Study On Motivation And Incentive Of Direct Selling

Recently, owing to the drastic global competition, enterprises focus on marketing channel more and more. The design and management of marketing channel is becoming the key strategy weapon to satisfy customers'needs and competition needs. Direct selling is a jumped-up mode of marketing channel, which means that company employs salesman to sell product to customers directly. When the salesman sell product to customers directly, they could provide personal service to customers, and recommend the customer join in the selling team. In this way, the customers become part of selling team. Thus, the distribution network of direct selling enterprise expands rapidly. Making use of the channel and network of direct selling, the enterprises and salesman can communicate effectively and feed back supply and demand information fleetly. Furthermore, it can promote selling and induct production. Hence, developing direct selling business not only can provide more suitable and excellent product and service, but also has positive sense to expand market, flourish economy, increase employment and maintain social stability.This article focuses on the direct selling, with game theory to analyze the motivation of direct selling operation. Furthermore, this article adopts principal-agent theory to analyze salary institution in this mode. The result shows that direct selling is an effective mode, and direct selling raised profit of marketing channel; besides, the salary institution which correlate with sales achievement and the hard work degree of recommending customers to be salesman really inspirit salesman effectively. Furthermore, this article takes Tiens Group as example, analyzes its direct selling support system, and gives some suggestions about salary institution and developing direct selling in China.