1. Consumers who buy from direct sales companies Daisy Lam & Eric Sin

2. Content Introduction Figures Conclusion

3. 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

4. Companies with household names 1989 Amway Avon Tupperware international 2006 Amway Avon Herbalife Nuskin Tupperware international And many more…..

5. 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

6. Method August 1987 Consumers drawn from national consumer mail panel > 18 years 50% male, 50% female 1600  988 responded, 62% Middle-class America

7. 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.

8. Analysis and results

9. Purchase Incidence Number of Direct Selling Modes used in past 12 months Percentage of survey participants 043.4 128.4 220.2 36.2 41.8

10. 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:

11. Characteristic Purchaser in past 12 months Nonpurchaser in past 12 months Sex Male45.250.5 Female54.849.5 Age 19-2918.85.8 30-3925.517 40-4918.212.4 50-5915.318.1 60 or older22.246.7 Education Not high school graduate19.630.9 High school graduate42.335.1 Some college18.514.3 College graduate19.619.7 Marital Status Married72.371.3 Not Married27.728.7 Household Income Less than $10,00015.419.3 $10,000 - $19,99924.329.8 $20,000 - $29,99921.815.4 $30,000 - $39,99916.722.6 $40,000 or more21.812.9 Demographic profiles of DS

12. Demographic profiles of DS purchasers and nonpurchasers

13. Perceived advantages and disadvantages of buying from Direct Sales company

14. 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.

15. Purchaser in past 12 months Nonpurchaser in past 12 months Perception Advantages Convenience55.754.1 Lower price35.5 Ability to examine products43.839.8 Personal attention45.933.6 Atmosphere10.615.4 Good selection2.34.6 Other43.339.0 Nothing8.026.3 Disadvances Pushy salespeople52.145.7 Expensive products23.726.3 Poor selection20.826.6 Low reliability27.935.6 Difficult to return16.818.3 Service problems32.129.1 Bothersome38.736.0 Takes time11.69.0 Other29.533.5

16. Perceived risk of buying from a Direct Sales company

17. 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)

18. Risk perception index values by purchase behavior

19. 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.

20. 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.

21. 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:

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