�ݺ�ߣ

Editor's Notes

• #5: The next few slides will be used to introduce the ESM to the Direct Sales Industry. You will introduce them to some of the commonly used terms in the Industry and help them to appreciate why the Oriflame Opportunity is unique.
• #7: Distribution Channels The Business Model Consumers today have four main ways to purchase a cosmetic product, e.g. a skincare cream: The traditional way is to visit a specialty store (a perfumery in some countries, a pharmacy in others). Supermarkets/hypermarkets are another increasingly important channel. More recent additions include e-commerce (Internet shopping) and TV shopping, where the customer herself filters through a lot of information to find a suitable product. The fourth main way is direct selling, i.e. selling person to person, which has been around forever. We will now explore the reasons why this form of selling is growing worldwide and has sparked the interest of many major corporations and brands such as Unilever, Body Shop and Virgin Cosmetics, who are venturing into this channel, and why the industry is positioned for growth in the 21st century. A direct sales company cuts out many of the intermediaries of traditional retailing. Instead of a chain of warehouses (e.g. L’Oréal) from the manufacturer to the distributing chain (Carrefour, Wal-Mart), and the high cost of introducing a product or keeping it on a supermarket shelf, a consultant receives the product directly from the manufacturer. There is arguably no stronger marketing than WOM (word-of-mouth) marketing as it is a trust-based purchase from someone you know. Thus, in direct sales there’s no need to spend the 20% - 25% on traditional advertising which retail brands have to do. They need to make the customer choose their specific product on the crowded shelves of a supermarket or perfumery. By contrast, direct sales companies often engage in “support” advertising of only 2-3% of net sales. The savings from cutting out middlemen and the lack of need for extensive advertising form the foundation of the consultants’ earning opportunity. And there are advantages for the customers as well, who enjoy a stress-free shopping experience and often get the products delivered to their workplace or home free of charge. In supermarkets, there is really no advice available to help consumers choose a skincare product, for example; in other retail settings, the customer has to approach a cosmetics stand and ask for advice. This can sometimes be uncomfortable as they have to share personal details about their skin with a stranger – often with another stranger waiting impatiently behind them. The advantage, of course,is instant gratification: the customer receives the product immediately. Direct selling companies are more attuned to the needs of their customers, and are thus better ableto bring relevant, innovative products to the market more quickly than retailers.