Place - Direct Selling

Question 1

What is Direct Selling?

Answer 1

Direct selling means selling directly to the consumer from the manufacturer. Shortest channel of distribution and means there are less ‘middle men’ taking a cut of the profits.

Question 2

What are the methods of direct selling?

Answer 2

• E-commerce
• Mail Order
• Direct Mail
• Personal Selling
• Shopping Channels

Question 3

What is E-commerce?

Answer 3

A business sells its products using the internet.
Example: ASOS

Question 4

What are the advantages of E-commerce?

Answer 4

• Customers in the global market can be reached 24/7.
• An entire range can be shown online.
• Online discounts can be offered to attract customers.
• Products information and customer comments can sway purchasing decisions.

Question 5

What are the disadvantages of E-commerce?

Answer 5

• It can take a lot of time and expense to design attractive, high-quality websites.
• Customer might be wary of providing their personal details online.
• Customers need to have access to the internet.
• Customers need to wait for products to arrive and may have to pay delivery cost.

Question 6

What is a Mail Order?

Answer 6

A business sells its products using a catalogue, which is usually sent directly to the customer.
Example: MandM Direct

Question 7

What are the advantages of Mail Order?

Answer 7

• Credit facilities are often offered to the customers.
• Customers can browse for products and place orders from, at a time that suits them.
• Mail-order-only companies save money on staffing and store costs.

Question 8

What are the disadvantages of Mail Order?

Answer 8

• Glossy catalogues can be expensive to produce.
• Producing catalogues is not environmentally friendly and may not meet CSR aims.
• A level of bad debt might be incurred.

Question 9

What is Direct Mail?

Answer 9

A business posts letters, leaflets and brochures directly to the customer.

Question 10

What are the advantages of Direct Mail?

Answer 10

• Specific market segments can be targeted, e.g. by inserting supermarket recipe cards inside cookery magazines.
• A wide geographical area can be targeted by placing leaflets inside newspapers and magazines.

Question 11

What are the disadvantages of Direct Mail?

Answer 11

• Customers can perceive this as ‘junk mail’ and simply throw it away.
• Customer mailing list can quickly become out of date, meaning a business may target the wrong people and waste money.

Question 12

What is Personal Selling?

Answer 12

A salesperson sells products directly to the customer, often by going ‘door-to-door’ or over the phone (telesales).

Question 13

What are the advantages of Personal Selling?

Answer 13

• Allows a demonstration or explanation of the product to be given.
• Feedback on products can be gathered from customers.

Question 14

What are the disadvantages of Personal Selling?

Answer 14

• Customers can find this type of selling a nuisance and may not be keen to listen.
• Staffing costs and commission make this method expensive and increasingly unpopular with businesses.

Question 15

What are Shopping Channels?

Answer 15

A business sells products on the TV using dedicated shopping channels.
Example: QVC

Question 16

What are the advantages of Shopping Channels?

Answer 16

• Customers can see the product being modelled and demonstrated.
• Customers can be encouraged to buy on impulse due to short-term bargain prices.

Question 17

What are the disadvantages of Shopping Channels?

Answer 17

• Customers need to switch on to the channel before they can be targeted.
• Customers need to wait for products to arrive and may have to pay delivery costs.