Case Studies and Management Resources
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Case Studies and Management Resources
Asia's Most Popular Collection of Management Case Studies |
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The first homegrown MLM major was Modicare, started by the house of Modis in 1996. Modicare's network was spread across northern and western India. Commenting on the Indian MLM experience, S.K.Gupta, COO said, "The concept is especially relevant for India because of the highly fragmented retail structure, high brand proliferation which limits shelf-space and massive brand wars both at the trade and advertising level." The direct selling industry in India was in its initial stages even in early 2001. Besides Amway, Oriflame Avon and Tupperware, other players included Lotus Learning, LB Publishers and DK Learning, all selling books.
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All the direct selling companies were members of the Indian Direct Sellers' Association (IDSA), and were bound by its code of conduct.4 While in international markets, a wide range of products was successfully sold directly to homes, this was not the case in India. |
However, MLM companies opted for direct selling as against the high visibility retail set up for competitive cosmetics players such as Revlon, aiming to get an image of exclusivity. There was some resistance to the network-marketing concept in India, as Indians preferred the security of a job. Being a salesperson in an MLM setup did not provide this security. This hampered the company's ability to attract competent personnel.
The problem was aggravated by the fact that companies treated direct selling as 'just another' promotional tool, while it was mainly about motivation. One positive aspect of network selling was that it was very convenient for women as the job could be done part-time and at hours of their convenience. Also, the products sold also usually targeted at women, and this made it easier for the Indian women to accept the distributorships.
4] IDSA primarily focused on promoting consumers' awareness and interest. Its other main objective was to support
and protect the character and status of the direct selling industry, and assist in the maintaining of qualitative standards
in direct selling. Legitimate direct selling companies were thus concerned with developing, protecting and maintaining
a suitable public image and ensured that their salesforce observed company as well as industry standards of
performance and complied with ethical and legal requirements.
Case Code : MKTG003
Themes: Direct Marketing
Case Length : 9 Pages
Period : 1994-2000
Organization : Amway Indian, Eureka Forbes
Pub Date : 2001
Teaching Note : Available
Countries : India
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