Consumers who buy from direct sales companies Daisy Lam & Eric Sin
Content • Introduction • Figures • Conclusion
Major modes of DS • One-on-one selling in a home • One-on-one selling at a workplace • A sales party at a consumer’s home • Sales party at a workplace, church or other workplace
Companies with household names 1989 2006 • Amway • Avon • Tupperware international • • • Amway Avon Herbalife Nuskin Tupperware international • And many more…. .
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
Method • August 1987 • Consumers drawn from national consumer mail panel • > 18 years • 50% male, 50% female • 1600 988 responded, 62% • Middle-class America
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.
Analysis and results
Purchase Incidence Number of Direct Selling Modes used in past 12 months Percentage of survey participants 0 43. 4 1 28. 4 2 20. 2 3 6. 2 4 1. 8
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.
Demographic profiles of DS Characteristic Purchaser in past 12 months Nonpurchaser in past 12 months Education 14. 3 19. 6 19. 7 72. 3 71. 3 Not Married 49. 5 18. 5 Married 54. 8 35. 1 27. 7 28. 7 Less than $10, 000 15. 4 19. 3 $10, 000 - $19, 999 24. 3 29. 8 $20, 000 - $29, 999 21. 8 15. 4 $30, 000 - $39, 999 16. 7 22. 6 $40, 000 or more 21. 8 12. 9 50. 5 Female 42. 3 College graduate 45. 2 30. 9 Some college Male 19. 6 High school graduate Sex Not high school graduate Age 19 -29 18. 8 5. 8 30 -39 25. 5 17 40 -49 18. 2 12. 4 50 -59 15. 3 18. 1 60 or older 22. 2 46. 7 Marital Status Household Income
Demographic profiles of DS purchasers and nonpurchasers
Perceived advantages and disadvantages of buying from Direct Sales company
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.
Perception Purchaser in past 12 months Nonpurchaser in past 12 months Convenience 55. 7 54. 1 Lower price 35. 5 Ability to examine products 43. 8 39. 8 Personal attention 45. 9 33. 6 Atmosphere 10. 6 15. 4 Good selection 2. 3 4. 6 Other 43. 3 39. 0 Nothing 8. 0 26. 3 Pushy salespeople 52. 1 45. 7 Expensive products 23. 7 26. 3 Poor selection 20. 8 26. 6 Low reliability 27. 9 35. 6 Difficult to return 16. 8 18. 3 Service problems 32. 1 29. 1 Bothersome 38. 7 36. 0 Takes time 11. 6 9. 0 Other 29. 5 33. 5 Advantages Disadvances
Perceived risk of buying from a Direct Sales company
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)
Risk perception index values by purchase behavior
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.
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.
Direct selling customers are compare to non-customers : Demographic: Personality: • • More likely to be female; Younger; Posses more education; Higher income; • • Less talkative; Sensitive; Sociable; Religious.
Our own thoughts • Teacher: Compared to the information from 1988, what is different now in 2006?
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