Franchising and Direct Marketing

Name : Edward Ferdinand
Class : 4 ea 13
Npm : 10207377

1. Franchising

Franchis is an opportunity for entrepreneurs to enter the business by utilizing the experience, knowledge and support of the franchise giver. Often entrepreneurs start new businesses, small business would likely succeed. With a franchise, entrepreneurs will be trained and supported in the marketing effort and will use a name that already has an established image. People who are facing an urgent situation to have his own business would probably feel that the franchise is the easiest solution. However, there are some important risks in the above matter. Franchise can be defined as an agreement where the company or the sole distributor of products that have a trademark gives exclusive rights to companies, distributors, or independent retailers in return for royalty payments and adjust to standard operating procedures. People who offer franchise (franchisor) and an experienced people in business for several decades and have knowledge about what works and what does not. Franchise is a person who buys the franchise and given the opportunity to enter into new business with a great chance to succeed. The main advantage of franchising is that the entrepreneur does not need to bother with matters relating to starting a new business. Giver of the franchise will provide businesses with the operation plan a clear direction. Recipient franchise given advice or a business location has been determined. In the retail franchise like McDonald's, location analysis conducted to ensure that the business will achieve the goals set. Assessment of traffic conditions, demographics, business growth in an area, competition, etc. is an integral part of the decision on where to place a business. Often involves a franchise that has been established which will provide a direct recognition of recipient franchise in the market area. This does not guarantee success but it gave impetus to start a business with a positive image.

2. Investment Risks In Business Franchising.

Franchising business involves many risks that should be known by the self-employed before they consider such investment. We hear McDonald's, Kentucky Fried Chiken, but each is successful there must be a failure. Franchising business requires hard work and not suitable for the passive. This business requires hard work because of business decisions such as withdrawal of labor, scheduling, purchasing and accounting remain the responsibility.
The steps can be taken to reduce or minimize investment risk in franchising:

1. Conduct self-evaluation. Entrepreneurs should do the evaluation themselves to ensure that businesses entering franchising is right for him. The answers to these questions will form, determine whether the right decision.

- Do you people who like to start your own business?.
- Do you enjoy working with others?.
- Do you have good health?.

2. Researching the franchise. Not every franchise is right for you. Entrepreneurs must evaluate to decide which franchise business The most appropriate. A number of factors to be considered before making decision

a. An established franchise business and has not been established. There are many advantages and disadvantages in investing in an established franchise business and has not been established. Investing in a franchise business that has not been established would be an inexpensive investment. However, this is balanced with great risk. Recipient franchise may make mistakes that result in business failure. Reorganization constant will cause confusion and miss management. However, business investment in the franchise that has not been established is a challenge which could bring big profits when the business.

b. Financial stability of the franchise business. Purchasing a franchise by
entrepreneurs should be made after the investigation financial stability of the franchise owner. There are many factors which will help entrepreneurs determine the stability and capability bring in profits from the franchise business organization in the long .

c. Potential market for franchise businesses. It is important for entrepreneurs to evaluate the market area from which customers will interested in the new franchise. One easy way is to map community or local area and try to evaluate the flow past traffic and population demographics of the area. Information then flows traffic can be observed by visiting the area. Direction of flow past traffic, ease of entry in the business, and the amount of traffic flow can estimated from observations. Demographics of the area determined from the data census. There should also find the location of competitors in areas that may have a potential impact on business. If the franchisee is willing and funds are available, will help conduct market research in the market area. Attitudes and interests in new ventures can be assessed in marketing research. If resources are not available for the study of marketing research, research can be done by a local college as part of study projects.
d. Potential gains for the new franchise. As is the case with business beginner, it is important to develop income statements, balance sheets, pro forma cash flow. Giver of rights should provide projections for calculate the required information.

3. Franchise Agreement

Contract or franchise agreement is the final stage to become a franchise users. At this stage the lawyer who is experienced in franchise would be necessary. This Agreement contains all the specific requirements and obligations of users of the franchise. Things like marketing exclusivity will protect the user's local franchise has the same franchise. Conditions that can be refurbished will indicate the length of contract and the requirements to renew it. Financial requirements will determine the price of the franchise, the schedule of payments, royalties to be paid, and others. Termination of financial agreement should indicate the terms of what would happen if the effort of the wearer franchise went bankrupt. Termination issues franchise agreements usually often bring lawsuits than other issues in franchising. Therefore, the conditions set out above should provide a fair market value if the user wants to sell franchises.

4. Direct Marketing

There is growing concern in the new business involving direct marketing. He provides profitable opportunities than any other beginner type because entrepreneurs typically bear the risk of a small initial capital and can benefit from its marketing efforts on customers who can be reached through direct marketing techniques. Because direct marketing is a specialized and entrepreneurial approach because it offers some benefit as the franchise, this approach is discussed here.


1. Definition of Direct Marketing.
Direct marketing can be called direct mail delivery, mail order delivery, and immediate response. Everything including the direct marketing category because it involves the "total activity" where the sales affect the transfer of goods and services to the buyer, directing his efforts on the observer by using one or more media for the purpose of collecting responses via telephone, postal mail or personal visits from prospective customers.

2. Innovations that Accelerate Growth of Direct Marketing.
The growth of direct marketing has been accelerated by a number of important innovations. Credit cards as such speed up transactions by mail order, can avoid paying in cash. The development of computers allows the preparation of large amounts of data, for example regarding the customer, the list of goods, and others. Growth media newspapers and television and radio broadcasts also help accelerate the growth of direct marketing techniques. When demographic factors such as increased education, income, and lifestyle change, the more developed the convenience and efficiency of direct marketing. Consumers can use the telephone or mail to buy household necessities to luxury goods.

5. Advantages Of Direct Marketing.

The main advantage of direct marketing is the ease of breaking into the business and needs a small capital. Any person may come in the direct marketing business without a business license and complex skills and educational requirements necessary. Besides the ease to enter the business, capital requirements needed to enter in direct marketing effort is also minimal. Not required large facilities, shops, or the number of employees big to fit in the direct marketing business. Capital required is usually used for printing, posting, and other lists. All this can be done as a part-time business until the business generates cash flow that can support management efforts. This is different to other new business that requires hard work and the full attention of entrepreneurs. Direct marketing business also enables entrepreneurs to enter the market quickly. Products and services can be tested to determine customer interest with minimum cost. If a particular product or service works, supply can be easily expanded to meet the potential demand of that particular product.

- Important Considerations Starter
As is the case with the new venture, entrepreneurs need to solve these important issues. Entrepreneurs can start a business marketing direct part-time with a small capital. An important problem with This small overhead is the use of post office box or address road, whether allowing the use of credit cards, and use duty-free shipments. Street address will give credibility to uasaha-new business and because it is the goal itself that should be given priority. Local street address allows customers to view products up close. The use of credit cards increase yield potential. He also adds credibility and gives comfort to the customer. This may be important for expensive products because it allows customers to finance the purchase. The use of duty-free items may increase spending for self-employed. However, this will improve customer response because it easier to order.

6. Alternative Techniques Direct Marketing.

A number of alternative strategies can be used by entrepreneurs on the efforts of beginners.

1. Classified advertising (classified advertising). The simplest approach and is not expensive for the entrepreneur is selected ads in newspapers and magazines. Magazines or newspapers should be identified that will achieve market products / services that are appropriate. Classified ads can bring high profit results.

2. Display advertising (display ads). This type of advertising allows entrepreneurs to buy the columns in magazines or newspapers. He gave the opportunity to explain clearly about the description of products / services. Besides, discount coupons can be inserted in the ad so that customers can cut it to send with your payment.

3. Shipments direct mail (direct mail). This technique allows entrepreneurs to send materials directly to prospective customers. This technique should be used when there are product and market segments clearly.

4. Catalog sales (catalog sales). Catalog printing quality is a very expensive investment for entrepreneurs. Although this is easier than selling in retail stores. Catalog should stimulate the interest of customers. The advantage is that the catalog allows repeat sales because the catalog may be stored for use in the future.

5. Direct response marketing media (media directy renponse marketing). Radio, television and telephones may be used as an alternative approach to marketing products or services. Radio and television advertising is seen as a form of broadcast media. In buying broadcast time rather than space, as advertising displays, entrepreneurs face a different problem. In buying time, no schedules available, which complicates planning. These costs will vary, depending on the time, station, ad length, and size of the listeners and viewers who might be achieved. Tele marketing is also a method of selling products or services that are very popular. The costs can be reduced to a minimum but still achieve a broad audience and viewers. Tele marketing advantage is that which gives immediate feedback to the user. So a higher response rate than other methods. Entrepreneur can identify communities with a telephone conversation by demographics to people who might be great to buy products / services.

7. Multi Level Marketng.

Understanding and How to Work MLM.
One way the company to penetrate the market quickly is with a system of multilevel marketing (multi level marketing). MLM is marketing systems that rely on direct sales (direct selling) through a network of distributors who formed a chain, in where every distributor who recruited and hired is always something to do calculation of commissions and bonuses. The aim of multilevel marketing system This is to spread the product and supply distributor as well as consumers. Due to product marketing is done directly to consumers, the success of marketing activities is depending on the number and ability of the distributor in selling. Besides the success of an MLM is also determined by the quality of products and services, ie products that meet consumer desires, familiar with health and environment, and of course the distributor must follow the rules of the game business MLM company. Judging from the manner and place relate to consumers, businesses retail can be divided into two: store retailing and non-store retailing. Supermarkets, convinience stores, department stores, super stores and show catalog rooms including retail stores, which means consumers come to shop to shop. While that including non-store retailing direct marketing responses, such as mail order katalogs, telemarketing, and so forth. Both stores and non store retailing strengths and weaknesses of each. MLM included in the in home selling, just merge, sort and select strength of the two groups and cover up its weaknesses. In conventional marketing systems and products of the plant must go through line single agent, agent territory, city agencies, wholesalers, shops and stalls, new to the consumer. Each unit involved issue cost and benefit of the magnitude of the different eventually become a burden for consumers as the cost of distribution. Cost higher distribution mainly contributed at the retail level. In MLM path relatively short. Goods are distributed from factory to a single agent, then through the members (distributors) to consumers. Thus, cutting the costs that occur on conventional distribution channels. How MLM, it is also different from other direct sales system. MLM is different because of factors seem more stressed consumers and distributors as a source of corporate life. "Without the customer and the distributor, the company nothing because they are an integral part of the company's business," according to a culture that developed in the MLM system is to maintain relationships with distributors and consumers. MLM salesperson called the distributor is self-employed independent, which has given management training, kewiraniagaan, product knowledge and disipil themselves, to then be taught in new distributors he sponsored. However, distributors This is not an employee of MLM!. If someone is interested in becoming distributor, he can apply directly to the MLM company and then trained. Because distributors are not employees of the company, he shall capable of autonomous in running its business. Income from gains on foreign distributors selling price and the purchase price, plus a bonus of progressive achievement of sales distributor network, including the sponsoring downline (distributors sponsors). The calculation of income is calculated by a mathematical formula that stimulates increased sales and expansion of the network simultaneously. To ensure this income calculation and apply the MLM company that provides computerized monthly reports to the distributor of the results achievement. Meanwhile, to give peaces of work for distributors, MLM companies guarantee their products cannot be bought from other general retail stores. Price war between the distributors will not happen because the selling price set by the central office MLM companies