Research project testing a hypothesis in organizational management

Direct Selling

A lot of companies are resorting to marketing one-to-one or concentrating on a narrow niche. For this reason, the respective corporations find it preferable to make use of direct communication with their clients who are typically a small targeted group that are considered after much thought. Direct communication helps the companies in obtaining a quick feedback from the clients that quickens the pace of their decision making. Over the years, the paradigm of direct communication has come a long way because of the dramatic evolutions in technologies and because of the introduction of new marketing media, particularly the usage of Internet.

Direct mailing and electronic catalogs, facilitated by Internet technologies have allowed for the implementation of models related to direct marketing (Jonker, Piersma, & Potharst, 2006; Liao & Chen, 2004; 2011). Researchers in the past have made use of direct communication as a model of complete business or as a complementary to a wider incorporated marketing combination. A number of advantages can be gained from direct marketing by not only sellers but buyers too. Thus, the concept of direct marketing is gaining popularity and recognition.

Contrary to direct marketing, the concept of direct selling is a colorful, multi-featured, holistic and an ever increasing medium of distribution when it comes to marketing products to clients directly. A major element of the industry of direct selling is marketing at a number of levels, a concept that is known as structure marketing, multilevel direct selling or structure marketing.

The effectiveness and probability of success of using this methodology has been proved over the years, particularly with respect to appropriately remunerating the direct sellers for their tasks that is to distribute and market products to consumers directly. A number of benefits can also be gained from the use of direct selling but several advantages exist in the usage of the concept for people who want earn a stream of incomes and establish their own business.

Also, for consumers who want a substitute to having a retail outlet. It also serves as an appropriate substitute for conventional types of information who aspire to have an income that is not fixed to complement their monthly household income, or the job description of such do not call for the employees to put in a regular amount of full time or part time work (Coughlan & Grayson, 1998).

Nevertheless, the concept of direct selling should not be taken to mean distance selling or direct marketing, both of which relate to an interaction-based marketing structure which employs one or more than one medium of advertising to influence a transaction and/or a set feedback with the respective activity being saved in the records. Direct response, telemarketing and direct mail are some examples of the common techniques that come under distance selling and direct marketing.

Even though organizations that employ direct selling methodology typically involve techniques related to distance selling and direct marketing so that the performance of their business can be improved. What differentiates one method from the other is the one on one, personal presence which is one of the necessary components of direct selling (Schelfhaudt & Crittenden, 2005). Considering the aforementioned facts, we can hypothesize the following:

H1: The extent of one-on-one interaction can positively influence the structures of direct selling

H2: The extent of information on customers can positively influence the structures of direct selling

Search Strategy

The search strategy for this paper was restricted to collecting prior literature available on the chosen topic i.e. direct selling or marketing. Hence, the library sources were used to access popular databases like scopus, informit, sciencedirect and proquest to access the relevant journals that could help analyze similar topics previously researched. The paper aimed to primarily and critically assess the strengths and weaknesses of the theory of direct selling and it application within the corporate world. In this section, I will present the search strategy that will help either prove or refute the aforementioned hypotheses. The keywords used for the search in databases included 'direct selling', 'marketing', 'implementation of direct selling' and 'application of direct selling'.

There are numerous aspects that can affect the direct selling prospects and structures in different corporate structures and the most relevant ones will be chosen for research in this paper and thus analyzed in line with the notion of direct marketing, its fundamentals, standards, strategies and application. The relevant aspects chosen for this paper include the extent of one-on-one interaction that companies have with customers as well as the extent of knowledge that the company has on the needs and wants of the customers. Hence, that paper will include those articles and studies that were focused on analyzing direct marketing procedures and the direct selling strategies that had been practically tested in the corporate world.

The methods for analysis in this paper will be the same as those used in the studies that are included in this research. The results will also be similarly corroborated.

Analysis

The customers have a major role to play as assets for the business. Most of the departments of an organization are cognizant of the fact that having an appropriate level of customer knowledge is necessary in order to ensure the smooth functioning and survivability of any business. This proves the second hypothesis to be true. However, this is easier suggested then practiced in reality as the knowledge about customers is not readily or easily available, being confined with the consumers themselves.

In fact, it is there but cannot be easily accessed and the chances of going through the entire amount of data that ought to be gathered because of its significance are quite less. Also if the information that is collected is not utilized like the way it should, the effort that went into the whole process and the information itself becomes meaningless. This is how the databases transform into "data dumps" (Keim, Pansea, Sipsa, & Northb, 2004). This proves the first hypothesis to be true.

Therefore, it is essential that organizations possess the knowledge of effectively using and processing information. This, however, requires that the corporations make use of new and innovative methodologies that assist them in critically examining, comprehending or imagining the volumes of information saved on the records collected from various applications, scientific and business (Liao & Chen, 2004).

Data mining is one of the new methodologies established that are designed to identify and establish meaningful information, for instance, trends, connections, modifications, errors and important framework from huge volumes of data saved in the records, databases and other repositories of information (Keim et al., 2004). When information about consumers is collected from the process of data mining, it can be incorporated with the information about marketing and product. This information can then be offered to retailers and suppliers, down and up the supply chain.

The information, thus collected can perform the function of a reference or base line for which to premise product establishment, marketing and management of customer relationship on. If organizations are able to effectively use this information, it can help them in obtaining a competitive advantage over their competitors as it will enable the corporations in coming up with product and services that are more in line with what consumers want rather than what the organization thinks they want (Liao, Chen, & Tseng, 2009).

Nevertheless, a number of issues may appear with respect to the customers particularly the ones who do not purchase the products owing to the adverse image of direct selling, dissatisfaction about the quality of sales service provided by the employees of the organization, lack of information about the product, bad reviews about the product and so on.

In such a case, it will be difficult to market the products to such consumers, even if special offers and discounts are provided later. However, if an effort is made to improve the outlook towards direct selling and to increase awareness about the products, a positive impact on the consumer's behavior and attitudes might result. Hence, the aforementioned analysis proves both hypothesis to be true.

Recommendations

The recommendations presented by the respective analysis are given below:

Make an effort to enhance or modify the general opinion of consumers towards direct selling. The dissatisfaction with the quality of sales service provided increases apprehension about the level of professionalism and the training of the employees. This leads to an overall adverse opinion by the consumer. The organization should make an effort to increase awareness about the training given to the sales staff and their education and capabilities in order to gain consumer trust and loyalty.

Concentrate on increasing consumers/customers. Customers who do not have the product mainly get their information from what is portrayed in the media, particularly television whereas consumers who have purchased the product acquire their data from the website of the product. The key here is to increase awareness about the product through multiple media. When reliable information about the product is readily available the consumers will find it easier to trust the safety of their transactions.

To make the most of these recommendations, the organizations make use of relationship marketing instruments or RMIs, for instance direct mailing and loyalty programs (Hart et al. 1999; Roberts and Berger 1999). Organizations also aspire to establish integrated linkages with consumers so that their opinions or customers' relationship perceptions (CRP) can improve. Even though the effect of such techniques have been often recognized (e.g., Bolton, Kannan, and Bramlett 2000), dubiousness still prevails about the effectiveness of such techniques in establishing the share of customers in markets of consumers (Dowling 2002).

A number of research studies have taken into account the effect on consumer retention and share by CRP. However, either consumer retention or share is considered but they are not considered together (Bowman and Narayandas 2001; De Wulf, Odekerken-Schroder, and Iacobucci 2001). Certain research has taken into account the impact on customer retention of RMIs (e.g., Bolton, Kannan, and Bramlett 2000).

On the other hand, the impact on consumer share has been neglected. Moreover, most of the research emphasizes on consumer share with respect to a certain category of the product (e.g., Bowman and Narayandas 2001). If the sale of a certain product goes up, the share of the respective product can be increased. Nevertheless, organizations that sell more than one product are able to increase customer share by pursuing a strategy of cross selling their products.

In addition, not many research studies have taken into account the impact of RMIs and CRPs on customer share together with customer retention. It is occasionally perceived in the research and texts that identical plans of action employed for enhancing consumer share can at the same time be used to increase customer retention. Nevertheless, studies that have been carried out recently, depict that to enhance customer share an organization might have to employ strategies that are different from the ones used to improve customer retention (Reinartz and Kumar 2003).