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 Amway Avon Tupperware international 2006 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

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. An examination of the four major direct selling modes indicates that:

Characteristic Purchaser in past 12 months Nonpurchaser in past 12 months Sex Male Female Age or older Education Not high school graduate High school graduate Some college College graduate Marital Status Married Not Married Household Income Less than $10, $10,000 - $19, $20,000 - $29, $30,000 - $39, $40,000 or more Demographic profiles of DS

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.

Purchaser in past 12 months Nonpurchaser in past 12 months Perception Advantages Convenience Lower price35.5 Ability to examine products Personal attention Atmosphere Good selection Other Nothing Disadvances Pushy salespeople Expensive products Poor selection Low reliability Difficult to return Service problems Bothersome Takes time Other

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 : More likely to be female; Younger; Posses more education; Higher income; Less talkative; Sensitive; Sociable; Religious. Personality: Demographic:

Our own thoughts Teacher: Compared to the information from 1988, what is different now in 2006?