Professional Documents
Culture Documents
SUBMITTED BY:
RASHI SHUKLA
ROLL NO. : 00710601709
BBA (GEN.) IIIrd SEMESTER
ANSAL INSTITUTE OF TECHNOLOGY
RESEARCH SUPERVISOR
MRS. NIDHI PRASAD
ANSAL INSTITUTE OF TECHNOLOGY
Submitted to:
MARKETING SYSTEM OF
ORIFLAME IN INDIA DIRECT MARKETING AND
MULTI-LEVEL MARKETING
ACKNOWLEDGEMENT
My sincere thanks go to Mrs. NIDHI PRASAD my supervisor for this
project work,
guidance at every
stage of
RASHI SHUKLA
INTRODUCTION
Oriflame is an internationally successful company providing consumers with
Scandinavian natural skin care and cosmetic products marketed through direct
sales systems. In accordance with its vision, it started its operation in the largest
consumer market of world in India in July 1996 through a joint venture. Now, the
company has good reputation among Indian consumers, but its direct sales,
systems and multi-level marketing systems has made the academics and
practitioners of Indian corporate market to focus centrally on the issue. It is in this
concern that, finding the issue most interestingly; I selected this topic and
company for my final year project.
The present study makes an attempt to inquire about the impact of innovation in
marketing system (direct marketing and multi-level marketing) on Oriflames
performance in relation to making improvements in customer service system.
For this study both the primary and secondary methods of research methodology
have been applied. Based on these a brief findings and analysis follows. After the
completion of whole study, plainly suitable suggestions and recommendations
have been made, which would be useful not only for the future operation of
Oriflame, but several other companies wishing to adopt the concerned marketing
system, may learn a lot and in this way the utility of this study goes without
saying.
RESEARCH METHODOLOGY
2.1
2.2
Secondary Research
To assert the validity of the subject, a secondary research in the form of a
Literature review was undertaken. The objective was to collect thoughts of
experts on the subject matter.
Data Collection
The method of structured interview was adopted in Data Collection. Here,
questionnaires were prepared (see Appendix) and questions were presented
in the same order and same wordings to all interviewees of the Customers.
The interviewer had full command on the questionnaire all along the
interview process.
My aim throughout was to extract as much honest opinion and information
from these interviews as possible.
Also, the objective was to achieve quantitative as well as qualitative
data. The structured interviews included a set of questions, with utmost
sincerity and sensitivity to make it sure that they veritably measured up to
the degree of efficacy and validity characterizing the essence of the present
study.
2.4
2.5
10
2.6
Questionnaire Design
The author had a set of ideas and expected result based on those ideas from
the questionnaire. For this reason questions were:
The segment selected for the interview process viz. Customer Level
was reached out to receive more accurate and balanced data.
2.7
Choice of Sample
Lot of importance was given for selecting the right sample. I ensured that
the characteristics of the sample were the same and that it belonged to the
cosmetic industry. It was also imperative to select a sample from which data
could be analysed and conclusions drawn. The criteria, which was decided
upon by me was Delhi based busy markets i.e. (1) Sarojini Market, (2)
Lajpat Nagar Market, (3) South Ext. Market and Munirka Market.
12
13
group
manufacturers
and markets a
completed range of skin care and cosmetic products through direct sales, mail
order and pharmacies. The business primarily consists of selling it products,
directly to the end-users. Since it was established in Sweden, Oriflame has
expanded world wide and now operates through out Europe, the Americas and
the Far East. The Brand names of Oriflame group are marketed in 48 countries
world wide through approximately 600,000 consultants and members. The World
wide sales force consists of over 500,000 (5 million) Distributors.
Their International success
14
Oriflames
with
Scandinavian Natural Skin Care and cosmetic products marketed through direct
sales systems. Oriflames vision is to be recognized as a global marketer of
Scandinavian Natural Beauty Products, for the quality of its business operations,
an its commitment
environment.
Oriflame International SA is a public Company with its shares listed on the
London stock Exchange. Oriflames markets can be broadly classified into the
traditional mature markets of Western Europe and South America. In addition
there are exciting potential markets in India & China. The three largest product
sectors in Europe are Fragrances, Hair Care and Skin Care. In India Oriflame is
concentrating more in the Skin Care sector by generating awareness about the
aspects of Skin Care in prospective Consumers.
The company
distributors
ahs a well-established
corporate network;
thus Oriflame
15
environment both for Oriflame and Distributors. This was true in case of India
also. Oriflame entered the Indian market in 1995.
4.1
16
Oriflame India Pvt. Ltd. Has set up a centrally air-conditioned modern and well
equipped manufacturing facility at Noida Phase II is
making India Oriflame third production base besides Dublin and Warsaw. The
company
where there is only one intermediary between the company and the
consumer, the distributor. This means that Oriflame works with independent
DIRECT SELLING
Distributors who deal directly with the end customer and offer her/him a direct
and personal services.
DISTRIBUTOR
CUSTOMER
FACTORY
17
Oriflame set up a service center in Delhi to recruit the first level of distributors.
These were the people usually known to the officials of the company and were
called the core group. These distributors had the authority to recruit more
distributors who are called the downline . So, the chain
goes on and is
multiplied.
Now, the distributors who are recruited by the company are allowed only to sell
to friends, relatives and acquaintances. Oriflame range of Skin-Care an colour
cosmetics products are deliberately premium range of products is hardly likely to
be effective and runs the danger of degenerating into forced selling. In India, the
salesman is still looked upon with suspicion. As a result, the products he harks
will hardly be viewed with confidence.
Every Oriflame distributors starts the same way. One has to be recruited by
another Oriflame distributor. The trick is to look for a distributor profile, which
is similar to the target customer. The Distributor Application form is to be filled
by the person. The prerequisites visit are that the person should be more than 18
years age and should be introduced by an existing distributor. Once the form is
deposited with a registration fee of Rs. 800/- a starter kit is being provided. This is
a unique sales kit having product samples and literature this is to be used as a
display and demonstration tool to start the business. This kit also contains free
AF and distributor order forms.
18
Oriflame provides all the help to its new recruits before they move in to start
their real business. It conducts regular classroom training sessions aimed at
upgrading products knowledge. The are intensively trained not only about the
product range but also about the nuances of direct selling. These sessions also
serve as a forum for experience sharing aimed at enhancing selling skills. The
distributor is expected to perform the role of a beauty consultant. An important
objective of the training programme in to bring out the merits of selling a
premium cosmetic range to people whom the distributor and comfortable with,
so that the exclusive and premium image of the product is maintained.
The distributor once ready to enter the real market and approach the customers has
to proceed in a systematic manner. The daily schedule (photograph).
The initial expected goal should be to service 20 regular customers, and to call on
them at least once a month. This is way to give personalized service and establish
a business with a steady income.
The sales start by taking orders right there on visits to the customers. This brings
in the income with the products being ordered by an order form at the Head
Office. The company provides a credit facility to all its distributors. It extent a
credit limit of Rs 5000/- where products worth of this amount an be picked up and
sold to the customer. Distributors order products at the Distributors price and sell
products
is a mark-up
255 on all
products purchased, at intensively trained not only about the product range but
19
also about the nuances of direct selling. These sessions serve as a forum for
experience
sharing
October 1996 they started the open recruitment on an all India basis. Thus the
existing distributors could recruit from any part of India. Oriflame geared up
timely for this all India Launch by opening up service Center across major metrocities in the India subcontinent, i.e.;
Banglore
Madras
Calcutta
Mumbai (Bombay)
Delhi
Hydrabad
And 3 more which have become operational now in July 97. These are in
Chandigarh, Pune and Jaipur. Each service Center is linked up with the main
computer at Delhi Head office thus ensuring quicker services to the distributors.
Thus Oriflame India is here and they are to lead the beauty revolution from the
India home. The day is not far when Oriflame will be household name with its
multi location presence, strong sales and marketing support. Says
Bawa, CEO.
20
Lajinder
4.3
MEDIA SUPPORT
As a direct sales outlet Oriflame plans to use print advertising to simply make
consumers families with its brand and leave it to the distributor the crucial task of
educating the customer about the entire product range & the recommended usage.
That way it allows the distributor to orchestrate has sale pitch. As a result,
Oriflames advertising costs imply a fraction of that of a typical retail sales
driven outfit.
The all India launch of Oriflame was further strengthened by media support
besides the infrastructural support
were to
communicate the message of the business opportunity and the Product Range,
thus creating a strong brand image and awareness.
Media releases commenced from first week of November 1996 and continued till
March 1997 for the financial year. These ads of Oriflame were published in
weakened color Supplements of Delhi, Mumbai, Banglore and Calcutta dailies
magazines such as Cosmopolitan, Femina, Filfare, Savvy and Readers Digest
also features these ads.
Oriflame will be starting its new product ad campaign beginning from June
1997 till March 1998. The primary objective of the present campaign is to help
out distributor increase their sales by creating countrywide awareness about the
products of Oriflame. It will consists of releases of ads to some of Oriflames
21
Lipsticks.
The ads will be released in leading magazines all over the country like Femina,
Cosmopolitan, Filfare, Savvy, Ella, Womans Era, CineBlitz, Readers Digest,
Grihshobha.
4.5
PRODUCTS PROFILE
9. Wild pansy.
10. Aloe Vera: Renowned natural oil. All these chosen were the pick of the
crop with a history and reputation for their soothing, calming, healing,
cleansing, toning and rejuvenating properties.
The products are thus totally vegetarian formulated by purely
plant extract,
without the use of any animal ingredients. The packaging is also done in
environmentally friendly components as far as possible. Thus, Oriflame has
permission to use some special logos along with its products, which ensure the
above principals.
Oriflame products are so safe and pure that they can be used even by Vegans by
any fear, being purely vegetarian.
categories:
4.5.1 Narural Skin Care
Oriflame has developed different skin care lines, to suit varying ages and skin
types. The purifying range is a basic skin care region for young skin and is aimed
both for me & women. The Oriflame Natural skin care system for normal. Dry
and oily skin is a comprehensive range of products. Thus Oriflame first
emphasizes its distributors to help the customer identify the real skin type and
then recommend the best skin care system for that particular skin. The use of he
right product only will yield those magical results which Oriflame aims at.
24
The Royal Velvet range is specially formulated to provide dry & mature skins
with the rich lubrication they need to help minimize fine lines and smooth out
wrinkles.
The purifying range is for young and oily skins. Especially for teenagers, more
active and prone to access, pimples and rashes. This range is for cleaning and
purifying the skin, which is susceptible to injury due to extensive pollution &
sun.
Now, Oriflame has introduced new range specially for India skin and weather
conditions. They include the sun protection and fairness creams. This range is
expected to do very well in India as the fair & glowing skin is always aspired by
Indians.
Oriflame emphasizes that this skin care range should be used as a system in 3
types: Cleanness, Toners and Moisturizer. For extra care of skin care of skin the
face pacts and scrubs are available which are not be applied in small quantities.
Thus, the skin care range covers the overall collection of products as per
required by customers.
25
color for eyes and tips to add the finishing touch, this range included some
absolutely new products for India. people have been purchasing these unique
items on their visits abroad, but now they are being available in India.
4.5.3 Toiletries
Oriflame offers a wide range of toiletries using natural active ingredients in hair
care, foot care & body care, suitable for whole family. There are special products.
4.5.4
Fragrances
Oriflame take natural ingredients & oils and blends them together to create a range
of exciting fragrance far other men & women. They have deodorants, perfumes,
after shaves and colognes will scintillating fragrances to choose from. The have
introduced a concept. Every perfume resembles a triangle.
Top Note- The first thing that is smelt, for few minutes.
Heart- The body note of heart, which gives character and richness.
Base- The basis is the fixative, which gives lasting power & aromatic warmth.
26
Top
Note
Heart
Base
All products are very specific and unique in formulation. They are developed
keeping in mind special skin types and varying needs of humans. It is therefore
very important that their application and use is also done will care. The products
are expected to yield desired results only on proper applications as results only on
proper application as per instructions. For their purpose the distributors are given
special training about products and their application. The distributors help the
customers to identify their skin type and special requirement and only then after
them the right products. This distribution help the customer to identify their skin
type and special requirement and only then after them the right product. This
ensures very effective and quick results of these products.
The products are a result of long and laborious research by skin scientists in
Dublin. The maximum Treatment cream is a result of 7 years of research carried
out to provide mature skin will all the possible care and treatment. All the
products
applications wont yield results. The products are such they wont cause any
harm as for allergies or irritations on normal application and condition. But if
applied on wrong skin types or more than required amounts they may cause
27
problems in few causes. For this reason Oriflame emphasis on proper care while
selling of products only by trained distributors.
Though Oriflame is confident of its preparations provide they are used for correct
purpose, using directions as given. It says its products should not cause injury.
But in case of any allergy or harm to the users it assures to return back full value
of product.
OF ORIFLAME IN INDIA
5.1
THE PROCESS
For the first time, a form of direct marketing will be used as an alternative channel
of distribution and sales in this country. The innovative marketers are imported
this unusual channel of multi-level marketing. Where the shelves in the countrys
retail stores are overflowing already this new technique is outright do some good
to them.
What MLM supporters are counting on is that Indian housewives will jump at the
opportunity to make money in their spare time besides being able to win friends
& influence people to use their companys products.
28
RATAIL
SHOPS
SALES TEAMS
ADVERTISING
WHOESALERS
STOCKISTS
TRANSPORT
DIRECT SELLING
29
CUSTOMER
DISTRIBUTOR
CUSTOMER
FACTORY
FACTORY
MLM strategy is a form of direct selling where there is only one intermediary
between
the company and the consumer, the distributor. This means that
Oriflame works
to recruit more
distributors who are called the downline. So, the chain goes on and is multiplied.
30
RECRUIT
SELLS
CUSTOMERS
SECOND LEVEL
DISTRIBUTOR
RECRUITS
SELLS
SECOND LEVEL
DISTRIBUTOR
RECRUITS
SECOND LEVEL
DISTRIBUTOR
SELLS
RECRUITS
SELLS
CUSTOMERS
THIRD LEVEL
DISTRIBUTION
RECRUITS
THIRD LEVEL
DISTRIBUTION
THIRD LEVEL
DISTRIBUTION
SELLS
RECRUITS
THIRD LEVEL
DISTRIBUTION
SELLS
THIRD LEVEL
DISTRIBUTION
RECRUITS
THIRD LEVEL
DISTRIBUTION
SELLS
THIRD LEVEL
DISTRIBUTION
THIRD LEVEL
DISTRIBUTION
RECRUITS
SELLS
RECRUITS
SELLS
RECRUITS
SELLS
RECRUITS
31
CUSTOMER
SELLS
distributor price, so there is an immediate profit of 25% on the very first sale. The
payments are to be cleared within the 1-month period for the products taken on
credit.
The process, however, only begins here. The system is structured in such a way
that the more products a distributor sells, the higher her commissions. The
business income of a distributor is based on a monthly accumulation of points. All
products are assigned 2 sets of numbers; Bonus Points and Business Volume.
32
to each product
corresponding to their vale of these points remain constant. These determine the
performance discount.
BV Business Volume- It is a monetary value that change if prices change. The
value of the BV equals the Distributor Price less sales Tax. This represents the
monthly sales.
Volume- The selling of products with a BP of Bay, 10 points could earn an
additional commission the total BP of all the products one buys and sells during
the course of a month will determine the performance discount. The monthly
performance discount, is base not only own business volume but also on the
business volume generated by any distributor willing the group.
The discount payment are calculated and paid on the total business volume
generated by each distributor group in accordance with the performance discount
schedule. The bonus points ensure that the effort required to reach performance
discount level remains same despite inflation or other factors.
Bonus Points
10,000+
21%
33
18%
15%
125
9%
6%
200-599
3%
For e.g. Product sale of BV of 400 points could can commission of 3% of the
price at which she brought the products from the company. In this case say
Rs45000.
So, Performance is count is 3% x 4500 = Rs 135
The total income for month is:
Total monthly profit and Performance discount: (1225 + 135) = 1360
However, no distributor is expected to make all these sales on her own. Instead
the system involved her recruiting a second ring of distributor. The first-tier
distributor who sells products worth 200BP on her own, and recruits 6 more
distributor each of wh9om sales another 200BP or Rs 1000 worth products can
actually claim as additional commission equivalent to 200BP, or her own as well
as those of her recruits. Or their combined sales of Rs 7000, therefore, her
additional commission will ramp up to 9 per cent.
34
Of course, she has to share some of this with her recruits each of wh0m is
entitled to an additional commission of 3% on her Rs 1000. However, after
playing them their share the first distributor is left with a hefty amount besides
the original commission. The logical conclusion: it is more profitable for any
distributor to recruit an additional ring around her own, with the result the
network will keep expanding.
Consider one more case of a distributor , who sells cosmetics worth Rs. 4,000 a
month on her own. As three-month-old
our:
35
5.2
When a distributor group achieves a total of 10,000 BP per month for f three
consecutive month, the Oriflame Director level is reached. At this level, special
rewards are presented they achieve the leadership, eligibility for seminars and
honours.
Oriflame has attractive rewards are recognitions to extra ordinary performance.
There are great motivators for Distributors. There are leadership training, where
the leader or distributors who have achieved high sales. This acts as experience
sharing to give tips to inactive distributors and also serves as recognition and
praise for the star performance. Apart from this regular tips or princes are
arranged. All these interactions serve to induce a feeling of belonging to Oriflame
family and is itself is a great motivator. They are also give recognition through
monthly newsletters mentioning their names along with their photographs and
levels reached by them.
Thus the entry of Oriflame with its multilevel direct selling system could change
the very way the discipline is handled in India and also increase its importance.
5.3
ORIFLAME INTERNATIONAL
AS A
MEMBER OF WORLD
36
The Indian direct selling Association has been established in India. Oriflame is a
founder member of this association. Thus, Oriflame is bound to follow the codes
of conduct set by the association in the Indian Scenario. The code is aimed at
achieving the satisfaction & production of consumers, the promotion of fair
competition and the enhancement of the public image of Direct Selling.
The code is a measure of Self-regulation by the direct selling industry. Nonobservances dos not create any civil law responsibility.
5.4.
customers to
which
37
where the products are dispatched. The forms have all terms of the sales
spelled out clearly.
2. Verbal Promises: The distributors are clearly told to make such claims before
the customers, which are genuine and realistic about product features &
quality. At the training sessions they are specifically told not to mention any
odd promises about products. Once more reason for his is that the products
are very specific and to be used according to proper instructions.
3. Cooling off and returns of Goods: A reasonable cooling off period must be
provided in order from and all payments or goods traded in must be returned
within reasonable period to the consumer. At Oriflame the damaged or those
causing allergy to the users can be returned back within 4 weeks of delivery
or invoice day. This facility is under the Guarantee of Excellence. Oriflame
give unconditional rights of return to the customer.
4. The Guarantee and after sale service is to be set forth in the literature.
Oriflame gives the guarantee seal on every product catalogue & manual. It
also mentions the details of after sale service as being offered by distributors
on a continuously monthly basis.
5. Literature is not deceptive & misleading as per the code.
6. Comparisons and Denigration are not allowed. The distributors are told not to
compare the products on any grounds with other products and to just
mention the natural ingredient formulation of them to them to the customers
without confusing them.
38
7. Respect for privacy: Distributors are guided to take prior appointment when
visiting customers to preserve their Privacy.
8. Referral selling. This relies on some ensure future event in prohibited. This
section does not prohibit giving immediate and certain price reductions or
payments for referrals given with a sale.
9. The timeliness of delivery is required: The orders must be dispatched within
a reasonable the distributors reputation. For this Oriflame needs to deliver
and process orders as soon as possible avoiding any delays.
The enforcement of the code is the responsibility of the company. Direct selling
Association or the code administrator
complaints.
5.5
39
3. Earning claims: All distributors are to set targets for themselves ad decide the
levels they want to reach. Thus, Oriflame gives them opportunity to claim
earn in proportion the their efforts.
4. Fees: The registration fees of Rs. 800 only are charged. This is under the
reasonable limits as set by he code.
5. Termination : Under this the companies are required to buy back inventory,
which include promotional material and sales aids and kits at the cost to the
direct seller less a deduction up to a maximum of 10 %
6. Inventory: Oriflame does not encourage distributors to place range orders in
normal circumstances. In fact they have a provision in the order-processing
package of reaching the quantity if it exceeds a limit of say 10 items.
7. Remuneration and Accounts: The code says that money owned to Direct
Sellers must be paid in commercially reasonable time. Oriflame clears all
accounts by paying the performance and bonus checks till 25 th of each month
to all its distributors.
8. Training and Education: Proper training sessions are arranged for the
distributors to make them apt with all latest changes and improvements. They
are regularly informed about the company policies and performances via
widely distributed monthly new letters.
40
5.6
The distributors application form (DAF) are received at head office form:
1. Immediate service by hand/in person.
2. Post
3. Service Centers
DAFs are send to the DAF processing department which is a part of the customer
service cell. At the processing table following steps are performed.
HOW CARE FOR DAT PROCESSING
CHECK FOR ALL DETAIAILS BEING
ITS THE
RECRUITER D.
No. GIVEN ON
YE
ENTER THE RECRUITERS D.NO. IN THE
QUERY BOX ONTEH SCREEN
IF
FOUN
INVALID DAF
41
NO
NO
DOB
YEAR<1980
INVALID DAF
YES
COLLATERAL CHEQUE
ATTACH
IDD PROOF
42
NO
ENTERY FOR
THE QUERY
NO
VALED
COLLATER
CREIT NOT
GRANTED
CREDIT LIMIT OF
Rs 2000 GRANTED
YES
PROFF OF ATTENDING NO
PPT SESSION
ATTACHED
NEW DISTRIBUTOR NO.
ALLOTED TO THE DAF
BEING PROCESSED .
ENTER ON THE DAF ALSO
5.7
Till now we have seen how does the sale and distribution takes place under the
MLM strategy of direct selling at Oriflame. Now, the real working at the Oriflame
India will give the understanding of this organization.
43
ORGANISATION CHART
ORIFLAME INDIA PVT. LTD.
MANAGEMENT
CHIEF EXECUTIVE OFFICER
GENERAL
MANAGER
OPERATION
S
CUSTOMER
SERVICE
PROJECT
COUNTRY
SALES
MANAGER
EDP
MANAGER
FINANCE
MANAGER
The various departments are headed by Managers who have the staff at specific
positions to assist in their work as a family.
The country has been divided into 4 zones North, West, South, East. The service
centers for these regions are having the staff function situated in various cities
like:
North
Chandigarh
West
South
East
Delhi ,
Jaipur,
Mumbai
Pune
Banglore
Madras,
Hydrabad
Calcutta
44
2. Customer services.
3. Sales and Marketing
4. EP-Electronic at a Processing
5. Finance & Accounts department.
The Region / Zone wise set up of each department in given.
The customer service department would be taken up hers. I was associated with
the customer service department, under the customer service and project manager.
5.7.1
3. Fax
4. Immediate service
5. Service Windows at service centers they are I direct contact with H.O.
service cell.
5.7.1.1Who Makes The C. S. Department
Customer service cell-this is further sub-divided as:
a. DAF counter.
b. DOD counter.
c. Telephone Order/ Queries.
d. Senior Controller/ Customer service executive.
Immediate service.
Complaint cell-This has been designed as a separate cell named ORIHELP.
The customer service cell has been provided with an online computer set up of 10
computers. All the customer records are fed into the computer on an online basis
as and when calls are received. The staff is trained in a manner to answer any
queries and process all records of distributor.
All the distributor records
maintained
by the
46
This enables the customer service cell to function in most efficient manner being
very user friendly. The service is thus very fast and fool proof. The orders received
on telephone are processed by the girls of this cell on-line.
The queries received are immediately answered to, by browsing through Orico
and any action i.e., updating or deletion required is done right there.
DAF Counter
Thus, the distributor application forms received from applicant distributors are
processed by this department. This has been described in the form of flow chart.
After the DAF are processed the eligible distributor is issued a Distributor
Number, which is the identifications of the distributors there after with
the
47
Immediate Service
This is the first and foremost counter which is customer interface with Oriflame
at the head office. This is a state of the art facility provide immediate service to
Oriflame distributors. This has 2 staff persons on duty. They take all orders or
attend
distributors
who visit
personally and want to pick up orders by hand. This service is very quick and
efficient with least time lags as all transactions occur on line and directly in
person. The immediate orders & other services are given the top priority at
Oriflame as the customer is present right there and is to be serviced in the best
possible manner.
5.7.2
distributors.
48
The second phase comprised of devising methods to solve these cases of varied
nature. This required a step wise approach to be followed for each.
Deciding on the formats of the Log-sheets for logging in the complaints so
distributor wise record can be maintained.
Formatting the letters to be sent to the distributors replaying & informing about
the action taken.
Designing he MIS of Orihelps monthly records for the management use. The
whole process of designing phase took one month.
5.7.3
Orihelp at Oriflame
OBJECTIVE- To up hold the Goodwill of Oriflame by distributor and
the company. Thereby satisfying & pleasing the customers.
regarding damages or inquires about credit status etc. These are forwarded to
the complaints department.
2. Customer services- The customer
phone, the department. This is usually he case with specific queries. These fall
beyond he preview of customer service cell.
49
department
The fax messages are also received on a round the clock basis at
Orihelp.
6. Service centers & single windows- All complaints from service centres are
their complaints at the immediate service counter. They are again forwarded to
Orihelp and a readmitted on priority basis as the customer is waiting for an
immediate replay.
Now have a problem is solved by Orihelp?
50
being
introduced in India for the first time is very near has to be rightly promoted and
explained to people so that it is adopted.
In India the Conventional retail system is deep rooted. Thus, there is a stiff
competition for this new sales strategy. Oriflame s network selling model has
succeeded largely in the European Countries, which are sparsely populated and the
special distribution of retail outlets is very low, contrast that with India, where the
density of population is not only high, but there is already a large well established
retail network in place, as a result, market leader Lakme sells through over
50,000 outlets across the country. The existing distribution thus offers great
convenience to the consumer.
51
developed through
continuous recruitment special training sessions (PPT) are arranged. The training
sessions are arranged very regularly and in all possible locations throughout the
country. These sessions are specifically designed for people who are fresh in the
field of selling.
Here, the distributors are motivated through a variety of programmes. New
distributors are trained on issues such as recruitment planning, selling skills and
business development, so that she has enough confidence in her abilities in
starting the business.
Monthly training schedules are sent to all distributors so that they are able to
plan out and attend these as per convenience. The service centres in all the 9
cities have regular training sessions weekly. The distributors are encouraged to
attend these sessions at least twice before starting the visits to customers. All new
distributors are informed about these sessions and the importance to attend them.
It is the dusty of the sponsor to inform the recruit about training sessions. They
are supposed to encourage the recruit to attend the session y providing all
necessary information about the place and timing. If possible the sponsor should
also visit training sessions with the recruit.
The new distributors are again encouraged by a provision in the credit
scheme. The credit limit is raised to Rs. 5000/- only when the distributor
52
attends one PPT session. So people are motivated to come and attend these
sessions.
Initially the number of distributors attending the PPT sessions were very less and
then this scheme was introduced whereby the numbers started increasing.
Now, daily session are organized at G. K. Delhi which are for a 3hours duration.
The aspects covered mainly are the direct selling strategy, company profile,
recruitment planning, product introduction and detailed description, selling
skills and rewards & remuneration systems offered by the company.
The first half i.e.1 hours covers the Business aspects. The second half covers
the product description and product testing. The members are encouraged to raise
as many queries to clear all doubts. The punctuality of time is strictly adhered to
as the whole 3 hours session is important. The company wants its distributors to
have all necessary information before they go and start the business in the real
market. If the distributors lack any critical information, it will make them loose
their confidence. Thus, they are encouraged to reach in time and attend the
complete session to have adequate information.
The training sessions are nicely arranged and tuned. The language used is easily
understood. Both Hindi and English are used as per the situation. The trainer
emphasis on the superior product quality an their personal experience of products
and the results.
Analysis and Suggestions.
53
session
important aspects of the business. All this is present in the success plan. They
should be training sessions with live examples and demonstrations and
role plays etc. The first part of PPT is dull and thus lose its importance. This
has to be made interesting by introducing exciting examples of achievers from
India and abroad. So that distributors get motivated to sell the products and
earn.
3. Demonstrations should be introduced. During the increased time, product
use demonstrations, live sales demos or role plays be arranged. Some
special and extraordinary beauty care tips be displayed for the products in the
range. A beauty consultant is in the making, so she should be given training
by a professional, how to use of these products? They should know the
54
exact method and amount of product to be used for best results. The live
demos are always more effective them lecture method in case of sales.
Distributors should be asked to volunteer for demonstrations, so that they
get a feel of the real products and thus making them user.
4. The sales demonstrations should also be arranged where some role plays
can be tried out and improvements suggested. New selling tips should also
be shared with distributors. The selling aspect should not be left.
5. The distributors should have a feeling of belonging to the Oriflame family.
This can be done even at the training sessions. The use of words such as our
Products and not your and our separately and make the difference. The word
our should mean (Oriflame + distributors) sitting in same room, being
one family.
6. The amount/quantity of products to be applied is not clearly mentioned.
They are to be used in small quantities, but small as different meaning for
different people. Indians s it sis have very different usage patterns &
styles.
7. Many international products lose their effectiveness because of this when
introduced in India. Thus , live & practical display of applications is very
important. These products are very specific and effective only when used as
pr directions, it is thus all the more necessary. Indians are used to putting
55
56
6. LITERATURE REVIEW
6.1
effective routs. In todays market place the sales- driven company must transit to a
customer-oriented one.
Smart companies do not just sell and demanding customers do not just buy.
57
It all started with a small group/community of people coming up with the idea
of circulation of certain commodity on demand.
The circulation area was limited to dose friends and relatives.
A sort of verbal sales promotion entirely on basis of faith and personal
contacts.
Gradually, the circle grew
E.g. Readers digest launched through direct selling where the magazines
were available to customers by post on demand basis. It is only through this
method of circulation that an extensive network was established in the entire
world for the Readers Digest. Today it enjoys one of the largest circulations
in the world.
Bull worker- German Company (35 years.)
Starting adds in magazines. Still it is restricted to magazines ads, only never
seen in any shop. Today it is also one of the most popular Gym. Items and
exercising machine.
India only adopted this and one every popular coy came up with attractive resultsEureka Forbes.
Today, many companies have adopted the multilevel marketing model. These are
Amway, AVON, MODICARE, OFIFLAME, LBH, EUREKA FORBES.
58
After all, these companies have realized that, what could be more effective than a
face to face dialogue between a salesperson and a customer. In an environment
where the latter is utterly receptive her home whereby, the salesperson has a
complete control and attention of the customer, which
is very important to
takes a minute to
clinch a sale but choosing the right minute to contact the customer involves a
days work for a direct marketer. This is all the more necessary because the direct
marketer is much like an uninvited guest and, therefore, must ensure that he does
not impost on the customers time. Thus, direct sellers can offer additional value
by placing a premium on the customers time.
Times are changing and it is the performance, which is being valued today and
not just the product. So for companies like Eureka Forbes which has to introduce
and sell a concept not just the product direct selling was the best alternative. For
many cosmetic manufactures also. The direct contact between the distributor
ensures that the latter actually gets to experience how smoothly a lipstick can be
59
applied, or how oil free a moisturizing lotion id Direct Selling, therefore, is not
about crude sales calls but a carefully crafted performance when the products
value to the customer is
clearly
60
Thus the evident advantages that direct selling have over conventional selling
can be summarized as:
ADVANTAGE
Flexibility
STRATEGY
By contracting
customers at their
demos
at
to conduct
customs
at
By
giving
customers
get
personalized
visits,
attention
and
other customer
by
immediately by By allowing
salesperson to take
retail locations.
PRODUCTS
62
one level of distributors. Each distributor can recruit many distributors under,
him who in turn can again further recruit more people under them and all these
would constitute a Down Line of the distributors who initially joined the
company. It is a relatively new concept in India.
Party Plan: where the host/hostess organizes a party or a get-together at his/her
house or a venue with the purpose of demonstration the products collectively to
the group. All the participants are aware of the purpose of the meeting and they
share the interest. Orders are obtained during the course of the party or after the
demonstration/presentation of the products is complete.
Although single level and multilevel marketing concepts have been launched in
India. Eureka Forbes, Modi Telstra, INDAL have been selling their products by
single level direct selling. Where s the companies like Amway, AVON Oriflame
and Modicare have adopted the multilevel marketing. The party plan concept has
yet to take off in a big way.
63
There is on thing common to all the methods of Direct Selling, which is ALL OF
THEM ESTABLISH A DIRECT CONTACT between the prospective customer
and the company by cutting down the intermediary steps of the conventional
selling.
They direct selling concept has the following key points.
1. Truly entrepreneurial,
2. Low/no capital investment,
3. Learnable profession.
By truly entrepreneurial nature it means that three is an open opportunity for
earning in proportion to the efforts. This can be full fledged business p provided
all the necessary inputs, where very one is his/her own boss.
There is practically on or very less capital investment is compared with any other
business at the initial stages. All one needs to do is to get the distributorship with a
very nominal fees and start the business, which brings results in proportion to
the efforts put in.
Then, thirdly it has a Learnable nature as a profession. One learns as one carries
it on, from own experiences but there are a very few setbacks to be faced alone as
there is always a company backing the distributors.
64
6.3
On the International front direct selling has been always an important concept in
the marketing world. This promotion of the direct selling concept is the
important objective. To fulfill this objective the World Federation of Direct
Selling Association was established. Today the direct selling associations are
operational in 43 countries all over the World. These associations have the direct
selling companies as their members. The direct selling associations have the
principle objectives such as:
1. Promote Direct Selling industry in the particular country.
2. Meet the collective need of the member companies.
3. Protect the rights of consumers.
The World Federation of Direct Selling Associations, ensures full protection to
consumers and assures ethical behavior
company and
II)
65
6.3.1
The direct selling associations are very important bodies in over 43 countries.
This is because of the following features they offer.
Code of conduct as set by DSA.
Voice to talk to the Government.
Help and Advice.
Training and Education.
World-wide Contacts.
Specialists suppliers as Associate Members.
Product diversification.
Encouragement to small and start-up companies.
6.4
The direct selling concept is relatively new in India. But now with the postliberalization area in India, this concept has been adopted by many companies.
Thus a need for establishment of the direct selling association was establishes
with the objective of the direct selling industry in India.
The founder members of Indian Direct Selling Association (IDSA) are:
66
67
The association is a platform to be is close touch with the government and have
say in policy matters related to the direct selling industry.
It will promote the direct selling industry through media publicity, seminars
events & help in creation k of a trustworthy image of the entire industry and its
promotion. It will educate people about the earning opportunity it offers and how
working with a direct selling company can change peoples lover.
It will promote ethical
practice
6.5
6.5.1
Network marketing began life in 1886 when door to door salesman avid H.
McConnel founded the California Perfume Company, and set up a sales team
using the concept. His first saleslady Mrs. P.F.E. Albee not only vended the little to
68
perfume set. But also recruited other women to her team. McConnels next
company Avon set up in 1928 followed the system faithfully.
In todays Network aged MLM can be a multi-marketing solution. It ahs the
power to rush the product into the customers home neatly by passing the
complex conventional system. Its advantage, being that it asks for no investments
in advertising, promotion and infrastructure building. The MLM
company
A lot of companies world over have adopted MLM model where a concentric
and ever growing ring of distributors help carry products from the company to
the customers. MLM offers some unique features above the conventional system.
1. No formal marketing infrastructure is required. The investment for setting
up an collaborate marketing system comprising of sales person, showrooms,
or even an extensive marketing dept. Is not required.
2. The products are always sold directly to customers. This gives a very
personalized service to them. Thus buildings strong
relationships. The
requiring special
69
distributor who
an effective
Depot
Distributor
Retailer
route.
5. Advertising and promotions are not necessary. Once an awareness is
generated
product
them provided
on group
turnover.
Thus, a
distributor becomes truly successful only when she starts recruiting others.
6.5.3
This system is distinct and thus targets a specific segment of the market where
reside its customers.
relies on turning
customers, the best customer is the distributors herself since she buys on whole
sale prices and gets he best deal. So the focus is on converting the distributors
into the consumers.
71
6.5.4
MLM being a Quick cost effective channel for distribution of products. If the
products are fast moving consumer goods targeted at niche markets such as
specialized cosmetic
or premium
fragrances
distribution network.
But the MLM model can just build a relationship with the customer. Unless the
transactions can deliver greater value than transaction can deliver grater value
than making purchases at retail outlets. So either a price discount, or the ability
to test
home.
If a customer is getting
72
be effectively sold at home. The ideal product are thus the house hold cleaners
and e.g. Medicare. Personal care products e.g. Oriflame & Avon.
High-value durables like TV on or air conditioners, buying which normally
involves comparing rival brands before making a choice. However Innovative
products where there are few brands to chose from can find customers through
forms of direct selling including of course MLM.
6.6
MLMS BENEFITS
of
marketing will never exceed 25 per cent of its direct selling price. After all,
the distributors primary commission is a mark up on this price with out the
company having to pay her anything. The income from registration fees will
softens its codes continuously.
3. Entering new markets is both quicker & easier. As there are new recruitments
and expansion
of network
through new
73
to customer, needs
atmosphere
could be presented
in
personalized
products.
6.7
MLM s DRAWBACKS
of expanding the
network. Thus the products are either consumed by the distributor herself, or
sold to other distributors. So, while company may be satisfied with volumes,
the drawback is that it may nit be growing to market
74
4. The company will never be in touch with the real consumers of its products
hence the MLM distributors are its effective customers. Tracking customers
tastes. Checking their perceptions and monitoring their satisfaction level is
there fore impossible.
5. The company cannot control the sales team/s actions. The company Cannot
keep a vigil on the sales targets and proceeding of its sales force is as possible
in conventional system.
This concept is a success world-wide for customer care products, Household
goods and childcare
75
COMPANY
Amway Corporate
PRODUCTS
Household goods, personal care &
nutritional products.
Avon Products
cassettes,
records.
Discovery Toys
Encyclopaedia Britannica
Educational publications.
Oriflame
Cosmetics, skin-care
Time-Life Books
Educational publications.
Tupperware home
Shoes.
76
7. SAMPLING
Sampling serves as the most important source of primary source of research for
the present project. To corroborate the views articulated by scholars and experts
on this subject, the samples have been designed to comprise a host of issues put
across through relevant set of questions highlighting various aspects of the subject
undertaken. For this purpose, one set of interviewee has been chosen as the
fundamental point of reference for sampling at consumer level. Accordingly
sample is presented here on the basis of one set of respondents interviewed.
The set of respondents chosen for interviews are from four Delhi-based busy
markets, namely (1) Sarojini Market, (2) Lajpat Nagar Market, (3) South Ext.
Market and Munirka Market.
SAMPLE: (CONSUMER LEVEL)
No. of people approached
= 30
No. of respondents
= 20
Sample size
= 20
Response rate
= 66.7%
77
QUESTIONNAIRE
1. What do you think as about the customer service system or Oriflame?
Excellent
5
5
Working Women
Housewives
Good
4
4
Not so good
1
1
No. of Respondents
6
5
5
4
3
2
1
0
Excellent
Good
Working Women
Not so good
Housewives
The above table interprets that out of 20 respondents, 10 are of the opinion that the
customer service system of oriflamme is excellent, 8 respondents opine as good,
whereas respondents are of the opinion that the system is not so good.
78
To great extent
6
7
Working women
Housewives
No. of Respondents
To some extent
2
3
It is satisfactory
2
-
5
4
1
0
0
To great extent
To some extent
Working Women
It is satisfactory
Housewives
From this table the manifestation is that out of 20 respondents, 13 respondents find
it that Oriflame is quick responsive towards customers complaints to great expert;
79
80
3. Do you know that Oriflame provides you its product through direct
marketing?
Yes
4
3
Working Women
Housewives
No
6
7
No. of Respondents
6
5
4
4
3
3
2
1
0
Yes
Working Women
No
Housewives
The above mentioned table shows that out of 20 respondents are aware of the fact
that Oriflame sells its products to the customer through direct marketing; while the
remaining 13 respondents are quite unaware about it.
81
82
Yes
8
8
Working Women
Housewives
No
2
2
No. of Respondents
10
8
6
4
2
0
Yes
No
Working Women
Housewives
The above table shows that out of 20 respondents 16 respondents find it that
comparatively Oriflame reaches to the customer with specific marketing system;
where as only 4 remaining respondents do not have such finding.
5. Do you know multi-level marketing?
83
Yes
4
2
Working Women
Housewives
No
6
8
No. of Respondents
10
6
4
4
2
2
0
Yes
Working Women
No
Housewives
The above table shows that out of 20 respondents, only 6 respondents are aware
about the company multi level marketing and it is nothing unusual or surprising
that 14 respondents do not know about the multi level marketing.
84
6. In recent times have you found that there has been significant change in
the mechanism of Oriflame customer service?
Yes
4
5
Working Women
Housewives
No
4
1
Cant say
2
4
No. of Respondents
10
8
6
4
5
4
2
0
1
Yes
No
Working Women
Can't Say
Housewives
85
From this table it becomes clear that out of 20 respondents, I have found that there
has been significant change in the mechanism of Oriflame customer service, while
5 respondents do not agree with this; where as, 6 respondents declined to comment
anything.
7.
Working Women
Housewives
Yes
6
7
86
No
4
3
No. of Respondents
10
8
6
7
6
4
2
0
Yes
Working Women
No
Housewives
The above table shows that out of 20 respondents, 13 respondents agree that
Oriflame while serving its products to customers adopts the best system of
marketing while the remaining of respondents deny this.
87
Yes
4
5
Working Women
Housewives
No
3
3
Cant say
3
2
No. of Respondents
10
8
6
4
5
4
3
2
0
Yes
No
Working Women
Can't say
Housewives
The above table interprets that out of 20 respondents, I respondents are of the view
the Oriflames direct selling system has been proved advantageous for them; while
88
89
7.1
Customers interviews very plainly expose the inside story of Oriflames marketing
system, changing with innovations on occasions. Though, Oriflame has still to
make a mark in India, it has shaken the Indian market through its experimentation
of direct marketing and multi-level marketing. The duration of eight years, since
its operation in India, Oriflame have had sufficient time to perform its best.
However, Oriflame is in news in Indian Corporate World due to its experiments in
marketing systems and following facts emerge through the findings:
Indian women customer (in cosmestic products) has little to do with how the
company runs with its marketing system as they still are conventional
regarding this.
It is, of course, that the new method of direct marketing to some extent has
paved the way for the direct contact between the company and the customers
which will help the company to know about the customers choice and
complaints directly.
Now, there is growing awareness among the Indian customers and particularly
Indian women customers, all about marketing system adopted by different
companies.
90
may benefit a lot through this tool, where Oriflame is propounded in this
regard.
91
8. RECOMMENDATIONS &
SUGGESTIONS
Based on my observations made during the training & detailed discussions with
the employees and also with the distributors by way of informal interviews,
following are my recommendation with respect to the marketing strategy of
Oriflame India Pvt. Ltd.
Related to sales and marketing.
The products have o be given the right image in the customers mind. A study
of what the customer wants from this product range, is to be done. This is
necessary because, Oriflames belief systems. How much value does the
customer give to the natural skin care products? This is to be found, then this
value is to be delivered through advertising and perception building.
Indians do value the natures extractions and natural formulations a lot. It is
thus; here Oriflame can find place in Customers mind. The concept of home
made recipes and face parts for improving and beautifying skin is age old in
India. it is till very alive in Indian society and minds. Oriflame products are all
natural preparations and this fact is to be emphatically propagated in the
market. Indians would definitely accept the pure and natural skin care products
that offer them same goodness of nature and plant extracts. Only thing been an
added advantage of easy and convenient use, smooth
92
applicability, some
problem in those countries in is the sunrays which harm the skin. Indian skin is
adopted towards this heat by presence of coloured pigments. Here, the skin has to
be protected against he pollution and harmful dust in air. The Oriflame products
have these protective qualities also but they are not emphasized. People have to be
made aware of this fact so that they start realizing the need for protecting their
skin against these odds.
The brand name has to be built in the market people still compare it with
Shahnaz
being
Oriflame products are very mild and harmless. Thus the name has to be built
93
with respect to this. They need to aggressively advertise its products to build a
strong image in the mind of average customers.
The products are of a very superior quality and a customer becomes so use t9o
these that he does not like using any other afterwards this fact
is to be
more
have to be
successful
examples.
The out of stock situation should be avoided by keeping a minimum safety
stock. This problems will be soon settled with the manufacturing being started
at Noida soon.
There should be more Distribution centres for he distributors to have an easy
& quick
delays.
The top achievers should be monitored closely for their selling methods, if
found
accordingly.
94
One strategy to compensate for he lack of choice which is the strong point of
conventional system in needed. The customer has a lot of options to choose
from at the retail shop. The strategy can be to widen the product range: MLM
should try and sell several products simultaneously. Oriflame has already
brought is entire range of 60 products in India. there are plan to expand its
portfolio to over 300 in next 2 years. As a result , the wide ranges will be
available
Internal Analysis & Suggestions
There is a lot of time loss and disturbance in day to day functioning in the
customer service call due to queer handling. As the girls attend to query calls, it
disrupts their normal functioning or the job they were performing. This causes
delays and minor tasks are being postponed further. This hampers the daily on
the line processing.
Suggestion : There should be a separate query cell comprising of 2 operators.
They should be exclusively handling queries.
A grievance-handling cell should be performed, handled by 1 person, who
listens to problems or a suggestion box for letters should be kept.
95
BIBLIOGRAPHY
BOOKS
Blackwell R. D., Miniard P.W. and Engel, J.F. (2001), Consumer Behavior, 9th
Edition, Vikas Publishing House, New Delhi.
Kotler, P. (2000), Marketing Management, Millennium Edition, Prentice Hall of
India, New Delhi.
Schiffman L.G. and Kaunk L.L.
96
NEWSPAPERS
Times of India
Poineer
Financial Express
Economic Times (Brand Equity)
SOURCES OF OTHER INFORMATION
Escorts Library
PHD House
FICC Library
97
ANNEXURE
QUESTIONNAIRE : Customer Level
Name :
Age
1.
Excellent
Good
Not so good
Working Woman
Housewife
To great extent
To some extent
Working woman
Housewife
98
It is satisfactory
3.
Do you know that Oriflame provides you its product through direct
marketing?
Yes
Working Woman
Housewife
99
No
Yes
No
Working Woman
Housewife
6.
Yes
No
Working Woman
Housewife
6.
In recent times have you found that there has been significant change
in the mechanism of Oriflame customer service?
Yes
No
Working Woman
Housewife
100
Cant say
7.
Yes
6
7
Working Woman
Housewife
101
No
4
3
8.
Yes
No
Cant say
Working Woman
Housewife
Thank you
102