A study on unethical use of relationships in Multilevel Marketing

Multilevel marketing, first made popular by Amway Corporation, in 1950s in USA is now gaining momentum in India. The total turnover of Multi level marketing companies in India was estimated at INR 71641 million in 2012–13 with an annual growth rate of 12 percent. At present direct selling market is around 0.08% of the Indian GDP, and hence has huge potential to grow. According to industry experts and researchers, consumers often have negative perception of direct selling organizations and Multilevel marketing organizations in particular but once clear regulatory guidelines are in place, the Indian direct selling industry has the potential to reach Rs 64, 500 crore turnover by 2025. The aggressive selling techniques, exaggerations of facts in prospecting, high product cost, pyramiding scams and unethical way of using relationships form a basis for this negative perception. This paper presents the use of Relationships viz friends, relatives and colleagues and attitude of Multilevel marketing Distributors in network marketing.