Direct Selling : A Multinational Strategy

by Martin L. Schwartz(1992)

• 直銷通路管理報告• 指導教授﹕陳得發教授• 學生 : 王昭雄 • 學號﹕ 8941812• 中華民國九十一年三月二十七日

•Summary

This paper provides a method of identifying international markets for which new products marked via direct selling may be commercially successful.Results of the study indicate that consumer wealth, urbanization and literacy may be used as lead indicators of new product, direct selling success.It is recommended that multinational firms consider the use of a direct selling strategy when launching products into developing markets, and the use of an instore strategy when launching products into mature markets.

•Introduction

This paper evaluates the use of direct selling as a marketing distribution strategy decision.It is not intended to provide a comprehensive analysis of the entire distribution system.The question which this paper attempts to answer is, “To what extent to the socioeconomic characteristics of alternative to in-store sales ?”The model used is:

Success of Direct Selling Launch = f(National Socioeconomic Characteristics)

Both Euromonitor(1986) suggested and theoretically justified using various socioeconomic characteristics to explain the success of direct selling in the marketing of products cross culturally.In developing countries, direct selling may be filling distribution gaps which economists believe may act as barriers to economic development.Weber (1983) suggested that the industry market potential for each product product line is in part a function of the distribution gap which a firm faces in each country.The research provided in this paper is designed to identify the specific socio-economic characteristics which best explain the direct selling success.

•Background

•Research Methodology

Cosmetics and fragrances are the products used in this study.Sample Selection

The sample consisted of 32 countries, of which approximately twelve were mature, seven were newly industrialized and thirteen were developing .Dependent Variable Selection

Total Industry Sales From Direct Selling POM=---------------------------------------------------------------------- Total Industry Sales (Direct Selling + Instore + Direct Mktg)

Independent Variables It Selected in meetings with Avon products international region

management personnel.These data were then screened by two tests.

(1) .The characteristics had to be either theoretically or logically justifiable. (2) .The characteristics had to be obtainable through exiting data bases.

Statistical Method Selection: Bivariate regression, correlation analyses, factors analyses.

•Analysis and Results

In table 1. The result indicate a 95% or greater probability that POM

obtained from the direct selling of products is directly related to food as a percent of household income and the extent to which income distribution is skewed.

It is inversely related to age, number of TV’s per capita, literacy rate, private consumption income per capita, and percent of population living in urban areas.

•Analysis Result

•Analysis Result

•Analysis Result

Nations with the largest market gaps ,less developed nations such as Nigeria, Thailand and Philippines , provide the greatest potential POM for the direct selling of new products.Firm interested in marketing products in foreign markets should evaluate the consumer wealth of those markets prior to deciding on a distribution method or on product features.The products features for direct selling:

(1). The product has a high personal selling elasticity. Ex. Life insurance, magazine subscriptions. (2).The product is part of the home and benefit from the use of a demonstration in the home. Ex. Burglar alarms, water purification devices.

•Discussion

The products features for direct selling:

(3). The product is one which benefits from demonstration, but is not part of the home. Ex. Towels, clothing, and food.

(4).The product is one which requires a private discussion. Ex. Prearranged funerals, financial planning.

(5). The products benefits from reference group interaction. Ex. jewelry, kitchen gadgets.

•Discussion

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