Network Marketing

-Yashna Dokania
Prit Dia Jewels.
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
The Mantra
"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”.
Network Marketing
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
History
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
 What is Network Marketing?

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).
Contd…….
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.
The New face of Network Marketing
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.
Traditional model
Traditional business
vs N/w Marketing
Network Marketing
In traditional business goods and Same price
services move from one channel to
the other with the increase of prices
at every channel.

A pen at a manufacturing will cost In network Marketing the same pen

you Rs 2, the same pen will cost Rs3 sell to the customer at Rs 2 from the
at the whole sale price, while at the manufacture
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
 How Does the Model
Work?
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.
Contd....
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
Model
Advantages of N/W 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

The Business opportunity aspect of
MLM- earnings potential

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.
Prominent Network Marketing
Firms in India
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
Statistics
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)
 3 Key Elements to N/w Marketing
Strategies

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.
3 Key Elements to N/w Marketing
Strategies, cont...

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 Key Elements to N/w Marketing
Strategies, cont...

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
Thank you