1. Introduction:
Multi-level marketing (MLM) companies, has found its ground roots in recent years, MLM business can be defined as the practical approach of direct selling and network marketing business. The main aim of this type of marketing is to promote brand value along with customer benefits so as to gain consumer trust and make consumers (distributors) emotionally and psychologically get attached to products offered by the organization. Vestige Marketing pvt. Ltd. is also a type of direct selling organization started its operations in the year 2004 in India and currently working in several other countries as well for instance Dubai, Bahrain (company website). This report talks about sustainability and issues related to sustainability taking in account the signature product of Vestige that is “Spirulina capsules” and also talks about the proposed circular economy model for Spirulina along with proposed marketing mix, customer segment, target market, market positioning while delivering the statement of value and customer benefits and at the end this report concludes with some sustainable recommendations.
1.1 About Vestige and Spirulina:
English meaning of the word ‘Vestige’ is traces which means following the foot prints, the company also works on the same meaning that to become successfully one should follow the footprints of their up line (can be termed as business of duplication) , thus forming an effective hierarchy of networking (as displayed on the figure below) (Appendix 1).
“Spirulina is a microscopic filamentous alga that is rich in proteins, vitamins, essential amino acids, minerals” (Belay et al, 1993).
Further Belay et al in his article of 1993 explains the need of this natural alga to meet daily functioning of human body, which influenced Vestige to adopt the processing of spirulina and make them available to public in form of capsules (Appendix 2).
2. Sustainability in business:
For Vestige to attain sustainability with spirulina, it must follow the principles of sustainable development (which can be studied in detail in appendix 3). “The World Council for Economic Development (WCED)” defines sustainability as “a development that meets the needs of the present without compromising the ability of future generation to meet their own needs” (Lexicon Financial Times, n.d.). Further Geissdoerfer et al. in year 2017 elaborates and describes business sustainability as “representing resiliency over time through practice in line with earth’s resource as opposed to over consumption, with balance integration of economic performance, social inclusiveness and environmental resilience to the overall benefit of all generations” (Geissdeoerfer et al., 2017).
Since, it’s quite difficult and challenging to meet the present demand without affecting the future variables. Several theories and frameworks are been set to determine and evaluate the impact of sustainability for instance, Triple Bottom line, the Natural Step Framework and the concepts of Circular Economy, which helps a company to maintain its sustainable development. The frame set discussed in this report are essential to regulate the Vestige Spirulina. Many sustainable issue and need of circular economy can also be highlighted with the use of these frameworks.
2.1 Triple Bottom Line (TBL):
TBL frameset id defined as an accounting frameset which is used by the organizations globally in order to regulate their sustainable growth along with that many companies have also adopted this frameset to create greater business value. “This frameset allows organizations to evaluate the consequences of their process from a sustainable, long-run perspective” (Slaper and Hall, 2011). TBL takes into account the use of the basic elements as described.
Firstly, People, this element may also be termed as social added or reduced value (appendix 3), in accordance to Vestige Marketing (with its product Vestige Spirulina) social element considers labour (working anywhere in supply chain), employs or the social corporative responsibility (McWilliams, Siegel, 2001) of the company, vestige focuses on its improving its working environment and culture (www.myvestige.com). Secondly, Profit, also known as Economic added or reduce value, spirulina being the signature product of Vestige Company have always added value to the company along with the boosting GDP of the country (appendix 4). Since people and profit are a strong part of Vestige that’s the main reason for the prosperity of the company (in India, the home country), so almost negligible issues can be recorded on that part, but the third element i.e. Plant (also termed as environmental added or reduce value) (appendix 4), over exploitation of this natural algae is creating a serious problem, D.R.Dabhade in the year 2015 explained that “biodiversity had faced serious threats due to over exploitation” (Dabhade, 2015) along with this increasing use of plastic consumption has also lead to the environmental degradation and “The Great Pacific Garbage Patch” is the biggest example of global level plastic pollution.
2.2 The Natural Step Framework:
The NSF can also be termed as strategic framework, the main aim of this frameset is to address the key elements which effects a company’s sustainable capacity (Ny et al., 2006). It also provides a strategic direction for businesses to attain their sustainability goals. The NSF is based on the four principles (system conditions) (see fig 3).
Fig 3. Displays the four system conditions (principles) on which The NSF is based.
Fig 4. The ABCD and Backcasting model of Natural Step Framework
“The ‘back casting’ strategy allows for the comprehension and planning for sustainable goals and methods efficiently, where policymakers ‘work backwards from their goals’, relying upon the principals described in the NSF” (Robert et al. 2000).
Therefore, this framework will be used in the analysis of the process of ABCD framework of the Vestige Spirulina (See Fig. 4) (See Appendix 5).
2.3 Circular Economy:
Circular economy is an alternative to traditional linear economy model (increasing loss to environment), the circular economy is a regenerative cyclic process in which “everything is a source of something else” (appendix 6). It’s a system in which “resource input and waste, emission, and energy leakage are minimized by slowing, closing, and narrowing energy and material loops, this can be achieved through long-lasting design, maintenance, repair, reuse, remanufacturing, refurbishing, recycling, and upcycling” (Geissdoerfer et al., 2016).
The proposed circular economy plan (see appendix 7) for Vestige spirulina outlines the catastrophic effect of use of plastic packaging along with over exploitation of natural algae ‘Spirulina’ with abundance use of water and other power waste implied in manufacturing of plastic bottle for packaging. The new proposed circular economy model overcomes these sustainable issues which are currently employed with the organization (see appendix 7). The new circular loop model aims at the reuse and recycling of the used bottle and also replaying the packaging material with sustainable biodegradable resources which will decrease the pollution level caused by plastic usage and will also help in reduction of power consumption in processing plants.
3. The Marketing strategy: Target Market, Positioning and customer segmentation
STP is a systematic approach for businesses in modern marketing, it is the most commonly used marketing model and helps in creating effective marketing communication plan. The report will discuss the new STP approach of Vestige Spirulina Capsules along with statement of value and customer benefit offering, (fig 5, shows the systematic STP process of marketing).
3.1 Customer Segmentation:
Increase in research and development in health care sector has increased the competition with in different multi-level marketing companies and in order to maintain dominance in the health sector Vestige has to understand the importance of customer segmentation and have to change its current plan. Customer segmentation is a statically approach of dividing the targeted audience into different groups based on common characteristics, it’s a necessity to group together different consumers in health care sector because of the diversity of consumers and to determine how effectively they are connect with the brand and product. This classification can be done based on four elements “Demographic, Geographic, Psychological and behavioral” (Kray G., n.d.). The proposed segmentation for Vestige (Spirulina) should be based on the principles of demographic and geographic elements of segmentation for instance age, gender, profession, region and income class, this type of classification will help the marketers to focus on particular target audience.
3.2 Target Market:
Target market involves segmentation process basically it’s the second approach to STP process after customer segmentation, for sustainable growth of Vestige Marketing globally it’s an imperative task for the company to understand their target audience after segmentation, as elaborated earlier after grouping the customers now it is important to distinguish them accordingly as per the group needs. The current market focus of the company for spirulina is the entire population in which the company is operational (i.e. India, Dubai, Bahrain, Nepal), but the proposed target marketing plan aims on the consumers who are willing to change their lifestyle this can include either of the consumer who wants to lose weight or gain muscles or needs to consumer herbal protein products. Proposed plan also includes focusing on the networks who are not so successful in their current MLM Company, or part time job seekers. Fig 6 displays the process of narrowing down the target market which is essentially needed by Vestige to prosper globally.
Fig 6. Narrowing target marketing strategy
3.3 Positioning:
Positing is the market is often referred as where the customers puts a particular product either at high priority or low. Frances in 2007 also stated that “Positioning in the market is usually analyzed in correspondence to levels of brand awareness, price strategies and product quality and range and is vital in ensuring that specified target segments are effectively reached” (Franke, 2007). The current marketing position of Vestige Marketing in terms of Vestige Spirulina is at high priority among the distributors who are involved in the business (see appendix 9) but if the Company focuses more on brand awareness and educating the target market this positioning can be increased in significant time (see statistical data figure 7).
Fig 7. Forecasted data of Vestige Marketing Pvt. Ltd.
3.4 Statement of value:
The current mission of vestige is “To grow to a global scale and become the benchmark in direct selling” (myvestige.com) and the vision is “To help people live a life of economic independence on their own terms” (myvestige.com). Basically, a statement of value for any company is the declaration core values of the top management towards its customers and staff, which helps in maintaining the trust of consumers into the brand and product. Proposed value statement based on the circular economy model for sustainability is “Pioneers of future” i.e. by consuming Vestige Spirulina the customer tend to become the person who care sustainable future and by recycling the product packing consumer also plays an effective role in developing the circular economy, other than this one more value statement can also be suggested i.e. “In your success lies our success”. Having an effect value statement can increase the growth of the company and also promotes the ‘Social Cooperative Responsibility’ of the company.
3.5 Customer benefit:
Customer benefit is the main reason which shows why the product is valuable to the customer. Vestige marketing with its product Spirulina offers a wide range of consumer benefits along with that company also communicates with the distributor for the business opportunities which can be attain while promoting Vestige product. The benefits involves several health benefits such as spirulina is rich in several types of vitamins, minerals, protein and can also be consumed in cardiovascular problems, spirulina is basically health care dietary food supplement which fulfills the daily protein requirement of a person (see appendix 10). Other profitable benefits which attracts the customer is the unique business plan of company (though some gaps are present in the business model, which can be overcome with small amendments) (see appendix 11).
4. The Marketing Mix
The marketing mix consists of 7P’s of marketing (see appendix 8), this report will validate different P’s of marketing in relation with the current and proposed marketing mix of Vestige Spirulina which will promote their new values and customer benefit based on the new circular economy model to attain the sustainability and growth globally. Fig 8 resembles the different essential group in the marketing mix.
Fig 8. Extended description of the marketing mix
4.1 Current and Proposed Product Strategy
Bacallan in 2000, suggests that “organizations are enhancing marketplace competition through improvements in their environmental performance, addressing environmental concerns of their customers and mitigating the environmental impact of their production activities” (Bacallan, 2000). Therefor Vestige can improve their productivity through adopting green practices (see the table 1)
Current Production and processing materials
Proposed material
Benefits
Plastic Container
Can be replayed with biodegradable materials for example paper bags, jute bags and also recycling of the previous packaged bottle are recommended.
This will decrease the plastic pollution which is caused by the disposal of empty bottles by the
Natural alga Spirulina
Cultivation of artificial ecosystem is necessary and use of rice grains to form capsule shells.
This will reduce the over exploitation of naturally found algae.
Table 1. Demonstrating alternative product production strategy.
4.2 Unique pricing strategy
The Current pricing strategy of Vestige and its products involves the co relation of Point value, Maximum retail price and discounted price, normally vestige tends to provide even types of income to the customer (distributor) (see appendix 12) which often makes the product unavailable for low-class society, currently vestige follows a premium pricing strategic in which the mindset of consumer is ‘expensive’ material is high quality product. While the proposed pricing strategy recommends to dropdown the price by giving tax benefits to the customers, this will increase the demand of spirulina (but this strategy is also profitable until MR=Mc, i.e. Marginal cost equals Marginal Revenue). Marinating adequate balance in price for profitability is necessary. The new strategy should also be based on the availability of the proposed product strategy for sustainability of the circular economy.
4.3 Systematic distribution system
Vestige is a direct selling network marketing company, so its place of operation and distribution system differs from normal retail marketing and distribution system, currently vestige have 15000+ franchised bran offices for retail along with 20+ personally owned branch outlets (across India, Bahrain, Nepal and Dubai). The proposed distribution system involves increase in the number of outlets of the company to improve the brand awareness apart from that Vestige products like spirulina should also be made available on self-owned ecommerce platform with effective in a day delivery. It is similar to it global competitor, AMWAY (a globally recognized network marketing company), the proposed recommendation for distribution system is based on Omni-channel.
4.4 Current and proposed promotional process
Promotional process for any marketing company is referred as any type of marketing communication which is performed for brand awareness, or to spread the value statement which is offered by the company in reference to their product. Currently Vestige Marketing Pvt. Ltd. Does not advertise on cable television, for any type of formal communication with company consumer has to relay upon branch offices, and brand awareness or product information can be find in organized meeting, on company’s website, printed catalogues or on YouTube (see appendix 10 and appendix 13). Proposed promotional process is basically an extension of the current promotional plan, it is recommended that Vestige Marketing (especially the signature product Vestige Spirulina) should focus on brand awareness as the first step for sustainable development of a network company is its fame.
4.5 The People
People are the most imperative part of any company as they are the one you makeup the company or product as a brand. Vestige is fully based on customer service and employee benefits, the working culture of organization is quite unique and positive, which influences more and more people to be a part of vestige family, a part from this customer delight is the main agenda of the company.
5. Conclusion:
Circular economy is the necessity of the modern civilization and systematic approach to attain sustainability. This report focuses on a product (Spirulina capsules) of Vestige Marketing Pvt. Ltd. (a health care and dietary food supplement company, operates as a direct selling network marketing and Multi-Level Marketing).
This report observes the sustainable issue related to the supply chain of Vestige Spirulina Capsules i.e. the increase in plastic pollution as a result of use of traditional linear economy and provides a new understanding to modify the linear model into proposed circular economy model. Firstly, this report discusses the relevant sustainable issue with the help of TBL and ABCD Natural Frameset model and talks about the proposed circular economy model along with the STP process (i.e. Segmentation, Target Market and Positioning) and then provides the recommended Marketing mix based on the newly proposed circular sustainability and about the Customer value and how this value will in delivered in correlation with the customer benefit.
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