Forever Living Products International

History
FLP is an American privately held multi-level marketing (MLM) company
basein Scottsdale, Arizona, which manufactures and markets aloe vera based drinks and bee
derived cosmetics, dietary supplements, and personal care products. The company was founded
in 1978 by CEO Rex Maughan. After acquiring the company Aloe Vera of America by the
1990s, In 2010 the company reported a network of 9.3 million distributors and revenue of $1.7
billion, and in 2006 they reported having 4,100 employees (Sumit).
Forever Living was founded in 1978 in Tempe, Arizona by Carl Jensen and Rex Maughan. By
the 1990s, Maughan had purchased the Texas company Aloe Vera of America, with Aloe Vera
of America selling its products to Forever Living for distribution. Some journalists have likened
the multi-level marketing business model of Forever Living's distribution system to that of
a pyramid scheme.
In 1983, the company was named No. 6 on Inc. Magazine's annual Inc. 500 list of the fastest-
growing private companies in the United States.
According to Arthur Andersen's Top 100, as of 1993, Forever Living Products International was
Arizona's second-largest private company. As of August 1995, Forbes reported the company's
product line included "deodorants, toothpaste, laundry detergent and three dozen other products,
nearly all of which contain extract of aloe.
Annual revenue exceeded $1.15 billion in 2005 and Forever Living ended the year with around
150,000 distributors, and 55 employees. The following year, Forever Living was listed at No.
340 on the Forbes 400 list, which ranks the largest private companies in the United States. At the
time, the company was described as having 4,100 employees and sold its product in 100
countries.
In 2010, the company reported a revenue of $1.7 billion and a network of 9.3 million
distributors. In 2013 the publication New Vision reported that Forever Living had over 20,000
distributors in Uganda, of which only 83 had reached a managerial level and begun to recoup
expenses; their investigation concluded that Forever Living Products' "distribution system does
not guarantee profits and majority of members drop out along the way, after losing millions.The
company was active in over 150 countries as of 2015. In February 2015, the company announced
they had appointed a new management team to "oversee the affairs of the company in Nigeria.

Company history

Founded in 1978 on little more than inspiration and hard work, Forever Living Products is now a
multi-billion dollar, life-changing company that manufactures and sells hundreds of wellness and
beauty products all around the world. Drawing on years of experience, innovative new ideas,
solid values and unsurpassed quality control, Forever Living Products continues to forge new
pathways on its journey towards unimagined success. When Rex Maughan created Forever
Living Products, he knew it wasn’t in the best interest to rely on third-party vendors to deliver
the kind of quality he demanded for his products so he insisted that Forever become completely
vertically integrated by securing its own aloe plantations, manufacturing and packaging plants
and storage facilities. Rex’s foresight provides Forever the ability to control quality and cost
every step of the way. It is because of this that Forever is able to focus on what matters most…
quality, innovation and the best products on earth.
With more than $1 billion in annual sales, Forever Living Products International Inc. is Arizona's
largest privately held company and one of the world's largest direct marketers. The nearly 20-
year-old firm has millions of representatives in North and South America, Europe, Africa, Asia,
and Australia. Forever Living's product line includes aloe vera-based drinks, lotions,
supplements, cosmetics, and detergents. The company owns 5,000 acres of aloe plantations and
facilities capable of processing 6,000 gallons of raw aloe each day. Forever Living also owns and
operates more than a dozen resorts and attractions, including Dallas's Southfork Ranch.

Late 1970s Origins

The company was founded in 1978 by Rex Maughan. Raised on a farm in Idaho, Maughan
worked his way through Arizona State University, earning a degree in business administration
with a concentration in accounting in 1962. Upon graduation, Maughan served as a Mormon
missionary in Western Samoa. Back home, he started as an accountant in a Phoenix firm and
then entered the real estate industry in 1964. Three years later, he took a top management
position with real estate developer Del E. Webb Corporation. After ten years there, however,
Maughan realized that he was not likely to rise to that company's presidency, so he started to
look into creating his own enterprise.

Before deciding on a product or service, he focused on devising a marketing plan. Maughan

quickly homed in on multilevel marketing, researching well-known direct sales firms like Avon,
Amway, Tupperware, and Shaklee. Also known as MLM or network marketing, multilevel
marketing is a method of direct selling whereby each distributor/salesman brought into the
company brings in several new distributor/salesmen who become part of his "downline." The
original distributor makes profits not only on his own sales, but also earns commissions on
downline sales. A key advantage of this strategy is that it relies on word-of-mouth networking
for growth, thereby eliminating the need for an advertising budget.

Although the direct sales industry in general and MLM in particular have been blighted by illegal
pyramid schemes, several standards guide the operation of lawful organizations. A company
must offer a legitimate product or service that is fairly priced to distributors; offer commissions
on sales, as opposed to downline sponsorships; provide sales and recruitment training; and not
exaggerate earnings potential. The Federal Trade Commission legalized multilevel marketers
who adhered to these guidelines in 1979.
Maughan first got involved with multilevel marketing as a distributor selling
gasoline additives in his free time, but soon observed that "most [network marketing companies]
seemed to be top-heavy--designed to benefit the guys who founded them. So I started developing
my own plan for a company." He and an associate who had some experience in the field drew up
a business plan and started recruiting their own downlines in 1978.

Only after they settled on a marketing scheme did the two partners seek a product. Maughan was
convinced that they needed to offer something expendable to encourage repeat sales. In a 1995
interview with Success magazine's Duncan Maxwell Anderson, the Forever Living founder
reflected, "Water purifiers and burglar alarms were very popular, then, but I didn't want anything
that wasn't consumable. I was interested in health products and thought other people might be,
too. But I didn't want a me-too item like diet products, soaps, or vitamins." Maughan found what
he thought was an ideal candidate--aloe vera.

Commonly known as the "first aid plant" or the "burn plant," aloe vera is a succulent whose juicy
middle has been used cosmetically and medically for centuries. The Bible notes that aloe was
used to anoint Jesus' body before it was entombed, and other sources claim that the substance
was used by Cleopatra and Alexander the Great. Maughan stumbled upon a group of doctors in
Dallas who had developed a method of stabilizing and storing the highly perishable aloe gel,
which they used in a sunburn lotion. The Dallas group, Aloe Vera of America, had been trying to
sell its product in health food stores with little success. Maughan and his partner believed that the
products would benefit from the direct selling method, which relies heavily on demonstrations,
testimonials, and word-of-mouth sales.

Maughan, who continued to hold his day job with Del Webb, rented an office in Phoenix and
warehoused product in his garage. From an initial investment of $10,000 in 1978, he and his
partner recruited about 40 people who sold $700,000 worth of aloe-based products under the
Forever Living name that first year. Within just two years, annual sales had increased to more
than $30 million. Feeling confident that he had achieved "financial freedom," a 43-year-old
Maughan quit Del Webb to concentrate on Forever Living Products (FLP) full time in 1980.

Growth Accelerates in the 1980s

In 1981, Forever Living Products purchased Aloe Vera of America's patents, its cosmetic
production plant, and its field processing operations. From 1980 to 1981, the company's sales
more than doubled to more than $71 million, ranking FLP among America's fastest growing
firms. This rapid expansion drew the attention of "dozens" of brokers seeking to take the
company public or merge it with another firm. But Maughan was not ready to cash out. In the
mid-1980s, he reflected, "I was not interested then, nor now. I'm still in it to help other people."
Of course, every person Maughan "helps" brings him increased profits, too.

As Forbes's Christopher Palmeri noted in his August 1995 article on Forever Living Products
and its founder, "More money works its way to the top than stays at the bottom. The big money
is not in selling the stuff, but in recruiting people to sell the stuff." In 1983, Maughan solidified
his position at the top by buying out his partner's half interest.
Forever Living Products exceeded $100 million in revenues and 500 employees by 1985, when
the company had more than 1,000 acres of aloe growing in Texas's Lower Rio Grande Valley.
By this time, the company also owned processing plants and research labs in Dallas, a fleet of
trucks, and an official headquarters in Tempe.

Capitalizing on his experience as head of recreational properties at Del Webb, Maughan formed
a resort division in 1981. By the mid-1990s, Forever Living owned 18 resorts in Nevada,
Missouri, Kentucky, Texas, California, Wyoming, Arkansas, Colorado, Indiana, Arizona, and
Georgia. Properties included Southfork Ranch, made famous in the "Dallas" television series.
Maughan bought the ranch from its cash-strapped owner at auction in 1992 and refurbished it to
feature a convention center, "Dallas" museum, and rodeo. Cut-rate trips to the resorts are used as
rewards for productive Forever Living representatives and are also open to the public.

Maughan refined Forever Living's MLM plan over the years. By the mid-1990s, sales people
were ranked from beginner-level "Distributor" to high-flying "Double Diamond Manager." The
company supported these representatives with training materials ranging from booklets and
videotapes to "ForeverVision," a bimonthly satellite broadcast featuring product information and
motivational programs. In addition to downline bonuses, distributors had the potential to earn
vacations to Forever Resorts, autos, electronics, and other incentives.

Product and Geographic

Diversification Drives Continued Growth in the 1990s
Although aloe is most commonly used topically, Forever Living's key product has been its aloe
vera beverage. The substance has long been used as a purgative agent, to which Maughan may
have been referring when he asserted, "Aloe vera helps our bodies perform like they are
supposed to." By the mid-1990s, the company had developed three flavors of aloe "juice":
cranberry, apple, and natural. Although Forever Living promotes the natural flavor as "exotic,"
Christopher Palmeri characterized the taste as more near that of "turpentine" in his 1995 piece.
The nutritional benefits of aloe consumption remain debatable. Some doctors note that aloe
products are at worst ineffective, while others, like Mount Sinai School of Medicine's Dr. Victor
Herbert, have asserted, "There is no reason for humans to drink it." Aloe drinks generated about
50 percent of Forever Living's annual sales into the mid-1990s.

The company also made dozens of skin care products from aloe, including lotions, creams,
soaps, hair care products, deodorant, aftershave, lip balm, and a burn treatment. Other aloe-based
goods included toothpaste, colognes and perfumes, and laundry detergent.

FLP launched its line of Forever Bee Products in 1983. At the core of this group of nutritional
supplements is "Royal Jelly," a food created by honeybees especially for the queen bee. Some
scientists attribute the queen bee's growth, reproductive ability, and comparative longevity to her
consumption of royal jelly. The company offered royal jelly in 250 mg tablets, bee pollen (the
worker bees' food source) in 500 mg tablets, bee propolis (from the walls of the hive) in 500 mg
tablets, and pure honey. Forever Living made absolutely no claims that humans who consumed
these products would obtain the same health benefits apparently enjoyed by the bees, making
assurances only about the source, potency, quality, and purity.

Although the founder has asserted that, initially, he was not interested in selling vitamins and
diet products, nutritional supplements would become an important segment of the Forever Living
line. The company combined aloe with vitamins, ginseng, minerals, fish oils, garlic, and other
substances to make an array of nutritional supplements. Forever Living's promotions were
peppered with pseudo-scientific terms like "flavonoid extract" and "bioflavonoids," but the most
the company would guarantee was that its products would "make people feel better and more
beautiful."

Forever Living took even greater pains to avoid making specific health claims in the wake of a
1992 lawsuit. That year, the Texas state attorney general brought suit against the company,
charging that a Spanish language infomercial made unfounded claims that consumption of aloe
could control diabetes.

Having fleshed out its product lines, Forever Living began to diversify geographically in 1983.
The company focused first on the Far East, where natural remedies enjoy a strong heritage and
high esteem. By 1995, FLP had distributors in 40 countries.

Although Rex Maughan calls his company "the best-kept secret in Arizona," Forever Living's
fame grew in line with its sales in the late 1980s and early 1990s. Revenues mounted from $100
million in 1985 to more than $200 million in 1990 and surpassed $1 billion in 1995. Although
some observers warned that multilevel marketing could reach a saturation point, where virtually
everyone was a distributor, there seemed no limit to Forever Living's growth.

Introduction:
Forever, the aloe Vera company Established in 1978, forever living product giving best health
and natural product to provide healthy and long life to the people and increase their personal
value. Forever is sharing their product with whole world and giving great pleasure to get
importance from product. On basis of new survey, forever, the aloe Vera product company
becoming giant manufacture, distributor and publisher of Aloe Vera and as well as great bee
products in the world. Forever is multi-billion company over the world and operating their
business over 140 countries. “Forever is international headquarter located in Scottsdale, Arizona,
Rex Maughan, founder, President and CEO, Directs operations worldwide, it’s approx 9.25
million distributors enjoy the support, tools and guidance need to live healthier and wealthier
life.

Since their business grew and achieve high boost 9 millions of distributors over the world, their
product line is increasing by day to day, which is some product e.g. Aloe Drinks, Bee products,
Nutrition, Personal Care, Skin care and weight loss etc.

Parker, B (2007) Forever Living Products (UK) ltd. Forever Living Products (UK) ltd. () 4,5
Forever Company Background:
Forever living products are commence their operational business form United Kingdom and after
short period of time company ready to achieve largest provider of aloe Vera services over the
world. In year of 1994, company was ready to spread their magic; first they start head office to
the prestigious longbridge manor in Warwick. Forever company is operating and believing on
‘Open door’ strategy policy meaning for new entrants are always welcome, and regular meeting
and discussion are held throughout the year. In year of 2007, Company’s revenue number is $2.1
Billion, forever transferred to the United States, which is larger location of business growing
industry? Forever started their business as their distribution centre and now they can store 50
containers (1,000 pellets) of product form the US. Forever company successful distributor is
packing order approximately 1, 35,000 orders annually. The distribution centre hosts to give
increment to distributors and provide tour facilities and operation.

The Business projects opportunity & Scope:

By through of author view mission is, “We endeavour to understand our customers’ business so
well as to be able to offer comprehensive solutions to their problems.”

Author is describing if your mission gives ability to solving problem and accurate understanding
with customer in business. It is great achievement for company portfolio and good indication of
business reputation.

Basically, Forever Company’s scope strategy describing in following points:

Company has been successful in the past but in market so many competitors are giving
challenging by global operators expanding into the world.

For be successful in the business environment company developing their current product and
giving more consideration on R&D to improve their services and value of money.

To make new implementation on territory, and expand new customer and new market in the new
location.

To attract and build good relation with customer and distributors, who is giving repeat business
from market? To keep distributors and customer loyalty safe provide rewards scheme.

Company are trying to introducing new entrants in the team because they are brining new ideas
and experience and giving flexibility into the incorporate world.

Scribd.com (2010) Available: http://www.scribd.com/doc/12982888/Busines Last accessed: 10th

April, 2010.
REVIEW OF LITERATURE
The purpose of this study is to examine the relevance of multilevel marketing in Kerala. A
literature review resulted in identification of selected research papers, books, journals, articles
and surveys, each of which examines both the positive and negative views on multilevel
marketing system. Literature is analysed carefully and selected few which seems to be the most
appropriate to the current context of study. Data analysis results in tables and analysis of
different prerequisite elements identified by the literature and their categorization into specific
multilevel marketing problem areas. Conclusions are presented for readers as a list of
recommendations related to the varied aspects of multilevel marketing. Since multilevel
marketing is a new marketing concept to our country, wide studies have not been conducted so
far in the area. At the same time, this type of marketing was quite popular for many years in
USA and as a result many studies both in favour and against the system were found in literatures
of that country. In addition to that, the researcher has also made references at the appropriate
places regarding the studies and the opinion expressed by well known authorities, in the
connected areas of multilevel marketing such as 33 distribution, advertising etc. which seems to
be relevant and closely associated with the concept of multilevel marketing system. To
accomplish this goal, this researcher employs literature review as the research method to identify
existing publications in areas collateral to the area of this study. Selected research papers, book,
journal articles and survey results published are analysed. Most resources selected are located
online because; 1.

They are timelier and much more accessible, as well as the fact that 2. Very few books and
academic research papers are available on the topic of multilevel marketing. The initial search
produced over 74 sources. A closer review identified around 58 that directly discuss the
relevance of multilevel marketing. The survey of literature connected with the research in
question also contains an annotated bibliography of the primary references examined during the
research. The literature is surveyed in such a manner to have a discussion in the following lines.

1. Key aspects of the reference related to the purpose and problem of this paper.

2. The role that the reference plays in the content of the paper. References are published in
various formats, including research papers, books, journal articles and surveys. Based on the
content, these documents are 34 presented as two categories namely literature connected with
multilevel marketing and literature connected with marketing. A summary of such a literature
survey is outlined below.
Direct Selling
Marketing is practiced today in all modern nations, regardless of their political philosophy. As
international competition has heated up, the attention paid to marketing has increased.
Depending on circumstances, marketing can be vital to the success of an organization. In recent
years numerous service firms and non-profit organizations have found marketing to be necessary
and worthwhile. Every organization, large or small must have a mission. The global economy is
changing so fast and the marketing organizations have to keep in touch with these changes.
Developments affect marketing, direct sales, including technology, work practice and systems.
The marketing concept was born out of the awareness that marketing starts with the
determination of consumer wants and ends with the satisfaction of those wants. The customer,
not the corporation has to be the centre of the business universe. The key to success of any
marketing method is the satisfaction of needs and wants of consumers. The modern marketing
concept proclaims that the key to success in any business consists of determining the needs and
wants of target marketers and delivering the desired satisfaction to consumers more effectively
and efficiently than competitors

Direct selling is defined as personal contact between a sales person and a consumer away from a
retail store. This type of retailing has also been called in-home selling but, the changing roles of
women have made the term less accurate. A variant of direct selling is called multilevel
marketing where by companies such as Amway or Shaklee recruit independent business people
who acts as distributors for their products, who in turn recruit and sell to distributors, who
eventually recruit others to sell their products. A distributor’s compensation includes a
percentage of sales to the entire sales group that the distributor recruited as well as earning on
any direct sales to retail customers.

Social Media as a Marketing Tool: A Literature Review

In today’s technology driven world, social networking sites have become an avenue where
retailers can extend their marketing campaigns to a wider range of consumers. Chi (2011, 46)
defines social media marketing as a “connection between brands and consumers, [while] offering
a personal channel and currency for user centered networking and social interaction.” The tools
and approaches for communicating with customers have changed greatly with the emergence of
social media; therefore, businesses must learn how to use social media in a way that is consistent
with their business plan (Mangold and Faulds 2099). This is especially true for companies
striving to gain a competitive advantage. This review examines current literature that focuses on
a retailer’s development and use of social media as an extension of their marketing strategy. This
phenomenon has only developed within the last decade, thus social media research has largely
focused on (1) defining what it is through the explanation of new terminology and concepts that
makeup its foundations, and (2) exploring the impact of a company’s integration of social media
on consumer behavior. This paper begins with an explanation of terminology that defines social
media marketing, followed by a discussion of the four main themes found within current
research studies: Virtual Brand Communities, Consumers Attitudes and Motives, User Generated
Content, and Viral Advertising.
 Network marketing - literature review

Network marketing is a dynamic business model that is growing in popularity on the

domestic front as well as the global arena. The extant literature on network marketing
covers public image, negative perceptions and controversy, general knowledge,
organizational socialization, organizational identity, entrepreneurship, customer
relations/relationship marketing, immigrant entrepreneurship, discourse, leadership
styles, organizational citizenship, and ethics/legality. Network marketing has
foundational establishment in 1945. Network marketing is the most popular form of
direct selling. Network marketing is face-to-face retail selling away from a physical
retail site with a tiered compensation plan. Network marketing organizations
compensate personnel outside the company, network marketers, to market and sell the
products or services direct to consumers. Network marketers are independent small
business owners that recruit, train, and manage their sales force. Network marketing is
open to everyone and has low capital investment, high margins, no designated
territories, and minimal interference from the company. Operating and monitoring
cost are minimal. Network marketing appears to be a viable business architecture for
subsidizing income and to some a formidable full time business. The major
competition in network marketing is the labor market where the network marketer is
in competition with other network marketers for prospective network marketers. The
literature on network marketing covers a broad spectrum of business dynamics and
present the tension in the literature on perception, legality, ethicality, and potential for
success.

Methodology
A qualitative research design will be used in order to answer the research questions.
Questionnaires were sent to business owners of Rodan+Fields through email to gather
exploratory research for the purpose of this study. The resulting data was analyzed following the
method outlined by Spiggle (1994). This method is appropriate because of the use of qualitative
data. Spiggle’s fundamental operations of categorization, abstraction, and comparison best
organized data, extracted meaning, arrived at conclusions, and confirmed conceptual theories
described by the data. Since the study is descriptive in nature, Spiggle’s method proved most
useful for coding and analyzing the data
Participants
Since the research deals with the characteristics and motivations of direct sellers in the marketing
field, gathering data from those directly involved in multi-level marketing seemed most effective
in collecting materials to answer the research questions. Questionnaires (Appendix A) were used
to gather information from 10 business owners in Rodan+Fields. Each participant has been a
business owner in Rodan+Fields for a minimum of 1 year. Participants were chosen from
personal contact and all reside in the southern United States

Procedure
The primary researcher served as the sole receiver and reviewer of the questionnaires
distributed. Once questionnaires were returned, they were printed out to 10 provide the primary
researcher with better methods of comparison and analysis of reoccurring themes. The list of
questions used were designed to be open-ended, allowing the participant to elaborate as much or
as little as desired. However, the questions were outlined in a way that a definite answer could be
derived regardless of expansion or lack thereof. Questionnaires were distributed through email
and 8 out of the 10 were collected through email with 2 being hand delivered. The questions
were designed to gain a better understanding of the characteristics of a person that do versus do
not contribute to success in direct selling as well as the motivations for maintaining success.
Business owners were first asked about characteristics they look for in prospective team
members and what characteristics make successful direct sellers. Participants were then asked
about what they considered success and how they motivate self and team to achieve success.
Lastly, participants were asked to provide reasons they were given by others about not wanting
to join Rodan+Fields as well as characteristics and reasons of those who left Rodan+Fields soon
after joining. The questionnaire and email script can be found in Appendix A

Analyses of the Research

Once the questionnaires were coded, the analysis followed Spiggle’s (1994) three processes:
categorization, abstraction, and comparison. In the categorization and abstraction process, each
questionnaire was first coded to find independent themes. This was done to identify
characteristics and motivations of the type of direct seller identified in the question. Answers that
seemed to indicate each theme were underlined on individual questionnaires. After this process
was followed with all questionnaires, the goal was to combine all samples to examine similarities
and differences. This is done in 11 order to find the emergent themes that go beyond the
identification of the common themes (Spiggle 1994). Following this method, only after
individual themes had been discovered could emergent themes be found within the data as a
whole.

Multiple reviews of the data were conducted to see if emergent themes occurred and to employ
the principles of logic in making inferences from the data (Spiggle 1994). This uses a grounded
theory approach, meaning, to build theories that are grounded in data (Strauss and Corbin, 1990;
Spiggle, 1994). Results of the analysis of characteristics of those who do make successful direct
sellers show three emergent themes: determination, teach ability, and confidence (table 2). Of
these three, 80% of participants said that having determination was a major contributor as to
whether one would be successful in direct selling or not. Confidence was a close second with
70% of participants saying that it is a contributor to success. As addressed in the literature
review, this theme of determination was tied back to the “Why” 50% of the time

Results of the analysis of those who display characteristics of unsuccessful direct sellers show
four emergent themes: laziness, lack of motivation, unwillingness to dedicate time to the
business, and lack of consistency (table 3). While not every questionnaire displayed all of these
themes, all questionnaires addressed at least one of 12 the four emergent themes. Analysis
showed that laziness was the strongest theme with 70% of participants identifying it as major
factor in lack of success.

Limitations and Future Research

The current research conducted here can be expanded upon in many ways, which makes room
for future opportunities for improvement. A larger sample size could greatly contribute to
findings in this study. With a larger number of participants, outliers are easier to eliminate and
margins are widened between characteristics, making it easier to discern true emergent themes.

Secondly, it may have been beneficial to create two groups of participants separated by length of
time spent with the company or by downline size. Both of these factors contribute to the way a
direct seller runs his business and the types of incentives he can offer as well as promotions. A
direct seller with only 10 members in its downline has less opportunity to engage in riskier
business tactics because it lacks the security of a direct seller with 5,000 members in its
downline. Likewise, someone who has been engaged in multi-level marketing for many years
would have the advantage of experience over a new member. By conducting research with
multiple groups separated by one of the two methods proposed, one could observe the business
strategies used by those more secure in their businesses and how they affect the type of team that
leader has.

Lastly, having two or more researchers could have proven helpful in the data analyses and
collection. Generally, a second researcher is used to determine reliability of the data and findings
and minimalize risk of human error. Having two researchers also could have been helpful in
recruiting more participants for the study. Since data has been collected and stored, an expansion
upon these findings can still be conducted through the 17 correct methods.

A starting point can be set from this research into the characteristics and motivations of
successful direct sellers

OBJECTIVES OF THE STUDY

The overall objective of the present study is to assess the relevance of multilevel marketing in
Kerala. To achieve this broad objective, the researcher had to examine the following additional
components.
1. To study how the concept of multilevel marketing system is perceived by distributors.

2. To assess the influence of demographic variables such as gender, age, marital status, monthly
income, education level, and employment status of respondents on their perception level towards
multilevel marketing system.

3. To examine the involvement of distributors in MLM practices, and how the involvement is
adding value to their business

4. To examine the significance of training methods adopted by distributors’ to develop network

in MLM business.

5. To examine the behaviour of distributors towards products marketed through multilevel

marketing. 6. To assess the influence of relationship in developing MLM networks and its effect
on business outcomes.

7. To identify and test the antecedents of turnover among MLM distributors in Kerala’s work
environment.

8. To examine the effect of job image, met expectations and job satisfaction on the intention to
quit and, subsequently, turnover of distributors in multilevel marketing.

9. To provide recommendations on the basis of findings to improve the activities of MLM.

RESEARCH DESIGN
Introduction World over multi-level marketing (MLM) has become a successful concept which
provide opportunities for the emergence of successful entrepreneurs. Multi-level marketing is the
fastest growing sector of the direct selling industry in the world during the last six to nine years.
Moreover it is becoming more popular day by day due to the minimum risk involved. The reason
for the growth of multi-level marketing business is simple; there are more people looking for
opportunities to earn additional income to supplement to their regular income. Multi-level
marketing is one of the forms of direct selling method which is also known as Network
Marketing. Multi-level marketing enables customers to receive goods directly from the
manufacturer. Thus, the customers get the entire benefits of direct selling. Multi-level marketing
method have been successfully implemented for the first time by Carl Rehnborg in 1920 and
started a company to distribute unique range of food supplements called California Vitamin
Company and later renamed as Nutrilite Products Inc in 1934 and also the first multi-level
marketing plan was introduced in 1945 by the company. This business is in operation in United
States in all 50 states and in more than 100 other countries. The most reputed companies in
multi-level marketing in India and abroad are Amway, Modicare, Oriflame, Tupperware,
Quantum, Rmp, Goodways, etc. India, as an emerging economy, has registered a phenomenal
growth in the multilevel marketing industry. India is one of the largest consumer markets and has
attracted many multi-level marketing companies to operate. The country has experienced
reasonably steady growth in the multi-level marketing sector. Amway India, Oriflame and
Modicare are the companies that have really introduced the concept of direct selling and multi-
level marketing in India. Amway is the third top of multi-level marketing company operating in
India. It is known to be the king of multi-level marketing industry which promotes individual
entrepreneurship through its innovative direct selling approach of world class products. Its
business is based on the simple integrity of helping people to lead a better life by marketing their
products and services through independent business owners worldwide

Statement of the problem Multi-level marketing through direct selling is reasonably increasing in
the Indian consumer market. In today‟s world, consumption of fast moving consumer goods
(FMCG) is tremendously increasing. The multi-level marketing companies offer household
utensils, homecare products, cosmetics, fitness equipments, healthcare products, food
supplements, etc. According to the American Marketing Association, “A customer is the actual
or prospective purchaser of product or services”. A marketer is in a position to study the
customer perception, problems and satisfaction in order to sustain in the market with stiff and
tough competition. Hence, the emphasis of this study is on the perceptions, problems and
satisfaction of customers of Amway which is the direct selling FMCG Company using multilevel
marketing. The study is restricted to Coimbatore district in Tamil Nadu. In this regard, the
following questions have been framed by the researcher for her study and research:

1. How a customer is aware of Amway products?

2. What are the perceptions of a customer towards Amway products?

3. What is the level of satisfaction of a customer in various aspects of purchasing Amway

products?

Objectives of the study

1. To understand the socio-economic profile of the customers.

2. To study the customers‟ preference and awareness towards Amway products.

3. To identify perception among customers towards the products.

4. To identify the problems faced by the customers.

5. To know the satisfaction level of customers.

6. To offer suggestions based on the findings of the study.

 Data collection
The primary data were collected from the respondents using a questionnaire. The questionnaire
was constructed with questions relating to socio-economic profile, perception, preference,
problems and satisfaction level of the respondents towards Amway products. The secondary data
were collected from the journals, magazines, dailies, books and from the company‟s kit issued to
the distributors and from brochures, handouts and websites.

Data Collection in Marketing Research is a detailed process in which a planned search for all
relevant data is made by researcher.

Types of Data

1. Primary Data- Primary data is the data which is collected first hand specially for the
purpose of study. It is collected for addressing the problem at hand. Thus, primary data is
original data collected by researcher first hand.

2. Secondary data- Secondary data is the data that have been already collected by and
readily available from other sources. Such data are cheaper and more quickly obtainable
than the primary data and also may be available when primary data can not be obtained at
all.

Data Collection Methods

Qualitative Research- Qualitative Research is generally undertaken to develop an initial

understanding of the problem. It is non statistical in nature. It uses an inductive method, that is,
data relevant to some topics are collected and grouped into appropriate meaningful categories.
The explanations are emerged from the data itself. It is used in exploratory research design and
descriptive research also. Qualitative data comes into a variety of forms like interview
transcripts; documents, diaries and notes made while observing. There are two main methods for
collecting Qualitative data

a. Direct Collection Method-When the data is collected directly, it makes use of disguised
method. Purpose of data collection is not known. This method makes use of-
i. Focus Groups
ii. Depth Interview
 iii. Case Study

b. Indirect Collection-Method
i. Projective Techniques

Quantitative Research- Quantitative Research quantifies the data and generalizes the results
from the sample to the population. In Quantitative Research, data can be colleted by two
methods

1. Survey Method
2. Observation Method
3.

Qualitative and Quantitative Research - Concept

As the names suggest quantitative research produces numerical data whereas qualitative research
generates non numerical data. However, this is only a superficial understanding of the terms. In
the first chapter, while exploring the types of research, we had hinted that when there is
uncertainty or when the problem is not clearly defined, we deploy exploratory research and use
qualitative studies for it. When there is little or no ambiguity and the business problem is
structured, we implement descriptive or casual research and use quantitative techniques for it.
Let us take the discussion further from here.

Qualitative Research

Focus
In a nutshell, qualitative research gives us vital insights in comprehending why do consumers
feel or behave in a manner they do. It helps in identifying and perceiving the underlying
opinions, behaviour patterns and motivations. Qualitative research aids the formulation of
hypothesis to be used for deeper exploration or quantification. In a way, it adds richness to the
information gathered by quantitative research by understanding instead of measuring. To sum up,
the qualitative approach helps decipher the less rational and more emotional perspective of the
consumer’s decision making nature, i.e. how would I feel if I were in the consumers’ shoes?

Usage
Qualitative studies assist in the following business situations:
  Market Study: Analyzing consumer interest in the company’s new idea in a particular
demographic.
 New Product Development: Understanding the actual need of the end user.
 Creative Development Research: Pertaining to branding; what should be said and how
should it be said.
 Diagnostic Studies: Understanding how is the company’s category or brand doing as
compared to the competitor’s offerings and image respectively.

Techniques

Qualitative research can be carried out by:

1. Focus Group Discussions: This is the most effective and preferred technique for
qualitative studies. Respondents, in a group of 5-8 people, are made comfortable and
asked general questions first. Gradually, the conversation is shifted to the topic of
research. It helps obtain initial reactions to marketing programs or understand the
consumers’ impressions about a new product concept.

2. In Depth Interviews: Personal interviews are conducted instead of focus groups in the
following cases:
 Discussing sensitive, confidential or embarrassing topics (Example: Women’s
hygiene issues)
 Requirement of detailed probing (Example: Purchase psychology for an
automobile is best done with the respondent one on one)
 Situations where the respondent may get influenced by the group response
(Example: Opinion on TV censorship where social norms prevail)
 Interviews with highly professional people with busy schedules (Example:
Understanding required from doctors on a new medical topic )

Another term associated with qualitative research and worth mentioning here are projective
techniques. These are ways of extracting information from respondents that capture the emotions
in consumer behaviour. Often direct questions do not bring out the hidden motivations as
consumers are themselves not fully aware of their reasons and naturally are not able to express
themselves fully. Direct questions may give sensible answers, but they may not necessarily be
�real’ answers. For this reason, projective techniques such as the below ones are used:

 Brand Personalities: The strength of advertising can be tested by imagining brands as

persons or objects. For example, asking that if Sunsilk was a person, what would he be
like?
 Collages: Asking respondents to draw collages of a brand to help understand what
consumers think about symbols used for advertising the brand.
  Word Association: First word that comes to mind upon mentioning a particular word. For
example if the word Coke brings out the first mentioned word as happiness, Coke is
maintaining its strong brand image.

Quantitative Research

Focus

The aim of this method is to consume numerical data and present facts or uncover patterns in the study.
The aftermath of quantitative research is results that are projectable because they are drawn statistically.
Basically, while qualitative research is subjective, the quantitative method is more objective. Another
characteristic of quantitative research is that it is drawn from a reasonably sized and carefully selected
sample which is representative of the target population. The methods of choosing a proper sample are
discussed in the previous chapter. Typically, a terminology of 95% confidence interval is considered good
while deciding the sample sizes. This actually means that if the survey is reoccurred 100 times, 95 times
the same response would be obtained.

Usage

Quantitative research is most widely used for determining cause effect relations. For example, if the
marketing budget is increased by 15%, how much is the revenue expected to increase. If the strength
between the dependent (revenue) and independent (marketing budget) variable is strong, the test
hypothesis holds true and the company should invest more in its marketing. Thus a decisive stance can
be taken from the facts presented in this research.

Techniques

Data collection for quantitative studies is done by various kinds of surveys using questionnaires. The
survey can be done through various mediums such as face-to-face, email, telephonic, online, etc.
Designing questionnaires for a survey is a detailed topic which will be covered in the next chapter. For
now, we will explore the methods for conducting a survey.

 Mail survey: Mail surveys are convenient and maintain anonymity of the respondent. They are
also relatively inexpensive. However the major drawback is that feedback cannot be obtained
from the respondent.
 Telephonic & Face-to-face survey: There is little scope of error in these types of survey as the
interviewer is available for assistance. However, while guiding, the interviewer may sometimes
influence the respondent leading to biased answers.
 Online: Surveys carried out over the internet are gaining popularity these days as they can reach
a wide audience. The downside is that without incentive, the respondent at the end may not be
interested in taking up the survey or answering all questions seriously.
 Hybrid: A fusion of techniques can be used to record better responses. A commonly used hybrid
method is Telephone-Mail-Telephone (TMT) wherein respondents are instructed over the phone
and then sent the survey over mail to be filled at their convenience.

The choice of the above mediums depends on the budget, time and complexity. If budget is a constraint,
mail surveys can be used. Online surveys are instant and hence should be deployed when there is a time
crunch. When interaction is required, personal or telephonic surveys must be utilized.
Concluding Remarks

We have seen in the sections above that in which situations the usage of quantitative research is
preferable over qualitative research and vice versa. Ideally, if there are less budget constraints, we can
use both types as they give variant perspectives and complement one another. Sometimes both have to
be used in tandem as in case of Usage and Attitude Studies that we will see in the later chapters. Finally,
a qualitative research will generate a more narrative report with a contingent account and direct
quotations from the respondents. On the contrary, a quantitative research will produce a statistical report
with correlations, significance, means, etc and hard facts.

MLM website design

The template design is the number one criteria for deciding whether a business website is
credible or not. Your business website wants to be a quality web design that can carry your brand
value and keeps the design interested and engaged with the visitors. It will automatically increase
your site traffic.

Are you having an idea to start a multi level marketing business, then take as much care while
deciding the MLM website templates. Because the template will set a standard for your online
business. The first action that client notices on your site is often a company honesty and
professionalism and both of them are quite hard to gain. Therefore, select the network marketing
templates which will reflect your true aim and attitude of the business. This will generate the
valuable customers to your online business website.

For this check out a great looking MLM design templates from our ARM MLM gallery page.
In our gallery page, you can find a monumental collection of web designs. Our web design is
having an innovative pages and great structures. And most of the templates listed in our gallery
are to be cost effective which will be included in your budget price. Try our multi level
marketing templates and just sit back and watch the growing amount of traffic for your MLM
website.

The ARM MLM software company is having an experienced web designers who can build a
great looking website by using the latest designing tools. And we have two types of templates
unique and normal.

Unique Template:

If you purchase the unique template from us, then we mark that as a sold out and will be no
longer available for sale. And the price of the unique template is $199 USD.

Normal Template:
This template can be bought by another person after you have purchased. And we have a right
to resell the template to other peoples. And the price of the normal template is $69 USD.

And our designing team is always ready to do customization work as per your
requirement. For this, just contact our customer support team and drop your
requirements to make a customized MLM website design. Our customer support
executive will be back to you in an hour with the schedule timing and quoted price. The
price for the customization is also very cheap when compare to other competitors.

Digital Marketing
Data Analysis
Define a Problem
First, you must know what you want to accomplish or what problem you want
to solve. This will show you what digital marketing data you need to track and
how you need to analyze it. Tracking the wrong data or conducting the wrong
digital marketing data analysis will lead you to incorrect assumptions.
Similarly, making decisions without data will prevent you from moving forward
in a measurable way.
Ask yourself what you want to know or what problem you want to solve. At this
stage, it’s okay to be general, but your problem should have a KPI attached to
it. This might be leads, brand awareness, sales, conversion rates, or ROI.
With this example, we’ll go through each step in the digital marketing data
analysis process to solve a problem.

You are a marketing manager and you’ve decided to take a hard

look at your website. You feel like your website is
underperforming, and you want to generate more leads from it.
Set Data-Driven Goals
With your problem and objective defined, a measurable goal will help you
determine if you’re moving in the right direction. Digital marketing data
analysis must be based on goals and benchmarks to give the numbers any
meaning. Your goals should be based on previous digital marketing data
analysis, or other benchmarks you’ve gathered. The goals you set should be
difficult to reach, but possible.
To adjust your goals accordingly, determine the level of performance you
would need to accomplish them. This will help you get specific. From here,
you can determine what you would have to improve and by how much to
reach a certain goal.

Previously, you’ve determined from your web analytics that your

best landing page generates 13,000 visitors a month, and 130
leads, with a lead conversion rate of 1%. In this case, you
decide improving lead conversions makes more sense than
improving traffic. Previously, you’ve doubled conversion rates on
similar pages simply by optimizing the page load speed, however
no landing page has a conversion rate higher than 5%. From this,
you determine how many leads you’ll need to meet a challenging
goal.
Collect Accurate Data
To generate the right conclusion and to focus on the right improvements, your
digital marketing data analysis tools must be reliable. The data you receive
should also be easy to interpret.
To gather data accurately, you will need a way to track user behavior. The
right codes, URLs, or plugins can show you how a user arrived on the page,
what they clicked, or whether or not they saw an ad. These tracking codes
may include a Google Analytics JavaScript snippet, URL tracking codes,
Facebook Pixel, or HotJar plugin, among others. When using these tracking
devices, make sure you set events properly, so the device knows what to
track. Google Analytics’ code snippets, for example, may need to be set up to
track conversion events.
Once your tracking devices are installed and events are set up, you’ll need to
integrate them with a data gathering or compilation platform so you can
assess your digital marketing data analysis strategy. For this, you may need
to integrate your website and analytics tools with a CRM system like Hubspot.
Or you may prefer to use a data compilation platform like Data Box or Google
Data Studio.

When assessing the performance of your landing page, you notice

that conversion rates dipped the last two months. To make sure
you have accurate data, you talk to your web design team about
the Google Analytics tracking code. You determine that a recently
installed chatbot interfered with the tracking code. The design
team fixes this problem, and you test the code to make sure your
conversion events are tracking properly.
You realize there’s still an issue; your sales team hasn’t seen any
of the leads from the new landing pages. You know some of the
leads generated must be sales-qualified, so you suspect an issue
between your marketing and sales CRM systems. Sure enough, you
see that the leads marketing determined to be sales-qualified were
being delivered to the wrong regional salesperson due to a CRM
system error.
Lastly, to get a full picture of page performance, you add your
Google Analytics and CRM system reports to Data Studio. You
build a custom report to look at the landing page you’re working
on, and you get an easy-to-read chart showing traffic, traffic
types, clicks, conversions, leads, marketing qualified leads, sales-
qualified leads, and more.
Make Informed Changes
To achieve your goals, you need to decide what to change and how to change
it. At this stage, you’ll want to hypothesize changes based on previous digital
marketing data analysis or other estimates. Use A/B testing or user testing and
study the results individually and gauge the impact of each change.

Improving the loading speed of other landing pages has doubled

their conversion rates in the past. Though you’re reasonably sure
this will be the case again, you make this change first and study
the results so the improved conversion rates from the speed
upgrades don’t affect the other changes you’ll make.
As you expected, the conversion rates doubled after the speed
upgrade and are now at 2%. Next, you suspect that making the
form on the page shorter and adding an explanatory video to the
page will improve it further. You conduct an A/B test to first test
your form hypothesis. It turns out to be correct; conversion rates
improve to 3%. Then you conduct another A/B test for the video.
This is also correct; conversion rates improve from the original
2% to 3%. Finally, you make both the changes together and, just
as you expected, you’ve reached 4%!
This may seem like a long process for improving one landing page, however
you’ve done more than that: you’ve made a framework for uncovering
problems across your site and solving them using facts, not guesses. For
each objective you target however, it’s also important to determine the time
and resources you can give to it. If you lack the tools, time, or experience to
apply marketing data analysis to your goals, a digital marketing agency can
work through the process for you. With this you can reliably resolve obstacles
holding back your digital marketing strategy, without taking time away from
your other business goals.

Conclusion
The discussed systems of calculating commissions clearly show arguments
supporting the concept of running operations based on the discussed business model.
In reality, hardly any new business can bring such a rapid growth of revenues and at
the same time eliminate the risks associated with the need to invest capital. According
to the U.S. ministry of labour and the direct sales organization, the likelihood of
earning USD100,000 in the same time and with the same effort, is five times higher
10
in network marketing than in case of typical business activity . However, we have to
remember that in order to make launching a real marketing plan possible, it is
necessary to take into consideration a series of factors present in the environment. We
also cannot forget about the fact that market rules affect typical business activity,
franchises, as well as Multi Level Marketing organizations in exactly the same way.
The choice of the right company functioning based on the method of distribution of
network marketing should always require in-depth analysis and assessment of the
capacity to achieve success. Such meticulous and analytical approach should also
protect against the risk of joining a pyramid scheme, which often is uncannily similar
to Multi Level Marketing. In order to avoid this threat, it is necessary to carefully
analyze a particular marketing plan in terms of cash flows and verify the appeal and
quality of the product or service offered by a company. After confirming that the
information presented by the company is credible, we can start an amazing adventure
and without taking a substantial risk, enter the world of business.

Never doubt that you have what it takes to lead a profitable network marketing empire.
You became a leader the day you signed your independent contractor agreement. Don’t
wait until you have a team before you start thinking of yourself as a leader, and acting as
a leader. The sooner your attitudes and actions align with the attitudes and actions of a
leader, the sooner your community will grow.

Leading a community is a big responsibility, but don’t let that overwhelm you. Let it
inspire you to be the best leader you can be.

Direct selling does have distinct advantages. Customers can get personal, detailed information on the
product and have it delivered to their door. It is a cost-effective, efficient marketing channel for small
businesses and new products. To some extent, it guarantees quality products, and also creates
employment.

There are two main methods of direct selling – single-layer and multi-layer. Avon is the best known
company operating under the former method, while Amway uses the latter. Avon’s door-to-door sales
mode proved a success in China. Single-layer direct selling uses a very similar strategy to
conventional sales, and is easily supervised. The riskier world of multi-layer selling, however, is a
fraudster’s paradise.

The introduction of the MLM business model into china in the mid 90’s created unprecedented millions
of Chinese joining MLM Companies. Along with the success of multilevel marketing, other operators
introduced illegal pyramid schemes which caused damage to China’s society. By association this
damaged reputable companies were operating legal multilevel systems.

To restore social order, the Chinese Government imposed a ban on Direct Selling in 1998. Multi-level
companies like Amway, though greatly affected in sales, did not stop operations. Instead, they took
the regulations openly and made adjustments in their business strategies to conform to the policies
implemented.

It is possible that the 50-year-old MLM industry made famous worldwide by Amway and now boasting
over 1,000 such organizations will provide the strength and foundation needed to stabilize an
economy. Because of the new communications technology of the Internet, people will no longer live in
obscurity regarding the benefits as well as tribulations experienced by other people around the world.

No longer can a biased press influence the opinions of the average thinking man. The MLM companies
of today and the future will play a great role in influencing people’s thinking. This is a great
responsibility and emphasizes the critical importance of quality MLM education for company executives
as well as their distributors regarding ethical behavior in business practices.

As for aspiring business investors, China embraces a ground for a great market. To grab a foothold in
the Chinese MLM market seems to be a great opportunity – a target to aim for. With the knowledge
that Direct Selling is the new wave trend of the future, it is feasible to think a well-planned marketing
campaign will go off with a bang!

Funding

MLM Funding is a privately owned and operated alternative lending company located in East
Elmhurts, New York. MLM offers a flexible and timely financing program to help assist small
and medium sized businesses achieve their goals.

Operating exclusively through a trusted network of professional sales organizations,

MLM is keenly focused on user experience and efficiency, making us a trusted leader in the
alternative lending space. With many years of experience in commercial financing, MLM
knows how to effectively facilitate, from application through funding, our customers’ working
capital needs.

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