The legendary “Avon ladies”, who made a living going door-to-door marketing their products, might hold the key to South Africa’s crippling unemployment crises, according to a former Nelson Mandela Bay academic.
Brand management researcher and Cape Peninsula University of Technology marketing lecturer and former lecturer at NMMU Pieter Steenkamp, says that to alleviate the high unemployment rate, business models – such as the network marketing model used by Avon – need to better cater for the communities crying out for work.
Steenkamp, who has his Masters in Business Administration from the University of Stellenbosch, is busy with his doctorate in business-to-business services branding in the insurance industry. He is also an independent non-executive director at national network marketing insurance company, Multisure Corporation, which was started up by Uitenhage advocate-turned-entrepreneur Denton Goodford.
“Based on my involvement in hundreds of community-based projects during my career, and my years with Multisure, I have come to the conclusion that there are phenomenal, world class entrepreneurs throughout South Africa,” says Steenkamp.
However, most people end up as entrepreneurs only after being forced into it, rather than entering into it as their first choice, says the former Oudtshoorn Afrikaans Business Chamber chairman.
“Most end up as entrepreneurs due to not having any other alternative to survive,” he says. “They become ‘survivalist entrepreneurs’, not entrepreneurs by choice. This is South Africa’s reality and it is not likely to change anytime soon.”
As proven by the legendary Avon ladies, network marketing is a solution to unemployment and poverty, Steenkamp says.
While living in Nelson Mandela Bay, before taking up his lecturing post in Cape Town, Steenkamp worked with more than 100 small, mostly township-based entrepreneurs, partnering with the Uitenhage Despatch Development Initiative (UDDI) and the Uitenhage Self Employment Centre (USEC).
“We need to reorganise the entrepreneurial landscape by having ‘survivalist entrepreneurs’ linked to leading entrepreneurs. Franchising is a good example of this, but it is too expensive and out of reach of most survivalists,” says Steenkamp.
“This is where the proper network marketing model can make a difference. A proper network marketing model can give survivalists affordable access to structured entrepreneurship with support, personal development and motivation from leading entrepreneurs.
“This will provide ‘bunches’ of entrepreneurs who are educated by those with more experience. This will in turn improve sustainability and empowerment. An example of a company employing this business model is Multisure.”
Multisure managing director Denton Goodford says having Steenkamp on the board of directors has proven invaluable to the company. Goodford, an advocate-turned-entrepreneur, says the increased demand from people wanting to become “independent consultants” (ICs) – marketers of the company’s insurance products – has meant it has had to open up more offices nationally.
The company has seen a rise in its ICs of more than 30% over the course of the past year, according to Goodford. After opening its headquarters in Port Elizabeth in 2005, Multisure opened an office in Johannesburg in 2010, and Cape Town late last year. Plans to open in Durban, Bloemfontein, East London and George were at an advanced stage, says Goodford.
“Where network marketing in the past was seen as something part-time, we are finding people are signing up for it fulltime,” Goodford says.
Steenkamp is continuing with his community upliftment projects, involving his CPUT students in service learning projects. More than 100 brand plans and 70 strategic marketing plans for community-based small businesses have been developed in the process – something which would have cost the emerging entrepreneurs more than R1-million otherwise, says Steenkamp.
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