Selling Magnolia ice cream, the multi-level marketing way

As part of the revival of the Magnolia brand of ice cream, San Miguel Corp. president and chief operating officer Ramon Ang is exploring a non-traditional distribution network – multi-level marketing.

The way this works, San Miguel will sign an exclusive MLM deal with a local company, which will use its network of sales people to push the ice cream (and its flavor of the month concept) to their families and friends on a commission basis.

Here’s an indication of how hot Mr. Ang is on the idea. He’s open to a consignment, rather than cash upfront, package. And should the MLM experiment prove successful, another SMC brand, Purefoods, is expected to follow suit.

Of course, the exclusivity does not cover the three traditional distribution systems now available to SMC’s branded consumer products, including Magnolia — groceries/supermarkets, fast food outlets, and institutional outlets.

Oh yes, even Nestlé Phils. is said to be looking at an MLM tie-up.

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Did you know 1: Forget about going to the Mercedes Benz showroom at Bonifacio Global City next week.

You see, the Philippine distributor, CATS Motors Inc. (which is headed by president Felix Ang), will be, uhm, redecorating the high tech-looking place in time for next Friday’s show by German fashion house, Escada, as part of the celebration of German Month, a first in the Philippines.

As everybody knows, Mercedes Benz – second only to the Porsche among German luxury cars – sponsors the annual New York fashion week.

Escada is locally distributed by Euro Mode, which headed by Marilou Pena Koa.

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Did you know 2: Supermarket chains have found another source of cash. They now charge manufacturers and distributors a "listing" or entrance fee of between P3,000 and P5,000 for every stock keeping unit.

This simply means that a product which comes in three sizes or three SKUs will have to cough up P9,000 to P15,000 per store. If the chain has five stores, that’s P45,000 to P75,000 in additional expenses for the manufacturer/distributor, which will, of course, be passed on to the consumer.

Over and above the entrance fee, supermarkets, both big and small, already require manufacturers and distributors to provide for their own merchandizers (to restock and promote their products). Some supermarkets also collect about P8,000 per manufacturer/distributor for a common advertising fund.

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Did you know 3: Remember the P20 a kilo detergent powder that looks, smells, and works as effectively as well-known brands?

Well, the Kape at Negosyo Foundation headed by Melencio Dayao is organizing a three-hour seminar on how to do just that on Oct. 23 at the Philippine Coconut Authority auditorium.

At its cheapest, unbranded detergent powder currently retails for P59.75 a kilo. That’s more than a 100 percent profit margin. Branded powders sell for more than P100 a kilo.