personal selling case study india

Personal Selling: Definition, Real-Life Examples, and Strategies

Melissa Williams

What Is Personal Selling?

Personal selling advantages & disadvantages, types of personal selling, how to piss people off: the opposite of personal selling, personal selling process, how to get started with personal selling, 5 personal selling examples that are endorsed by prospects.

It’s hard to give a personal selling definition when there are so many out there.

You can browse online for a minute — or ten — and it’s still very unclear.

Let’s look at the best answer plus real-life examples, processes, and how to get started.

Here’s what we’ll cover:

• The Opposite of Personal Selling
• 5 Personal Selling Examples

Personal selling is an approach where sellers humanize themselves and show they’re there to help prospects, not sell at them. The approach involves one-on-one interaction between buyer and seller and can be via email, phone, video, or in person (face-to-face).

So instead of taking a megaphone to share features far and wide, you take a step back and turn your head to listen.

This applies to both in-person and virtual meetings. When you don’t have your prospect there to tell you what they want, you can still take a first step.

Read on for 5 examples of personal selling that take place over email. All of them involve the action you need to take when you haven’t spoken yet: looking them up online.

When you identify their responsibilities, interests, and needs, you take one giant leap for sales kind.

Although there are immense benefits of personal selling, there are some disadvantages to this type of selling. Let’s look at both the advantages and disadvantages below.

Personal Selling Advantages

• Creates two-way communication which helps you resolve objections easier
• Builds rapport and forms lasting business relationships
• Helps you convey more information and value

Personal Selling Disadvantages

• Takes more time, effort, and is ultimately more expensive
• Your reach is more limited and you talk to fewer prospects
• Contributes to a longer sales process

Personal selling can typically be categorized into three types of sellers: order takers, order creators, and order getters.

• Order Takers: Order takers serve as the point of contact for customers; they handle customer requests and inquiries. Their primary responsibility is to identify customer requirements and help fill their needs. An example of an order taker is a retail sales rep.
• Order Creators: Order creators don’t complete the transaction themselves; they persuade customers to promote the business’s offering. Examples of order creators include pharmaceutical reps and brand reps working with retailers.
• Order Getters: Order getters reach out to potential buyers directly in hopes of persuading them to buy their product/service. Examples include B2B sales , telemarketing, door-to-door sales, and consultative sales.

We’ve all been there.

Something that, by its nature, irks you happens again, and again, and again — but you brush it off because you can just focus on other things.

Until someone totally calls it out for you, and you’re like, “YES!”

The bad news: You might be the thing annoying your prospects right now (whoops). We get it, you have a quota. But there’s a person on the other end of that email, and your “respectful persistence” is actually pissing them off. To the point that you’re hurting your chances of getting them to take a meeting with you.

The good news: You can actually become the person who identifies what’s annoying them and shows them that there’s a way to totally eliminate it. More on this later.

What to Avoid When Personal Selling

For right now, just remember that you need to avoid these sources of frustration :

• Leading with who you are and what your company does instead of their situation.
• Telling them that you want to talk rather than asking them if they are interested.
• Personalizing a line to them while still being pushy — that’s just putting lipstick on a pig.

With each of the scenarios above, your recipient reads your email the same, no matter what it actually says: “Hi faceless prospect, I have a quota and am worried about me. Confirm a meeting time or else.”

Not the most appealing, right?

We already spend 35% of our workday in meetings that we schedule and we are required to attend. Why would we add another?

Getting to “yes” with a meeting request requires two things: 1) that they agree with you that their time is worth it, and 2) their preferred mode of communication to gather info is to have a call.

Studies show that introverts make up one-third to one-half of the population, and they dislike having meetings where they haven’t info-gathered on their own first. Booking a meeting just to tell them more is not their cup of tea.

What to do about it:

• Read over any professional email before you send it, and ask yourself: If I were the person receiving this email, would I say “yes” to this request?
• If you do ask for a meeting, be specific about what they would get out of that phone call that they can’t learn on their own.
• Think through your tendency to ask for a call. Is there a more engaging way to ask, or a better way to start a conversation that qualifies the match for both of you?

1. Prospecting

Prospecting involves identifying and qualifying ideal buyers for your product/service. This can be done through networking events, referrals, cold outreach, social media, and more. Lead qualification is essential here to narrow down your pool of leads to the prospects that are most likely to turn into paying customers.

2. Pre-approach

Next, research is necessary before contacting/meeting with your leads. That way, you’re entering the conversation prepared with knowledge of their background, business, and market.

3. Approach

The goal of the approach stage is to understand the prospect’s wants, needs, and pain points. You should ask open-ended questions to gauge as much information as possible about the prospect so that you can tailor your pitch to their specific needs.

4. Presentation

Now it’s time to show the prospect why you’re the right fit to solve their problems and help them succeed. This is where you show them your product/service and demonstrate its benefits and how it can help solve their specific pain points .

5. Handling Objections

Sales objections are inevitable. This is where you should be ready to alleviate any concerns they may have and address them head-on. This may include answering unresolved questions, providing further information, and offering tailored solutions.

If all has gone to plan, you’ve built rapport with this prospect and developed a relationship. Now, it’s time to close the mutually beneficial deal. This step involves finalizing contracts, payments, and invoices.

7. Nurturing/Following Up

Last but not least, always follow up with the customer. This is where you ensure the customer is happy, is receiving an effective onboarding process, and is satisfied with the product/service. This step is important to show the customer you still care, even after the sale has been closed.

How can you stop nagging your prospect and become a friendly, useful note in their inbox?

Personalization — Find an interest or need to create affinity bias and remove negativity bias.

Benefit — Show them the end picture; don’t just spell out your features.

Request — Doesn’t have to be their time. It could be a question to open up a conversation.

As emailing individuals, we’re trained to 1) have a disdain for sales emails and 2) like people who are similar to us.

Turn 1 into 2 by showing them that you aren’t just a seller; you’re a human being who is just like them, and you recognize their needs.

This brings us to 3: our brains are wired to love talking about ourselves . Use this to your advantage by focusing on them to start a conversation with your prospect.

Personal Selling Strategy: PBR Approach

How to get started with the PBR approach right now :

Third — Relate this back to your value prop.

Here’s how it works in an email:

• Start from where they are. (Ex. “I noticed XX” — where XX is where they are).
• Add context. (Why you bring it up)
• Connect the dots. (What’s in it for them?)
• Get to the point — make your ask.

Hint : It’s a waste of time (and sabotage to your email) to make an unwarranted request. Yes, your goal might be to book a meeting, but sometimes it’s worth nurturing with questions first. Because their silence to repeated requests to book time isn’t really silence, is it? It’s them saying “Nope, I’m good.”

To help you get started, below are five real personal selling emails that booked meetings.

Tip: Perfect your sales outreach with these data-backed findings.

1. The Candid Close — Give Them a Reason Why

Nothing’s worse than being invited to a meeting without an agenda that truly applies to us.

It’s estimated that we spend 31 hours in unproductive meetings every month. And in every meeting, 73% of people do other work because they don’t relate to the content.

When we’re in control of deciding whether or not to go, we’re going to say no.

Unless we’re given a good reason why it’s worth our time.

In the email below, a Yesware account executive adds two clear reasons for a meeting that help him transition from his Benefit to Request:

Email tracking revealed to this sender that this email was opened multiple times and the link was clicked. So he probably wasn’t surprised when he got this back:

Pro Tip: If your recipient published anything on LinkedIn recently, reference it, link to it, and show you read it with a connecting statement (all in the first paragraph above).

2. Crash My Calendar (Seller Turned Singer-Songwriter)

Hearing our favorite song makes us feel good. Neuroscientists at McGill University discovered that it releases dopamine, a chemical that controls our reward and pleasure centers.

“These findings provide neurochemical evidence that intense emotional responses to music involve ancient reward circuitry in the brain,” says Dr. Robert Zatorre, neuroscientist at The Neuro. “To our knowledge, this is the first demonstration that an abstract reward such as music can lead to dopamine release.”

Which is why emailing a prospect with lyrics from a favorite song — adjusted to them and their business needs — puts a smile on their face and a reply in your inbox.

Here’s an example from one of our account executives:

And what Luke got back:

How to do it: Find their favorite band (try Facebook). Look up a song by said band, then tweak the chorus to your value prop.

3. Everyone Has the Same Achilles Heel: Competitors

We’re all constantly working to meet the needs of our target market and stay ahead of competitors at the same time.

It’s a difficult task, and it comes up on all teams across all industries.

Because it’s universal, you can use it for any prospect you’re emailing.

Give their pain point a nudge, then show them how you can fix it.

Here is a good example of personal selling from a Sr. Business Development Rep at Influitive:

There are two important things that Josh does well:

• Goes beyond simply naming a competitor by pointing out a very specific weak spot. This is what delivers true value, along with a very specific way to solve the problem.
• Asks a question instead of requesting my time. This is a good technique to use if you’re creating a drip campaign that you’ll automate. Work up to asking for a meeting.

How to do it on your own:

• Find their competitor.
• Identify one weak spot where you can help, and make it specific.
• Ask a question that is relevant, would likely be answered by a “no,” but should be a “yes.” If it’s clear you have the intel to get them to “yes,” boom – there’s their incentive to answer.

4. Connecting on a Human Level — What’s Bothering Them?

Some days, it can feel like the world is out to get you.

Personal selling lets you turn this around for someone by showing them you’re on their side.

Check out this email from our Account Executive Clare Durkin:

How to do it on your own: Find something that’s been bothering your prospect (ideally outside of work), then use a high-level connecting statement to tie it to a pain point on their team. Here, the connection is wasted time. In this case, it’s okay to ask for a meeting, because:

It’s the fastest way to help them solve the problem.

Here’s what Gloria replied back:

5. Bringing In Their Favorite Movie

What’s your favorite movie?

Think about it.

Now, how would you feel if someone acknowledged your love for this movie and geeked out with you about it?

You’d probably be impressed, and if it came through your inbox, it would be a welcome reprieve from typical business emails.

Here’s an email sent by our sales consultant Alex (and the reaction he got back):

How to do it: Find their favorite movie (try Facebook and Twitter). Identify a character and at least one well-known attribute that you can relate back to your own product or service (through metaphor). What end benefit do they both share?

Here’s how it works in Alex’s email:

Character : Jedi → Salespeople at JBX

Attribute 1 : Lightsaber → Sales enablement tool

Attribute 2 : Mind tricks → Engagement data

Shared end benefit : Success (whether it’s conquering the sith or scaling and growing a team).

Note: This technique works best for movies where there’s a clear protagonist and antagonist.

That’s all for now. Do you have any examples of emails that worked for you? We’d love to hear from you!

• “Personal selling” = Finding out who they are & what their needs are, then catering your initial outreach to that. Your first email should start a conversation where you listen .
• Move away from features and identify your value prop. What’s the end benefit?
• Lead with them, not you.
• Use a tool like email tracking to see when they’re opening your emails.

This guide was updated on October 10, 2023.

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AN EMPIRICAL ASSESSMENT OF PERSONAL SELLING AS A MARKETING STRATEGY IN INDIAN INSURANCE SECTOR: A CASE OF PRIVATE INSURERS IN DELHI AND NCR REGION

2020, IAEME PUBLICATION

The role of promotion is quite significant in a developing country with low literacy rate and pre-dominance of rural economy, and India is one of the best examples to have strong promotional measures to persuade customers for the kind of products and services for which they have greater need, but they lack in having proper information and understanding about the product. Insurance is one such service offering which is largely in demand by Indian population of all regions, be it rural population or urban population. The life insurance products success in business depends heavily on effective promotional measure, especially the personal selling plays vital role in converting prospects into buyer as it directly connects the sellers and buyers. The study tries to examine the effectiveness of different objectives of personal selling based on the data collected from officials of select insurance providing private companies product including that of HDFC, ICICI, Bajaj Allianz, Max Life, and Tata AIA in Delhi. To reach the inferences, factor analysis has been used reflecting that the private insurers are having three major objectives to use personal selling as means of effective marketing strategy

Related Papers

Dr. Israel Kofi Nyarko, FICWLS, FCIML, CMC, ChPA

Personal selling is a paid personal communication that seeks to inform customers and persuade them to purchase products in an exchange situation. It is a powerful two-way form of communication. It allows an interactive relationship to develop between buyer and seller in which the latter can modify the information presented in response to the needs of the audience. The intent of this study is to establish the contribution of personal selling to the promotion of life insurance products in Ghana. A lot of literature abounds on advantages of personal selling but the outcome of this study will help establish contribution of personal selling to the promotion of life insurance. Thus, the study focused on life insurance clients in Ho, Ghana. Data were collected with a questionnaire administered to 100 clients of a leading insurer in the city of Ho. Simple frequency distribution tables were used to analyze the data. It was found that personal selling is an essential tool in prospecting, informing, educating and persuading life insurance clients. Thus, insurers must recruit and train more salespersons to intensify these activities. Also, insurance companies should consider apportioning a good percentage of their promotion budget to developing salespersons.

manvendra Singh

EPRA International Journal of Multidisciplinary Research (IJMR)

Sanjive Saxena

This paper is covers the exploratory research study on the marketing strategies of IDBI Federal Insurance, Company. In the Indian context, Insurance companies are playing a major role in the development of Indian economy. With the entry of many private players in the insurance industry, the competition has risen manifold and hence insurance companies are coming out with innovative marketing strategies to woo the customer. This was the reason for narrowing down the scope of the research work. The present paper is an exploratory research study on the marketing strategy of IDBI Federal Insurance Company. The paper seeks to address the following objectives (a) To determine the marketing strategies of IDBI Federal Life Insurance Co. Ltd (b) To determine the means and mechanism deployed by IDBI Federal Life Insurance Co. Ltd. Applying the marketing mix and to determine the effectiveness of the strategy and (c) to understand the reasons which provide competitive advantage to IDBI Federal L...

Dr. Mallikarjun M Maradi

A marketing strategy is a business game plan for reaching prospective consumers and turning them into customers of their products/services. It's a long-term plan for achieve a goals by understanding the needs and creating a distinct and sustainable competitive advantages. Life Insurance Corporation, popularly known as LIC in IndianState owned insurance group and Investment Company. The promotional strategy of LIC agents is straightforward. Its main aim is to keep investors updated on various policies and its brand. LIC's biggest strength is its agent network which is wider than the entire private life insurance players' agent network in India. As of March 31, 2021, LIC had 13.5 lakh individuals in its agent network compared to 11 lakh individuals for the entire private LI industry. Further, LIC also had the highest agent productivity, both by premium (Rs.4,13,000 in FY21) and the no. of policies(15.3 in FY21). In this study, an attempt has been made to elaborate on the marketing strategies of LIC agents used and challenges faced of the LIC agents while marking their LIC products to investors. The paper consists of both primary (150 LIC agents as sample size from Jamkhandi Taluq) and secondary data like books, research papers etc., which was analyzed by using various statistical tools for data inference. Henceforth, the present study has more reliability and relevance in this competitive era and understand the level of satisfaction of LIC agents in their profession.

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Rannelyn Espiridion

Life Insurance Corporation of India, the capital intensive business, provides the most important financial instrument to customers aimed at protection as well as long term savings. The Corporation reaches out to the people through the main traditional route of the agency model for the selling processes of the numerous complex need-based products. The agents help in marketing its policies by spreading the message of life insurance among the masses. They serve as the kingpin for insurance companies seeking to provide traditional and innovative products, and focal point for customers seeking to procure insurance coverage and long term savings. The present paper investigates the factors influencing agents' perception towards Life Insurance Corporation of India. The study is based on a sample of 225 respondents taken from three cities of Punjab. Factor Analytic Approach has been performed for data analysis. The results of the factor analysis reveal that Staff coordination is the most important factor to influence agents' perception followed by other six factors namely: (i) Customer target; (ii) Competitive advantage predicates; (iii) Material hallmarks; (iv) Promising products and process; (v) Service enhancement; and (vi) Exclusive attention. Moreover, analysis of one way classification has also been performed to test the significant differences among the various groups of respondents across the 23-item perception scale. The results demonstrate that no significant differences exist among various groups of respondents with respect to their perception towards Life Insurance Corporation of India.

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Health insurance market in India has become the fastest growing segment in non –life insurance sector in India. The health insurance business in India saw a 24% growth in FY 17 with a premium of INR 30,765 Cr and a market share of 24%. It has been the fastest growing market segment registering a CAGR of 23% for the past 10 years. Health insurance industry is in a nascent stage with 25% of population under its coverage. There exists a huge potential for growth and penetration of health insurance to a large population. Going forward there are both opportunities and obstacles in marketing and distribution of health insurance products in India. This paper attempts to uncover the prospects of successful marketing of such products from the standpoint of insurance marketers and look at issues of impeding the growth of health insurance market in India.

Analysis of the Effect of the Role of Agents, Promotions and Services on Market Penetration at the Bumiputera Office of Life Insurance with South Jakarta Region

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Shared Life Insurance (AJB) Bumiputera is the oldest insurance company in Indonesia. During the Covid 19 pandemic, we had experienced great obstacles and obstacles, but until now they still exist to serve their customers. The purpose of the study was to determine the relationship and influence of the factors of the role of agents, promotions and services on market penetration at the Bumiputera Joint Life Insurance office in South Jakarta. The methodology used is a survey and uses a questionnaire to do quantitative calculations and analysis. Using a sample of 265 respondents. The finding is that there is a combination of the influence of the agent's role, promotion and service variables partially and jointly on market penetration.

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• Personal Selling

What is Personal Selling?

Introduction.

Personal selling is also known as the act of convincing a customer to buy a given product or device. It is also considered to be one of the most costly and effective promotional methods that are ever seen. It is effective as there is a face-to-face interaction observed between the seller and the buyer which helps the seller to change their promotional techniques used as the situation asks for. If you have been wanting to know more about Personal Selling - Concept, Importance, Advantages, and Limitations then now you can check out this article through Vedantu to get a detailed view on personal selling and the concepts that are involved.

Personal Selling is yet another type of selling initiative by the business companies, a way to persuade the local people to try their products. Personal Selling is surely one of the distinctive methods which are used by the selling strategists to achieve their goal of selling a destined quantity of sales. 

In our discussion, we have included this interesting topic of ‘Personal Selling’, and to further strengthen our knowledge we have discussed the pros and cons related to this.

Concept of Personal Selling

Personal selling is face-to-face selling where one person who is the salesman tries to convince the customer to buy a product assigned by the company. It is a promotional activity by which the salesperson uses his or her skills and abilities to persuade people to buy the product thereby in an attempt to make a sale.

Here, the salesperson tries to highlight the features of the product to convince the customer that the product will hold benefits in the long term. However, getting a customer to buy a product is not always the motive behind personal selling, this personal selling is also done to make the customers aware of new products in the market. 

Personal Selling Examples

Personal selling is where businesses use the sales force to sell the product after meeting the customer face-to-face.

The sellers advertise these products through their skills such as attitude, appearance, and specialist product knowledge. The salesperson informs and encourages the customer to buy or at least try the product.

A unique example of personal selling is found in the department stores on the perfume and cosmetic counters. A customer can get advice on how to apply the product, its specialties and can try different related products, these all are guided by the personal selling staff present there. Products with high prices, and with complex features, are often sold using this type of technique. Examples: Cars and many products that are sold by businesses to other industrial customers.

Importance of Personal Selling 

The following points explain the importance of personal selling:

1. Two-Way Communication:

This is the best tool for personal selling. Salesmen can provide necessary information to customers about the company's offer, and also can collect feedback from customers. He can ask if there are any queries about the product to the salesman present for personal selling. 

2. Personal Attention:

Advertising and publicity are among mass communication tools, and thus personal selling is concentrated and is focused on one individual, this will result in ineffective results. 

3. Detail Demonstration:

Television demonstrations are limited; thus, salesmen can provide a detailed demonstration and can supervise the customer through personal selling.

4. Complementary to other Promotional Tools:

Personal selling supports advertising, sales promotion, and publicity. Personal Selling even removes the drawbacks of advertising and its sales promotion. 

5. Immediate Feedback:

This is the only market promotion technique that provides immediate feedback from the customers. 

Advantages of Personal Selling 

The Advantages of Personal Selling are as follows - 

This is a two-way communication where the selling agent gets instant feedback from the prospective buyer about their intention to buy. 

This is an interactive form of selling, which helps in building trust with the customer. While selling high-value products like cars, the customer must trust the product and thus personal selling is needed. 

Personal Selling is a persuasive form of selling as in this type of sale the customers come face to face with the salesperson where it is not easy to dismiss them, there is an effort of the customer to listen to them.

Direct selling helps in reaching the audience. 

Limitations of Personal Selling 

It is an expensive method of selling that requires high capital costs.

Also, this method involves many labours as it is a labour-intensive method as a large sales force is needed to carry out personal selling successfully.

The training of the salesperson for personal selling is also a very time-consuming and costly process.

The method can only reach a limited number of people, it does not provide mass advertisements like TV or Radio ads.

FAQs on Personal Selling

1. Who is the ‘Sales Force’ Team?

For rigorous selling techniques, the company forms a distinct selling team who are equipped with efficient knowledge about the selling strategies that can be used to persuade the mass, this comes in many forms – mere advertising, giving off free samples, personal selling, and so on. Thus, the team which focuses only on the selling department of the company and attempts to finish the selling stock is called the ‘Sales Force’ team.

2. What are Mass Communication Tools?

Advertising and Publicity is the most popular form of mass communication tools, which engages the mass of people in buying the product they intend to sell. Not only selling, but mass communication is also used to make the customers aware of the products.

3. What is a Demonstration?

A demonstration is the reason or proof, or the explanation or making clear by the use of examples or experiments with the product by the salesperson. Demonstration means 'to clearly show' the benefits of the product by showing the public how to use it, this is done in personal selling.

4. Why is Personal Selling Important?

Personal selling is an important marketing tool that helps small businesses, particularly those that sell complex or high-value products and services to other businesses, rather than the consumers. Companies conduct personal selling by hiring sales representatives, the representatives pay visits to the clients or by contacting clients by telephone.

5. What is the process involved in personal selling?

The process involved in personal selling includes the process of prospecting and evaluating while also preparing approach and presentation skills.

1. Prospecting and Evaluating:

The effort that is taken to compile a list of potential customers can be defined as prospecting. Those people who will be sales representatives can access the information related to customers or potential buyers via advertisements or even company records and telephone or trade association directories.

2. Preparing:

Knowing about the product and the company is a must-have knowledge before approaching the customer to check the full potential of the customer.

3. Approach style and Presentation:

It is needed that the approach must be done carefully. The person who is the buyer might be in a bad mood and hence approaching the customer to buy a product must be done with proper planning. Explanation of how the product is beneficial to them and why they should invest money in it is also needed to be explained in brief.

6. How to overcome objections and close the sale when the personal selling process is used?

There is a high possibility of getting objections right from the start itself. However, it is the quality of the seller that determines whether he or she is a professional or not. Only those that understand how to overcome the objection will be able to close their sales. This however can be hard and hence make sure you give the correct reason to buy the product right from the beginning to increase the chances of a customer saying yes. It is also seen that a lot of sellers tend to lose their sales as they have never asked the customers whether they need to buy it or not. This is hence a crucial step in the process of personal selling.

7. What are the objectives involved in personal selling?

There are a variety of objectives that are involved in personal selling and can be provided as follows:

1. Attracting Potential Customers:

The main objective of having a method such as personal selling is to increase the percent of potential customers who will be interested in your product.

2. Creating the Desire to Buy:

While a lot of customers might think that the product is not of much importance to them, sellers must find a way to convince them and create a desire in them to buy the product.

3. Providing Detailed Information

Just letting the customers know why they should buy the product and closing the sale is not the key. The key here will be to educate the customer and make them understand why the product is of great usage to them.

8. What are the challenges faced during the process of personal selling?

The following challenges are faced during the process of personal selling:

1. Dyadic Selling:

Dyadic selling means personal selling that involves two people. It is hence important that between the buyer and the seller a mutual trust is created. Without the mutual trust being generated between the buyer and seller selling products might seem a bit hard

2. It is a Long Process:

It is to be kept in mind that the process of personal selling does not just start at explaining the product and end at selling the product. Even after selling the product, the buyer and seller must maintain a relationship. Companies pay special attention to this customer relationship management.

3. Highly Interactive Process:

With two people being involved in the process it is necessary that proper timely communication is being followed. This means that a follow-up at each stage will be necessary for a proper customer and buyer relationship.

9. Why is it important to learn about Personal Selling?

Personal Selling - is an important concept that is needed not only for your board exams but also in your daily life. You might have seen sellers coming to your doorstep and providing products. This is an example of personal selling. Vedantu makes sure that students understand the concepts that are involved in personal selling by also providing Vedantu NCERT Solutions for Commerce.

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Please note you do not have access to teaching notes, innovative approach and marketing skill: a case study of artisan entrepreneurs of india.

Journal of Entrepreneurship in Emerging Economies

ISSN : 2053-4604

Article publication date: 20 September 2022

Issue publication date: 12 April 2024

This study aims to examine individual-specific market orientation as an innovative approach and its relationship with marketing skills among artisan entrepreneurs in India.

Design/methodology/approach

The study adopted an in-depth interview to explore variables, a questionnaire survey to understand their latent dimensions through exploratory factor analysis and structural equation modeling to test the relationship between constructs under study.

The interview result indicates that 20 variables explain factors affecting individual-specific market orientation with four latent dimensions: customer orientation, competitor orientation, external coordination orientation and personal selling orientation. There is a significant and positive relationship between customer orientation and personal selling orientation with the marketing skills of artisan entrepreneurs in India.

Research limitations/implications

The study is confined to three southern states of India and weaving villages known for their endemic product specifications.

Practical implications

The study found significance in orienting artisan entrepreneurs of developing countries and equipping them with desired skills to meet the changing dynamics of the market and meet their livelihood needs. The study further supports policymaking in strengthening the capability of artisans to enter the market without mediators.

Social implications

The model provides insight into other unorganized sectors to formulate innovative approaches to strengthen marketing skills and entrepreneurial ability.

Originality/value

As an exploratory study, examining individual-level market orientation as an innovative approach and their relationship with marketing skills among artisan entrepreneurs was unexplored in several unorganized sectors, including handlooms.

• Artisan entrepreneurs
• Innovative approach
• Individual-specific market orientation
• Marketing skill

Acknowledgements

The researchers are grateful to all stakeholders who immensely contributed to the development of this manuscript by extending their valuable time and input. The academic colleagues who studied the issues in their length and breadth contributed a lot to bring a meaningful shape to this research with their strategic advice to strengthen artisan entrepreneurs.

Data available on request from the authors: The data that support the findings of this study are available from the corresponding author A. Vinodan, upon reasonable request.

Meera, S. and Vinodan, A. (2024), "Innovative approach and marketing skill: a case study of artisan entrepreneurs of India", Journal of Entrepreneurship in Emerging Economies , Vol. 16 No. 3, pp. 576-601. https://doi.org/10.1108/JEEE-03-2022-0105

Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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Personal Selling: Definition, Techniques, and Examples in 2024

• March 4, 2024

Once upon a time, sales was 100% personal selling. But now, thanks to globalization, advances in technology, and the rising cost of travel, personal selling is just one of many techniques available to salespeople to warm up a lead and close a deal.

Personal selling should be part of a wider sales mix, alongside telesales, email marketing, sales promotion, advertising, and public relations. But personal selling must not be overlooked: it remains an extremely important part of a salesperson’s arsenal and is a skill every good salesperson must master.

What is personal selling?

Personal selling is when a salesperson meets a potential buyer or buyers face-to-face with the aim of selling a product or service. The most traditional form of sales, many salespeople are lured to the industry by the adrenaline rush of high-stakes personal selling; picture those whisky-swilling Mad Men, or the ultra-driven salesmen of Glengarry Glen Ross.

These days, there’s a lot more to sales than attending meetings.

Why? Simply put – the expense.

Think about it: each face-to-face meeting requires significantly more investment – from both sides – than just contacting a prospect via email or phone. Suddenly, you’ve got travel expenses. And the time it takes to prepare for, travel to, and take the meeting only adds to the cost. This is why it’s vital to consider the value and type of product you’re aiming to sell – as well as the likelihood of closing the deal – before automatically opting for personal selling.

But face-to-face meetings certainly still have their place. Consider this: 68% of B2B customers are lost due to indifference or perceived apathy rather than mistakes. Attending a sales meeting is a prime way to combat this issue by showing you care enough to invest time and money in your prospect on good faith.

Fifty-eight percent of buyers state that sales meetings are not valuable, and that there should be a greater focus on the value businesses can deliver to them. On the face of it, this doesn’t sound like great news for salespeople who shine in meetings. But it does mean that over 40% of prospects are open to sales meetings. The other 60% may just need convincing that a meeting will help you add real value to their business.

Personal selling Techniques

1. focus on the right leads.

With the extra time and monetary investment required for face-to-face sales meetings, it’s essential businesses lock down ROI by choosing the right prospects to meet in person through a comprehensive lead-qualifying process.

Not every meeting will lead to a sale, but you can get yourself closer to hitting those sales stats by asking yourself:

• What is the value of this potential sale?
• What is the size of the business you’re selling to?
• Is your product or service genuinely going to serve the business well?
• Could building a strong relationship with the DM lead to more business down the line?
• Is a sales meeting actually going to help close the sale? Perhaps the DM is extremely time-poor and prefers email or telephone communication?
• What value can you add in a sales meeting?

2. Exceed expectations through preparation

Salespeople who turn up to a meeting without preparing properly are a serious irritant for buyers. In fact, 82% of B2B buyers think sales reps are unprepared. This suggests that many prospects have been deterred from sales meetings – which they may consider a waste of time – due to negative past experiences.

It’s your job to change their mind.

Buyers don’t want to work with pushy salespeople. For buyers, a positive sales experience involves a sales representative who:

• listens to their needs
• is invested in the success of their business
• provides relevant information

Yet, just 13% of prospects believe a sales rep can understand their needs – suggesting salespeople have a reputation for not listening properly and just pushing ahead with a boilerplate pitch.

Active listening is of course vital for sales reps – not just in the meeting, but ahead of it. Note down every piece of information you receive via call or email and use this to your advantage in the meeting to prove you understand the business’s real needs. And practice active listening outside of meetings – when your mind is racing, it’s not as easy as it sounds.

Put yourself head and shoulders above the competition by over preparing. Don’t just research the company so you can show off by reciting stats or dates in the interview – learn about their pain points, their budgets, and what they’re trying to achieve. You can then position your product or service as a solution that helps them achieve their wider goals.

Your presentation should never be boilerplate: use the information you’ve gathered through research and listening to tailor it specifically to the company’s goals and how your product or service slots into their strategy.

3. Add value in the meeting

These days, it’s drummed into sales reps that they must add value in meetings, demonstrating that they’ll continue to provide useful assistance should the client sign on the dotted line. Doing this successfully demonstrates that you know what you’re talking about, and also that you care about working with the company long-term to help them achieve their goals, thereby building trust.

But what are the best techniques for adding value in that initial meeting?

Sixty-nine percent of buyers state that providing primary research data that’s relevant to their business is the best way for reps to add value. Furthermore, 95% of customers choose to buy from providers that offer relevant content at every stage of the buying process.

The amount your company is willing to invest in research or content ahead of the meeting will no doubt vary depending on the size of the potential deal. But there’s always some level of research salespeople are able to do ahead of the big date.

Use your company’s tools to pull data surrounding the business and its competitors that the organization hasn’t gathered itself. Give an analysis of the top-level findings in your presentation, explain how your products and services can help with the challenges you’ve uncovered, and then send the DM the data and your analysis. Ask your content team to create a bank of assets surrounding regular FAQs and industry pain points – whether blogs, infographics, videos, or ebooks – so you’re able to send links to additional helpful information during or after the meeting.

4. Make it clear you’re in this together

The best-performing sales reps use collaborative words like “we” or “us” instead of words like “I” or “me.” This is a simple method for making the prospective buyer feel like you’re on their side and want nothing more than to see their business thrive.

Asking intelligent, in-depth questions surrounding their business challenges, and coming back with potential solutions related to your products and services, takes this a step further, as does turning up to the meeting with the research and data outlined above.

However you do it, make sure your client leaves the meeting seeing your relationship as a partnership.

5. Tell a story

An important stat to remember when crafting your pitch: following a presentation, 63% of prospects remember stories, but just 5% remember statistics. Storytelling hooks in prospects significantly more than a bunch of dry numbers.

Turn how you can add value to your client into a story, with a clear beginning (now), middle (how you’ll work with them) and end (the results they can expect).

Ensure case studies are told in story form, too. Where relevant, you can also tell the story of your company to gain buy-in: you’ll be seen less as a faceless entity, and more as a friendly brand.

When to Use Personal Selling?

Although personal selling can be used in most business scenarios, it is especially effective when you have a:

• Highly specialized offering: Personal selling is an effective way to introduce a specialized product, as it allows you to explain and demonstrate how the product is specifically tailored to your prospect’s needs. It also allows for more personalized conversations with potential customers, allowing them to ask questions and learn about the benefits of the product.
• Small market with a few large buyers: When there are only a few buyers in the market, you can reach them all through personal selling. Your sales reps can visit each buyer directly and provide detailed information about your product, convincing them of its value.
• High-end/complex product: Personal selling is especially useful when selling high-end or complex products. It allows you to explain why the customer should invest in this product, rather than settling for cheaper options available on the market. You can also demonstrate how the product works in detail, which is often necessary with more complicated items.
• Highly competitive market: You’ll need something to make your product stand out from the rest if you’re in a highly competitive market. This can be done through personal selling. Your sales rep can demonstrate how your product is different and has features that other products don’t.
• Lack of funds for other advertising channels: There are times when your company isn’t doing very well. But even if you can’t afford other advertising channels, such as TV or radio advertisements, you can still use personal selling to market your products.
• Trade show or an exhibition to leverage: Personal selling is perfect for leveraging trade shows and exhibitions, as you can use these events to introduce your product to a large group of people at the same time. Your sales reps can also go ahead and engage with each interested customer individually, explaining why they should choose your product over the competition.

Personal Selling Examples

An example of the importance of genuinely making your customer feel like you’re on their side and building trust comes from Andrew Peterson, CEO of Signal Sciences. While at college he worked at The North Face, and says his favorite customer interactions were always those where he’d recommend the customer go to another brand to find the product they needed.

Speaking to Inc , he said: “Don’t get me wrong, I loved The North Face and all of their products! But I was always more intent on getting the customer the best product for what they were looking for. When that wasn’t something from our company, I’d tell them what they should get instead and where to get it from. Funny thing was, they always ended up buying at least something from me because they were so shocked I wasn’t just pushing our products on them. A great lesson I learned from this is that the best salespeople are the ones you trust.”

When working in sales, Richard Nieset, chief customer officer at Pixlee, found a unique way to tackle one of his employer’s toughest clients in a brilliant example of personal selling. Having been warned that the contact was a “pain in the butt” who led on salespeople but never committed, he went to a meeting armed with a toy gun filled with six bullets.

Speaking to Inc, he explained: “Here was my deal: He could ask me for anything he needed from us and anything we could possibly do, we would do. But each time he asked, he had to give me one of those bullets. When I got all six bullets, I would get to ask for something in return. And you can probably guess what that was going to be. Eventually, I got him to agree, leading to one of the largest deals in our company history.”

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What marketing strategies made American Tide so Indian

The year was 1946. Product X transformed Procter & Gamble from a soap company to a global organization that would hinge its future on technology. Any guesses which product is being referred to?

Well, it is Tide, the world’s largest selling detergent brand with a market share of 14% in the global markets. Kyu, chaunk gaye na? Many people assume that Tide is an Indian brand, reflecting its high brand recall value.

Tide enjoyed blockbuster success upon its launch in the USA. It was a novel product based on synthetic compounds and not soap chemicals. It soon became one of the most profitable brands for P&G and turned the tide for them (pun intended).

Entry of Tide in India

As per a report Detergent market of India is expected to reach INR 49067 crore by the year 2025 registering a CAGR of more than 9%. The Indian Detergent market seems to grow at a healthy pace as the detergents have become a daily necessity especially in India, where laundry is an important household chore. The Indian Market is very different from the global detergent market. The Indian market is made of multiple foreign (Ariel, Tide) and indigenous brands (Nirma, Ghadi).

Tide evolved through multiple forms initially in the USA before entering India. In 1946, it was launched as a heavy-duty laundry detergent . In 1968, Tide’s formula was tweaked by adding enzymes, making it easier to clean carbohydrate and protein stains. Tide Liquid was introduced in 1984.

In the year 2000, Tide was launched in India. The FMCG market in India can be tricky due to the sheer cultural and economic diversity and the various nuances affecting consumer preferences. The ultimate goal of any detergent is the same, i.e., cleaning clothes. This makes it crucial for marketers to gauge the consumer psyche to ensure that a specific brand stands out amidst the market clutter to win the attention and loyalty of the consumers.

As of 2019, Tide has a market share of 13% in the Indian detergent space, placed third on the podium with market leaders Ghadi and Nirma. Tide has carved a space for itself in the mid-tier detergent segment appealing to the burgeoning middle-class of India. So, let us find what marketing strategy Tide used to achieve such a feat.

Tide’s Pentagonal Marketing Strategy for India

Target Audience:

The right message should reach the right people to make the desired impact. Most of the decisions regarding household products in India are mainly taken by women, considering they are the homemakers (in most cases). Identifying this, Tide has constantly made women the focal point of their advertising campaigns.

Owning a washing machine can still be a luxury in middle-class Indian households, making manual washing prevalent. In 2009, Tide introduced their new range of products Tide Naturals with lemon and sandalwood extracts which are less harsh on hands while washing clothes. This showed the consumers that the brand understood their pain points.

In 2017, Tide came up with the #CollarUpWithTideCampaign , conveying the message that dirty collars serving embarrassment are a thing of the past with the arrival of the New & Improved Tide Plus. Once again, realizing the influence of women as homemakers making their families look presentable, Tide promoted this campaign through actresses like Mouni Roy and Namrata Shirodkar.

Women in their roles either as mothers, wives, sisters, or working professionals are constantly striving to give their best and get that little extra goodness in the lives of their families. Tide launched the #TideGivesExtra campaign in 2018 to promote the New Tide Plus with Extra Power along these lines.

Thus, Tide has consciously maintained a deep connection with its target audience by showing that they care.

Premium yet Affordable:

Indian consumers aspire to buy top brands but are also pretty price sensitive. Tide was able to bridge this gap and find a perfect blend between the two conditions. On the one hand, it tackled the brand power of Surf Excel and sister-brand Ariel through pricing. On the other hand, it managed to compete against the lower-priced brands Ghadi and Wheel, courtesy of its international brand equity.

Attractive Packaging:

80% of millennials consider the packaging of FMCG products in the range of moderate to very important based on its impact on their purchasing decision. Tide has managed to grab the eyeballs due to its vibrant packaging. The iconic orange and yellow bulls-eye design was created by architect Donald Desky. At a time when most other detergent brands had sober-colored packaging, Tide’s colorful packaging stood out.

View this post on Instagram A post shared by Tide India (@tide.india)

Offering Solutions:

Great brands offer simple solutions to problems faced by consumers. The color white has an important place in India’s history, forming a part of the tricolor, symbolizing peace and purity. Tide has constantly promoted itself as a detergent that maintains the whiteness of clothes.

India with its unique topographical features creates natural factors like humidity and dust, making clothes dirty pretty quickly. Tide recognized this problem and has created multiple campaigns focused on effective cleaning without affecting the quality of the fabric.

For instance, Tide launched the #TideWhite campaign on India’s Independence Day in 2018, celebrating various moments which made India proud.

Clever Advertising:

Tide has regularly come up with campaigns and taglines which have resonated with the public and given the brand a great recall value. “Chaunk Gaye”, “Tide hai, toh white hai”, “Tide Plus, jo de White Plus” are some of the iconic taglines which have become a part of advertising folklore.

Blending humor with everyday situations faced by the common man, Tide has created a high RQ i.e., relatability quotient in the market. Campaigns like #TideWhite , #TideUltra , #TideGivesExtra , and #CollarUpWithTide have struck a chord with the public and enhanced the emotional engagement of the brand.

Recent Developments

As part of its brand marketing strategy, Tide has roped in Ayushmann Khurrana as its brand ambassador for Indian market. The actor who has been riding on a massive wave of success is known for his relatable roles that mesh entertainment with a strong social message. Tide hopes to build on qualities like an earthy connection with the masses, wittiness, and a charismatic attitude that the actor possesses to engage a wider audience.

With the advent of the pandemic and lockdown, many people started to indulge in household chores, albeit forcibly. Tide grabbed this opportunity to introduce Tide Pods in India. Pods are advertised as a 3-in-1 capsule that comprises three different concentrated liquid detergents to ensure whiteness, stain removal, and brightness. They eliminate the hassle of measuring doses and spills due to manual pouring.

The question is whether the price-sensitive Indian consumers will choose convenience over price and opt for pods. A detergent would cost Rs 5-7 per wash , whereas using pods would escalate the cost to Rs 22, questioning the price-value equation of the pods.

Tide launched the #AngelsInWhite campaign to salute the healthcare professionals who continue to make invaluable contributions to society in the war against COVID-19. The campaign has generated over 10 million views on YouTube and once again established Tide’s connection with “whiteness”, symbolizing purity and unity.

The Way Ahead: Challenges and Opportunities

The primary challenge faced by Tide is the competition from market leaders Ghadi and Nirma, which play in the popular segment. These brands enjoy a strong mass appeal across the country due to aggressive pricing, higher margins paid to the suppliers, and a strong focus on the regional market.

The USP of Tide has been its ability to evolve with time and come up with new products that satisfy consumer needs. With the launch of Tide Pods, the brand is showing its willingness to experiment in the Indian market with products focused on convenience first and cost later.

Tide Eco-Box is another such opportunity for the brand. The Eco-Box was launched in the USA in 2019 to simplify product deliveries to consumers in the e-commerce space. The box consists of a sealed bag of liquid detergent, an easy-pour tap, and a measuring cup. A compact and lightweight design coupled with minimal packaging make this product a win-win for consumers and suppliers.

For over two decades now, Tide has created a strong brand resonance in the Indian market. Tide has managed to do so by catering to consumer needs through constant product evolution and creative marketing and advertising strategy. It would be intriguing to see the kind of tweaks it makes in its approach to sustain a leadership position in the Indian market in the coming years.

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Multilevel Marketing and Direct Selling in India - How does it Work and Is It an Illegal Ponzi Scheme? (Case Study)

Harshit Verma

The initiation of every Ponzi scheme starts with a promise of unusual and supernatural returns. We all know that there are no ‘get rich quick schemes, they are a hoax. If you see or hear about these schemes, you should quickly assume that every quick rich scheme is someone else getting rich from (off) your money. Even then too, people fall for these tricks.

You too must have somewhere or sometimes must have seen these, a friend or a relative coaxing you to follow a trend in marketing, direct selling or some network marketing thing. You must have heard about these, but never thought too seriously about them, now is the time. This is the article about the same unsaid industry, we will find meanings, laws and eventually reveal how they operate. Read on to find if these are real or a mere Ponzi scheme?

What is Direct selling? Multi-Level Marketing - Connecting networks Difference Between Multilevel marketing and Direct selling Do Multilevel marketing Companies Make Money? Business Model behind Multi-level marketing Selling Dreams of Financial Independence Structure of a Multi-level marketing Company Pyramid Scheme - The illegal scheme Direct Selling - India Reports Differences between Direct Selling and Pyramid Schemes Direct Selling Rules and Guidelines 2021 Conditions required for every Direct Selling entity (Guidelines 2021) Quick Points to Remember (according to the Direct selling rules 2021) FAQ

What is Direct selling?

Direct selling is a type of distribution channel used by global brands and not just that, it is used by small and medium-sized brands too. It is a retail channel that they use for that matter.

Small companies and even entrepreneurial companies use this method to market the product that they have to offer to the general public. As the name suggests, it is direct and strictly consumer focussed. Direct selling enables all types of goods and services, that includes expensive jewellery and low selling products like cookware, everyday used cosmetics, items used in a. Houses like housewares, energy and insurance supplements and more and more. Tupperware is a great example of one of the leading direct selling companies in India.

The direct selling channel avoids all the middlemen in between a product selling cycle. The model is to offer a broad retail channel in a slight differentiating way. It is not only about getting a great value-adding product and getting it in the hands of a consumer, but more than that.

This model of business is primarily sold with the hope of business minds people will take on this venture. Every Indian who is entrepreneurial in his thinking capacity takes up this work of direct selling, it is a form of a low startup with low overhead costs. Thus, this business model while eliminating the middleman helps the business-minded person take on and build his/her own venture of selling and building business.

Having said that, we can claim that these people who work under this umbrella and ubiquitous sort of academy work on their own. They not only work with their time, but they also affiliate it with the company that uses the personal channel, this retains the freedom to run the business on their own terms.

This opportunity of running their own business is often regarded as the most lucrative opportunity that makes people get into the Direct Selling business. Thus, the main or the focus point of direct selling is the affiliate income that one can generate from the parent company. The purpose or goal of volunteers or joiners is only one and singular in nature.

The purpose or goal above all the work is to forge personal relationships with prospective customers. Anyone can be a prospective customer if he/she fulfils the need or want of the product or the designation, whatever the executive finds easy off.

Consultants have to build and forge relationships with clients/customers mainly through face to face discussions and demonstrations . In this time when social media is predominant in quite every field and the walls between industries are defusing, it is easy to go with.

For people at this age, direct selling is an easy market shift and a go-to strategy for marketing their products and generating customers with networking. This method is more looked at as a better and effective way of selling than that of traditional marketing of advertisements or securing shelf space.

Speaking of direct selling, it is quite famous in foreign and abroad countries. In India, the concept is relatively new than that of abroad. When we discuss direct selling, MLM is just the other round of it. The full form for MLM is Multi-level marketing, we should discuss it at this point to make it count on our path of learning about new marketing and distribution channels.

Multi-Level Marketing - Connecting networks

This might seem a new term to many but it is not new at all. Although the concept of direct selling and multi-level marketing is still in the early stages of growth, the concept is widely accepted and has a lot of users in India (The second most populous country in the world). If any of the concepts find a place here, it will most probably generate huge returns.

The term Multi-level marketing refers to a strategy that is operated and equipped by some companies. By some companies, we mean companies that dominantly are direct sales companies, in the field of any product or service.

Difference Between Multilevel marketing and Direct selling

MLM and direct selling may seem the same but there are some differences that are key to the definitions and working of both models. In a multi-level marketing strategy, the existing members try to promote and sell the products that the parent company offers to other individuals. Not only this selling aspect, but it also has the faculty to bring in and add on new recruits to the business.

The head is known as the distributor and is responsible for adding members and networks. The distributors are paid some percentage of the sales that their recruits (newly added) people make. These new recruits make and become what we call the distributor’s network or down team. These recruits are encouraged and motivated to make sales and as an outcome of those sales, earn money.

Multi-level marketing is a legal thing but there is one aspect that is added to it and is illegal by its nature. The illegal aspect is known to the world as “ pyramid schemes ”.

Do Multilevel marketing Companies Make Money?

It is reported and there are many actual proofs to prove this, that companies operating with this strategy earn a handsome amount. Multi-level marketing companies often generate billions in annual profits. However, these profits that they earn accrue to the majority of the workforce (who are constituents).

Often referred to as MLM participants. Out of all the distribution made, only a little profit is shared with individuals who are at the top tier of the MLM pyramid scheme. The fact that only the top tier people earn a handsome amount then becomes a new strategy of marketing for itself.

These earnings by those at the top tier in leadership are advertised and marketed in seminars and conferences . This sort of emphasis on the earnings of a few top earners motivates the new joiners. This in turn creates an illusion of financial indolence and the financially successful nature of the job. These small amount of earners are the marketing face of the MLM company that helps in generating more workforce under the whole organisation.

This pyramid scheme of MLM marketing makes people win companies with wrong assumptions. More and more distributors join the scheme with unrealistic and abnormal returns in earning margins. These sorts of earnings in real reality are just theoretical and merely improbable.

Business Model behind Multi-level marketing

Multi-level marketing, as previously mentioned, holds few top individuals as evidence of how it can lead to success and great financial earnings. This top shining tier of the brand is not what the issue with the scheme is. The issue is about a whole new perspective and dimensional shift.

The multi-level business model depends on the failure of the majority who fails in this pursuit of financial independence . They either fail to earn even a little or worse, they inject their own money from their own pockets to join and even then fail to earn a little amount, forget the unnatural amount. This is the main locus point of the business model at any MLM based company.

Volunteers who inject their own money into MLM becomes the reason why these companies become big and earn big in numbers, out of the received money from people, the MLM corporation only shares a little sum with the top tier participants. Thus, to enable the whole multi-level marketing organisation to work, the largest or majority of participants must operate at loss.

Only when those at the lower level of hierarchy operate in loss, the uppermost level of the MLM pyramid can derive their abnormal earnings. Those earnings then are emphasised and overemphasised by the MLM company to all other new joiners and this encourages them to participate at a financial loss.

We can clearly see that MLM or multilevel marketing is just about selling empty dreams to people who are unaware . The hope of high returns and easy income leads people to fall for these Ponzi schemes . In fact, this method of selling empty dreams is the focal point of their business model. The whole organisation is built on selling fake and empty hopes that appear really shiny.

Selling Dreams of Financial Independence

The main and even the primary face of an MLM company is the sales pitch . The sales pitch is obviously not the products and services. The products or services that the multilevel marketing company offers are only to the edge, or are just a fake face that they wear.

The products or services are largely peripheral to the MLM marketing model. Rather than a valid and sensible sales pitch, the company offers free confidence to the participants. The goal of that hyped up confidence is the promises of fake promises.

They have all sorts of techniques that they use to lure young people into the pyramid scheme. They will lure people with hopes of a “luxury lifestyle” or a lifestyle that you deserve. The basic sales pitch is that of financial independence and that all your dreams will come true .

You get the designation of “Independent distributor” and everything seems so good. You are hyped up by fellow young entrepreneurs and people would call you a ‘business partner’. MLM marketing companies don’t just sell you the idea of some financial and monetary benefits, they do more than that. MLM companies sell you dreams, that is what is known to us as “Selling the dream” in the real world.

We now know that Multi-level marketing people lure you to join by showing proof of income of the topmost tier level of the pyramid. One should not take that emphasised earning amount as a basis of hope for the same future earning prospects.

Structure of a Multi-level marketing Company

We looked at the business model of multi-level marketing, now let us see that in action. An MLM company mostly operates with the same structures as the business models.

Once a person is recruited in the scheme, by hook or by crook, they are given a designation of independent non-salaried participants. They can be known as many names, it can be associates, business owners, agents and whatever more that builds confidence .

Once they are boarded, they are authorised to distribute products or services that the company makes. Once they start selling the products and get some revenue from the company , they get some share of the income generated by the sales. It is here to note that they are just rewarded their share of the immediate retail profit from the customer and not downlines. The compensation paid is through a predefined compensation plan that is based on the products sold with the volunteer's own efforts.

After this simple transaction, business owners or those independent distributors try to develop their organisations by either building an active consumer network, who buy directly from the company or they recruit newcomers. This starts a new chain of independent distributors who also build their network base. This expands the whole organisation at the overall level.

This is the basic structure of a multi-level marketing company.

Pyramid Scheme - The illegal scheme

A pyramid scheme is the formal name given to the same effect that we read up till now. A pyramid scheme is a scheme (and scam) that is based on a hierarchical setup of marketing networks. It is illegal by the way in every place of the world. The most famous pyramid scheme is nothing but a clean and clear Ponzi scheme.

Every new recruit who is recruited makes up the base of the structure and provides funding for the operations of these big scams. The funding that these innocent people provide become the abnormal return that the top tier of executives gets.

A pyramid scheme usually does not include selling off anything or any product or even service. It is based on the inflow of cash by new entrants, it is based on these additional investors that want to earn abnormal returns. Those are the very people who lose up the invested money to the people who are at the top of the pyramid. This means that multilevel marketing schemes are not classified as pyramid schemes and are not necessarily fraudulent if a product is being sold at the place.

Direct Selling - India Reports

In India, there was a lot of scope for direct selling by business people. The reason is the fact that India is an immensely populous country. Moreover, here the average age is about 28 years, which is relatively younger than even most of the developed countries. Here we will discuss a report about the Annual Survey of India’s direct selling industry in 2011-12.

“At a time when most businesses faced a downturn, direct selling has recorded a significant increase in gross sales in back-to-back quarters of the current fiscal,” said IDSA chairperson Rini Sanyal

A new report by industry body Indian Direct Sellers Association (IDSA) said the sector saw 53 lakh, new entrants of direct sellers and consumers, in the first six months of the present financial year. Let us discuss some statistics for the Indian Direct selling, it is here to be noted that these reports are from the latest published survey of yr 18-19.

The Indian Direct Selling Industry stood at around INR 1,30,800 million in 2018-19 growing at approximately 13% from INR 1,16,700 million in 2017-18. The industry showed a Compounded Annual Growth Rate of approximately 16% growing from INR 83,085 million in 2015-16 to INR 1,30,800 million in 2018-19. Amway continues to be the leading Direct Selling organisation with global revenue of USD 8.8 billion in 2018. Avon Products IncHerbalife, Infinitus and Vorwerk along with Amway comprise the top 5 Direct Selling organisations in 2018 based on their global revenue.

The straight-line graph is simply the CAGR that the India Direct Selling Industry provided in the following years. CAGR here means compound annual growth rate, The Indian direct selling industry produced a cagr returns of about 16 percent. 16 percent is even greater than what most equities offer (About 12-14 percent is given by equities). This growth even surpasses the equities market in India. We can see why this is a growing investment area for investors.

The total sales of the Direct Selling Industry in India grew to INR 1,30,800 million (INR 13,080 crores) in 2018-19 from INR 1,16,700 million (INR 11,670 crores) in 2017-18 registering a ~13% year-on-year growth in the sales. The Direct Selling Industry showed a CAGR of ~16% from 2015-16 to 2018- 19. These figures include the sales of 21 members of the Indian Direct Selling Association (IDSA) and the non-member Direct Selling entities.

The share of IDSA members in the total sales of the Direct Selling Industry in India stands at approximately 60% as compared to the 40% share of non-members in 2018-19. Wellness products (which include products such as weight management supplements, meal replacement bars & drinks etc.) contribute more than half of the Indian Direct Selling Sales by IDSA members.

This is followed by cosmetics and personal care (which include products such as cosmetics, skincare, fragrances etc.) which contributes more than one-fourth of the sales by IDSA members during 2018-19. The Indian Direct Selling Industry’s contribution to the exchequer stood at around INR 2,500 crores in 2018-19. The number of active direct sellers (i.e. those who have ordered at least once in the last 3 months) in the country was around 5.7 million growing at ~6% from 5.4 million in 2017-18.

We can see that wellness products are the most used and directly sold products. However, the government did something related to this big industry in India.

The Government of India has banned companies from pyramid and money circulation schemes. The government brought out new rules and regulations for such a type of business marketing model, these are strict and needed to be followed. It is forecasted that these new rules will separate some entities, like that of Amway, Tupperware and Oriflame from operators that are likely to be called Ponzi in nature and feature.

According to the new rules, Direct sellers must have at least one physical location as their registered office within the country . They moreover, have to make a public declaration that they are not involved in any pyramid scheme or any sort of money circulation scheme as per the Consumer Protection (Direct selling) Rules 2021, notified by the Ministry of Consumer Affairs, Food and Public Distribution.

The first noted pyramid scheme was coaxed by Charles Ponzi (Italian-American) in 1919. He founded the Securities Exchange Company that year with the promise to investors of doubling their money in about 90 days. As this scheme continued to attract new puppets, he used that money to pay the earliest investors to double their investment. As the company came to light, Ponzi was bringing in $1 million a week.

Direct Selling Rules and Guidelines 2021

The Ministry of Consumer Affairs, Food and Public Distribution, and the Department of Consumer Affairs have made strict and clear rules for direct selling, Multi-level marketing and pyramid schemes in India.

They have struck guidelines that have to be followed by every company that tries to include direct selling as a mode of their product distribution. Here in the article, we will get to know what are these rules and guidelines that companies have to follow in order to directly sell their products,

These guidelines may be called the Direct Selling Guidelines 2021. These are issued as guiding principles for State Governments to consider regulating the business of Direct Selling and Multi-Level Marketing (MLM) and strengthen the existing regulatory mechanism on Direct Selling and MLM, for preventing fraud and protecting the legitimate rights and interests of consumers.

Conditions required for every Direct Selling entity (Guidelines 2021)

These Rules shall apply to all goods and services bought or sold through direct selling, all models of direct selling, all direct selling entities offering goods and services to consumers in India, all forms of unfair trade practises across all models of direct selling and also to a direct selling entity which is not established in India but offers goods or services to consumers in India.

Existing direct selling entities need to comply with these rules within 90 days from the date of publication of these rules in the Official Gazette.

The direct sellers, as well as the direct selling entities using e-commerce platforms for sale, shall comply with the requirements of the Consumer Protection (e-Commerce) Rules, 2020.

Direct selling entities and direct sellers are prohibited from:

• Promoting a Pyramid Scheme or enrol any person to such scheme or participate in such arrangement in any manner whatsoever in the garb of doing direct selling business;
• Participate in money circulation schemes in the garb of doing direct selling business.
• Rules provide for Monitoring by State Government.–– For ensuring compliance with these rules by direct selling entities and direct sellers, every State Government sets up a mechanism to monitor or supervise the activities of direct sellers and direct selling entities.

The Rules provide for certain obligations upon Direct Selling Entities which inter alia include:-

• Incorporation under the Companies Act, 2013 or if a partnership firm, be registered under the Partnership Act, 1932, or if a limited liability partnership, be registered under the Limited Liability Partnership Act, 2008;
• Should Have a minimum of one physical location as its registered office within India.
• Make self-declaration to the effect that Direct Selling Entity has complied with the provisions of the Direct Selling  rules and is not involved in any Pyramid Scheme or money circulation scheme;
• Have a prior written contract with its direct sellers in order to authorise them to sell or offer to sell its goods or services, and the terms of such agreement shall be just, fair and equitable;
• Ensure that all its direct sellers have verified identities and physical addresses and issue identity cards and documents only to such direct sellers;
• Create adequate safeguards to ensure that goods and services offered by its direct sellers conform to applicable laws;
• Be liable for the grievances arising out of the sale of goods or services by its direct sellers.
• Every direct selling entity to provide the following information on its website in a clear and accessible manner
• Registered name of the direct selling entity; registered address of the direct selling entity and of its branches; contact details, including email address, fax, landline and mobile numbers of its customer care and grievance redressal officers;
• A ticket number for each complaint lodged through which the complainant can track the status of the complaint;
• Information relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment, grievance redressal mechanism and such other information which may be required by the consumers to make informed decisions;
• Information on available payment methods, the security of those payment methods, the fees or charges payable by users, the procedure to cancel regular payments under those methods, charge-back options, if any, and the contact information of the relevant payment service provider;
• The total price of any goods or service in a single figure, along with its break-up price showing all compulsory and voluntary charges, including delivery charges, postage and handling charges, conveyance charges and the applicable tax;
• Provide correct and complete information at the pre-purchase stage to enable buyers to make informed purchase decisions,  No direct selling entity shall adopt any unfair trade practice in the course of its business or otherwise and shall abide by the requirements specified in any law for the time being in force.
• A direct selling entity and a direct seller shall not induce consumers to make a purchase based upon the representation that they can reduce or recover the price by referring prospective customers to the direct sellers for similar purchases.

Clause 8: Prohibition of Pyramid Scheme & Money Circulation Scheme

• No person or entity shall promote a Pyramid Scheme, as defined in Clause 1(11) or enrol any person to such scheme or participate in such arrangement in any manner whatsoever in the garb of doing Direct Selling business.
• No person or entity will participate in the Money Circulation Scheme, as defined in Clause 1(12) in the garb of Direct Selling of Business Opportunities.

Quick Points to Remember (according to the Direct selling rules 2021)

• ​​Both Direct sellers, as well as the direct selling entities using e-commerce platforms for sale, shall comply with the requirements of the Consumer Protection (e-Commerce) Rules, 2020.
• Both Direct selling entities and direct sellers are prohibited from promoting the Pyramid Scheme or money circulation scheme.
• State Government to set up a mechanism to monitor or supervise the activities of direct sellers and direct selling entities.
• Well laid down duties and obligations for both direct selling entities and direct sellers to safeguard the interests of consumers.
• Direct selling entities are to be liable for the grievances arising out of the sale of goods or services by their direct sellers.

It is quite clear and evident till now that pyramid schemes are illegal and they are banned specifically in ‘clause 8’ of the Direct Selling Guidelines 2016 and then in the updated versions of the Direct selling guidelines 2021. We can clearly see that our ministry of consumer affairs has clearly shut the case for “Multi-level marketing” and any sort of money circulation schemes.

The reason behind this is that these schemes are based on hopes of supernatural profits. In real life, there is nothing as easy as money. Innocent people who volunteer who fall for these types of schemes are misguided into investing their hard-earned money and they lose even that. It is to be noted that the latest guidelines (for direct sellers) were released on the 28th of December 2021, this article is based on those press releases.

Watching all the issues that ‘Pyramid schemes’ brings to the table, it has been banned and prohibited by the law. But we all know that clever people always find loopholes and then continue to run these schemes of direct selling and money circulation.

Most of these clever executives follow a pyramid scheme in the name of “Selling a product”, which is just a mask to protect the real predator. The products are super cheap and are of no use, these products are just used to legalise the otherwise illegal business of pyramid schemes. It is a loophole and we alert our readers not to fall for these “Get rich quick” schemes.

Why is MLM bad?

Many people who join MLM in the hope of getting rich quickly end up losing all the money they invested and leaves them in debt.

What is an MLM example?

MLM is a business model where companies recruit sales representatives to sell their products who work full- or part-time. Tupperware is an example of MLM.

What is the biggest MLM company?

Amway is one of the biggest MLM companies with a revenue of 8 billion dollars as of 2019.

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Case Study Hub | Samples, Examples and Writing Tips

Case study on personal selling, personal selling case study:.

Personal selling is the technique or method used in marketing to advertise and attract customers to purchase goods and services. Personal selling is an interesting method which has appeared not so long ago. The principle of personal selling is very easy: the seller or administrator calls a random person up and tries to advertise the production of the company. The method has a range of advantages and disadvantages. The best positive side is that there is a live contact with the potential customer and the seller can change his behaviour and tactics as soon as he sees the client loses interest or becomes bored.

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Psychologically, personal selling is a good think, because many people are too well-bred to break the conversation over the phone up and with the run of time they catch all the necessary information about the product and often become interested in it.

It is obvious that a seller should possess a range of special communicative skills and to be good at human psychology. The person should be flexible and look for the phrases and the right words which can help her sell the product. The biggest disadvantage of personal selling is the clients’ prejudice that the product advertised by the seller does not worth anything; its quality is low and price high. Moreover, many people do not like being told what to buy. Finally, personal selling is quite an expensive type of advertisement, because the boss has to pay money to the sellers who spend their time trying to sell goods over the phone.

Personal selling is quite a useful type of advertising but it can be used only in the particular cases. A good personal selling case study is expected to be informative, logically composed and interesting. One should present the history of the method, its main principles and techniques and catch the importance of the method for the marketing. After that one can move to the research of the direct problem related with personal selling in the particular case or situation. One should investigate the case site, understand the cause of the problem and analyze its effect. In the end one should demonstrate his knowledge and present good methods which can improve the situation for the better and reduce the consequences of the problem under research.

The web is the best help for students who have problems with the organization of their case studies. A free example case study on personal selling written by an expert illustrates the general ways and standards of writing which can be borrowed by a student. It is wise to read at least a few free sample case studies on personal selling in the Internet to improve your knowledge on the topic and writing skills.

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