Evolution and Impact of Network Marketing in Modern Business

 
-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, Satisfaction and 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, arguing and plain
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 line at the supermarket
 
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 business operators
 
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 to pursue 
new
opportunities in the booming network marketing
 
An industry that is now attracting former doctors,
CEOs, and others, seeking independence and financial
rewards.
 
 
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
 
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.
 
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
 
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
 
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 Selling
 
Association)
 
 
 
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.
 
1.
Trust
       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.
 
The term is technically a 
type
 of marketing that can be
used as part of an overall 
marketing strategy
 which
may or may not encompass multiple 
tactics
. For
example, the most common marketing tactic in a
network marketing strategy is 
word of mouth
.
Many companies which utilize a network marketing
strategy facilitate it with a 
multi-level marketing
(MLM) compensation structure. For this reason, the
two terms are often confused with one another and
used interchangeably
 
 
It is important to make the distinction that the term
"network marketing" describes a particular 
marketing
strategy
,
while "multi-level marketing" is a specific characteristic
that is a large part of, and speaks to an overall 
business
model
. While the two are often seen implemented within
the same company 
business plan
, they need not be and
in many cases one is used without the other.
 
It is possible confusion arises from the hierarchical structure created in
a multi-level system: because of its nature, the system itself results in
the formulation of a 
tree network
 within the scope of the company.
 
The term "network marketing" however is not in reference to the
structure
 of the company; it is a description of the 
nature
 of the
strategy used to market the company products.
 
 In other words, the "network" adjective is not referring to any
company-related attributes; it refers to 
how
 the marketing itself takes
place: through the 
social networks
 of individuals. Put yet another way,
network marketing is not marketing which necessarily creates a
network within a company, it is marketing that is performed 
through
the social networks of independent people.
 
 
Word-of-mouth communication
-
 
• Most influential for consumer decision making
– Comes from an independent source
– Often based on experience
– Can be negative and positive
 
• But, how can marketers act on it?
– Until now, we did not know who is talking to who?
– We could not easily reach “opinion leaders”.
– We could act on w.o.m. only on the aggregate using broad
proxies to identify opinion leaders
• Psychographics
• Demographics
 
• We have refined data on consumer communities.
--Social network data: people designate friends (e.g.
MySpace.com)
• Telecom data: people talk to friends, people designate
preferred contacts (e.g. Skype)
• We have new technology to analyze the data
• Hardware
• Software (graph theory)
• We can act on the data (viral marketing)
• Send messages to key people in the network
• Avoid marketing “noise” (blanket SMS promotion
 
 
Consumer communities….
-
 
• They are the path of “word-of-mouth” communication,
the basis for viral marketing
• They contribute to each network member’s customer
value, the basis for customer relationship management
(CRM)
• They may reflect correlated preferences and needs, the
basis for segmentation and targeting
 
 
What network marketers do?
• Find communities in complex networks (Skype,
Myspace, Telecom traffic data)
– to target with brands/content
– to discriminate w.r.t. price/advertising
• Find “key people” who (i) connect communities, (ii)
hold
communities together
– to initiate new product/service diffusion
– to ensure best return on direct (viral) marketing
– to refine CRM techniques
 
-
At its core, network marketing is a simple business.  It’s all
about generating leads, qualifying those leads and then
following up with those qualified leads until they take the
action
you want them to take (or tell you to stop) - either
purchasing
product from you or joining your downline as a productive
distributor.
 
Conybio
Conybio as one of the largest Network Marketing Company
in India. Conybio Healthcare (India) Pvt. Ltd. is an Indian
Company and is into the 
business
 of Interactive
Distribution
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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.

  • Network Marketing
  • MLM
  • Modern Business
  • Sales Management
  • Evolution

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  1. -Shifali Mandhania AMSSOI

  2. 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

  3. "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 .

  4. 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

  5. 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

  6. 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).

  7. 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.

  8. 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.

  9. 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

  10. 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.

  11. 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

  12. 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

  13. 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

  14. 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

  15. 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.

  16. 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

  17. 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

  18. 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)

  19. 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

  20. 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.

  21. 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.

  22. 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

  23. 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

  24. 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.

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