Evolution and Impact of Network Marketing in Modern Business
Organizations worldwide are adapting to modern business dynamics, transforming their marketing and sales approaches. Network marketing, also known as multi-level marketing (MLM), has evolved to provide customers with unique selling opportunities. The history of network marketing traces back to the 1940s, with companies like Amway leading the industry. This distribution channel empowers customers to sell products for compensation, operating independently from the company's traditional sales force.
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Presentation Transcript
-Shifali Mandhania AMSSOI
With the changing scenario of business around the globe, organizations have quickly and effectively synergized with the dynamics of the modern business. Their orientation, their focus, their processes, and above all, their ways of marketing & sales management- everything has evolved Internet, E Commerce, Direct Selling, Mail Order System and there's an in exhaustive list of innovative ways and media through which organizations sell to their customers
"Customer Service, Satisfactionand Ease". The following lines of a famous leader- "Today's illiterate won't be the persons who aren't educated, but instead they'll be the ones who aren't adopting themselves to changes .
For many people, the words network marketing or MLM (multi-level marketing) conjure up images of hitting up your so-called warm market (those two or three hundred people near and dear to you as well as those unfortunate enough to have crossed your path at some time in the distant past) and pleading, cajoling, persuading, pressuring them to join your program. Or organizing house parties and presentations to make your pitch to a captive audience. Or having to approach complete strangers while standing in lineat the supermarket arguing and plain
The history of network marketing originates back to the 1940 s where a company trading under the name of California Vitamins ....... Nutrilite Food Supplement Corporation. In 1959 Richard DeVos and Jay Van Andel founded the company Amway. Almost 50 years later Amway is a well established network marketing company operating in more than 80 countries around the world and with more than 3 million businessoperators
Network or Multi Level Marketing may be defined as a distribution channel/ sales method wherein the manufacturer directly sells to the customer at a preferred rate and also gives the customer rights of selling the same product(s) for certain compensation/ incentive. Company does not employ full time salaried employees to sell and market its product offerings. The customers acting as independent agents/ distributors/ network marketers/ independent consultants on behalf of the company do this (very similarly like the life insurance companies have independent marketing agents to sell their insurance policies).
Network marketing is a general term for a type of marketing that is usually performed by an individual instead of a company. It refers to the use of interpersonal or social networks to market products and services for business purposes as opposed to the more traditional and common practices of wide-range advertising.
Network Marketing is the Perfect Business Every year, thousands of men and women leave established, lucrative careers opportunities in the booming network marketing to pursue new An industry that is now attracting former doctors, CEOs, and others, seeking independence and financial rewards.
Traditional business Network Marketing In traditional business goods and services move from one channel to the other with the increase of prices at every channel. Same price A pen at a manufacturing will cost you Rs 2, the same pen will cost Rs3 at the whole sale price, while at the distribution you buy the pen at Rs4 to go and sell to the customers. You as a retail to get more profit you sell the pen at Rs6 In network Marketing the same pen sell to the customer at Rs 2 from the manufacture
The firm motivates the customers of the company to sell its products by way of Network Marketing (direct selling). The customer introduces other people to the system of MLM and sells to them his firm's products. Now, after purchasing, these new customers will automatically have agency rights for marketing the same products to other people, thereby increasing sales and recruiting more marketers (consultants). Hence this system of network marketing boosts sales and also brings in new and more marketers by way of existing customers working on behalf of the company and marketing its offerings + the great business opportunity available with the customer ship.
The structure is designed to create a marketing and sales force by compensating promoters of company products not only for sales they personally generate, but also for the sales of other promoters they introduced to the company, creating a downline of distributors and a hierarchy of multiple levels of compensation. The products and company are usually marketed directly to consumers and potential business partners by means of relationship referrals and word of mouth marketing
http://upload.wikimedia.org/wikipedia/commons/thumb/2/21/Multi-level_marketing_tree_diagram.png/250px-Multi-level_marketing_tree_diagram.pnghttp://upload.wikimedia.org/wikipedia/commons/thumb/2/21/Multi-level_marketing_tree_diagram.png/250px-Multi-level_marketing_tree_diagram.png
The 45 per cent or more of the margin or mark-up, which was charged by the middlemen, is now given to the consultants. The consultant gets the product direct from the firm, hence the material is always genuine. The products will be of superior quality at affordable prices and in appropriate packings. These products will not be available at retail outlets, hence there is exclusivity of selling rights. A detailed computerized monthly statement of accounts, along with the payment is sent to the consultant. This statement also gives the names, addresses and phone nos. of all the consultants in your group. The consultant gets a chance to do business without any investment or liability
The poor and middle class work hard for their money and the rich have their money work hard for them I work for money My money works for me
Multilevel marketing allows sellers to build a business through their own sales efforts and by inviting others to become sellers. Remuneration is based on a seller's personal sales AND on the combined sales of those people they have sponsored, trained and motivated.
4Life Research ACN Advantage Nutraceuticals, Inc. Aim International Inc AMS Health Sciences Amway Arbonne BeautiControl BigEar Inc. Big Money Pro Big Planet Bio-Metics Bodywise International Brain Garden Cognigen Networks, Inc. DHS Club Ecoquest International Eniva Corporation Essante Essentially Yours Industries Financial Destination Inc. First Fitness International Forevergreen Forever Living Products Inc ForMor International Freelife International Global Domains International GNLD International LLC GoldShield Elite Gourmet Coffee Club Herbalife International Heritage Health Products Immunotec Research Ltd Innerlight Kaire International Krystal Planet Leadersclub Liberty League 5Linx \Mannatech Inc. Market America Max International Melaleuca National Safety Corp. Natures Sunshine Products Orenda International Oxyfresh Worldwide Inc Powur Pre-Paid Legal Services, Inc. Projoba International Quixtar Reliv International Simplexity Health Synergy WorldWide Tahitian Noni International USA Healthcare Savings Usana VitaMark International Watkins Xango YTB International
Amway India Sunrider India Forever Living Modicare AMC Cookware Oriflame India Hindustan Lever Network Herbal Life Avon Beauty Direct Educational Technologies Daehsan Trading India Tupperware India PS Press Service
1988 from US$ 33.32b to US$ 100b (approx.) Growth of almost three times (in last two decades) In India, the direct selling industry is estimated to be around worth of Rs.2,400 crores. *References have been taken from information sources of FEDSA (World Federation of Direct Selling Associations), IDSA (Indian Direct SellingAssociation)
Everyone is a prospect We ll build your business for you This isn t marketing we are just sharing products Anyone can do this We have the best product ever You just don t have enough belief Proven system
1. Many people join these companies thinking they'll get rich quickly and with little effort on their part. 2. The person joining has no sales or business experience. 3. Because most people already have full time jobs, they treat their part-time business like a hobby. 4. Many times people sign up under a friend, family member, or a co-worker, which is great. But do they have any experience building a large, profitable business? 5. Some people just get frustrated and give up. It may not always be easy, and it may not happen as quickly as you would like, but if you quit, it will never happen period.
Trust 1. Build "trust" first in your prospects eye by giving them good resources that could help them build their business faster and easier than they might ever thought possible before in their businesses. When you start doing that for your down line, your network marketing strategies will not only help you to grow your MLM business substantially but it will also help you to build good reputations in your prospects eye.
2. Competence Nobody wants to do business with people who are very incompetent Show your true expertise in the eye of your prospects and customers. Give them good taught that they can't resist and let them know that there are more to come
3. Contribution If you really want to make things happen in your life, you have to be very proactive and be a good contributor. There are many ways you can accomplish that by reaching out to people through different medium
The industry is looking forward towards the government of India and industry to come up with a proper legislation in form of a Direct Selling Act in the country, so as to properly organize and regularize business in this sector. Also such legislation would boost healthy competition and eliminate incompetent & fraudulent players and promote level playing field in the industry.
