Swadeshi Marketing – A Road to Prosperity, or a Huge MLM Fraud?

India is no stranger to corruption scams, with latest being the “Mother of All Scams” – Coalgate scam – resulting in potential losses worth an astronomical Rs. 186,000 crore.

In most cases, these scams stuff the pockets of a select few and result in draining the resources of the country. What about borderline cases of marketing fraud that become instant hits, and (supposedly) help thousands of ordinary people cash in during a short span of time?

I came across yet another case of a company called Swadeshi Marketing, whose business principles straddle the no-man’s land between the ethical and the unethical.

It all started when a “friend” of mine (who I now regret befriending him) recently invited me to a “scientific and business” conference to convince me about the perils of using mobile phones, and find a “revolutionary solution” that not only fixes the problems, but also provides a huge business opportunity for ordinary people.

I was skeptical about this because there is absolutely no evidence to support the widespread claim that millions of mobile phone users are inviting cancer with open arms, but felt I could hear a contrasting viewpoint.

Tricks of the Trade

The money-spinning affair started right at the entrance door, with Rs. 50 being collected as entry fee. Next, the national anthem was recited with all the attendees, after which the “scientific” talk and demonstration commenced.

A smartly-dressed man, who was introduced as a “science buff”, stood up from the front row and attempted to instill fear in the minds of attendees with claims that mobiles phones drain much of the body’s energy, and that a breakthrough discovery of a certain mineral neutralized its effects.

The mineral, he announced, was packed in a pendant which the company sold. The man called one of the listeners for a demonstration and had him interlock his hands behind his back, after which he exerted pressure on them. The man nearly fell the first time. When the same maneuver was applied after the pendant was hung around his neck and his mobile phoned place several meters away, he stood steady. The entire room roared in applause!

Was the scene real or enacted?

Well, this video that appeared in a skeptics.stackexchange.com thread will let the truth out; it explains what’s wrong with the demonstration and other similar ones that were shown in the same conference.

These are some of the points to note from the video:

1) Random words that appear in science textbooks are lifted to describe the magical, energizing pendant. The video gives an example of “harmonic energy oscillation”, but in our story it was “quantum value pendant (QVP)” and “scalar energy”.

2) The demo man stands steady when the pendant is hung around his neck due to a subtle trick employed by the “science buff”, in which the direction of the force is slightly changed towards the body of the man.

3) The reality behind the bogus pendant is revealed – it tries to use all three tactics of unethical marketing to the fullest extent, the FUD, meaning “fear, uncertainty and doubt” to push unsuspecting listeners into believing they’re being presented scientific truth.

Let’s Talk Business

Immediately after the “scientific talk”, another well-dressed man calling himself a top business leader launched a talk extolling the benefits of multi-level marketing (MLM), and how the pendant can be used to swell their distributors’ bank accounts.

MLM did start its life as a legitimate marketing strategy that aimed to reduce the costs incurred due to high profit margins earned by middlemen. The idea is to enroll every buyer as a distributor who gets more distributors to sign up and sell the company’s products, with distributors earning a commission for every new enrollment.

However, when MLM-based companies push for higher earnings, the system works only when productions costs are very low and selling prices are very high – this is proven by the Quantum Value Pendant, which probably costs very little to manufacture but is sold for a price of Rs. 3000.

Additionally, MLM schemes are known to collapse when the company runs out of distributors. Still, the Swadeshi Marketing leader was confident that they’ll go on forever since awareness levels are low!

This is not the first time a mad rush has been made for MLM schemes – Arun had blogged about the Speak Asia Online craze last year and its associated problems.

Why is it that the masses fall for these schemes?

These are some of the possible explanations I have in mind:

1) Even though India has made great strides in technology and business in the last two decades, many Indians are still illiterate and fail to tell the difference between science and non-science.

2) Many educated Indians make it past college through rote learning & some of those front row leaders at the conference included a science graduate, a bank employee and a high court lawyer.

3) People prioritize material gains over business ethics as a means to make a mark in their lives.

It’s over to you now, readers!

Let us know what do you think of Swadeshi Marketing & the Quantum Pendant…. Genuine or Fraud?