Tag Archives: MLM कारोबार

Direct-selling companies go beyond word of mouth

By Kangen Water on November 22, 2013 | Leave a comment

Hemmed in by slowing sales on the one hand and the rapid rise of online sales on the other, direct-selling companies in India, which together account for 35.8 per cent of non-store retail sales and 0.07 per cent of gross domestic product, are again relying on the charisma of star endorsers and the power of mass media advertising.

While Herbalife, a US-based direct-selling company that entered India in the 90s, has roped in Arjuna award winning cricketer Virat Kohli, direct selling brands such as Eureka Forbes, Tupperware and Amway have upped the ante by increasing spends on print, television and digital advertising.

Ajay Khanna, country head, Herbalife India, says: “At Herbalife, we do realise the importance of communicating to the consumers about the brand, which stands for nutrition. Our communication platform is predominantly print-focused. Our campaign stresses on nutrition, which is what the brand signifies. Our print campaign features our brand ambassadors such as Virat Kohli, Saina Nehwal, Dipika Pallikal and Mary Kom, who carry our brand vision forward.”

While Amway has no ‘Indian’ brand ambassador so to speak, the company has announced a partnership with Australian screen actress Teresa Palmer for its skincare and colour cosmetics range. The company, whose ad budget is pegged at Rs 15 crore, is also investing in brand assessment-cum-experience centres for basic health and beauty assessments for customers.

courtesy : MLM Bhaskar

This year, Amway launched new advertising campaigns for Attitude, its affordable skincare and cosmetics range. This is not the first time the company has launched a television-based campaign. In 2000, it had launched its first television campaign to establish the Amway brand name in the Indian market. Now, its ads are largely product-specific.

Some direct-selling companies are giving traditional one-to-one communication a more professional face. Traditionally, 40 per cent of the cost of bringing a product or service to a consumer is marketing-related. Till a few years ago, this expenditure was perceived as a waste by direct-selling companies, which sold their products on three pillars—word of mouth, face-to-face interactions (road shows, sampling and events) and experience centres or small retail outlets.

Direct communication was favoured, as it was cost-effective and, to an extent, measurable. With increasing competition from brick-and-mortar stores and the mushrooming e-commerce portals, leading direct-selling brands have had to rework marketing strategies.

There are other issues. Unlike Singapore, Malaysia, the US, and the UK, there is no regulatory framework for the direct-selling industry in India. Besides, there are issues concerning quality or mis-selling. “The industry suffers from some perception issues,” says a brand consultant based in Bangalore. “So, it is incumbent on more professional players to establish their credentials and remove any niggling doubts in the minds of consumers.”

Eureka Forbes, the manufacturer of Aquaguard RO, as well as a range of household products, claims the company is investing heavily on building online relationships with customers. Shashank Sinha, general manager and head of marketing (direct-selling), Eureka Forbes, says, “We have achieved this by spending 20 per cent of our media budget on digital.”

This trend, however, does not take away from the significance of word of mouth as a communications tool. Daniel R Pranjal, chief strategist at Strategy India, which works with many direct-selling companies, feels above-the-line media can, at best, be a reminder medium because direct-selling primarily relies on word of mouth, which continues to be a powerful medium. He adds a direct-selling company has no need to deal with the challenges traditional retail faces such as confusion over which media to choose for advertising, air time cost/space cost, credits, actors posing as users of the products, etc. Since it comes from product users, word of mouth is usually authentic.

Posted in: Industry, MLM News, Sudesh Malik | Tagged: Direct selling, Herbalife, india, mlm, MLM कारोबार, mlm मार्केटिंग हिंदी में, mlm news, mlm video, mlmindia, Multi-level marketing, Pyramid scheme, Virat Kohli

Chit fund companies & Forex trade continues to dupe networkers in the name of MLM

By Kangen Water on July 12, 2013 | 1 Comment

Kerala Police have arrested two persons in connection with a forex racket which has duped over 60 investors of several crores of rupees, while, at the same time, employees in Chennai have escapedWhile the rupee has been grabbing headlines of late, what is little known or reported is that a multi-level marketing (MLM) company under the guise of foreign exchange trading, Wismore Trading and Investment Consultancy Pvt Ltd (Wismore Trading), has defrauded more than 60 hapless investors of several crores of rupees, by promising them lavish returns, since 2011. The company’s officials, Antony Devassia and K Jaikuttan, have been arrested by the Kerala police, according to The Asian Age, which reported the news. It is also reported, by Manorama News, that Wismore International India Pvt Ltd (Wismore International) has closed down and the employees escaped upon hearing the news of the arrests. These two episodes clearly show regulation, or lack of it, has once again failed to protect Indian investors and savers, and that smaller companies that fly under the radar are capable of robbing investors and savers of their hard-earned money.According to the Asian Age, the Kerala police acted when it received two complaints from investors who had collectively lost Rs110 crore investing in Wismore Trading. The company’s modus operandi is similar to that of most MLMs and companies, which give ‘guaranteed’ returns. It supposedly, promised investors lucrative returns, of as much as 10%-15%, in exchange of large investments. It even paid initial investors regularly for at least three months to attract more savers. The money collected was deposited in another firm Wismore Trading FZC operating out of Ajman Free Zone in Dubai on the basis of fluctuations in currency value, reports The Asian Age.What is more shocking is that the Tamil Nadu police have not taken any action because no official complaint has been filed in the state yet, even though they are aware of what happened. According to Manorama News, it is believed that employees of Wismore International escaped in three cars.It is also interesting to note that the hoarding at the Wismore International office in Chennai has “Nirmal Bang” written in a larger typeface than Wismore. Moneylife wrote to Nirmal Bang seeking confirmation of whether the broker was indeed connected to Wismore International, in any capacity. We have not received any reply so far.Apparently, according to Wismore International website, it is a ‘registered’ forex trading company based in the British Virgin Islands (BVI), a well known offshore country where millionaires and crooks stash their money. No legal details could be found though.According to the Wismore International website, the company has two branches, one in Dubai and one in Chennai. However, according to Times of India, a preliminary police probe has revealed that the Wismore International had operations in various parts of the country under different brand names. Wismore Trading is one such entity that could be related to Wismore International.A quick glance at Wismore International website clearly shows that the company doesn’t look genuine. It even describes itself as a consumer-friendly company. For instance, Wismore International’s vision is to “Provide Healthy Products and Services with Life Changing Results” while its mission is to “Provide a Safer Platform for Forex Trading Solutions”. The company goes a step further describing its USP by using positive adjectives: “The USPs of Wismore are Transparency, Trustworthiness, Sincerity, Integrity, Experience, Promptness and Ethical Responsibilities.” Many financially illiterate investors usually fall for rosy descriptions like the ones described above.It doesn’t stop here. In a similar case, the Peramangalam police arrested noted Kerala industrialist MK Kuruvila of Bangalore. He was arrested following a complaint lodged by Bijeesh, a native of Aamballoor, for swindling money from him, says Indian Express in a report. According to the Peramangalam police, Kuruvila had swindled Rs45 lakh on several occasions by saying that he would return the money after doubling it through foreign exchange trade and commodity trading. However, Kuruvila’s true intention came into lime light when he did not return Bijeesh’s money on time and did not answer his calls.Kuruvila is accused of duping several people making them deposit money in his company called Pan Asia Brokers and Consultancy Pvt Ltd, a company registered with the ministry of corporate affairs. The police said that several other cheating cases were also registered against him at various police stations in the state. Sunil, a native of Amballur in Thirssur, had filed a complaint with the Pudukkad police against Kuruvila for cheating him of Rs52.35 lakh in the same manner.Unfortunately, the state of regulation in India is in a mess. Savers often have to rely on police complaints to take action, especially after they have lost money. This isn’t the first time the police have unilaterally taken action on the basis of complaints. Moneylife had written about how the Andhra Pradesh police took action against unsafe and shady MLMs. The story can be accessed here: MLMs to face scrutiny by FIPB following action by Andhra Police.

courtesy: Bhaskar