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Research Journal of Pharmacy and Technology
Year : 2020, Volume : 13, Issue : 3
First page : ( 1204) Last page : ( 1210)
Print ISSN : 0974-3618. Online ISSN : 0974-360X.
Article DOI : 10.5958/0974-360X.2020.00222.X

An Analysis of Approaches regarding the Regulation of Parapharmaceutical products sales through the network marketing system in Ukraine

Mishchenko Viktoriia1,*, Nazarkina Viktoriya1, Vynnyk Olena1, Chernukha Vitaly1, Kurylenko Yuliia1, Breusova Svetlana2

1Department of Organization and Economics of Pharmacy, National University of Pharmacy, Ukraine

2Department of Commodity Science, National University of Pharmacy, Ukraine

*Corresponding Author E-mail: viktoriamischenko@ukr.net

Online published on 22 April, 2020.

Abstract

The Aim

To analyse approaches regarding the regulation of parapharmaceuticals sales through the network marketing system.

Results

The system allows any person to conduct independent commercial activities (social status, education, experience, gender and age do not matter). Network companies exist in 125 countries around the world. There are over 800 network companies working in Asia Minor. In Europe, there is more than 700, and in Russia, more than 70 of only large ones, in Ukraine there are only 50. Today in Ukraine, more than 100 companies sell their products in this way, which, along with cosmetics, offer parapharmaceuticals: Amway; Herbalife; Mary Kay; Oriflame. Today, in Ukrainian market there are more than 50 companies using the direct sales method, but most of the turnover is concentrated in the hands of organizations that are members of the Ukrainian Association of Direct Sales, the best of which are Avon Cosmetics Ukraine, Amway Ukraine, Mary Kay (Ukraine), Oriflame Cosmetics Ukraine. These companies mainly promote cosmetics, but in their assortment there are vitamins, dietary supplements (DS), including parapharmaceuticals. Their share accounts for 88% of turnover and 94% of distributors of the given branch of sales. With the above-mentioned companies, about 685, 000 Ukrainian citizens cooperate. It was investigated that in order to regulate the functioning of MLM companies which deal with parapharmaceuticals, Ukraine has formed the Ukrainian Association of Direct Sales, which functions at this time. As of January 1, 2017, it only consisted of the five largest corporate members: Avon, Amway, Mary Kay, Oriflame, Faberlic, and, as of January 1, 2019, they were ten: Herbalife Ukraine (Herbalife Line No. 60), Tiens Ukraine (Samin Glucosamine Capsules No. 60), Nu Skin Enterprises (MarineOmega No 120), Forever Living Products (Forever Lin No. 120).The share of companies such as Avon Cosmetics Ukraine, Amway Ukraine (Omega-3 and DOUBLE X ™ Complex, or Daily No. 60), Mary Kay (Ukraine) accounted for 88% of the turnover and 94% of distributors of the sales. All of them offer together with cosmetics parapharmaceuticals-DS for the prevention of diseases. In Kharkov today, there is also firm Dr. Nona International. In the structure of its distributors, the following social groups predominate (73%): 33% are occupied by entrepreneurs (mostly cosmetologists), 30% are civil servants (economists, medical workers), 20% are housewives, and the rest of social groups accounts for 27%. Distributors-cosmetologists, recommend to use parapharmaceuticals at home skin care: Mud face mask 75 ml. Dr. Nona, Salt for bath of patchouli, ylang-ylang and anise 300 ml, Dr. Nona and others Today, the company has 162 names of goods, which are divided into 7 groups, with parapharmaceuticals being 42 units, (26% of the total). The pronounced therapeutic and prophylactic effect of parapharmaceuticals is due to the presence in the composition of the bioorganomineral complex (Halo Complex ™ formula-includes derivatives of archebacteria), which consists in the fact that all components enhance the actions of each other. Responsibility for the quality of the products provided, the conditions of storage, transportation and information about its proper use lies with the network company. The imperfection of the normative legal base of domestic legislation, as for the issue of regulating the sales of parapharmaceuticals through the system of multilevel marketing, which needs further elaboration, has been established.

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Keywords

Network Marketing, Distributor, parapharmaceuticals, parapharmaceutical products, use only for the prevention of disease.

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