Case study I
The systems and operations of a typical local MLM company which deals with Insurance
products of a Brand leader were studied and the following information collected.
Company- Hilife Ltd, is promoted by a reputed local business man and registered as a Public Ltd Company under companies act. Shares are held by the promoters as well as some of the high achieving members of the MLM who reach a certain level of business called MD’s Club. Company says they have plans to list the shares in Bombay stock Exchange after 2 years and claims that the listing value could be Rs. 300 for a Rs. 10 share, reflecting the profits and financial position of the company.
Products- Company deals with ELSS Insurance products of a brand leader. A person can enter the MLM network only by purchasing a ELSS policy (premium paid can be as low as Rs. 5000 in a year for 3 years. The insurance company claims that this investment could double in 6 year’s time with the present market growth.
The MLM company gives a color mobile phone free (worth Rs 3500) for any client joining the MLM by purchasing this insurance policy. Company also offers annual incentives in the form of lowering the premium amount. For example, a member who buys a 3 year, Rs. 15,000 p.a premium policy need to pay only Rs. 10,000 as second year premium and also as third year premium. This discount is offered from the profits of the company.
Other Retail products
Be a customer, bring customers. Company is tied up with a host of local dealers (about 60 shops selling consumer electronics, computer education, automobiles, textile, jewelers) in the local towns and the MLM member can recommend his friends/ relatives/ associates to purchase these items from the specified shops.
For each purchase made, the member gets incentive points which work out to 3 to 5% of the price. A member can route his own purchases also through this network of dealers. In order to coordinate member purchases, company has started a Franchisee network in major towns to display and sell all products from associated dealers/ retail suppliers. They are also planning to build their own super markets in selected towns.
The systems and operations of a typical local MLM company which deals with Insurance
products of a Brand leader were studied and the following information collected.
Company- Hilife Ltd, is promoted by a reputed local business man and registered as a Public Ltd Company under companies act. Shares are held by the promoters as well as some of the high achieving members of the MLM who reach a certain level of business called MD’s Club. Company says they have plans to list the shares in Bombay stock Exchange after 2 years and claims that the listing value could be Rs. 300 for a Rs. 10 share, reflecting the profits and financial position of the company.
Products- Company deals with ELSS Insurance products of a brand leader. A person can enter the MLM network only by purchasing a ELSS policy (premium paid can be as low as Rs. 5000 in a year for 3 years. The insurance company claims that this investment could double in 6 year’s time with the present market growth.
The MLM company gives a color mobile phone free (worth Rs 3500) for any client joining the MLM by purchasing this insurance policy. Company also offers annual incentives in the form of lowering the premium amount. For example, a member who buys a 3 year, Rs. 15,000 p.a premium policy need to pay only Rs. 10,000 as second year premium and also as third year premium. This discount is offered from the profits of the company.
Other Retail products
Be a customer, bring customers. Company is tied up with a host of local dealers (about 60 shops selling consumer electronics, computer education, automobiles, textile, jewelers) in the local towns and the MLM member can recommend his friends/ relatives/ associates to purchase these items from the specified shops.
For each purchase made, the member gets incentive points which work out to 3 to 5% of the price. A member can route his own purchases also through this network of dealers. In order to coordinate member purchases, company has started a Franchisee network in major towns to display and sell all products from associated dealers/ retail suppliers. They are also planning to build their own super markets in selected towns.