by Direct consumer selling
Direct consumer selling is the oldest way of selling the goods. Under this system, the goods are directly sold to the consumer by the manufacturer. Direct consumer selling is gaining immense popularity these days on account of high cost of distribution through the middlemen.
Large organizations adopt direct selling in order to reduce distribution costs because they have ample facilities to sell directly to consumers. A manufacturer can sell goods to the consumers by opening his own retail shop in mill’s premises or by mail house to house selling or by engaging salesmen or by employing mechanical devices.
Direct consumer selling may be undertaken in the following circumstances.
- If the manufacturer’s plant is located near the majority of the customers, it would be easier to sell directly to them.
- If the manufacturer is not satisfied with the services of established retailers or if the retailers refuse to stock his goods, he may sell directly to customers.
- In case of new products, the manufacturer may like to introduce the same directly to the customers.
- Articles of technical nature which require demonstration before sale and as such services before sale can be best provided by the manufacturer.
- If the manufacturer wants to curtail retail prices of his products, he can resort to direct consumer selling by eliminating various middlemen.
- If the article is produced in small quantity, it is better to sell direct without intermediaries.
- A manufacturer with enough capital and in a position to undertake the various marketing functions on his own may employ his sales force or establish his retail stores to sell his product directly to the consumers.
- Manufacturers of perishable & fashionable goods may sell directly to avoid physical deterioration or fashion obsolescence.
- Manufacturers of products requiring after sales services may sell directly to consumers in order to maximise sales and giving maximum satisfaction to customers.
Organizational Selling
Organizational selling is the process of selling goods to companies and organizations instead of to individual consumers. The buyers in organizational selling transactions use their purchased to support ongoing operations or to resell to their own customer base.
When selling to an organization instead of an individual, you have to consider the group you are selling to, and their production needs that go beyond the buyer’s journey. Here are some considerations to help you understand and master organizational selling.
Difference between Consumer Selling and Organizational Selling
Both individuals and organizations need to purchase items to accomplish their daily tasks. There is a large difference, however, in how and why an organization purchases goods and services versus how an individual shops. Understanding these differences is important if you want to tap into both an organizational and a consumer market.
Why Goods are Purchased?
Organizations purchase goods to use in their ongoing operations and to resell to consumers, while consumers purchase goods for their personal use. Organizations also purchase more raw materials such as wood, steel and other items used in manufacturing than individuals who don’t have the tools or knowledge to put those raw materials to use as a product. Organizations generally purchase goods in larger volumes than individuals, and are driven by customer demand and need for manufacturing materials.
Consumers, on the other hand, are driven both by need and by want. It is possible to entice a consumer to purchase something he does not need through effective marketing or peer pressure, but it is much harder to entice an organization to buy an unnecessary product, especially when dealing with a purchasing department that is accountable for what it spends.
Buying Products in Bulk
Organizations often purchase in bulk, whereas consumers typically do not. For example, a consumer might buy three gallons of white paint to paint his house while an organization might need 3,000 gallons to paint shelving units for resale. The organizational market is thus more condensed it is possible to have a business succeed catering only to a small number of organizational clients while businesses that typically focus on consumers sell smaller quantities to more people.
That said, Costco and similar wholesale warehouse companies do successfully market low-price, high-quantity goods to individual consumers. These consumers tend to buy for small office spaces or family homes, however, rather than only for themselves.
Choices and Use
Consumers typically purchase goods for different reasons than organizations, and have more freedom in choosing the items they want. A consumer may purchase a chair so people can sit comfortably in his home. He will be able to choose any chair within his budget that he likes. An organization, on the other hand, may purchase a chair because an administrative assistant needs it to do his job.
The organization may be restricted in a chair purchase, not only by the budget set by a purchasing manager, but also by guidelines set by the Occupational Health and Safety Administration, and by company-wide guidelines on office furniture.
Marketing Strategy for Each
Reaching organizational clients requires explaining how your products and services will help their organization serve their clients and customers. It is a help them help others approach. However, to reach a consumer market, you have to show how your products enhance a consumer’s life in some way. whether it makes life easier or more enjoyable, or both.
