MKTG/086

IBS Center for Management Research

Tupperware in India
This case was written by Swapna Kingi, under the direction of Sanjib Dutta, IBS Center for Management Research. It was
compiled from published sources, and is intended to be used as a basis for class discussion rather than to illustrate either
effective or ineffective handling of a management situation.











2004, IBS Center for Management Research. All rights reserved.
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1

MKTG/086
Tupperware in India
India is one of the largest markets for the Tupperware products with a growth rate fluctuating
between 50 to 60 per cent per annum.
-Christian Skroder, Senior Vice-President, Tupperware.
We have been named in the Guinness Book of Inventions as one of the top ten inventions of the
20th century.
-Pradeep Mathur, MD, Tupperware India.
TUPPERWARES TRYST WITH INDIA
On April 27 2002, Christian Skroder (Skroder), vice president, Tupperware company
(Tupperware), felicitated about 900 star performers of Tupperware India, the Indian subsidiary of
the $1.1 billion Tupperware company in the US. Skroder said that India was one of the largest
markets for the companys products. The company had achieved a growth rate of 40% within four
years of its entry in the Indian market. In 1996, the company had a turnover of Rs.100 million,
which according to analysts was an achievement in itself and in 2000, the companys turnover
touched Rs.570 million.
Commented Rajan Chabba, deputy managing director of KSA Technopak, a retail consultancy,
At launch, Tupperware did a phenomenal job of creating a base in India and it has been growing
ever since,
1
According to analysts, Tupperware India performed better than most of the other
foreign direct selling companies in India. This was because it was focused on achieving its targets
both in terms of sales as well as segments. The company was growth driven and pushed the direct
selling method well. Tupperware India aimed at becoming the No 1 direct selling company in
India, by 2004.
BACKGROUND NOTE
In 1937, when Earl Silas Tupper worked in Duponts
2
plastic division in Massachusetts, he
transformed a piece of black polyethelyne slag, a waste product produced in crude oil refinement
process, into a resilient, tough, non porous, non greasy and translucent substance. He created many
light weight, non breakable containers such as cups, plates, bowls etc, with this substance.
Earl S. Tupper founded the Tupperware company in 1938. During the Second World War, the
company concentrated on molding parts for Navy signal lamps and gas masks. After the war, the
company turned its attention to manufacturing plastic products for the growing consumer market.
Its first consumer products were a bell shaped flexible container called the Bell Tumbler and the
Wonderlier Bowl (a round bottomed bowl with a lid). These products were superior to the
traditional glass and crockery as they were unbreakable.

1
Thukral, J. Jyothika, Out-Of-The-Box Performance, The Strategist, Business Standard, November 27, 2001.
2
A US based company that focuses on innovating science-based solutions in various areas such as
Nutrition, Health care, Apparel, Safety and Security, Construction, Electronics and Transportation.
Tupperware in India
2
Tupperware products were durable and were also easy to handle. They came in various attractive
colours and shapes. At a time when Americans used glass and crockery to store and serve food
items, Tupperware provided a more durable and reliable alternative. Tupperware also designed the
renowned air-tight, liquid proof lid in 1946. It was modeled on the inverted rim of a paint can. This
lid prevented spillage and wiltage of the stored items and kept them fresh for a longer time.
From its inception, Tupperware faced challenges in marketing its products. In 1946, though the
Tupperware plastic products were introduced in hardware and department stores, they failed to
generate demand. It became clear that the company needed to educate the consumers about the
quality and properties of the products. In the late 1940s, Brownie Wise, who was selling household
products for Stanley Home Products
3
was hired by Tupperware. She gave Tupperware its unique
Party Plan method of marketing. In 1948 Tupperwares first Home Party was conducted. Here,
Tupperware products and their uses were demonstrated to consumers. These demonstrations
helped the company to explain to the customers, the quality, the usage and the reasons for higher
cost of its products.
Brownie Wise was appointed the Vice President of the Tupperware company in 1951. She
removed all Tupperware products from retail outlets and marketed them through the Party Plan
method. The company concentrated on women as their prime sellers and consumers. Women
demonstrated these products to other women at Tupperware parties. It was women who and to
whom these products were demonstrated at the parties. This worked well for the company as it
rapidly gained recognition and sales and profits began to increase.
Tupperware always designed its products keeping in mind consumers tastes, preferences and the
changing trends. In the sixties, when there was an increase in double income families in the US,
Tupperware introduced handy and easy to carry products like the Plastic Carrying Case for
women. In the 1950s, during the period of the baby boom, Tupperware manufactured toys for
children of all ages keeping in mind each stage of a childs development.
When microwave ovens became an integral part of kitchens, Tupperware designed containers that
could be exclusively used in the microwave. Appliances such as Microwave Reheatable lines and
Tupperwave lines were introduced to facilitate warming up the leftovers or cooking frozen foods.
In the 1980s environmental awareness grew among consumers. They started using reusable and
environment friendly products. Products such as the Box Lunch and the LunchN Bag sets which
were light in weight, easy to carry and reusable caught the attention of consumers. Tupperware
also introduced products for various segments of consumers, differentiating on their needs. For
example, for traditional family dinners, TupperWave Stack Cooker cooked a meal for four in 30
minutes whereas for those in a hurry, the Meals in Minutes Microsteamer cooked a meal for two in
10 minutes.
In the 1990s, Tupperware launched products of contemporary designs such as the Peeler plus
4
,
Coffee House set, Double Colander.
5
The company also ran learning classes such as Value for
Time, Custo Kitchen Planning, where customers learned food preparation and cooking in
microwaves, as well as how to save money, time and valuable cabinet space.
Tupperware always looked for new products and newer markets for growth. With its innovative
party plan method, it spread to various countries across the world. It set up manufacturing units in
14 countries
6
. When Tupperware entered a country, it appointed a distributor from another

3
A company selling home products through parties.
4
Implement used for peeling the rinds or skins from fruits or vegetables.
5
A bowl shaped kitchen utensil with perforations for draining off liquid and rinsing food.
6
The United States, Mexico, Brazil, Venezuela, Argentina, Belgium, France, Portugal, South Africa,
Japan, South Korea, Philippines, China and India.
Tupperware in India
3
country, waited for her to grow and then promoted others from her team as distributors. As
Tupperwares profits increased it expanded its business into various lines such as Beauty Control
(beauty care, skin care and nutritional supplement products), Jewellery and Apparels.
Over the years, Tupperware gained recognition as the leading plastic products manufacturer. The
companys sales and profits grew continuously (Refer Exhibit I). By 1996 the company operated
in nearly 100 countries. It entered the Indian market in 1996.
Tupperware in India
Tupperware entered India in November 1996. It started its operations from New Delhi. It
appointed 15 distributors in the first 12 months itself. It achieved this by directly recruiting
candidates and training them, through a specially designed 14-week training program in Delhi and
Mumbai. According to Pradeep Mathur (Mathur), the then managing director of Tupperware India,
as the concept of direct selling was new to India, Tupperware had to sell both the direct selling
concept and its Party Plan.
Tupperwares initial focus was on utility rather than style. It initially launched 11 products (from
its food storage range) in India, out of its more than 800 product range worldwide. (Refer Exhibit
II for Tupperwares product range). These products were useful rather than decorative. The
company first launched its product range of dry food storage and then more trendy tableware. In
April 1997, Tupperware began operations in Mumbai. It expanded rapidly in other cities like
Bangalore and Chennai in October 1997 and Pune, Chandigarh and Hyderabad in 1998.
Tupperware India added new products at regular intervals and dropped those which didnt sell
well. It sourced its products from Bangalore-based Tafe unit and a Baroda-based unit
Innovation Polyplast which was set up by a Canadian plastic technologist of Indian origin.
These units were selected because they came closest to the Tupperware standards. However, the
capital equipment, raw materials and plastic moulds were all imported.
Within four years of operation, Tupperware India became the fastest growing market for the
company in developing countries. The companys turnover in 1999 was Rs. 400 million which
increased to Rs. 570 million by 2000. The dealer network increased from 20,000 in 1999 to 25000
in 2000. In 2000, the company set up a manufacturing plant in India with an investment of $2 mn.
The plant was located in Hyderabad and had four injection moulding machines, which could
manage 70% of the companys domestic requirements. The plant initially had a capacity to
manufacture 50,000 cartons per year which increased to 1, 25,000 cartons in 2001.
Tupperware which originally invested $15 million in India not only covered its investments but
also generated its first profit in 2001. By 2002, the company achieved a growth rate of 40% per
annum. The market in the south contributed to 20% sales whereas the northern and western
markets contributed 35% each. By 2002, Tupperware India offered more than 75 products, had
more than 40,000 sales people and a reach in 31 cities.
THE TUPPERWARE MODEL
Tupperware, though a direct selling company, differed from other direct selling companies. It
adopted a three-tier network structure which made operations easier for the company. Amway,
another direct selling company, followed a model where the distributors were the centre of the
model. They played multiple roles of retailers/distributors, sales agents, advertisers and promoters
(word of mouth) for the suppliers products. They also formed a major section of the consumers
since they purchased the products for their personal use.
In case of Tupperware, the network structure had three levels. At the lowest level was the Dealer-
who approached hostesses and asked them to host parties. One rank above the dealer was the
Manager who operated a team of six dealers. The manager also continued to sell like the dealers
and also motivated and trained dealers. She would get commission on the sales of her team. She
Tupperware in India
4
could also promote a dealer to manager level for which too she got a commission. The top level
was the Distributor, who was registered with the company. She did not keep any stock but was
responsible for recruiting many dealers and maintaining a healthy atmosphere in the unit (the
dealers and the managers working under her). She could promote managers to distributor levels.
The dealers could work part time but the manager needed to be more focused. The distributor
needed to be a full time Tupperware worker (Refer Exhibit III& IV for network structures of
Tupperware and Amway respectively).
The network of Tupperware in any country had 90% women employees, whereas in India, it had a
100% women employees. Tupperwares executives said that because Tupperware offered only
food storage products in India and kitchens in India were primarily looked after by women, it was
easier to promote products through women. Further, they felt that Indian women were not very
comfortable working with men.
Tupperwares compensation plan was also different from that of other direct selling companies. It
followed a single-level compensation program. Every person in the network from the dealer to the
manager to the distributor earned on the basis of his/her performance. The dealers earned 25%
commission on their sales but did not get commission on the sales of those they recruited. A
manager also had to make sales in order to make a profit. But she could also make money on
training the dealers she recruited and on her groups performance. The distributor made
commission on the sales of the entire distribution team under her.
The compensation plan followed by Amway resembled a pyramidal structure with the people at
the top (top distributors) earning the most. They earned commissions on the sales of the
distributors under them. The distributors at the base of the hierarchy earned the least. A distributor
at the top could earn even without selling Amway products through the chain below.
Distribution System
In the beginning, Tupperware India faced problems in distributing its products. It first hired C&F
Agents in Mumbai for the job, but this didnt work out. Tupperware wanted the agents to supply
the distributors with packages of small orders which dealers (under the distributor) ordered for.
Instead the agents moved whole stocks as they were and did not repack and distribute the smaller
orders. Hence, after eight months of working with C&F agents, Tupperware decided to change to a
multi-warehousing system. It had three major warehouses at Bangalore, Baroda and Delhi and
stock transfer points in 15 cities. This system anticipated stock and sales on local basis.
Tupperware succeeded worldwide not only because it had an innovative product line but also
because of its powerful marketing strategy. Like elsewhere, in India too the company sold its
products through the Party Plan.
MARKETING STRATEGY
Tupperwares marketing strategy was described by its three Ps- Product, Party plan and People.
The Tupperware products carried a life time guarantee. Any damaged product (cracks or breaks)
could be replaced by same/similar new Tupperware product from any place in the world. Mathur
said, Our product has been the corner stone of our success for many years.
7
The products with
the revolutionary lid offered unique advantages to consumers in terms of quality and durability.
The second P stood for Party Plan. Tupperware used a unique direct selling method called Party
Plan in which a Tupperware woman (dealer) approached a lady and asked her to host a party at

7
Leader Speak, Pradeep Mathur,www.indiainfoline.com
Tupperware in India
5
her place; the investment in the party being borne by the hostess. The Tupperware woman
demonstrated the benefits and use of the Tupperware products to the invitees to the party.
Depending upon the sales generated by that particular party, the hostess got a free gift-a
Tupperware product. The hostess was a means of promoting the products and she did not have to
become a Tupperware dealer. This method allowed the Tupperware products to be demonstrated
physically and their utility to be explained. According to the executives of the company, this
demonstration technique suited their products and was necessary to explain the reasons for the
higher costs of the products.
The third P stood for People. The Tupperware business was run through people. Brownie Wise
once said, build the people, and they will build the business.
8
Tupperware aimed at recruiting
people at dealer level and training them to do their business. The company recognized good efforts
and rewarded them. Said Mathur, People are what our business is all about. We dont really
worry when the next sale is coming. But we do worry about when the next person will join our
business, where she comes from and how she is trained and motivated.
9
The company encouraged
people to become dealers. There were awards and cash bonuses for the party hostesses.
The management of Tupperware India organized at least three social events per month for its
employees. This could mean the entire staff going out for lunch, or a movie or cutting a cake
together. We don't loose any occasion to celebrate,
10
said Mathur. Such programs developed a
healthy and fun atmosphere in the unit.
Though Tupperware did not face tough competition in the Indian market, its products were not
readily accepted by the Indian consumers, because of their high prices, and the product lines being
unsuitable for Indian kitchens. Hence, the company decided to customize its products to the needs
of the Indian consumer.
Customizing Products to Indian Needs
When Tupperware realized that the products it offered did not attract the attention of the Indian
consumer, it customized products to the Indian kitchen. It launched the Masala (spices) Magic,
Roti
11
keeper, Spice-it-up bowl (to serve pickles, jams or salads), Legacy microwave reheatable
(vegetable/curry server) etc. The company also investigated on products like Idly
12
maker and
Chapati
13
maker to suit the Indian eating habits. Today the Indian specific products account for a
respectable percent of the companys sales in India,
14
said Kanwar S Bhutani (Bhutani) who was
appointed as the managing director of Tupperware India in 2000. In 2001, Tupperware coloured its
products to match the needs and tastes of Indian consumers. For example, darker colours like dark
blue, red and green were used so that the containers did not show up haldi (Turmeric) stains.
Price was another factor which made consumers stay away from Tupperware products. All
Tupperware products were premium priced. They were about three to five times costlier than the
average price of plastic containers sold in India
15
. The executives of the company justified the

8
Leader Speak, Pradeep Mathur,www.indiainfoline.com
9
Leader Speak, Pradeep Mathur,www.indiainfoline.com
10
Waiting to Party, Business Line, Aug 27, 2000.
11
Roti means bread in Hindi. Source: (http://www.cuisinecuisine.com/Glossary.htm#Roti).
12
Shredded wheat balls.
13
Unleavened, thin, flat, round bread.
14
Thukral, J. Jyothika, Out-Of-The-Box Performance, The Strategist, Business Standard, November 27, 2001.
15
The plastic industry in India was highly unorganised and the local players offered low quality products at
cheaper prices.
Tupperware in India
6
pricing saying that it was in accordance with the quality of the products. In 2000, Tupperware
reduced the prices of a few of its products to attract middle class consumers. It introduced a range
of products - Classics which was priced 25% below the regular Tupperware portfolio. Products
like the Personal salt and pepper, salt and pepper server and the Travel Twins, a lunch bag
having 2 bowls, spoons and a vinyl bag were launched at low prices. An Oriflame (another direct
selling company) official observed, Tupperware had no choice but to scale down prices. Its what
most multinational organizations direct or otherwise, have had to resort to. (Refer Exhibit V for a
note on direct selling industry in India).
Tupperware India also launched childrens products in the year 2002. It branded these products as
Tupperkids and the brand included lunch case, drink and carry case and a tumbler. These products
had English alphabets printed on one side, thus proving to be a useful learning tool too, for
children.
Like any other direct selling company, Tupperware also did not opt for traditional means of
advertising, initially. The companys products were promoted through the parties and were
advertised through word of mouth. However, later on, the company decided to use the
conventional methods for advertising and promoting its products.
Advertising and Promotion
To promote and increase awareness about its products, Tupperware India decided to advertise
through traditional methods. It advertised in popular womens magazines like Elle, Femina and
Parenting. In 2000, the company entered into a strategic alliance with FMCG major P&G to
conduct a campaign in Chennai and Chandigarh, where P&G salesmen distributed Tupperware
pamphlets and P&Gs Tempo tissues as Freebies. The company held a cross-promotional exercise
with P&G in 2001. The idea was that Pringle chips, which were being promoted by P&G, stayed
crisp and crunchy when stored in Tupperware containers. Tupperwares sales went up by 20%
after this campaign. The Caravan (a van that carried Tupperware products in road shows during
festive seasons) and Tupperware melas (display of Tupperware products in residential parks)
were also introduced in 2001 to enhance awareness. The same year Tupperware and Whirlpool had
a Caravan joint promotion plan where Tupperware products were demonstrated using Whirlpool
refrigerators and microwaves and in return, Whirlpool products were assured a place on the
Caravan.
Continuing its alliances with FMCG companies, Tupperware entered into a joint marketing
program with FMCG major Hindustan Lever Limited (HLL) in 2002. HLLs brand of Vanaspati,
Dalda, was sold in Tupperware jars. According to analysts, such promotional efforts proved useful
to Tupperware. The company planned to ally with other FMCG companies also, for further
promotional activities.
Though direct selling remained its main revenue stream, Tupperware set up two Kiosks at the
Shoppers Stop
16
outlets in Delhi and Mumbai in 2001, which were increased to 16 in 2002.
Supporting the move, Bhutani said, The move is aimed at lead generation (enhancing the
recruitment set-up, in other words), upping brand awareness and reaching out to potential
customers unable to attend Tupperware parties.
17
In 2002, the company forged an alliance with
Indias largest manufacturer of Thermoware articles, Eagle Flasks Industries limited and launched
its own range of insulated ware in August, the same year.
FUTURE OUTLOOK
Tupperware was gaining fast recognition in the Indian market. Its Party Plan worked well
because it fitted in the urban and semi urban culture of kittie party. By 2002, the company
expanded its operations to more than 35 cities in the country.

16
One of the largest retail outlets in India.
17
Tupperware in talks with HLL for cross-promos, Business Line, June 5, 2001.
Tupperware in India
7
The company did not face any major competition from other plastic wares in India, as the quality
of Tupperware goods was much better. However, Tupperware India competed with manufacturers
of steel containers as Indian consumers used steel containers to store and carry food. Tupperware
was trying to educate the consumers that its products were a better option for storing and carrying
food as they were durable and had airtight seals to avoid any spillage of liquid. Also the food
stayed fresh for a longer time.
In 2003, Tupperware India announced that it would target the middle class consumers and enter
the rural market in the next five years. The companys executives also hinted that in the next few
years Tupperware would continue its partnership with Indian Direct Sellers Association (IDSA)
18
,
to double Tupperwares business in India and to make India the No. 1 market in the Asia-pacific
Region.
According to analysts, India offered a huge market for Tupperware and the companys growth rate
in India, facilitated accelerated investment in the country. Tupperware, which had many product
lines in other countries, decided to launch them in India only after achieving the desired
penetration. According to analysts, direct selling is gaining popularity in India and Tupperware has
every reason to be buoyant about the Indian market.
QUESTIONS FOR DISCUSSION:
1. Tupperware, a direct selling company, adopted a unique network structure and compensation
model when compared to its competitors in the direct selling industry. How does
Tupperwares model work and how does it differ from the models of other direct selling
companies?
2. Tupperware came up with an innovative method for selling its products, the party plan. It
also used an effective marketing and advertising and promotional strategy. What are the
advantages and disadvantages of such strategies?
3. Discuss the strategies adopted by Tupperware to adapt its products pricing and promotion to
suit the Indian market. What kind of innovations did the company adopt to expand its market
and become profitable? How far have these changes contributed to the success of the
company in India?
4. By the early 2000s, there were many direct selling companies operating in India. How do you
think Tupperware is placed in the highly competitive direct selling industry?













18
IDSAs main objective was to support and protect the character and status of direct selling industry.
Tupperware in India
8
Exhibit I
Earnings of Tupperware (1998-2002)
Year Earnings Before Tax
(Million $)
Earnings After Tax
(Million $)
1998 91.5 69.1
1999 103.3 79.0
2000 101.1 74.9
2001 82.2 61.5
2002 117.4 90.1
Source: www.tupperware.com.
Tupperware in India
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Exhibit II
Tupperwares Food Preparation and Storage Product Range
S. No. Category
Type of Products under the
Category
Product Usage
1. Clear Plastic Storage
Containers and
Canisters.
a) One touch reminder Kitchen
canister set
b) Classic Sheer 1Gal.Pitcher
Equipped with a see
through window to see
contents
Easy pouring ,prevents
dripping
2. Food Preparation
Serving Containers
and Sets
a) Egg-ceptional Server Set
b) Impressional 1 Gallon Pitcher
c) Large Pick-A-Deli Containers
24 half egg holder
To store and serve
beverages
For handling pickles
with care
3. Food Storage and
Preparation Methods
& Suppliers

a) Silicon Wonder Mat
b) Butter Huggers Set
c) Chef Series knife sets
Baking mat
Two containers to hug
corn and dispense butter.
For cutting, slicing and
peeling.
4. Handy Households a) Tupperware Mealmaker Set
b) Crystal Wave Small Set Bowls

To steam vegetables and
brown ground beef
To store food in
refrigerators. Also usable
in microwaves.
5. Insulated Freezer
Containers and Cold
Food Storage
a) Freeze Smart Products
b) Chillinout Sets

For frozen food storage
Higher capacity storage
6. Long Term Food
Storage and Home
Food Preservations
a) Pasta Mates For storing Pasta
7. Lunch Box and
Portable Storage
Container Ideas
a) LunchN Things Container
b) Sandwich Keeper Sets
Lunch box with four
compartments
For sub- style
sandwiches
8. Microwave Cooking
Safe Plastics and
Dishes
a) Oval Microwave Cooker
b) Crystal Wave Divided Dish

To steam, brown and
bake
Dinner plate sized
container for reheating
and serving
Tupperware in India
10
S. No. Category
Type of Products under the
Category
Product Usage
9. Plastic Barbie Doll
Products: Lunch and
Toy Boxes

a) Barbie Beauty Carry All
b) Barbie Mini Beverage Set
c) Barbie Lunch Set

Stylish carrier for
organizing Beauty
Accessories
Mini beverage set
including mini pitcher,
plates and tumblers
Slim sandwich keeper
and a tumbler
10. Plastic Food Storage
containers and
Canisters

a) Modular Mates
b) Serving Center Set

Store food, fit in narrow
places
Six components tray for
TV snacks
11. Plastic Home Storage
Solutions and Ideas
for Pantries
a) Fridge Smart
b) Spaghetti Dispenser
For storing vegetables
For easy Spaghetti
measuring and pouring
12. Plastic Storage
Pitchers and Bowls
Sets
a) Open House Tumbler
b) Refrigerator Pitchers

Four unbreakable
tumblers set
Sleek pitchers to save
space
13. Portable Plastic
Storage Containers
and Bins
a) Insulated Commuter Mug To reheat contents
14. Spice and Seasoning
Storage Containers in
Modern Designs
a) Spice Shaker Set
b) Classic Sheer Midget Set

To keep spices fresh
for pouring, measuring
or shaking
15. Stackable Small
Plastic Containers
and Storage Solutions
a) RockN Serve

To store, reheat and
serve individual portions
Source: www.tupperware.com.


Tupperware in India
11
Exhibit III
Network Structure of Tupperware

Distributor
(overall management of the
unit)





Manager
(manages a team of six
dealers )




Dealer
(organizes Tupperware
parties through housewives)

Source: IBS Center for Management Research.
Tupperware in India
12
Exhibit IV
Network Structure of Amway

Source: www.economictimes.com.
Supplier
(Amway)
Amway
Motivational Organization

Distributor
Sells to Provides
training/support to
Consumer
Sells products to
Tupperware in India
13
Exhibit V
A Note on the Network Marketing Industry in India
According to the International Chamber of Commerce, direct selling is defined as the selling of
consumer products directly to consumers, generally in their homes or the homes of others, at
their workplace and other places away from permanent retail locations, by the direct seller being
physically present and usually explaining or demonstrating the products.
In the pre-liberalization era, network marketing in India was usually in the form of various chit
fund
19
companies. These had a system of agents, who simultaneously mobilized deposits and
appointed sub-agents for further deposit mobilization.
Companies such as Eureka Forbes and Cease-Fire
20
pioneered the direct selling system in the
country with a sales force that was trained to make direct house-to-house sales.
Oriflame International was the first international major to begin network marketing operations
in India in 1995. This was followed by the entry of Avon India in late 1996. Tupperware, with
product portfolio comprising plastic food storage and serving containers, also entered India in
1996. These companies faced problems initially with the negative attitude of many Indians to
direct selling. The country was new to the direct selling approach and direct selling was
typically seen as unwelcome intrusion into ones privacy. The companies had to first explain the
method of direct selling to the customers and then sell their products. Avons decision to opt out
of the MLM setup came as a major setback to the direct selling industry.
21

The first homegrown network marketing major was Modicare
22
, started by the house of Modis
in 1996. Modicares network was spread across northern and western India. The direct selling
industry in India was in its initial stages even in early 2001. Besides Amway, Oriflame, Avon
Contd

19
A group of individuals who volunteer to contribute financially, at uniformly spaced dates, to create a
fund which is then allotted to each member of the group in turn, on a pre-arranged principle.
20
A direct selling company in the business of selling fire extinguishers.
21
Avon was the worlds largest seller of beauty products operating in 135 countries. The company opted
for MLM in India while worldwide it was known for its door-to-door direct selling success. Avons
decision to adopt MLM was led by the belief that in India, door-to-door salespeople were treated with a
strange indifference. However, this led to Avon losing its focus on its stronghold of having a strong end-
user focus. Besides, the company could not make the shift in mindset that multi-level selling required, as
MLM required a strong distribution push mentality, which was very different from the hard selling to the
end users that Avon was good at. Avon had also significantly lowered its advertising expenditures.
Avons Managing Director, David F Gosling said, It was a mistake to adopt multi-level system when we
werent good at it. We soon realized that we should stick to what we knew best. He claimed that MLM
had simply turned into a recruiting machine and it was difficult to ensure that the distributor down the
chain was not thriving on the performance of his recruits without actually performing (selling) himself.
Also, Avon held back the much-needed distribution push as the company gradually lost faith in the
system. Within two years, Avon switched back to door-to-door selling, putting in place a three-tier
network of beauty representatives (BR), beauty advisors (BA) and independent sales managers, which
established clearer relationships between the distributor and the company.
22
An Indian direct selling company which sells products in various categories such as Personal care,
Education and Toys, Food storage, Home care, Agricultural products, Stationery etc.
Tupperware in India
14
Contd
and Tupperware, other players included Lotus Learning, LB Publishers and DK Learning, all
selling books. All the direct selling companies were members of the Indian Direct Sellers
Association (IDSA) and were bound by its code of conduct.
23

There was some resistance to the network-marketing concept in India, as Indians preferred the
security of a full-time job. Being a salesperson in a network marketing setup did not provide this
security. This hampered the companys ability to attract competent personnel. The problem was
aggravated by the fact that companies treated direct selling as just another promotional tool,
while it was mainly about motivation. One positive aspect of network selling was that it was
very convenient for women as the job could be done part-time and at hours convenient to them.
Moreover, the products sold also usually targeted at women and this made it easier for the
Indian women to accept the distributorships.
Most Indian direct selling failures stemmed from the fact that they did not understand the concept
thoroughly. Companies who opted for advertising in the media soon found that it had a negative
impact. Advertising created a suspicion in the mind of the salesperson that the company was taking
direct orders and thus, reducing commissions. In some cases, it also negated the impact of
demonstrations. Eureka Forbes handled this carefully, when it advertised not its product, but the
salesperson as a friend of the customer. Advertising went hand in hand with retail, as people ought to
be told where to go and get the product. In an MLM setup, advertising was not the best way to spend
money. Though this did sometimes result in inadequate product exposure, the money, which would
have been spent on advertising, was usually diverted into training and motivating the salesperson to
contact as many customers as possible. Though Oriflame and Avon did advertise, it was mainly
attributed to their being prima-facie into cosmetics and personal care, thereby involving an image
factor. Amway, which was into home care products in a big way, had decided not to go in for
advertising on a scale as large as adopted by Oriflame and Avon.
Competition was intensifying in the industry in the early 21
st
century. Amway seemed to be
faring better than competitors like Modicare - a fact attributed mainly to its premium brand
image. Both Amway and Modicare were not the typical door-to-door selling companies, as they
sold only to customers known to their distributors. While Amway targeted only the upper
section customers, Modicare targeted the middle and the upper middle class customers. Some of
Modicares products were priced at one-fourth of the price of Amways products. Modicare
sources said this was because its products were priced for the Indian market, while Amways
pricing was more in tune with its global counterpart. Modicare was even willing to reduce its
margins in certain cases. Further, Modicare offered 100% refund even when the product had
been used, unlike the 75% refund offered by Amway.
Source: IBS Center for Management Research.
Contd

23
IDSA primarily focused on promoting consumers awareness and interest. Its other main objective
was to support and protect the character and status of the direct selling industry and assist in
maintaining qualitative standards in direct selling. Legitimate direct selling companies were thus
concerned with developing, protecting and maintaining a suitable public image and ensured that
their salesforce observed company as well as industry standards of performance and complied with
ethical and legal requirements.
Tupperware in India
15

Contd
Direct Selling Companies in India
S. No. Year of Entry Name of the Company Product Line
1 1981 Eureka Forbes Ltd Home Care
2 1992 Time Life Asia Educational Products
and Multimedia
3 1992 Lotus Learning (P) Ltd. Educational Products and
Multimedia
4 1995 Avon Beauty Products
India Pvt Ltd
Personal Care and Cosmetics
5 1995 Oriflame India Pvt Ltd. Skin Care and Cosmetics
6 1995 Amway India Enterprises Homecare, Personal care,
Cosmetics, Nutrition
7 1996 Quantum International
(P) Ltd.
Ayurvedic Health Care, Personal
and Home Care, Food and
Beverages
8 1996 Tupperware India Pvt
Ltd.
Plastic Moulded Kitchen containers
9 1996 Modicare Ltd.(Home
grown)
Home and Personal Care, Everyday-
use products.
10 1997 AMC Cookware India
(P) Ltd.
Stainless Steel cookware
11 1998 Herbal Life International Weight Management
12 1999 Aviance Hindustan Lever Cosmetics and Skin Care.
13 1999 Sunrider India Home and Personal Care, Everyday-
use products
Source: www.indiandsa.com.





Tupperware in India
16
Additional Reading & References:
1. Sharma Pranjal, Our Launch in India has been the most successful, Financial Express,
July 28, 1997.
2. Catching on, Business India Intelligence, Jan 6, 1998.
3. Melanie Warner, Can Tupperware Keep a lid on the web? Fortune, January 12, 1998.
4. Maranjian Selena, Stocks fools love Tupperware Corporation, www.fool.com, Feb 9, 1999.
5. Tupperware Plant in Hyderabad, Business Line online April 27, 2000.
6. Tupperware to tap middle class market- ties up with P&G for Cross-promotion,
Business Line, May 27, 2000.
7. Siddiqui Huma, Tupperware goes classic to push up sales, www.expressindia.com,
June 11, 2000.
8. Leader Speak, www.indiainfoline.com, July 15, 2000.
9. Interview of the week, Kunwar S. Bhutani, The Week, Jan 23, 2001.
10. V.Rishi Kumar, Co-marketing to be Tupperware thrust, Business Line online, April 10, 2001.
11. Bhushan Ratna,Tupperware breaks rules, plans print campaign, Business Line online,
April 21, 2001.
12. Bhushan Ratna, Tupperware Eyes No 1 direct selling slot, Business Line online, July 30, 2001.
13. Singh Shalini, Tupperware Topper, The Economic Times online, August 24, 2001.
14. Downgrading Tupperware to Hold, BusinessWeek Online, November 15, 2001.
15. Tupperware to double production,www.domain-b.com
16. The King of Plastics, Corporate Finance, Issue 198, May 2001.
17. Mukherjee Ritwik, Dealers are our best form of advertising, The Economic Times online,
February 8, 2002.
18. Tupperware, HLL in promotion deal, www.thehindubusinessline.com, March 6, 2002.
19. Tupperware puts the lid on parties, Nation (Thailand) March 25, 2002.
20. Crystal wave mug, The Hindu, April 1, 2002.
21. Tupperware plans premium range, Business Line, April 20, 2002.
22. Tupperware in pact with HLL for cross promotional activities, The Financial Express,
April 20/The Asian Age, April 22, 2002.
23. Tupperware India to double production, www.magindia.com, April 26, 2002.
24. Tupperware registers 40% growth, The Economic Times online, June 22, 2002.
25. Tupperware to expand dealer network, The Hindu, June 24, 2002.
26. India, a key market for Tupperware, Business Line online, June 24, 2002.
27. Singh Shalini, Tupperware to invest $15m to expand production base, The Economic
Times Online, June 26, 2002.
28. Waiting to Party, Business Line online, August 17, 2002.
29. Tupperware on Tops, Business India, September 4, 2002.
Tupperware in India
17
30. Tupperware, www.forbes.com, December 23, 2002.
31. Tupperware India to double production, Business Line, April 26, 2003.
32. Invited to a (Tupperware) party?, www.managementor.com
33. Jonathan Groner, The promise of plastic in 1950s America, www.salon.com
34. Mary Bellis, Earl Silas Tupper-Inventor of Tupperware, www.inventors.about.com
35. Tupperware links up with Sahara India, www.in.biz yahoo.com
36. Tupperware finds India a key market, www.domain-b.com
37. Annual Reports year ending 2002, www.tupperware.com
38. www.indianbusinessnews.com
39. www.tupperware.com
40. www.IDSA.com