HerbaLife Direct Marketing Strategies PDF

# HerbaLife - Herbalife's nutritional supplements are among the most popular products sold through Facebook and other social media. - Social media sales have increased among direct sellers who are trying to increase the amount of goods and services they sell. - Many direct sellers are now holdi...

# HerbaLife - Herbalife's nutritional supplements are among the most popular products sold through Facebook and other social media. - Social media sales have increased among direct sellers who are trying to increase the amount of goods and services they sell. - Many direct sellers are now holding online meetings on social media where people can buy anything from self-manicures to weight loss body wraps from the convenience of their own homes. - Man Cave is a new home-based sales organization for men that's described as "like Mary Kay, but on steroids." - Man Cave representatives invite male friends and family members to testosterone-fueled meetings where they use Man Cave products and eat Man Cave food. - Affiliates make commissions from selling jars of beer, grilling tools, frozen steaks and other Man Cave products. # Direct marketing - Direct marketing techniques are used to get consumers to make purchases from home, the office or other locations that are not retail stores. - Telemarketing uses telephones to sell directly to consumers. - Direct mail involves delivering advertising or marketing materials to recipients via postal or electronic mail. - Microtargeting uses extremely detailed data analysis to identify and target potential customers with a high degree of precision. - Home Shopping Networks are a specialized form of direct response marketing where products are displayed on television and the retail price is provided to viewers so they can order by phone. - Online retailing is a form of shopping available to consumers with personal computers and internet access. # Direct Marketing - Direct marketing is sometimes called direct response marketing, and it is a collection of techniques used to get consumers to make purchases from home, the office, or another convenient location. - These techniques include telemarketing, direct mail and catalog sales. # Other Direct Marketing Techniques - Direct marketers are less likely to be attracted to the use of traditional shopping environments due to time constraints and the likelihood of making purchases in suburban and rural areas where they prefer the convenience and flexibility of direct marketing. - Telemarketing continues to prove effective in directing sales. Recent estimates indicate that 5,000 businesses in the U.S. will have invested more than 15 billion USD in telemarketing by 2015. - Direct mail can be the most or least efficient of retail sales methods, depending largely on the quality of the customer list and the effectiveness of the marketing materials. - Direct mailers can target customers using demographic, geographic and psychographic information. Businesses using direct mail are becoming more effective in targeting the "right" customers. - Microtargeting utilizes data analysis from census data, lifestyle patterns, financial information, credit and purchase histories to allow direct mail marketers to target specific individuals who are more likely to make a purchase. - Each year businesses in the U.S. spend more than 46 billion USD on direct mail marketing, a figure that increased by 1 billion USD in recent years. This increase is due to rising postal rates even though there has been a decline in the volume of direct mail pieces. - Microtargeting is also a valuable tool for online retail sales. Businesses have purchased access to internet search engine data, making it easier than ever to discover customer preferences. - A customer's online search history allows retailers to target digital advertising to customers based on their individual needs and wants. - Home Shopping Networks are television programs that showcase products to viewers and allow customers to place orders directly by phone using a toll free number and pay by credit card. - Home shopping networks have seen rapid growth and become a multi-million dollar industry with many loyal returning customers. - These networks have a presence in virtually every home with a television. - Online retailing allows customers to make purchases online and have their products delivered to their homes. - Global online purchases are expected to exceed 4 trillion USD by 2020. - Amazon, an online retailer, sells more than 480 million products in the U.S., including more than 30 million items in clothing, footwear, and jewelry; 24 million sporting goods and indoor/outdoor activity items; 60 million items for household and kitchen use. - Live chats and interactive shopping tools on websites are replacing traditional in-store interactions with sales associates and product testing. - Shoppers can examine a wider variety of products online without limitations of space. - Shoppers can take their time to decide what to buy. # Inventory Models - The way retail formats are structured aligns with the unique operating models that guide managerial decision-making. - Each model is a set of guidelines. For example, low price retailers focus on low prices, rather than superior service or product variety, and focus heavily on streamlining inventory management practices. - Specialized stores focus on excellent customer service and utilize a fast-moving inventory management method. - More items are kept on the sales floor (floor inventory) and more are stored in the warehouse (warehouse inventory) to meet a wider range of customer demands. - This operational model generally results in higher prices for customers. - Retailers must satisfy their customer promises to retain customer loyalty. - Retailers also need to manage demand for items by using promotions and other sales events to move slow-moving items and create space for more popular ones. - Regardless of the supply strategy used there's always a chance that a shopper's most desired item will be out of stock. - Research indicates there may be a benefit to running out of stock: customers may view out-of-stock items as desirable and buy similar products. - These types of trade-offs lead to a more recent trend of developing hybrid retail models. - For example, Zara, a Spanish fashion distribution company, utilizes a hybrid model that combines a low-price model with a high-service model. # Shared Economy - The shared economy is a form of connected consumerism that involves the exchange of goods and services via online platforms. - Craigslist is a local community site where users can buy, sell and swap almost any good or service. - Other companies connect individuals seeking specific services, such as ride sharing (Uber), vacation rental (Airbnb), home repair (Thumbtack), and freelance work (Upwork). - These companies provide a platform, not only to connect buyers and sellers, but also to track feedback and reviews. - Customers also use these platforms to rate services providers. - Consumers use social media platforms for purchases with increasing frequency. - Social media sites like Facebook, Instagram and Twitter allow users to buy items that have been recommended directly by their social connections, a concept known as "social commerce." - Companies are eager to create links between social media websites and their own websites because they believe that goods or services recommended by friends will generate more interest. - There are more potential advantages to this model due to increased consideration from potential customers. # Different Types of Inventory - Inventory can be classified as: - **Floor inventory** - inventory displayed on the sales floor for customers to buy. - **Stock inventory** - inventory stored in the warehouse or distribution center for future sale.