Indirect Selling Case Study

CHAPTER ONE: INTRODUCTION

1.1 Background of the Study

Selling is a common promotional tactic used by organizations that market goods and services to consumers or firm buyers. It commonly involves face-to-face meetings between the sales representatives and prospective buyers. Selling is more common when organizations that market big-ticket items, such as furniture, cars and appliances (Armstrong, 2009). In such organizations large purchases usually mean more persuasive and communication efforts by the sales people with prospects. Such organizations often use promotions such as advertising to build awareness and attract potential customers which are then left to the sales people to convert them to sales. Thus the level of sales is dependent on

The theory of Distributional Channel proposes that the way an organization distributed its products affect the sales, the product choice, the marketing strategies hence the profitability of the organization (Bucklin, 1966). The Relationship marketing theory proposes that organizations should focus on customer satisfaction and retention rather than on sales transactions (Leonard, 1983). The AIDA theory by Lewis (1904) on the other hand illustrates the procedure with which the firm’s selling function could follow to enhance customer behavior hence their purchase decisions. These theories try to explain why organizations should invest more in selling to enhance their

The concept of indirect selling has recently received much attention from many manufacturers due to the increasing need by manufacturing firms to effectively increase their sales in order to survive the intense competition that is being witnessed in the current business environment (Treace, 2012). Indirect selling is said to relieve the manufacturer from the problems of distribution so that they can fully concentrate on production. The approach makes use of intermediaries provide expert services that enhance the firm’s sales. Indirect selling is however suggested to create a longer distance between the manufacturer and the consumers which may make the manufacturers to lose control over distribution of their products. The distribution may also be slow and costly due to intermediaries between manufacturer and the consumers thus increasing the price of the products (Mwanza &Ingari,