Term
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Definition
| This can be defined as a method of distribution of consumer goods and services through personal, face-to-face (salesperson-to-customer) sales away from fixed business locations, primarily in the home. |
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Term
| 3 Key Points of Direct Selling are: |
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Definition
1. Direct selling is a method of selling – in other words, a particular type of marketing channel that goes directly to consumers’ homes, offices, or other locations (but not to retail stores).
2. Direct selling is concerned with the sale of consumer products in consumer markets rather than industrial products in industrial markets, which is usually referred to as business-to-business marketing.
3. Unlike direct marketing (sometimes referred to as direct response marketing), direct selling involves salespeople meeting fact to face with customers, either one-on-one with the customer or in party-plan situations where the sales presentation is made to a group of people invited to someone’s home. |
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Term
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Definition
| As indicated in the definition of direct selling, only the consumer market is served by direct selling channels. |
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Term
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Definition
| Personal Care products, Home/Family care, Leisure/Educational, Services/Miscellaneous/Other |
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Term
| 5 Problems for Direct Selling: |
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Definition
1. Potential customers lack an awareness of direct selling as an alternative marketing channel. They do not think of it as an advantageous alternative to traditional retail stores.
2. A significant portion of potential customers have a negative impression toward direct selling in general
3. Lower availability of consumers for at-home sales calls and parties.
4. The perceived risk indicated by consumers toward buying products through direct sales is high compared to other modes of shopping.
5. Recruitment of direct sales people has become more difficult as a larger portion of the available pool of potential salespeople has either found alternative employment or lost interest in direct selling opportunities. |
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Term
| Opportunities for Direct Selling |
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Definition
1. Enormous untapped market of potential consumers
2. Changing lifestyles and high proportion of working women can be seen as a significant opportunity
3. Changes occurring in traditional retail channels, particularly the decline n personal selling availability and quality sales help in retail stores |
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Term
| Several developments in consumer attitudes and behaviors that could work to make direct selling a more attractive channel alternative |
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Definition
1. Increasing numbers of consumers have less time available for shopping in traditional retail stores.
2. Consumers are becoming more sophisticated in terms of demanding more and better product information
3. Consumers are seeking increased convenience in all spheres of their lives, including shopping. |
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Term
| Under what conditions should direct selling be considered? |
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Definition
| If the firm’s objectives and policies require a high degree of control over how a product is promoted and sold to its final users, the direct selling channel should be given serious attention as a possible channel structure. Direct selling channels, properly designed with strong emphasis placed on training and supervision of the sales force, can provide the manufacturer with a high degree of control compared to other marketing channels that rely on traditional independent wholesalers and retailers. |
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Term
| The basic intermediary variables to consider when analyzing possible channel alternatives |
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Definition
| Their availability, the cost of using them, and the services they are capable of or willing to provide. If it appears that existing intermediaries in traditional marketing channels are not geared to presenting the manufacturer’s products effectively, the direct selling channel can provide a realistic alternative. |
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Term
| The major categories of environmental variables discussed in Chapter 3 were |
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Definition
1. Economic
2. Competitive
3. Sociocultural
4. Technological
5. Legal |
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Term
| How could changes in the Economic environment affect direct selling? |
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Definition
| During slow or recessionary periods, direct selling firms often find it easier to recruit independent sales people because more people are looking to supplement their incomes |
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Term
| How could changes in the Technological environment affect direct selling? |
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Definition
| Technological – the Internet may have profound implications for direct selling, either in enhancing its growth or supplanting it. |
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Term
| How could changes in the Legal affect direct selling? |
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Definition
| Legal environment – most potentially significant issue is the independent contractor status of the direct selling salespeople. If they were considered to be employees, the entire structure of the direct selling industry would be adversely affected. |
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Term
| How Behavioral Variables affect the Direct Selling Channel |
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Definition
| A social system exists and all of the attendant behavioral processes (such as conflict, power, role, and communication processes) come into play. Given the people intensity of direct selling channels, behavior dimensions need even more attention. |
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Term
| Direct Marketing “Channels” |
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Definition
| Direct Marketing is an interactive system of marketing that uses one or more advertising media to effect a measurable response and/or transaction at any location. |
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Term
| 3 Key Points of Direct Marketing are: |
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Definition
1. Direct marketing is a system or approach to marketing.
2. In place of stores and/or personal salespeople, direct marketing relies on one or a combination of advertising media to inform and stimulate customer purchase responses.
3. Measurable response. The ability to measure responses, either in the form of customer inquiries, or actual purchases, is an integral part of direct marketing. |
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Term
| Markets Served by Direct Marketing |
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Definition
| More direct marketing companies have been taking a market segmentation or micro marketing approach in recent years in an attempt to target their markets more precisely and to find niches that avoid the intense competition of mass markets. |
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Term
| Types of Products Sold through Direct Marketing |
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Definition
| Apparel, sporting goods, consumer electronics, books, records, insurance, gourmet foods, etc. |
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Term
| Problems in Direct Marketing |
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Definition
1. Potential customers cannot see and examine the actual product before making a purchase
2. Operating expenses are high (direct mail, etc.)
3. Response rates are very low
4. Intense competition
5. Image problem persists |
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Term
| Prospects in Direct Marketing |
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Definition
1. Due to its niche strategy, direct marketing is well poised to take advantage of trends.
2. Offers enormous geographical range. Direct marketers can reach just about any possible customer anywhere (Internet, etc.)
3. Consumers’ desire for convenience in shopping.
4. Direct marketing will continue to be enhanced by technological developments. |
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Term
| Market Variables and the Direct Marketing Channel |
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Definition
| Direct marketing can provide the channel manager with an effective and efficient means for making products and services available to highly specialized market segments (niches) that might be less feasible to reach through other channels. |
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Term
| Product Variables and the Direct Marketing Channel |
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Definition
| Products that are not readily available through conventional marketing channels are best suited for selling via direct marketing. |
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Term
| Company Variables and the Direct Marketing Channel |
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Definition
| Direct marketing enables even the tiniest company with the most humble facilities (e.g., a room in one’s home or one’s garage) to conduct business. Hence direct marketing is an obvious possible choice for a very small firm with limited financial strength. This is not to say that the direct marketing channel is not appropriate for large firms; the difference is that large firms may well have other channel options as well. |
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Term
| Intermediary Variables and the Direct Marketing Channel |
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Definition
| If available intermediaries are judged to be unable or unwilling to aggressively promote and sell the manufacturer’s products, or if the cost of using their services is too high, direct marketing may prove to be an attractive and practical alternative channel structure. |
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Term
| The major categories of environmental variables discussed in Chapter 3 were: |
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Definition
1. Economic
2. Competitive
3. Sociocultural
4. Technological
5. Legal |
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Term
| What Sociocultural factors could affect the Direct Marketing Channel? |
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Definition
| higher proportion of working women, fast-paced lifestyles, and many competing demands on peoples’ time have reduced available time for shopping. |
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Term
| What Technological factors could affect the Direct Marketing Channel? |
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Definition
| Those technologies based on the computer and Internet have had a tremendous impact on direct marketing. |
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Term
| What Legal factors could affect the Direct Marketing Channel? |
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Definition
| Direct marketing is subject to more federal regulation than other channels, because of the so-called 30-day rule, which requires direct marketers to ship orders within 30 days of receipt of the order or, if unable to ship, to notify customers of the delay. |
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Term
| What Behavioral factors could affect the Direct Marketing Channel? |
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Definition
| Because the direct marketing system does not use intermediaries, it is not an interorganizational system, so behavioral issues are not present in direct marketing channels. |
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