIRECT SELLING

PRESENTED BY:NISHANT

Direct Marketing
Non-store sale of goods and services without the

use of personal selling Designed to elicit a measurable response

e.g. sales or membership registration

Can involve: TV, radio, print, catalogues, brochures, letters,

telephone and Internet Natural extension is the use of e-channels

Problems with Direct Marketing

High operating, order processing and shipping costs

Clutter amongst intense competition

Negative associations with junk mail
e.g. email, faxes and telemarketing during dinner

time

Low response rates

5% response rate is considered very high Higher response rates have higher return rates

High perceived consumer risk

Cannot see or try product prior to purchase

Opportunities to use DM exist when

1.

2.

3.
4.

Access to mailing lists and databases provide customer information and allows for micro or niche marketing Access to geographically dispersed markets Convenient alternative for consumers Access to advanced technologies

Conditions suited to DM
Market Factors
Firm is serving geographically dispersed market Firm seeking to target niche markets

Product Factors
Novel, unique or very high quality

Intermediary Factors
Lack of suitable intermediaries Possible intermediaries not willing or able to provide

required level of support Cost of intermediaries too high

 Company Factors

Small firms with limited financial capital Large firms requiring alternative channel Large firms seeking high market penetration Specialised expertise in direct marketing When higher degree of control needed over distribution and customer service

Environmental Factors
Eg Lifestyle or technological changes create

opportunities

Behavioural Factors
Requiring a channel with minimal problems of

communication, motivation and channel conflict

What is Direct Selling Channel

Non-Store Retailing defined as:A method of distribution of consumer goods and services through personal, face to face sales away from fixed business locations, primarily in the home (Direct Selling Education Foundation 1986, p.2)

Examples include:
door to Door sales eg insurance, Kirby and FAI security MLM companies eg Amway and Avon Party Plans eg Tupperware and Mary Kay

Direct infers direct from manufacturer to consumer. This is true for these examples IF:
the sales people (distributors) simply facilitate the

transaction but the delivery is direct to consumer however today these intermediaries are increasingly involved in product flows

Direct Selling Structure and Trends

Increasing consumer acceptance and growth Increasing types of business using this as the main or secondary channel Businesses adding a wider scope of products from other manufacturers eg Amway only produces (brands) 20% of their products Increasing scope or markets served
Consumer vs. industrial and business Possibly due to people having less time to spend at home entertaining a salesperson or sales party

6 Factors for using Direct Selling

Market

Product
Company Intermediary

Environmental
Behavioural

Market Time poor consumers seeking shopping

convenience Need for personalised service and better product information

Product needs explanation or demonstration Superior quality Unique and/or Complex item
High involvement item requiring all decision makers

to be present at once

Company Firm requires high degree of control over all marketing mix elements Intermediaries Difficult to attain suitable intermediaries Cost of using intermediaries are high

Environmental External forces conducive to direct selling

Behavioural Firm is prepared, and able, to manage a people intensive distribution system

THANK YOU