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VietNamNews

Consumers wary of new marketing schemes

Update: August, 17/2012 - 08:52
Last week, Viet Nam News asked readers for their opinions about multi-level marketing (MLM), and received mixed reviews and comments. Many say this was a good idea for business, but some express doubts about its effeciency. Here are some of the responses:

Hung Nguyen, Vietnamese, Da Nang

 

Next week:

Both first-time visitors and long-time residents of Ha Noi are constantly charmed by the city's gorgeous French villas, which provide a tantalising glimpse into the country's French colonial past.

There are about 1,600 colonial French villas in the city, of which more than 560 are privately-owned and 1,024 are state-owned. The rest are located in Ba Dinh, the political centre.

The Ha Noi Department of Construction has proposed that the city sell ownership and land-use rights to current villa residents, allowing them to preserve the buildings' original appearances.

This is part of a draft decree on preserving the city's old buildings chalked out by the department after three years of renovating colonial French villas.

Granting ownership certificates to residents is expected to stimulate them to invest in repairing the buildings. For villas which are occupied by many households, the department proposed the city allow individuals to purchase the whole building and preserve it.

However, many residents say it would not be easy for them to buy the whole building and in addition, authorities must clarify regulations for maintaining the original look of these villas.

What do you think of Ha Noi's French colonial villas? What do you think is the best way to preserve them: privately-owned or state-owned? In your country, what kind of initiatives are taken by the government to preserve old buildings or homes?

Please reply by email to: opinion@vnsmail.com, or by fax to (84-4) 3 933 2311. Letters can be sent to The Editor, Viet Nam News, 11 Tran Hung Dao Street, Ha Noi. Replies to next week's questions must be received by Thursday morning, August 23.

I think multi-level marketing is a modern and smart business model, which explains why it has been developing strongly in many countries and attracted a large number of participants.

Without the assistance of intermediaries, multi-level marketing helps prevent the circulation of fake and low quality products and also helps save costs for both producers and customers. It also allows companies to focus their investment and resources in improving the quality of products.

This type of marketing also helps provide business opportunities to people without initial funding or business experience.

As for the disadvantages, I think because this business model is still new in Viet Nam, the authorities still lack experience in its management. Some companies may take advantage of this model to commit commercial fraud and evade their responsibilities.

To prevent this, the Government needs professional and experienced managers. I think the Government's regulations on the management of multi-level marketing are quite adequate, but many companies still deliberately violate them.

Viet Nam needs to learn from countries with good experience in the management of this business model.

Andrew Burden, Canadian, Ha Noi

Multi-level marketing is generally considered a bad word in Canada. Everyone knows if it sounds too good to be true, you should be suspicious. Some people are greedy and lazy, thinking they can cut corners.

These people will invest in the stockmarket by trading on-line directly and not using a stock broker. These same susceptible people will listen to tele-marketers over the phone or surf the internet looking for deals.

Most Canadians are so exposed and aware of government and media warnings about quick deals that it is harder to trick them. Legal and business advice is easy to get. Research facilities are also available at the library or with the Better Business Bureau. If the company you are interested in has a bad reputation, someone has likely already reported it.

This does not stop many naive people looking for an easy earning opportunity. MLM is not the same as owning a franchise. Initially it looks appealing, but if you have to invest in inventory or "buy in" in order to collect earnings – that becomes a pyramid scheme. That's illegal.

Traditional victims of scams in the Western world are the elderly as they are more isolated and vulnerable. Technology has advanced so quickly that everyone becomes a potential victim.

A middle-manager friend who was recruited to work in a technology company in California once told me employees were more concerned about identity theft than anything else. Once someone messes with your credit rating, it becomes very difficult to earn trust and get your reputation back.

As for MLM, Canada's business and consumer market is mature enough so it is not a real problem. We have a strong regulatory environment in the government and the media. People do research and get advice.

Each new greedy generation has to find out the hard way that there is no quick fix or easy dollar. Unfortunately with the speed, attraction and power of the Internet, police can usually only play a catch-up game.

"Buyer beware!" (Latin: caveat emptor). If it sounds too good to be true, it usually is. Buy in a store, get a receipt. Buy over the internet, expect some pain and suffering. Multi-levels should only be used for parking lots or bookshelves.

Tran Bich Ha, Vietnamese, Da Nang

Multi-level marketing, or network marketing is an effective business model and sometimes called the business trend of the 21st century. Some companies, however, follow this model to conduct doubtful activities and commit commercial fraud.

I think we need to learn about the operation of each company to decide whether it is good or bad, because not all multi-level marketing businesses operate the same way.

I don't study the business models of other companies to decide whether they are good or bad, but I have something to say about the company I work for as a distributor.

It is a direct selling company. Customers buy their products directly from the company without any intermediaries. This model helps save money for customers who know they are not getting fakes.

They are also offered business opportunities in that they can work as distributors and enjoy commissions of 15 per cent. They can benefit from using the company's products and sharing their feedback about the products with others, thus creating a network of customers for the company.

Michelle Adams, American, Ha Noi

As a customer, I don't mind whatever marketing method a company uses, as long as their products are good. I bought some products from Amway and Herbalife from my friends and found their health-care products quite good.

However, I'm not interested in becoming a distributor for these companies, since I don't think it will bring much profit. I know some MLM distributors but I don't see any of them making big profits. Most only sell products to their friends, relatives and families and fail to expand their customer range.

Before deciding to participate in MLM, it is important that you do some research first about the company. If a company puts most emphasis on the quality of their products, then I guess they are operating properly. Multi-level marketing may be a good idea since a lot of money can be saved without investment in advertising and other stuff. That's why managers of MLM companies are very rich.

Whatever people decide, I think they should keep in mind that there is no easy way to earn money without efforts. MLM distributors often start with the dream of earning easy money in mind, so they will be easily disappointed if they fail.

John McDonald, Australian, Ha Noi

Quite frankly, why bother with MLM? Local markets and products are usually cheap - and their are extensive ranges. The only hassle is in the bargaining, but then that also becomes fun. A perfumed tree in a pot sold from the back of a bicycle will always be a damn site better than a green plastic Christmas tree sold on the internet or on the floor of someone's house.

Noah Duncan, British, HCM City

I don't really believe in multi-level marketing. Despite the "super benefits" they often promise, multi-level marketing companies usually put more emphasis on recruiting distributors than on selling products.

MLM sounds very attractive because it sells hope, promises wealth and independence to all and operates outside the mainstream of usual business. But after all, it is nothing more than a legal pyramid scheme. The basic idea is for a salesperson to recruit more salespeople. This is very advantageous to those who own the company and supply the products, especially since the salespeople are also customers. But I wonder why a sales person would think it is to his or her advantage to increase the number of competing salespeople.

Even Amway, one of the most successful MLM companies, was once found guilty of making exaggerated income claims. And I read in "The Times" that only 10 per cent of Amway's agents in Britain make profits. — VNS

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