Page 185 - DMGT507_SALES AND PROMOTIONS MANAGEMENT

Unit 10: Managing other Promotional Tools

9. It is very cost effective considering the sale generated per contact. Notes
10. The results can be measured most accurately.

10.1.5 Measurement of Direct Marketing Effort

The objectives of direct marketing in many cases are related to purchase behaviour and the
marketer knows in no uncertain terms, the number of orders received. For non-behavioural
response objectives, traditional measurement methods are used.

Task Identify one infomercial. Analyse different aspects of message presentation
and evaluate its effectiveness.

Case Study From Direct Selling to Direct Marketing

or years Avon lady was a fixture in American neighbourhoods. Selling door-to-
door built Avon into the world’s largest manufacturer of beauty products. Avon
Foperates in 135 countries and besides the cosmetics it also sells jewelry, home
furnishings, and baby-care products. Avon pioneered the idea of hiring housewives for
direct selling cosmetics in the neighbourhood. But in 1980s, as millions of women began
to work outside the home, the cosmetics maker’s pool of customers and sales
representatives dwindled, and its sales faltered. By 1985, its profits were half what they
had been in 1979.
Consumer research showed that many women thought Avon’s make-up was “stodgy,” its
gifts products overpriced, and its jewelry old-fashioned. So the company created a more
contemporary line of jewelry, lowered the prices of its giftware to offer more items under
$15, and expanded its lipstick and nail polish colours.
On the selling side, recruiting sales people had become problematic, much as it had for
other direct sellers like Mary Kay Cosmetics and Premark International’s Tupperware
division. To attract sales representatives and boost productivity, Avon improved incentive-
compensation plans and offered free training programmes for recruits. As a result, Avon’s
direct-sales business – which accounts for 70 per cent of sales and 85 per cent of operating
profits – experienced a dramatic turnaround. Within a year sales rose 17 per cent, to $2.9
billion, and profits jumped as much as 25 per cent.
Today more than 450,000 sales representatives work for Avon and fill out some 50,000
orders daily. Sales exceed $3.5 billion a year. Nonetheless, Avon estimates that at least ten
million women in the US who are interested in buying from Avon are unable because no
sales representative is calling. To win back some of the customers and attract new ones,
the company has begun mailing catalogues directly to potential customers nationwide.
The move represents growing concern at Avon that its core market has matured. The
growing number of women joining work force means that fewer of them have time to
meet with Avon representatives. Although Avon remains the nation’s largest direct seller
of beauty products, supermarkets and discount stores are stealing market share. Avon
hopes that mail-order catalogues will help to reach “stranded” customers.

Contd...

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