Step 1 – External Orientation
According to The European Direct Selling Association (seldia), direct selling can be defined as followed: Direct selling is a method of marketing and retailing goods and services directly to the consumers, in their homes or in any other location away from permanent retail premises (seldia, http://www.seldia.eu/direct-selling/about). Many companies sell their products during a party. This form of direct selling is called: party plan. A hostess agrees asks the direct seller to come to her house and invites a few friends who might be interested in the product as well. The direct seller then presents the product, for example in the form of a demonstration, a workshop. Every guest can then ask questions and test the product. At the end orders are taken and the hostess gets a reduction on her order, depending on how much turnover was made by her guests. The direct seller receives a commission for product sale and generates sales leads by asking guests if they would like to host selling parties, too. In the European Union (EU), the party plan is especially popular in France, Germany, Italy and Scandinavia , while in The Netherlands only 18% of direct selling is done this way (seldia Annual Report 2011-2012, p.21). There, another direct selling method is more popular: face-to-face. The direct seller visits potential customers in person, often after a prior arrangement has been made. She then explains or demonstrates the product to the potential customer and in some cases also the customer’s family. Many companies use multi-level marketing (MLM). The direct seller can build her own sales team, benefiting from additional rewards that come from the sales achieved by those she has recruited (seldia, http://www.seldia.eu/direct-selling/about).
In the EU, the total sales volume of direct selling in 2011 added up to €3,4 billion, an annual increase by 15.5%. The largest product category is “cosmetics and personal care”, which makes up 36% of...
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