Competitors Comp Plan

Top Competitors Profiles
and Compensation Plans

April 5th – 9th 2010 1
Competitors
Avon North America 3
Avon Latin America 13
Herbalife 23
LR Health and Beauty Systems 34
Mary Kay 40
Melaleuca 51
Nu skin 57
Oriflame 58
Amway 72
2
3
Yanira Aguayo
Co Profile
Global leading direct seller
Avon Products ranked fifth overall in the global cosmetics and toiletries market in 2008 with a share of 3.6%,
up by 0.2 percentage points from the previous year. Growth in share can be attributed to increased focus on
emerging markets including Brazil, China and Turkey.
More than 5 million independent Avon Sales Representatives all over the world. Today, Representatives
serve more than 300 million customers globally
The company’s principal business is skin care, which generated 31% of sales in 2008, followed by colour
cosmetics and fragrances at 24% each. In North America principal business in the market is fragrances, colour
cosmetics and most importantly, skin care. All of these categories have been especially vulnerable to mass-
market pressure from the likes of discounters such as Duane Reed or Target.
Avon maintained its share of its domestic US market at over 3% in 2008. The health of this market is central
to the company’s wellbeing; despite its successful international expansion, the US still generated 18% of
Avon’s 2007 turnover, compared to 28% in 2003.
The company’s dependence on such a mature market is problematic – cosmetics and toiletries sales in the
US are forecast to decline at a 0.6% CAGR compared to a 2% CAGR growth for the global market. This is
even more so in the current economic climate. The company has already felt the brunt of the slowing US
economy in the fourth quarter of 2008 with its sales declining by 8%.
At the same time, it is looking to augment its joint ventures – following the Ungaro and Lacroix fragrance
launches, Avon partnered with Finnish clothing firm Marimekko to create a colour collection to sell in the US,
Europe, Mexico and Asia, as well as developing a Bond Girl 007 fragrance under licence.
4
Domestic Market Likely to put Brakes on Global Development
Source; Euromonitor
.
source Euromonitor
Compensation Plan
6
7
Sales Leadership Program Highlights - Enhanced 2008
4 Levels Company Focus: Stronger towards business
Compensation Plan Type: Unilevel opportunity option
Earnings on personal product sales Products – Anew top line brand
Bonus Economic slowdown
1. Performance on Paid Product sales Strong TV campaign and Suze Orman
2. Mentor Structure - Leadership Bonuses and Success w/o Limits
Performance points
Recognition Program: President Club 6
• Behaviour 1: reaching new title within time Achievement Levels
frame set
• Behaviour 2: keeping title performance specific Starter Kit Price Option 1: Essential $49.99
time period or Option 2 Premium $99.99
• Behaviour 3: developing others Contents
Title Advancement;
– UL Promotion = 4 campaigns from Candidate (1st
Downline Recruit)
– AUL Promo = 13 campaigns from UL achievement
– EUL Promo = 13 campaigns from AUL achievement
– SEUL Promo = 26 campaigns from EUL
achievement
Recruiting Reward Options and Strong Cash-in
campaign
3-Way Link
Inactivity – after 3C
Title Review – every 6C
8
Source: Avon Literature

9
Dominican Republic
Comp Plan
• Starter Kit: RD$500.00 / $13

aprox.
• Contents: In a black portfolio
type bag
– Order-receipts book, pen,
calculator
– Recruiting flyer
– including CD in english
– Flyer of leadership
opportunity
+ Option Leadership Packet:

– Outstanding Training Material
a series of mini booklets
10
Top 5 Countries
1. Brazil
2. USA
3. Russia
4. Mexico
5. China
Based on 2009 sales RSP fixed ER in USD
Company Shares (by Global Brand Owner) - Retail Value RSP - US$ mn - Fixed Exchange Rates
Companies Geographies 2001 2002 2003 2004 2005 2006 2007 2008 2009
Avon Products Inc World 6296.6 7090.1 8033.9 9232.8 9575.8 9947.4 10876.7 11852.9 -
Avon Products Inc Asia Pacific 818.3 917.7 1006.2 1179.4 1169.2 1141.2 1249.8 1356.8 -
Avon Products Inc Australasia 126.7 134.1 139.2 153.5 158.7 158.4 152.4 150.2 -
Avon Products Inc Eastern Europe 794.3 1087.5 1381 1718.9 1873.8 1875.1 1991.1 2167.4 -
Avon Products Inc Latin America 1812.5 2056.9 2376.5 2877.6 3225.9 3553 4099.4 4746.4 -
Avon Products Inc North America 1743.6 1857.8 2017.2 2072 1905.7 1913.2 1941.4 1924 - 11
source Euromonitor
12
LATIN AMERICA
MULTILEVEL PROGRAM
13
Mauricio Vinay
These countries have multilevel program:
• Colombia
• Peru
• Mexico
14
These countries do not have multilevel program,
or they do not mention
1. Argentina 8. Honduras
2. Bolivia 9. Nicaragua
3. Brazil 10. Panama
4. Chile 11. Paraguay
5. Ecuador 12. Uruguay
13. Venezuela
6. El Salvador
7. Guatemala
15
COLOMBIA
PERU
• Their program includes this 4 steps, but there
are no details about:
Executive Leader
Silver Executive Leader
Gold Executive Leader
Platinum Executive Leader
16
MEXICO
• Has 6 steps in the multilevel program.
The leader gets commission override
from 1st, 2nd and 3th generation.
1. Representante Avon
2. Certificated Manager
3. Active Manager
4. Junior Manager
5. Senior Manager
6. Executive Manager
17
• Certificated Manager requirements:
Needs to have at least 15 direct sponsors
(1st. Generation),
Gets *$120 for each one (whith minimum
orders of $550), up to *$1,800 as
development support
There is no commission override
*local currency 18
• Active Manager requirements.
Personal sales *$1,100
Group sales *$6,500
5 daughters with payed orders in the 1st generation.
Gets *$750 as unique bonus when reach this level
Gets commission override according this table
Generation Rank %
19
• Junior Manager requirements:
Personal sales of $1,200
Group sales of $29,000
15 daughters with payed orders in the 1st generation, 2 of them
must be Active Managers.
Gets $1,500 as unique bonus when reach this level
Generation Rank %
20
• Senior Manager requirements:
25 daughters in the 1st. Generation, 3 of them must be Active
Managers and 1 Junior Manager
Generation Rank %
21
• Executive Manager requirements:
35 daughters in the 1st generation, 4 of them must be Active
Managers, 2 Junior Managers and 1 Senior Manager
Generation Rank %
22
• Plan type:
– Downline groups
• Do they utilize a global / regional compensation plan?
– No
• Pay out percentage compared to total revenue
– Not available
• Do they use cross country sponsoring?
– No
• Starter kit – start up cost and contents:
– Mexico – cost $90
– Colombia – basic cost $23,499 – premium cost 54,999
• What recruiting promotions or schemes do they use?
– See attachments
23
JAFRA COSMETICS INTERNATIONAL
Competitor Marketing Plan Analysis
Eugenio Lopez Barrios

WW Business Development
April 2010 24
1. Company Profile
• Network marketing company founded in 1980. HQ in Los Angeles CA. Gone public in 2004
• Core business is vitamins and dietary supplements, one of the largest and most dynamic
sectors in the global OTC healthcare market. Herbalife ranked fifth in the total global market
• Sales of 2.6 billion USD in 4 categories; Weight management 63%, Nutrition 20%, energy and
fitness 4% and cosmetics 7%.
• Claims to have around 1.9 Million distributors and 480,000 described as sales leaders (25%)
• Operations in 70 Countries. The last 5 Countries open (white spaces) are Costa Rica, El
Salvador, Honduras, Nicaragua and Guatemala, plus China DS license in 2007
• 28% of sales generated in domestic US market, at the same time focus in presence in
emerging markets such as China and Brazil that have the greatest long term potential.
• Technological positioning: places great emphasis on the R&D which go into its products.
• Relies on third party manufacturers, except China, which gives it less control over cost and
quality.
• Main opportunities: Latin America region where they have generated aggressive growth,
specially in Mexico and Brazil. China a great growth potential with the DS license granted in
2007.
• Brand awareness with sports sponsorship; they are using LA Galaxy David Beckman as the
driver of brand equity in China and other Asian markets. They are the official sponsor of the
Chinese cycling team for the Beijing Olympics and the US Olympics athletes.
• Global performance with a 12% CAGR compared to total core industry world market of 7%
CAGR.
25
2. Company Markets
Top 20 Countries in Volume WW Sales mix
USA 683 North America 28%

Venezuela 212 Asia Pacific 25%
Brazil 188 Latin America 24%
Taiwan 180 Western Europe 17%
China 146 Eastern Europe 5%
Mexico 133 Middle East and Africa 1%
Russia 108
Italy 105
South Korea 86 Top 20 Countries in CAGR %
Japan 74
Spain 72 Venezuela 79
Thailand 60 Argentina 61
France 54 Brazil 40
Australasia 49 Turkey 40
Australia 45 Mexico 38
Germany 39 Greece 36
Argentina 37 Colombia 24
Malaysia 35 Chile 24
Netherlands 35 Spain 19
26
India 26 Croatia 19
Retail Value 2009 - US$ mn - Fixed Exchange Rates
3. Company Focus – The Product
• Live the good life – Herbalife
• Premier nutrition and weight-management company with millions of customers satisfied worldwide in
more than 70 Countries with retail sales over 3.8 Billion and 1.9 million Distributors and strong growth
year after year – numbers speak by themselves. 30 year old company expanding at an incredible rate
• The science behind the products. Strong emphasis in R&D with a Scientific leadership team of well
recognized people and Nobel prizes.
• Obesity and its risks: 2 out of 3 US adults overweight (140 million) and 1 of 3 obese. 9 million US
children are overweight and 65% of US children and teens exceeds the US dietary guidelines for fat
intake. 1.5 billion people overweight WW. Elaborate around the risks and present the solution –
Herbalife.
• Achieving your health goal is as easy as a 1 – 2 – 3 step with Herbalife Cellular Nutrition.
• Product Testimonials all over the place: Print, DVD, Web site, Web newsletters. Before & After
• Categories: Losing weight, Digestive solutions, Women solutions, Men solutions, heart health, Children
health, Stress Management, Immune health, Energy and fitness, Personal care (Outer Nutrition
solutions)
27
3. Company Focus – The Opportunity
• Business opportunity for everyone

• 1) Use the product 2) Wear the button and pack your story 3) Talk to people
• Marketing Plan: The best Distributor compensation plan in the industry that pays
out up to 73% of product revenues to Distributors. Herbalife Supervisors
received $2.4 billion in commission, discounts and bonuses.
• Retail profit of 25% to 50%, wholesale profit up to 25%, Royalty Override
income up to 5% on three levels downline, Production bonus of 2% to 7% of all
the organization, special vacations and training events. Stair step recognition
culture (gimmics)
• WW Income Testimonials all over the place. Branding always couples and
families
• Robust How’s To Step by Step Training program: Print, DVD, Web site, Web
conferences, Phone conference, local and WW training events face to face and
web 24/7, CRM and lead generation digital tools etc
28
4. The Starter Kit • Core 4 products and samples
• Product catalog
• Your first 72 hrs brochure
International Business Pack $ 88
• Opportunity presentation magazine
Ready to make business WW
* Also a quick start pack with less cost and no product • Meal guide lean-protein estimator
• Free entrance ticket for a local event
• Free personal web site
• Four DVD
– Getting started
– Personalize your program – Product
– Design your life – Business opportunity
– The Herbalife Marketing Plan
• Four Handbooks
1. Your Business Basics
2. Using & Retailing Your Products
3. Building your Business
4. Sales & Marketing Plan & Business
Rules
29
5. The Herbalife Marketing Plan (effective Nov 09)
THE PRODUCT
• Live the good life – Herbalife
• Premier
30
Volume Points (VP); are a universal “currency” adopted to indicate a consistent value of the products in different Countries
5. Marketing Plan
Distributor Achieve 0-499 volume •25% discount (retail profit) until you become eligible for a
points higher discount
•Distributor HAP (autoship) 35% 0 42% retail profit –
(minimum order of 100 volume points)
Senior Consultant Achieve 500 Volume points •35% discount for all orders from 1 -1,999 VP until you
in one month become eligible for a higher discount
Senior Consultant Acummulate 2000 volume •42% discount in the month

points
in one month
Success Builder Achieve minimum 1,000 •42% discount in the month

volume points (one order)
Qualified Producer Acummulate 2,500 • 42% discount all orders(must requalify annualy)
(NEW) personally purchased • Receive split comissions (shared with Supervisor). 7% or
volume points 17% wholesale profit from downline Distributors and Senior
Tested in Russia, in 1 – 3 months Consultants at 25% or 35% discount
Israel, Chile, South
Africa, Botswana,
Lesotho, Namibia,
Swaziland and
Zambia. Effective WW
November 2009
31
5. Marketing Plan
Supervisor 3 ways to qualify: • 50% Discount (retail profit)
•One month – 4,000 volume points • Up to 25% wholesale profit
•Two months – 2,500 volume points for two • Earn Royalty Overrides (RO) of 1% to 5% on three levels of
consecutive months Supervisors (1st level direct, 2nd level indirect, 3rd level
•Accumulated – 5,000 personally purchased indirect)
volume points within 12 months (NEW)
1st level and 2nd level RO % from Total Volume and 3rd level
Requirements: RO only of Personal Volume of Supervisor
• Requalify Annually or demoted to Senior
Consultant and downline is moved to the next Your Total Royalty Overrides
upline Supervisor Volume Points Earning % Scale
0-499 0%
500-999 1%
1,000-1,499 2%
1,500-1,999 3%
2,000-2,499 4%
2,500 plus 5%
World Team 3 ways to qualify: • All benefits of Supervisor

• Recognition gimmics
•Achieve 10,000 Total Volume points in one • Special training
month • Qualify for company special incentives
•Achieve 2,500 Total Volume points, each month,
for 4 consecutive months
•Achieve 500 Royalty points in one Month
32
5. Marketing Plan
Global Expansion Team Achieve 1,000 Royalty points each • All the benefits of a Supervisor
GET month for 3 consecutive months. • 2% TAB Team production bonus on the entire downline
(TAB Team) organization’s volume.
* Earning period of 12 months for all • Qualify for special vacations and training events
TAB team categories
Millionaire Team Achieve 4,000 Royalty points each • All the benefits of a Supervisor
(TAB Team) month for 3 consecutive months. • 2% to 4 % organizational production bonus. Less difference with
other TAB’s in the downline
•Qualify for special vacations and WW training event
Presidents Team Achieve 10,000 Royalty points each • All the benefits of a Supervisor
(TAB Team) month for 3 consecutive months. • 2% to 6% organizational production bonus
• Qualify for special vacations and training events
20k President – 20,000 RP - 6.5% • Annual Bonuses represting a % of WW sales
30k president – 30, 000 RP - 6.75%
50k President – 50,000 RP – 7%
Chairman’s Club Achieve 5 first line President Team • Recognition Title

members in 5 different legs
Founders’s Circle Achieve 10 first line President Team • Recognition Title

members in 10 different legs
• Over 25% of Distributors reach rank of Supervisor

• The annual gross compensation paid to active Leaders during 2008 averaged USD $5,200. Supervisor
$440, World Team $4,500, GET $18,000, Millionaire Team $80,000, President Team $475,000 33
6. Training Program
• Four Handbooks • Four DVD - Hosted by several real life
– Your Business Basics successful Distributors (English – Spanish)
• Design your future – Getting started
• Set Goals – Personalize your program – Product
• Learn the Basics – Design your life – Business opportunity
• How to reach the goals – The Herbalife Marketing Plan
– Using & Retailing Your Products
• 1,2,3 steps • Other Tools
• Cellular Nutrition, Weight • Free Distributors web site
Management, Targeted Nutrition, • Local events
Energy & Fitness, Personal care • Web CRM, Lead generation,
– Building your Business Campaign mgmt, E cards
• Customer care & follow up • Web training library and videos,
• Being a good sponsor seminars and training sessions
• The Marketing Plan around the world recorded 24/7
• Long-term growth • Conference calls
• Running your Business • E-blasts
• Tapping into your resources
• Take action
– Sales & Marketing Plan
34
LR Health & Beauty Systems
Martina Blöchl
March 31st, 2010
35
LR – general company profile
• 1985 founded in Ahlen, Germany

• in 27 European countries, Australia, New Zealand and Philippines
• Recently opened markets: Bulgaria, Romania, Russia coming soon
(Czech Republic, Slovakia and Ukraine 2009 again integrated as affiliate
companies)
• Steeples sales growth - 206 Mio € net sales in 2009 (+10% vs 2008)
• Ca. 350.000 LR partners (130.000 in Germany)
• MLM/ Network-Marketing
• Clear focus on business opportunity
• Cross-country sponsorings
• Global marketing and compensation plan
36
LR – general company profile
• What is essential for LR:

– Products: health (Aloe Vera, other nutrition products) and beauty
– Star concept
– Car concept
– LR card
– LR Academy and seminars
• How to start as LR partner:

– Different starter kits for a minimum investment of 99 Euro,
there you get: LR card, starbox, 1 Aloe product (29 €) + individual
selection of products (70 instead of 80 €)
– In total there are 6 different starter kits up to 166 €
37
LR – compensation plan
• Basic income for every LR partner:
– Rebate: 25% (with LR card) – 40% (after starter seminar)
– immediate income
– Bonus: 3 – 21% (after month close) – additional income
Example: 500 € = 1000 PW

1 € cons. price = 2 PW
– PW = points fix value for every product indicates bonus

38
level … x%
• Development of income with leadership
- The own bonus % is then calculated on total sales
- On top exists the following bonus system:
1. Difference Bonus: 3 – 21%
bonus on partner sales
Ex.: 14% own, 9% partner you get the difference of 5% on partner sales
2. Special Bonus: 7 – 10%

bonus for direct 21% partners
Ex.: one 21% partner you get 7% on partner sales
3. Depth Bonus: 2 – 4%
bonus for indirect 21% partners
Ex.: you reached a certain career level (OL) and you have 4 direct 21% partners you get
2% on all indirect 21% lines down to the next OL and his direct 21% partners
4. Annual Bonus: 1 – 2.5%

bonus for a minimum of total sales 39
• Development of status
- First career steps – Junior Manager/ Manager
minimum requirement: 4.000/ 8.000 PW group sales,
250 PW personal sales,
3/ 4 bonus lines
- for higher steps you need more group sales
more bonus lines
- Personal sales are only required for the first 3 levels, afterwards not
- The whole plan is focused on sponsorings to build up 21% liners/
leaders
- Special starter seminars, LR Academy
- new quick-starter program with incentives (when reaching the 11%
level in your start or the following month)
40
Competitors Analysis
Mary Kay
Alma Delia Haro

Project X Meeting
April, 2010
41
1. General Company Profile
Mary Kay
Founded 1963
Organization Privately held

35 Markets worldwide (web lists 33 incl US)
Headquarters: Dallas, TX
Manufacturing facilities: Dallas, TX and Hangzhou, China
Mission and Motto “Enrich women’s lives”

“God first, family second and career third.”
Philanthropic orientation Women’s Cancers and Prevention of Violence against Women
2008 Wholesale Sales $2.6 Billion Worldwide

declared
Consultant base 1.9 Million Worldwide

36,000 Independent Sales Directors
Products Skin Care, Color, Body Care, Sun Care Protection and Fragrances
42
1. General Company Profile
Year Mary Kay

Worldwide
2008 $ 2.6 Billion
2005 $2.2 Billion
2004 $1.8 Billion
2003 $1.6 Billion
1996 $1 Billion
1991 $500 Million
Mary Kay states that they have had double digit growth year over year
since their inception in 1963.
Source: Mary Kay website March 2010
43
2. Company Focus
• The Company is focused in the Business Opportunity ‘Enriching Women

Lives’ and product . Therefore, the Field is balanced in opportunity/product
drivers
• Corporate Image
• Strong branding from New Consultant Kit
• Strong look and message: Pink corporate color, “God first, family second and
career third.”
• Extreme loyalty of field – almost a “cult” feel
• Public website is empowering and provides good information, particularly on

product
• Beautiful packaging, both product containers and boxes
44
3. Selling of the Opportunity
MARY KAY: The Business Opportunity

‘Enriching Women’s Lives’
1.Simplicity: Purchase of products at a set wholesale

price, sell to consumers at a retail price.
2.Clearly defined business plan
3.Open-ended opportunity
4.Achievement of personal growth and financial success
5.Beauty Consultant is her own boss (independent
business, setting of own schedule, building of own
customer base and determine of own level of success)
6.Provide to customers with one-on-one beauty advice
45
4. Regular Starter Kit Contents & Price
Business Tools:
•Face Cases, 4
•Disposable Trays, pk./30
•Disposable Facial Cloths, pk./30
•Empty Quick Zip Bag, 4
•Product Replacement Request Form
•Consultant Education —
Consultants Guide
Products:
•Flip Chart
•Time Wise 3-
3-In-
In-1 Cleanser (Normal/Dry)
•Beauty Book, 3 pks./10
•Time Wise 3-
3-In-
In-1 Cleanser (Combination/Oily)
•Customer Profiles, pk./50
•Time Wise Age-
Age-Fighting Moisturizer (Normal/Dry)
•Datebook
•Time Wise Age-
Age-Fighting Moisturizer •Hostess Brochures, pk./10
(Combination/Oily)
•Team-
Team-Building Brochures, pk./6
•Time Wise Day Solution Sunscreen SPF 25*
•Team-
Team-Building CD
•Time Wise Night Solution
•Independent Beauty Consultant
•Mary Kay Medium-
Medium-Coverage Foundation
Agreements, 2
•Oil-
Oil-Free Eye Makeup Remover
•Making the Connection DVD
•Color cards, Sponge-
Sponge-Tip Applicators, 2 pks.
pks. /15
•Starter Kit Bag
•Shade Selector Tool
•Mineral Pressed Powder Samplers, 3 pks.
pks. / 6
•Ultimate Mascara in Black; Disposable Mascara
Brush/15 Start-up cost $100
46
4. Promotional Starter Kit Price
Mary Kay Cosmetics is currently running a "special" for new

consultants. They can pay just $50 and get a mini kit in
determined months.
MK is calling this the "Opportunity Kit" with fewer products, and

the opportunity to get an extra 5% off the suggested retail price of
their initial product order.
47
5. Recruiting Promotions/Incentives
Promotion Incentives and Recipient
Queen’s Court of Sharing •24 QNC= Jewelry
Commission on wholesale •Senior Beauty Consultant

orders of personal team •Star Team Builder
members •Team Leader and Future Independent Sales Director
•Independent Sales Director
•Independent National Sales Director
Bonuses for •Star Team Builder $50 bonus

Team-Building •Team Leader and Future Independent Sales Director $50 bonus
•Independent Sales Director $100 or more
48
6. Global Plan type: Group Defined - Generational
Cross Country Sponsoring in designated international markets only

for Independent Sales Directors: Global Leadership Program under
special considerations
Pay out percentage from total revenue: From 22.5% to 24.5%
49
6. Global Plan type: Group Defined - Generational
Title Benefits per Category
Independent Beauty Consultant 40% discount. Order $400 suggested retail= 50%. Active=
$200 ws, QNC= $600 ws. $1,800 ws/cq= Star Consultant.
Star Consultant $1,800 + quarter + 1 QNC = 600 contest credit/ Ruby Star
2,400 cc/ Diamond Star 3,000 cc/ Emerald Star 3,600 cc/
Pearl Star 4,800 cc
Senior Beauty Consultant Personal activity+1 to 2 Team members=4%, 9% or 13%
Team commission. Men in the carrier policy (not SDQ)
Star Team Builder PA+3 to 4 Team Members=4,9,13%+Team-Building bonus
+ pin enhancer +red jacket
Team Leader PA+5 to 7 TM= 9,13%+TB bonus + pin enhancer +red
jacket + Grand Achiever Status (car or cash compensation)
Future Independent Sales Director PA+8 or more TM= 9,13%+TB bonus + pin enhancer
+future SD scarf + GA Status (car or cash
compensation)+eligible for submission of Sales Director in
Qualification form (DIQ)
Independent Sales Director Unit prod. $ 4,000=4%, 9%, 13%+TB bonus+ Unit Vol.
Bonus+ Unit Dev. Bonus+ Star Cons. Bonus+ Contest
Bonus+ New S.D. Bonus+ Wellness Bonus+ Life &
Disability Award + Leaders. Conference+ Top Sales Trip +
Cross Border recruit.
Senior, Future Executive Senior, Executive Senior Sr.= 1-2 Dirs.,F. Ex. Sr.=3-4 Dirs.,Ex. Sr.= 5-7 Dirs.,Elite
and Elite Senior Sales Director Ex. Sr.= 8 or more Dirs./ Unit prod.+ Units below=Tier1 4,
4.5, 5% - Tier2 5, 5.5, 6% plus all bonuses and awards
above.
Independent National Sales Director, Senior NSD=20 Dirs. (12 /3/8) (11/3/9) (10/3/10) / 0 line 4,9,13% +
National Sales Director, Executive National Sales 1st line 9%+2nd line 4%+3rd line 2% and only Elite Ex. 4th 50
Director, Elite Executive National Sales Director. line 2% plus bonuses and awards.
7. Markets
Markets Opened in the last few years
1. Korea 2004
2. China 2005
3. Moldova 2006
4. India 2007
5. Singapore 2008
Top Three Markets
1. China
2. Russia
3. Mexico 51
Juan Carlos Arellano 52
Mission Statement: “Enhancing the lives of those we touch
by helping people reach their goals”
• Founded in 1985, headquartered in Idaho Falls, Idaho.
• Melaleuca (A Cleaner Greener Company) manufactures

and distributes nutritional, pharmaceutical, personal
care, facial care, home hygiene, and other wellness
products of superior quality, and distributes them direct
to the consumer through a full-service catalog and
internet shopping system
• In addition to the United States and Canada, Melaleuca

has expanded its markets internationally, with
operations now running in Japan, Hong Kong, Macao,
Singapore, Korea, Taiwan, China, Australia, New
Zealand, the United Kingdom, Ireland, Scotland, the
Netherlands, Puerto Rico, Jamaica, and the Bahamas.
• $887,000,000 in sales in 2009 (35% of their sales are

generated in foreign markets)
53
Melaleuca – Concepts
• Melaleuca Membership Kit: $29.00. Cross-bordering sponsoring is available

• Member can also enroll with Value Pack / Career Packs (~$299.00)
– Enroller Bonus - $30 or $50
• Product Point: A value assigned to each Melaleuca product upon which
commissions and bonuses are calculated.
• Organization Volume: The total Product Points from products and services in the
Marketing Executive’s organization in a calendar month
• PEG Volume: Personal Enrollee Group (PEG) Volume is the total organization
Product Point Volume of a Marketing Excecutive’s Personal Enrolles in a given month
• Leadership Points: Leadership points measure the level of support a Marketing
Executive provides to his organization. A max of 6 Leadership Points are available
for enrolling a new Preferred Customer
– Lead 3 Leadership Points
– Presenter 2 Leadership Points
– Career/Value Pack 1 Leadership Points
• Members expected to purchase only what they consume (About $50 a month after 30
to 40% member discount) Equivalent to 35 points
• If member attempts to buy more than $150, special forms are needed
• An active member is one who generates a minimum of 35 points per month.
• A Marketing Executive will lose their organization after two consecutive months of not
satisfying the monthly minimum 35 Product Point requirement. 54
Melaleuca – Compensation Plan
Compensation Plan is based on a 5X7 Forced Matrix System
Monthly Commissions
• 5 Members 7% Directors earn 7% on entire group and:
• 25 Members 7% - 14% on personally enrolled members (PEM)
• 125 Members 7% -17% on PEM if more than 12
• 625 Members 7% - 20% on PEM if more than 16
• 3,125 Members 7% Enroller Bonus
• 15,625 Members 7% - $25 for each new PEM if Director I
• 78,125 Members 7% - $50 for each new PEM if Director II or higher
• You are automatically paid through two levels just for being a member.
• When you enroll two people you're paid through three levels.
• When you enroll four people you're paid through four levels.
• When you enroll eight people, you're paid through all seven.
There is no time limit to do this. You're also paid on every person on each level,
no matter who put them there.
Note: Commissions are only paid on the first 150 Product Points purchased by
55
each customer
Status Qualifications INCENTIVES
Organization Commission Is Paid
Active Personally Enrolled Senior

Monthly Organization Production
Avg Monthly Leadership Points
Since Achieving Senior Director
One Time Advancement Bonus

Monthly PEG Volume Required
# of Monthly of Active Personal
Max Organization Commission

# of Active Personal Directors
Pacesetter Mentoting Bonus

# of Monthly Product Points
# of Generations on which
First Generation Positions
Organization Commission
Months Since Enrollment
(3-month Rolling Avg)
Customers Required
Production Required
Executive Directors
Directors Directors
Monthly car Bonus

OR
Pacesetter Bonus
Pacesetter Bonus
Points Required
Required
Available
Marketing Excecutve 2 35 5 7% $50
Customer
Referrals
Marketing Excecutve II 3 35 2 5 7% $50

Marketing Excecutve III 4 35 4 5 7% $100
Director 7 70 8 1 2 5 7% $500 $100 or $200 $100
Director II 7 70 10 2 1,000 3 5 7% $750 $200 or $400 $200
Director Leadership
Director III 7 70 11 3 2,500 1,000 1 4 5 7% $1,000 $300 or $600 $300

Director IV 7 70 12 4 5,000 2,500 2 5 5 7% $1,500 $400 or $800 $400
Director V 7 70 13 5 7,500 5,000 2 6 5 7% $2,000 $500 or $1,000 $500
Director VI 7 70 14 6 10,000 7,500 3 7 6 7% $2,500 $600 or $1,200 $600
Director VII 7 70 15 7 12,500 10,000 3 8 6 7% $3,000 $700 or $1,400 $700
Director VIII 7 70 16 8 15,000 12,500 4 9 6 7% $3,500 $800 or $1,600 $800
Director IX 7 70 18 9 17,500 15,000 4 10 6 7% $4,000 $1,000 or $2,000 $1,000
Senior Director Leadership
Senior Director 7 70 20 10 20,000 17,500 5 12 10 7% Unlimited 5% of PEG or 10% of PEG $400 $2,000
Senior Director II 7 70 20 10 22,500 20,000 5 1 10 7% Unlimited 5% of PEG or 10% of PEG $400
Senior Director III 7 70 20 11 25,000 22,500 6 2 10 7% Unlimited 5% of PEG or 10% of PEG $400
Senior Director IV 7 70 20 11 27,500 25,000 6 3 10 7% Unlimited 5% of PEG or 10% of PEG $400
Senior Director V 7 70 20 12 30,000 27,500 7 4 10 7% Unlimited 5% of PEG or 10% of PEG $400
Senior Director VI 7 70 20 12 32,500 30,000 7 5 10 7% Unlimited 5% of PEG or 10% of PEG $400
Senior Director VII 7 70 20 13 35,000 32,500 8 6 10 7% Unlimited 5% of PEG or 10% of PEG $400
Senior Director VIII 7 70 20 13 40,000 35,000 8 8 10 7% Unlimited 5% of PEG or 10% of PEG $400
Senior Director IX 7 70 20 14 45,000 40,000 9 10 10 7% Unlimited 5% of PEG or 10% of PEG $400
• Directors are guaranteed a minimum commission of $120 per month, $150 if enrolling a customer.
Need a minimum of 1 leadership point to be eligible for organization and Leadership Commissions 56
• Director III and higher Participate in Leadership Pools
• Senior Directors and participate in 1% Leadership Growth Bonus Pools
Status Qualifications INCENTIVES
Organization Commission Is Paid

Monthly Organization Production
Avg Monthly Leadership Points
Since Achieving Senior Director
One Time Advancement Bonus

Monthly PEG Volume Required
# of Monthly of Active Personal
Max Organization Commission

# of Active Personal Directors
Pacesetter Mentoting Bonus

# of Monthly Product Points
# of Generations on which
First Generation Positions
Organization Commission
Months Since Enrollment
(3-month Rolling Avg)
Customers Required
Production Required
Executive Directors
Directors Directors
Monthly car Bonus

OR
Pacesetter Bonus
Pacesetter Bonus
Points Required
Required
Available
Executive Director 7 70 20 15 50,000 50,000 10 12 11+ 7% Unlimited 10% of PEG $1,000
Executive Director II 7 70 20 15 70,000 70,000 10 1 11+ 7% Unlimited 10% of PEG $1,000
Executive Director III 7 70 20 15 90,000 90,000 10 2 11+ 7% Unlimited 10% of PEG $1,000
Executive and Corporate Director Leadership
Executive Director IV 7 70 20 15 110,000 110,000 10 3 11+ 7% Unlimited 10% of PEG $1,000

Executive Director V 7 70 20 15 130,000 130,000 10 4 11+ 7% Unlimited 10% of PEG $1,000
Executive Director VI 7 70 20 15 150,000 150,000 10 4 1 11+ 7% Unlimited 10% of PEG $1,000
Executive Director VII 7 70 20 15 175,000 175,000 10 3 2 11+ 7% Unlimited 10% of PEG $1,000
Executive Director VIII 7 70 20 15 200,000 200,000 10 2 3 11+ 7% Unlimited 10% of PEG $1,000
Executive Director IX 7 70 20 15 225,000 225,000 10 1 4 11+ 7% Unlimited 10% of PEG $1,000
$1000,000+
Corporate Director 7 70 20 250,000 250,000 10 5 11+ 7% Unlimited 10% of PEG $1,000
Corporate Director II 7 70 20 300,000 300,000 10 7 11+ 7% Unlimited 10% of PEG $1,000
Corporate Director III 7 70 20 350,000 350,000 10 9 11+ 7% Unlimited 10% of PEG $1,000
Corporate Director IV 7 70 20 400,000 400,000 10 11 11+ 7% Unlimited 10% of PEG $1,000
Corporate Director V 7 70 20 450,000 450,000 10 13 11+ 7% Unlimited 10% of PEG $1,000
Corporate Director VI 7 70 20 525,000 525,000 10 15 11+ 7% Unlimited 10% of PEG $1,000
Corporate Director VII 7 70 20 600,000 600,000 10 17 11+ 7% Unlimited 10% of PEG $1,000
Corporate Director VIII 7 70 20 700,000 700,000 10 20 11+ 7% Unlimited 10% of PEG $1,000
Corporate Director IX 7 70 20 800,000 800,000 10 22 11+ 7% Unlimited 10% of PEG $1,000
Presidendial Director 7 70 20 1,000,000 1,000,000 10 25 11+ 7% Unlimited $1,000,000 $1,000
• Executive Directors and higher participate in 2% Leadership Growth Bonus Pools
57
58
Johan Wicklund
Westlake / New Delhi, March/April 2010 59

Business Business Market Entry Organizational Financial
Objectives Set Up & Milestones Structure Plan
2.5.5.1 Oriflame Profile
60
2.5.5 Competition Analysis
2.5.5.2 Key Success Factors – Systemization with Localization
61
62
63
2.5.5.3 Compensation / The Oriflame Earning Opportunity – How It Works
• There are 3 ways to earn money with Oriflame:
1. 25% immediate profit on your sales to customers
2. Performance Discount (PD), 3-21% on Personal Sales (on your Business Volume)
3. You earn the difference between your own level (12% e.g.) and their level (6% e.g.)
on all their Group Sales.
4. Bonuses / Cash Awards
• All products are assigned 2 sets of values:
Business Volume (BV)*

Bonus Points (BP)
• Oriflame always pays 21% of BV in Performance Discount (PD) to each Group
The BPs of your Group = your income % from personal sales
• The difference of your own income and of the levels of your directly sponsored Consultants
is your earnings on their group sales
Group BPs % Level
10,000+ = 21%
6,600 - 9,999 = 18%
* Business Volume (BV) = Sales at Consultant Price less Government taxes 4,000 - 6,599 = 15%
For the purpose of the examples BV Rs. 230,000 = 10,000 BPs, thus 1 BP = 20 Rs. 2,400 - 3,999 = 12%
1,200 - 2,399 = 9%
600 - 1,199 = 6%
200 - 599 64
= 3%

BACKUP
65
66
67
68
Business Market Business Market Entry Organizational Financial
Objectives Perspectives Set Up & Milestones Structure Plan
2.5.5.9 Competitive Analysis Grid
• Opportunity • Strong product • Opportunity • Opportunity • Opportunity • Single level • Strong product
driven (70%) focus Driven (70%) Driven (90%) driven (70 - 80%) focus…
• Same model
• Product sale is • SLM but also MLM • Product sale is • Product only • Product has some system as in other • ”Use the products
Philosophy /
still very attractive (40%), 3 levels still very attractive vehicle (10%) focus (20-30%) countries and talk about the
Business Model
for basic for basic results”
consultants • Company consultants • 100% MLM, with
employees, unlimited levels • 70% MLM system
in sales/training • Similar to JAFRA of downlines ( 3 levels down)
Sales System MLM Hybrid, P2P, SLM/MLM MLM STI, MLM MLM Hybrid, party plan, SLM, Hybrid, party plan, MLM
Consultants 165,000 (2010) 35800 / 26900 active • 450,000 Advertised for couples • 50,000 Active
• Skin Care
• Skin Care (69) • Skin Care (19) • 140 products in • Nutrition (26) • Plastic Food • Slimming (5)
• Color
• Make up (45) • Color (26) four categories: • Skin Care (13) Containers (80-100) • Skin Care (13)
• Fragrances
• Fragrances (56) • Body (14) • Color (12) • Cosmetics (14)
• Toiletries
• Fashion (22) • Fragrances (6) • Personal Care • Bee Products (4)
Product Lines / • Accessories
• Personal Care (24) • Men (5) • Home Care (Royal Jelly)
Product Range
• Nutrition/Wellness • Personal/
• Regular: 476
• Cosmetics Body Care
(# of SKUs) • New: 33
• On offer: 117
• Product Flyer: 35
• Not catalogue: 99
• Testers: 235
Price Policy / • Medium / Low

• Low / Medium • Medium / High • High / Medium • High • High • High
Positioning • High also
Average
See price positioning See price positioning See price positioning See price positioning See price positioning N/A • To be checked
MRP Prices
69
2.5 Direct Selling Market
• 25% Immediate • Consultant • Senior Gold Director • Sapphire President

• Double Diamond • Sapphire Executive • Senior President
Income on your Director
PD = 0 - 9% 3 direct 21% groups Director Director Director
personal sales to
Customers • Manager for 6 out of 12 months 10 direct 21% groups 18 direct 21% groups 24 direct 21% groups 24 direct 21% groups
Average annual for 6 out of 12 groups for 6 out of 12 months of which 6 contain a of which 18 contain a
• Immediate Income PD = 12 - 18% qualified Diamond qualified Diamond
income = Rs. 878,400 Average annual Average annual
= BPs x 6 Rs./Point Director at any level Director at any level
• Senior Manager income = Rs. 3,672,000 income = Rs 9,000,000
Cash award 6 out of 12 months 6 out of 12 months
• Performance Min. 10,000 BP or = Rs. 120,000 Cash award Cash award
Discount on personal 1 more 21% groups Average annual Average annual
= Rs. 400,000 = Rs. 1,440,000
sales (see below) + Personal Group
Directors‘ Dinner
income = Rs 18,000,000 income = Rs 27,360,000
Basic Discount/ International Gold Conference
Directors‘ Dinner
Director‘s Dinner
Retail Margin with min. 4,000 BP Global Diamond Conference

Global Diamond and Cash award Cash award
• Sapphire Director Executive Conferences
Average annual = Rs. 8,000,000 = Rs. 16,000,000
All products are • Executive Director
4 direct 21% groups
+ Assigned 2 sets of Income = Rs. 244,800 • Diamond Executive Directors‘ Dinner Directors‘ Dinner
for 6 out of 12 months
Values; 12 direct 21% groups Director Global Diamond and Global Diamond and
Directors‘ Seminar Executive Conferences
Average annual for 6 out of 12 months Executive Conferences
Commission Business Volume (BV)* Income = Rs 1,180,000
21 direct 21% groups (Business Class Flight) (Business Class Flight)
• Director Average annual
(Personal & Bonus Points (BP) for 6 out of 12 groups Global Leadership Council Global Leadership Council
Fullfilling Senior Cash award Income = Rs 5,302,800 Car Programme
GroupSales) Average annual
Oriflame always pays Manager criteria = Rs. 160,000 • Gold President
Cash award income = Rs 11,772,000 • Diamond President
21% of BV in for 6 out of 12 months • Diamond Director = Rs. 960,000 Director
+ Performance Discount Cash award Director
Average annual 6 direct 21% groups 24 direct 21% groups
(PD) to each group Directrs‘ Dinner = Rs. 1,680,000 24 direct 21% groups
Income = Rs. 360,000 for 6 out of 12 months Global Diamond and of which 12 contain a
Bonuses/ Executive Conferences Directors‘ Dinner of which 24 contain a
The BPs of your group Cash award qualified Diamond
Cash Awards Average annual Global Diamond and
Director at any level
qualified Diamond
= your income % from = Rs. 40,000 • Gold Executive Executive Conferences Director at any level
income = Rs 2,325,600 6 out of 12 months
personal sales Director 6 out of 12 months
(19 Compensation Directors‘ Seminar Cash award • President Director
Directors Dinner 15 direct 21% groups Average annual
/Promotion Levels) The difference of your = Rs. 240,000 24 direct 21% groups income = Rs 22,320,000
Average annual
own income and of the • Gold Director for 6 out of 12 months income = Rs 33,840,000
Directors‘ Dinner for 6 out of 12 months
levels of your directly Average annual Cash award
2 direct 21% groups Global Diamond Conference Cash award
sponsored Consultants Average annual = Rs. 12,000,000
for 6 out of 12 months • Senior Diamond income = Rs 7,200,000 = Rs. 40,000,000
is your earnings on Income = Rs 14,400,000
their group sales Average annual Director Cash award Directors‘ Dinner
Cash award Global Diamond and Directors‘ Dinner
Income = Rs. 594,000 = Rs. 1,200,000
8 direct 21% groups = Rs. 4,000,000 Executive Conferences Global Diamond and
Group BPs % Level
Cash award for 6 out of 12 months Directors‘ Dinner (Business Class Flight) Executive Conferences
Global Diamond and Directors‘ Dinner
10,000+ = 21% = Rs. 80,000 Global Leadership Council (Business Class Flight)
Average annual Executive Conferences Global Diamond and
Executive Conferences Car Programme Global Leadership Council
6,600 – 9999 = 18% Directors‘ Dinner income = Rs 2,952,000 (Busines Class Flight)
4,000 – 6599 = 15% International Gold Conference Global Leadership Council
2,400 – 3,999 = 12% Cash award Car Programme
1,200 – 2,399 = 9% = Rs. 320,000
600 – 1,199 = 6% Directors Dinner
200 – 599 = 3% Global Diamond Conference
70
• Business Class • Weekly trainings

• SHOW, INVITE, • Name List
Program: in the offices
ATTEND… • Catalogue
A continuous Oriflame University
monthly • Talk to at least
• Opportunity - Your Path to Success
promotion for all 3 people a day
Catalogue
consultants. • 3 contacts/day • Step 1 Training:
x 5 days = • Consultant The Oriflame Products
By placing
15 contacts Application Form and how to sell them
personal orders
of min. 150 BPs • Opportunity • Consultant • Step 2 Training:
in a month, Recruitment Leaflet Price List Inviting others & advance
you get up to 50% Strategy in the success plan
discount on any • Name List Sales Tools / • Consultant
Order Form • Oriflame
product next / Communication
• 20 regular Leadership
month Materials • Welcome Program
customers per Academy
Program Success
• Product: catalogue - Module 1
Promotions Formula • Consultant Manual
Place orders of • Find 5 people/ • Oriflame
• Skin Care Guide Training System
min. 100 BPs and week who accept Leadership
receive ‘Black your invitation to Academy
Beauty Case‘ for an ‘Opportunity - Module 2
only Rs. 250 Meeting‘ and get
(valued at Rs. 2,500) at least 1 new • Beauty Academy 1
recruit per week! - Skin Care
• Sponsoring:
4 weeks = • Beauty Academy 2
Invite 2 friends
4 recruits - Colour Cosmetics
to Oriflame and
help qualify to
• Beauty Academy 3
the Welcome
- Body and Hair Care
Program, receive Points (%) Income • Medium on PR
‘Amethyst Fatale‘ • Beauty Academy 4
• Very low on
for only Rs. 250 200 (3%) 125 - Fragrances
(valued at Rs. 1,990)
advertising
Income 600 (6%) 600 PR /
Atractivity 1,200 (9%) 2,500
Advertising
2,400 (12%) 4,500
4,000 (15%) 6,000
Incentive Trips Yes (local/overseas) 6,600 (18%) 12,000
10,000 (21%) 25,000
71
2.5.5.3 Compensation / Oriflame Success Plan
72
Business Market Business Market Entry Organizational Financial Management
Objectives Perspectives Set Up & Milestones Structure Plan Summary & SWOT
2.5.5.6 Training Concepts / Business Tools Oriflame
73
74

Competitors Comp Plan

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Competitors Comp Plan

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Top Competitors Profiles

and Compensation Plans

Source: Avon Literature

• Starter Kit: RD$500.00 / $13

+ Option Leadership Packet:

Competitor Marketing Plan Analysis

Eugenio Lopez Barrios

USA 683 North America 28%

• Business opportunity for everyone

Senior Consultant Acummulate 2000 volume •42% discount in the month

Success Builder Achieve minimum 1,000 •42% discount in the month

World Team 3 ways to qualify: • All benefits of Supervisor

Chairman’s Club Achieve 5 first line President Team • Recognition Title

Founders’s Circle Achieve 10 first line President Team • Recognition Title

• Over 25% of Distributors reach rank of Supervisor

• 1985 founded in Ahlen, Germany

• What is essential for LR:

• How to start as LR partner:

Example: 500 € = 1000 PW

– PW = points fix value for every product indicates bonus

2. Special Bonus: 7 – 10%

4. Annual Bonus: 1 – 2.5%

Alma Delia Haro

Organization Privately held

Mission and Motto “Enrich women’s lives”

Philanthropic orientation Women’s Cancers and Prevention of Violence against Women

2008 Wholesale Sales $2.6 Billion Worldwide

Consultant base 1.9 Million Worldwide

Year Mary Kay

2005 $2.2 Billion

2004 $1.8 Billion

2003 $1.6 Billion

1991 $500 Million

• The Company is focused in the Business Opportunity ‘Enriching Women

• Public website is empowering and provides good information, particularly on

MARY KAY: The Business Opportunity

1.Simplicity: Purchase of products at a set wholesale

Mary Kay Cosmetics is currently running a "special" for new

MK is calling this the "Opportunity Kit" with fewer products, and

Queen’s Court of Sharing •24 QNC= Jewelry

Commission on wholesale •Senior Beauty Consultant

Bonuses for •Star Team Builder $50 bonus

Cross Country Sponsoring in designated international markets only

Pay out percentage from total revenue: From 22.5% to 24.5%

Top Three Markets

• Founded in 1985, headquartered in Idaho Falls, Idaho.

• Melaleuca (A Cleaner Greener Company) manufactures

• In addition to the United States and Canada, Melaleuca

• $887,000,000 in sales in 2009 (35% of their sales are

• Melaleuca Membership Kit: $29.00. Cross-bordering sponsoring is available

Compensation Plan is based on a 5X7 Forced Matrix System

Organization Commission Is Paid

Active Personally Enrolled Senior

Active Personally Enrolled Senior

Since Achieving Senior Director

One Time Advancement Bonus

Max Organization Commission

Pacesetter Mentoting Bonus

First Generation Positions

Monthly car Bonus

Marketing Excecutve II 3 35 2 5 7% $50

Director III 7 70 11 3 2,500 1,000 1 4 5 7% $1,000 $300 or $600 $300