Consumers who buy from direct sales companies

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Consumers who buy from direct sales companies

• Daisy Lam Eric Sin

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Content

• Introduction
• Figures
• Conclusion

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Major modes of DS

• One-on-one selling in a home
• One-on-one selling at a workplace
• A sales party at a consumers home
• Sales party at a workplace, church or other
  workplace

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Companies with household names

• 2006
• Amway
• Avon
• Herbalife
• Nuskin
• Tupperware international
• And many more..

• 1989
• Amway
• Avon
• Tupperware international

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Purpose of the study

• Determine the extent to which consumers buy from
  DS companies and document characteristics of
  purchasers
• Obtain perceptions of the advantages and
  disadvantages of buying from a DS company
• Investigate the perceived risk of buying from a
  DS company

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Method

• August 1987
• Consumers drawn from national consumer mail panel
• gt 18 years
• 50 male, 50 female
• 1600 ? 988 responded, 62
• Middle-class America

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They were asked

• Whether they had purchased a product or service
  from any of the four major modes
• By open-end questions, their perceptions of the
  three major advantages and disadvantages of
  buying from direct sales companies
• And their perceptions of the risk in buying from
  direct sales.

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Analysis and results
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Purchase Incidence
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An examination of the four major direct selling
modes indicates that

• One-on-one selling in a home is the most popular
  (36).
• 27 purchased at work
• 27 purchased at a sales party
• 10 purchased somewhere else.

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Demographic profiles of DS
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Demographic profiles of DS purchasers and
nonpurchasers
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Perceived advantages and disadvantages of buying
from Direct Sales company
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• Survey participants buying from a direct sales
  company
• On average, perceived more advantages than did
  non-buyers, whereas non-buyers perceived slightly
  more disadvantages than buyers.

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(No Transcript)
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Perceived risk of buying from a Direct Sales
company
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Risk in purchasing a product through the five
alternatives sales modes

• Retail store (13)
• Mail-order catalog (32)
• Direct selling sales party (37)
• Direct selling in home (44)
• Unsolicited telephone call (74)
• (100 is very risky and 0 Not risky at all)

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Risk perception index values by purchase behavior
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Conclusion

• 57 purchased from DS in 12 months preceding
  survey.
• Consumers DS differ from nonpurchasers in
  demographic characteristics, perceived advantages
  and disadvantages of buying from DS company, and
  risk perceptions.
• DS purchasers are younger, more educated and more
  affluent than nonpurchasers.
• DS purchasers perceived more advantage in buying
  from a DS company than the nonpurchasers.

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Final thoughts (1988)

• For example, constructing a buyer typology would
  permit categorizing consumers according to their
  shopping/purchasing propensities for various
  forms of in-store and non-store retailing (e.g.,
  catalog, direct mail, telephone).
• Consumers buying from direct sales companies
  warrant individual study, little is known about
  the attitudes of direct sales buyers.

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Direct selling customers are compare to
non-customers

• More likely to be female
• Younger
• Posses more education
• Higher income
• Less talkative
• Sensitive
• Sociable
• Religious.

Demographic
Personality
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Our own thoughts

• Teacher
• Compared to the information from 1988, what is
  different now in 2006?