Ethicality of DCHL’s marketing activity
Digital Crown Holdings Limited (DCHL), so-called Lampe Berger (LB), is a private company which is famous for using Multi-level marketing as their operating method, but in fact, the situation is more serious, it can be called as a pyramid selling. Multi-level marketing is illegal in mainland, Macau etc. actually, these places banned all kinds of Multi-level marketing, but in Hong Kong, there are no such kinds of laws to ban this method. So, they can still make profit by utilizing the weakness of the law, their behaviour in public’s eyes is totally unethical.
First, let’s give an introduction for DCHL’s marketing activity. The main product of this firm is fragrance. This fragrance is actually a famous brand called Lampe Berger in France in nearly one hundred years ago. However, one hundred years is a very long period and the patent of the inventor had been expired. So, many others factories owner produce and sell identical products. DCHL is a local example. The quality of the fragrance is one of the problem as they are not produced in France anymore. The biggest problem is not the product, but the selling method of the firm. As the discussion above, they are doing a pyramid selling under the name of Multi-level marketing. Their operating method is, a person find new members to become his ”partner”, maybe four to five people, these people have to paid a large amount of money to join the company, usually at least a few thousand dollars, after they paid, a fixed amount of fragrance that is equal to the entrance fee, will be given to them. Then, the people who join the company continuously finding “partners”, “partners” find “partners” again, one block goes under one block, when the lower block “partners” successfully find a new member, the upper block can enjoy a fixed percentage of commission of each new entrance fee, so, the profits are indirectly come from the...
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