The Study of Direct Selling Management Strategies:
An example of the Avon cosmetics company in Taiwan
Yen, Jui-Yen, Associate Professor, Department of Business Administration, National Taipei College of Business, Taiwan
Chen, Mei-Liang, Lecturer, General Education Center, Hsin Sheng College of Medical Care and Management, Taiwan
Chen, Yi- chieh, Graduate student, Grabluate Institute of International Business Management, Ching Yun University, Taiwan
The management strategy of Direct Selling is quite different than that of business administration of general enterprise; it is an industry that is highly mobile and emphasizes on interpersonal relationship; no matter it is Direct Selling or Marketing, although they can save the company a lot of cost, yet they are accompanied with uncertain risk. Being affected by the rat’s club due to the misuse of Direct Selling, government has to put control on Direct Selling; currently, most people still do not know too much about Direct Selling and they worry that they might become a victim of ”pyramid fraud” if they are not very careful, which in turn makes the spreading of Direct Selling more difficult. Therefore, some Direct Selling companies such as Avon, changes its form from single-level Direct Selling into multi-channel sale so as to adapt to the change in the social form. Therefore, in this study, we are going to aim at the study of one Direct Selling form, that is, in-depth study and understanding on Avon’s multi-channel system. Keywords: Direct Selling , management strategy, 4P, channel marketing.
Master of Management Peter F. Drucker once said: “What an enterprise is, is decided by the customers”1. For a successful Direct Seller, in addition to treating himself/herself as part of the business body to accurately reflect enterprise image and concept, it is more important to clarify and satisfy real customer’s need through sincere and objective mind. This is also the most important spirit of Direct Selling and is the reason why an excellent Direct Selling company stays strongly in the market.
In the past, when the vendor sells the product using traditional selling way, profit will be stripped off by vendors in the first stage and second stage sales channels, and the cost of the vendor will get increased greatly and accordingly. No doubt, these costs will be transferred to the customer, which in turn leads to a burden to the consumer. Therefore, some suppliers, in order to reduce profit stripping in several stages by the intermediate vendors, they start to find their own personnel for the product sale, or try to use mobile technology to assist product sale, the new generation of selling ways such as ”Direct Selling”, “Marketing” and internet shopping are thus generated.
In 1982, with the introduction of Amway, Direct Selling started to enter Taiwan and other Direct Selling companies started to follow. On November 1997, some companies which have the sales mainly based on interpersonal network, for example, Direct Selling for example, Amway, SHUANG HOR (HK) COMPANY LTD., Nuskin Taiwan, Forever, etc., started to launch company’s web sites for sales and business promotion so as to enhance the business operation efficiency of Direct Selling; these companies are seen with great potential. At that time, Direct Selling Association also reduces its entrance barrier for the membership application, that is, a company will have the qualification to become a member once it is founded for more than one year; and a commission for promoting commercial virtues has been founded to implement the restrictions of commercial virtues on the companies in this industry.
Direct Selling can be divided into single level Direct Selling and multi-level Marketing; however, in recent years, to cope with the change of industry environment, some of the Direct Selling companies such as Avon started to shift its Journal of International Management Studies * February 2008...
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