Multilevel Marketing in India
Project Area: Understanding the Multilevel Marketing in India with focus on business model, market saturation, pyramid structure and the various criticisms associated with MLM in India.
| Marketing Management II
Date of Submission:
| 8th January, 2012
| Prof. Rajeev Roy
Manish Kumar Swain
Smruti Sankar Lenka
PGDM (BM) - I (Section B)
Group no. 1
Table of Contents
MULTILEVEL COMPANIES OPERATING IN INDIA
BUSINESS MODEL OF AMWAY & PV SYSTEM
PRODUCT OFFERINGS BY AMWAY, MODICARE AND TUPPERWARE
Product Range of Tupperware
Product Range of Amway:
Product Range of Modicare:
UNDERSTANDING MLM AND ITS BUSINESS MODEL
TRADITIONAL DISTRIBUTION CHAIN
MLM DISTRIBUTION CHAIN
MARKET SATURATION AND PYRAMID STRUCTURE:
INDIAN DIRECT SELLING ASSOCIATION (IDSA)
ANNEXURE 1: Interview with Amway Distributor
ANNEXURE 2: Interview with Oriflame member
ANNEXURE 3: Questionnaire used for Customers
ANNEXURE 4: Survey Data Collected
We would like to express our heartfelt gratitude to Mr. Rajeev Roy, Faculty – Marketing Management for giving us an opportunity to apply and understand our marketing concepts and understand the various methods of marketing goods and services by taking a practical example and analyzing the various strategies applicable in a real scenario. We would also like to thank the survey respondents and business associates of Amway and Tupperware who interacted with us and gave us their valuable inputs without which this report would have never been complete.
Multi-level Marketing is coming of age in India. There are more than 30 players and more than 1 of them have presence across several nations. Some of the major MLM firms operating in India are Amway, Tupperware, Modicare, Oriflame and Unilever.
Amway has a unique business model and money and/or incentives can be earned through the methods of Retail Mark up/Mark down, Leadership Bonus, Volume rewards and higher awards and incentives. Point Value (PV) and Business Value (BV) System is adopted by Amway to award its distributors and incentivise them to work towards higher targets. Product offerings of Amway, Modicare and Tupperware are represented in Length, breadth and depth to understand various offerings. Between these 3 MLM Companies, Amway has the widest range of offerings and it has been increasing its product length continually.
A survey was conducted with over 80 customers as respondents to understand the customer preferences and perceptions about products offered by these MLM Companies. The product related questions touched several aspects like quality, ease of availability, price, discount, lead time, reliability, performance, knowledge of distributor and packaging. The various responses were collected in a likert scale and tabulated in pie charts for better understanding.
Furthermore Traditional Distribution structure and MLM structure is being distinguished. The absence of wholesaler and retailer adds extra cushion for margins for the MLM Companies. MLM Organisation and Pyramid structure is being distinguished on basis of business models and legal aspects. Several other facets of an MLM Organisation such as Low Barriers to Entry, Sales Focus of Distributors, and Flexible Hours and Leveraged income are being discussed in detail. Moreover, Indian Direct Selling Association (IDSA) and the advantages of being a member are clearly defined. IDSA is a regulatory framework that works in close association with pioneering policy makers of Government of India to ensure ethical business practice in Direct...
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