Sunday, 26 February 2012

The History and Truth of Network Marketing

MLM Secret, MLM Truth, Network Marketing Secret, Network Marketing Truth, by Greg Stewart Enlightenment vs. En-dark-enment the most fundamental fact of life in our world today is change. As a rule, people are reluctant to change.

We resist it, we like to stay within our comfort zone of what is known and accepted by most. THIS IS HUMAN NATURE. But it's true that what you resist will persist, especially when you resist a better method whose time has come. In almost every field of endeavor, the arts, sciences, medicine, and business, most new ideas have always met with resistance and rejection at first. The more unique and revolutionary the idea, the louder and stronger the opposition to it. People have always been afraid and even ignorant about ideas and methods that may result in change. Fear of change caused ridicule of Christopher Columbus, Louis Pasteur, Thomas Edison and Albert Einstein. There are other examples of how fear of change had effects on progress. In the 1800's, people bought what they needed at small, family owned shops. Then a man named W.T. Grant had an idea that created change. What if we combined all these separate, little shops by making 9them individual departments under one roof, in one large store? A new and better way of doing things. Customers loved it. The individual merchants who owned the old-fashioned retail stores saw their businesses decline. The shopkeepers fought back politically . There were thousands of them with thousands of votes, and they lobbied for their right to do things the same old way. They finally got the local and state governments to outlaw Grant's department stores. Eventually, Grant's department store won out. If there is a better way it will persist. In the early 1960's franchising was a revolutionary new technology in business, and it was also met with resistance. Newspapers and magazines wrote what a scam and rip-off franchising was. Stories of people who lost their life savings to some franchise were everywhere. There was a strong move to make franchising illegal. In fact, franchising actually came within 11 votes of being outlawed by Congress. Today this so-called scam is responsible for over 34 percent of all retail sales in North America. Franchises sell nearly 800 billion dollars worth of goods and services today. Every industry goes through an evolution similar to this. Chiropractors were considered quacks in the 1970's, the stock market was considered shady and a form of gambling, and the first newspaper in British North America, The Public Occurrence (1690), was suppressed by the governor of Massachusetts. Now, we almost can't do without these industries. The Pioneers satisfied customers, most of whom were family and friends, who each had the same right to offer the product and representative status to others, which allowed the sales force to grow exponentially. The company rewarded them for the sales produced by their entire group or network of sales representatives. Network Marketing was born! A few years later, the company changed its name to NutraLite Food Supplement Corporations. In 1956, NutraLite was joined in Network Marketing by Dr. Forrest Shaklee to gain a broader distribution of the food supplements he had developed. Not long after, in 1959, former NutraLite distributors Rich DeVoss and Jay Van Andel started the Amway company as the American Way of marketing products. Like many truly innovative breakthroughs, the development of true network marketing was an accident. 10Abuses of exponential growth haunted network marketing for years and it is still misunderstood today. One of the first abuses of the concept of exponential growth to generate income may have been the chain letter craze that swept the U.S. after World War I. The letters promised great profit if you would send a dime or a dollar to the person at the bottom. The chain letters spread as far as Europe, and by the 1930's the U.S. post office estimated that 10 million letters were being mailed each day. Postal Authorities and law enforcement agencies battled the fraudulent schemes and the chain letter phenomenon began to subside in the early 1940s. Unfortunately, this scam spawned schemes which came to be known as pyramids, where money was given for the right to involve others, as no valid product which was being purchased from the company. In 1974, Senator Walter Mondale declared such companies to be the nation's number one consumer fraud. Law enforcement agencies moved quickly to clean up the abuses. In the mid 1970's, with no clear understanding of what constituted a legitimate use of network marketing, the Federa Trade Commissionand state agencies across the nation turned their eyes to almost all network marketing companies. In 1975, the FTC filed suit against Amway, alleging that the company was an illegal pyramid and that its refusal to sell its products in retail stores constituted a restraint of trade. Amway spent four years and millions of dollars in legal fees to clear its name. In 1979 the FTC (Federal Trade Commission) ruled that Amway was not a pyramid, that its revenue was generated from the sale of its products, and the FTC acknowledged network marketing as a legal and efficient distribution system. Network Marketing exploded in the next decade.

MLM The People's Franchise

whenever its name comes up.’ Newspapers, magazines and television news and talk shows regularly expose it for the 'flim-flam rip-off it really is.' Major corporations who get involved go out of their way toavoid any appearance of doing so. There is even a move in Congress to outlaw it altogether!'

Now, guess: which one is the right answer?

a) Some TV ministries

b) Off-shore Investment Deals

c) Multi-Level/Network Marketing

d) None of the above

Did you pick a), b) or c)? Well, there's probably some truth to all those choices - but none of them is the right answer.The truth is, it's a trick question. The right answer,’d) None of the above,' WAS correct - nearly 40 years ago! Back then, that's exactly what people were saying about a revolutionary new business concept called Franchising. In the 1960s - before Ray Kroc and McDonalds, before Seven/Eleven, Subway, Pizza Hut, and all the other successful franchise companies established franchising as a legitimate industry – all of those negative things were being said and done about franchising. Yes there was even a move in Congress to outlaw franchising.

Wednesday, 22 February 2012

How do I choose a good Network Marketing company?

How do I choose a good company?

Choosing a good company is not always a simple task. Most importantly, you should check that a company fits the guidelines in question fiveabove. Many people make this mistake, and then get put off NM for life because they had a bad experience. You owe it to yourself to look around and find a company with which you will feel comfortable. You do not owe any allegiance to the person who introduced you to network marketing – if they insist on you joining their business even if you consider it to be inferior, then remember that they may be biased!

Is this an impartial FAQ?

I hope that this site is entirely impartial. I deliberately have not mentioned any specific company names, nor individuals. I have been involved with network marketing, and I love the business model that it presents. However, I accept that most people don’t think this way, and so I have aimed to steer well clear of the unqualified hype that can sometimes surround this subject. I was first introduced to the concept in early 2003. I was initially very sceptical, but intrigued. This inspired me to read up as much as I could on the concept, and on business in general. To the best of my knowledge, everything written on this page is the truth. Though I believe that everyone should have an opportunity to learn about network marketing, I appreciate that it isn’t right for everyone, and an informed decision should definitely be taken. I don’t want people to miss out on an opportunity because they read something negative on a website. But equally, I don’t want people to join an opportunity and realise (too late) that it’s not for them, and then generate negative feelings towards the industry.

How much money can I make?

Theoretically, you can make a phenomenal income from network marketing, though very few people ever do. Many people have used this business model as a springboard for creating personal fortunes of hundreds of millions of dollars, though they are a tiny minority and most people will never earn enough to give up their day job. Theoretically, you could make nothing whatsoever. Actually, if you pay money to join and then do absolutely nothing, you’ll probably losemoney! Some people complain about this, but of course you’re entering a business, and you must expect to do some work in order to get paid! Go down to your local shopping centre and ask some of the merchants there how much money they lose for every day they fail to open their shop. Then ask them how much they paid to set up the shop in the first place. That should help to put things in perspective! Remember that this may be a simple, straightforward business model, but it is still a business, not a hobby. If you want to work it like a hobby then expect to lose money, as you would do on any hobby.Also, bear in mind that most companies are under strict regulations not to claim that very large incomes are easily obtained, so the top earners are rarely found to disclose their exact earnings. In addition, network marketing requires a lot of work to get to a decent income, by the nature of the business model. If you think that someone’s monthly income is low, try multiplying it by twelve months a year for the rest of their life!Finally, by owning your own business you are entitled to write off business expenses against income tax. That means that you can legitimately claim back some of the money spent on travel, equipment, phone bills and attending functions. All this helps to cut the cost of the first few months in the business, even if you make very little from the business itself. It also helps you to make some more money once your business is up and running. Note – don’t form a business purely for the sake of saving tax! This can often be illegal. Please take professional advice from a registered tax adviser in your country.

What are my chances of success?

This is a misleading question. If you do absolutely nothing, then your chances of success are precisely zero! However, if you work hard then you will almost certainly succeed, at least to some degree. I say almostcertainly, because nothing is guaranteed in this world. Also, working hard isn’t worth a penny if you’re working at the wrong thing! Learning how to become an effective networker is a valuable skill, and takes more time for some than others. I’ve met people who were born ready for this sort of opportunity, but I’ve also met people who are completely unable to relate to other human beings and end up offending everyone they speak to. The latter are not going to make a success of this business model unless they learn how to improve their interpersonal skills.Network marketing is not a question of luck. There is a certain fraction of the population of your country looking for a business like this. You just have to find them. Of course some people meet with earlier success because they happen to find more keen people early on, but everything evens out eventually. The difference between a successful networker and an unsuccessful network marketer is nothing to do with luck. There are skills to learn in overcoming objections, and a good networker knows the importance of following a simple, powerful system. There is always, as in any area of life, a huge benefit towards developing courage and persistence.Another vital thing that a successful network marketer will learn is that the only way to get more ‘yes’ results is to get more ‘no’ results. You could focus all your time on half a dozen people and maybe increase your chances of success slightly. Alternatively you could ask a hundred people. Even if your chances of success are small, you will still get far more ‘yes’ results in total – it’s a numbers game! If you ever meet someone who failed at network marketing, just ask them how many people they shared their business with, how much time they spent developing it and how closely they followed an established system. Compare their answers to those of a successful network marketer and you will likely find a substantial difference.

How much time does it take?

Lots of people don’t work on their network marketing businesses in a serious way because they’ve not paid serious money to set it up. They have no boss forcing them to work, Of course, there are no quotas or targets to meet, so you can do nothing whatsoever if you want. Some people quickly go full time in network marketing and put several hours each day in to their businesses. Others just put in an hour or two here and there. Both will get a decent income from their business, but the first type will get there much faster! In the average network marketing company, fewer than 20% of business owners are actually doing any significant level of work. In some cases this is closer to 5%. Lots of people unfortunately join without realising the committment required, and consequently end up very demoralised. Do not be fooled into thinking that a stable income is easy to obtain!Finally, consider how much time you are working on your conventional day job (if you have one). How long do you expect to work at this job before you can retire? And on what salary? Do you need thousands of pounds per month extra, or just a few hundred?

Is this a ‘get rich quick’ scheme?

No! Network marketing is not by any means a get rich quick scheme. If you’re looking for a way to make vast amounts of money in a very short time then you should probably consider crime or gambling, but I wouldn’t advise either! Network marketing requires effort to get it to work. As answered in point tenabove, it usually takes a dedicated effort over the course of several years before anyone starts earning a substantial income. Most people never achieve a substantial income.Network marketing is not a ‘get rich quick’ scheme, but it is a good method to build up an extra stream of income, which is a lot better than most people have right now!

Am I being brainwashed?

Yes, every time you watch a TV commercial, read the news paper or speak to any of your opinionated friends. Your opinions on pretty much everything are the result of brainwashing, some of which is accurate and some is not. The point of this page is that network marketing does not need to rely on such methods to be successful – either it makes sense to you or it doesn’t. Lots of people are worried because they find network marketing extremely exciting, but their friends don’t seem to agree. They have perhaps heard stories of unscrupulous conmen and wonder if they are being conned too. At some point, you have to stand back and look at the situation with logical eyes – just ask yourself who is most qualified to make a valid decision. If you ask negative people why they dislike NM, 9 times out of 10 they will return with an incorrect or illogical reason. I soon realised that theiropinion was probably based on brainwashing, not mine.Having said this, you should be slightly careful with any scheme claiming to be NM which doesn’t conform to the guidelines in question 5 above. Some weak schemes try to dodge issues such as product quality and financial stability with a series of ‘brush away’ comments. You are starting a business – make absolutely sure that the company you’re looking at stands up to every question you can ask. Let’s face it – you’ll have to answer them convincingly when you’re showing your corporate business plan.

Isn’t this exploiting my friends and relatives?

Lots of people worry about this point, despite the fact that they never considered it themselves when they were introduced to the business. When I was introduced to NM, I was grateful for the opportunity to examine the business, and I never once thought that I was being exploited. After all, I was offered exactly the same opportunity as my friend, and it was my choice whether to enter into the business or not. If I did all the work and they did none then I would still get a substantially larger income from my business than they would. In most network marketing organisations, those who do nothing are not elligible for an income just for referring somebody else who works hard. Besides – if there were no upline above me and I was the first person ever to join the organisation, the compensation scheme presented to me would have been exactly the same. The actions of those above me in the organisation were not affecting me, except in a positive way through their encouragement and commitment.Many people have managed to work themselves out of debt using network marketing as a vehicle. Some of these people now live wealthy lives because somebody had the decency to think of them and introduce them to a business that they sincerely believed would help. I wonder if the many NM millionaires complain about being exploited? If somebody introduces me to a business opportunity that allows me potentially to make large amounts of residual income, then I have no problem whatsoever with someone else paying them for doing so!Let’s suggest that you offer to sell your best friend a car. You work for a car dealership, so you arrange to put in a lot of effort selecting the right car for them, showing them brochures, filling in all the details and optional extras. Finally you arrange them a discount price on a special car range that is normally only reserved for the salespeople themselves. In return, your employer pays you some cash as a reward for making a sale. If your friend then told you that they resented you making money out of them, what would you say?As a similar analogy for distributors, let’s say that you worked in a rich city firm which was looking to hire some good people. You suggest one of your close friends might be suitable, and (s)he applies and gets the job. That friend then works really hard, quickly rises through the ranks and enjoys a substantial salary together with all the best bonuses. As a reward for finding somebody good, your boss pays you a nice bonus too – (s)he wants to encourage other workers to do the same and recommend such good potential employees. Now, five years later, your friend has in fact risen above you in the company and is vice president. The company is so glad that it gives you a brand new Porsche. Your friend has a great job and a large salary because you had the foresight to think of them and to put them forward for the job. The company is doing well because your friend has made them lots of money. So, who is losing out? Is this bad for anyone? Of course it isn’t! If only real businesses worked like that!HOWEVER, you should never force friends and relatives into buying your product or joining your organisation with emotional blackmail – that would be immoral. Maybe they just don’t want the product or the business opportunity. Maybe they just don’t understand what it is you’re offering them. Maybe you sell top quality products and they’re on an economy drive. Maybe they just don’t like the smell, look, taste, feel or even the name of your product! You have to accept their opinion and stop pestering them – all you’ll do is irritate a good friend for no reason. See also question 17.

What type of goods are available through network marketing?

Anything you could ever name, from disposable chemicals such as soap and washing powder, vitamins, beauty products etc. right the way to gas, electricity, telephone calls and life insurance.

Isn’t it greedy to make more money than I need?

Many people in today’s society believe that money is a bad thing. This is either for religious reasons, or simply because they see a few examples of multi-millionaires behaving dishonestly and ripping people off. They also see examples of those who embrace poverty and are regarded as great people. This is especially striking amongst religious leaders such as Jesus and Buddha, and also recent examples such as Mother Theresa of Calcutta.So is money a bad thing? Of course not! Money in itself is neither bad nor good – it is simply a tool. What makes people think that money is bad is simply what people dowith it. People think about drugs dealers and dictators and see money being used to fund violence and killing because these are big news items. They don’t tend to see the billions of dollars given by the richest people in the world to alleviate third world suffering, or the many regional grants offered by local government for building community centres and schools, or the refurbishment of some crumbling piece of our national heritage. What was the aim of Live Aid, Live 8, or Band Aid, or any of these huge charity events? To help those in the impoverished parts of this world. How did they plan to do that? By raising money!To those people who claim that it is greedy to own more than one coat – just think if you owned ten, you could give nine away!Money is not the bottom line in life. The most important things to most people are friendship, love, community, personal beliefs, relaxation and health. Now think about how much more time you could spend doing those exact things if you had the money to quit your job and retire. Or even if you could just give up working overtime.Anyone quoting religious reasons for being poor should perhaps reconsider his or her motivation. People with money can do much more good than those without. Christians worried about the teachings about money in the Bible should re-read the story of the good Samaritan, and add up in today’s terms how much money he spent helping the man who had been attacked by thieves. Do you have that much in your wallet to spare right now?

Will these businesses saturate?

MultiLevel Marketing - What's Wrong With MLM

The number of companies using multi-level marketing (MLM) for promoting and advertising their products has increased considerably over the past few years. MLM can help you earn that much-needed extra income, if you learn it well. So, go through the online MLM business suggestions mentioned below, to understand the basics of this business.
Facts About Online MLM Business
For all those who have their own website for the MLM business, having a list of emails and names of people is extremely essential. This is because, emails can help you get in touch with those people who can promote and market your products. So, The pay per click advertising for MLM can also work wonders for the website owners. By finding the right kind of keywords, you will definitely be able to grab a lot of traffic. While implementing this method, it would be advisable for you to target those keywords which have less competition than those which are highly competitive.
Having good marketing skills is a must to be successful in the online MLM business. You should also have complete information about the products and services which your company offers. Posting videos on the Internet can be very useful in expanding your online MLM business. The video which can typically be of the duration of half a minute to one minute, can be posted on popular and most surfed video sites to get maximum visitors. In this video, you should speak about the offerings of your company and how these goods have a rising demand in the market. You should be able to convince people how they would benefit by getting associated with your company. You should also give a link that will direct the visitors to your website, which will be profitable for you. Online MLM secrets will help you know more.

Many people engaged in the online MLM business, prefer the method of article marketing to get more members for their company. In the article marketing method, all you have to do is write an informative and perfect article, which will give the visitors all necessary information about your products. Such articles need to be posted in article directories. Those who wish to post articles in more than one article directories, will have to make sure that the content is original for all the directories. At the end of your article, you should give a link which will help the visitors navigate to your website to seek more information. MLM home business has become a full-time earning opportunity for many people across the globe.
All those who wish to enter the online MLM business, should make sure that the website which advertises for MLM is genuine and has a sound business model. You will have to conduct a lot of research to judge which sites are legitimate and which are not. Also, you should not fall prey to words of people who guarantee you a lot of profit in a very less period of time. This is because, establishing the MLM business takes time and overnight returns are not possible. Consistent efforts can make you hugely successful in this field. So, are you ready to take up this challenge?

MLM Prospecting
As per popular definitions which people give on ‘prospecting’, it means searching for something you are looking for. And in this case, you are definitely searching for ways and means of earning a handsome income every month. Also called network marketing, Multi-level Marketing (MLM) marketing involves nonsalaried people, called distributors, representing a particular company and selling their services and products. In return of their efforts, they are paid a commission, and that depends on the volume they are able to sell. These distributors, in turn, search for other distributors who would sell the products of the company, thereby creating a chain of people selling products and services.
There are no MLM secrets for success, you need to be a good speaker and love to talk to people about different business opportunities, this is the only route to success. But one of the most common MLM prospecting questions which people tend to ask is how to go about selling the product to people or recruiting new distributors. This is exactly the answer we will try to give you, and in the following paragraphs we give you the MLM prospecting system and scripts used by successful people.
MLM Prospecting System
There are basically 4 MLM prospecting letters which you should remember, FESS – finding, exposing, separating and system, which would help you get great MLM leads. If done right, it can yield numerous names of people, whom you would work with and make your business larger. Let’s take a look at all these steps, which would give you an idea of what exactly you would need to do.
Finding
The first and one of the most important MLM prospecting scripts is to find out the right kind of people. There are several tactics of finding out people who would take interest in your business and product. You need to have multiple ways of searching people, may be through advertising in newspapers, present your business to people on a one to one basis or may look for friends and family members who may be interested. You can also opt to create a website, but make sure to make it as user-friendly as possible. Provide a form so as to collect the contact information of the interested people.
If you have created a website, you would need to market it over the Internet. You can also opt to promote your product on social networking websites as they are quite popular and you would help you to reach a wider range of audience.
Exposing
This step follows finding out the right kind of people, so once you have got a list of people who may be interested, you need to give them an idea of the company and the kind of people you are looking for. This may not necessarily be a long presentation, you may include things like a short video presentation, so that people know what you are exactly looking at. You need to make sure that you expose only the idea and not the whole information on what you are looking at. You can hand out brochures, DVDs or CDs which people can listen and see.
Separating
This step involves segregating people who are interested from those who do not show any interest. There would be people who are open to new ideas and those who are not open to new concepts. People who are open would listen to you, while those who are not would not listen with interest. A good way to judge people is to ask them if a particular idea makes sense to them. You would get a clear picture of whether they are in sync with your idea.
System
Once you have got those people who are interested in your concept, you need to get them in touch with the company’s retailing and recruiting system. You should also give them a formal presentation on your product or services.

MLM Strategies
I still remember that day when one of my friends called me up and asked me if I could come down to his place in the evening as he had arranged for a management scholar to speak on innovative business ideas. I reluctantly said yes and immediately after hanging up, I thought of the possible reasons of not turning up. But curiosity is an exemplary trait of human mind and there I was knocking on his door in the evening After the customary greetings and stuff, I asked my friend what exactly the plan of action was. He said that the ‘management guru’ would be sharing some ideas on how to be a successful entrepreneur through network marketing. After a while, a smartly dressed executive walked in and what followed was a two hour sermon on MLM strategies.
Multi-level marketing has to often employ these strategies to make people listen to their ideas. It has been 25 years since network marketing was introduced to the world, but besides a handful of companies there aren’t too many players you can count on. MLM strategies have been supported by eminent writers such as Robert Kiyosaki and Robert Allen. Kiyosaki’s bestseller Rich Dad, Poor Dad even has one of the chapters dedicated to explain the so-called pyramid structure in MLM. But there are many opponents who claim that multi-level prospecting system is not an ethical way of conducting a business. The lawsuits MLM companies have had to face has only marred their reputation and people are skeptical about participating in a MLM venture.
What is MLM?
Well, to understand MLM, you can think card-pyramid structure. The stability of the cards at the top depends upon the stability of the cards below them and so on. Similarly, in MLM, the profit made by the person who initiated the business venture depends on the participants working under him. In a traditional business, a salesperson is hired to sell the products of the company and he is paid a salary and a bonus for the sales that he makes. Contrary to this, in MLM prospecting, you are the owner, the marketing agent and the salesperson. You have to make sure that you are selling your products in the best possible way. Let us take a look at some of the MLM marketing strategies.
Effective MLM Strategies
One of the first and foremost MLM marketing strategy is to present yourself in a unique way, whether you are using online MLM or the traditional marketing systems. There are a lot of competitors out there and each of them claims to be the best, so it becomes important for you to create a positive vibe among potential participants.
While recruiting new participants, do check their areas of interest and their prospects of being in the business for the long run.
In MLM system, people are wary of scams, (read organo gold scam) so it is important to create a trust factor before telling them to put their money in. Persuading people to invest can put them off.
With so much of technological innovation, there are some very good MLM software and MLM tools like social networking websites, blogs, etc., which you can use to promote your business. This helps in generating MLM leads and you save on time and money. In fact, it is widely accepted that MLM companies who are able to market themselves in a better way online have better prospects of growth.
Try to charge a no or a minimal sign up free. This way, you can increase the number of people joining your network.
One of the long standing criticism of MLM strategies is that participants buy far greater products than they can sell. This hampers the efficiency and results in several legal issues. Make sure that you allow members to buy products again when the previously bought goods are sold.
Whatever critics have to say, MLM is there and ‘surviving’ if not ‘thriving’. So, if you have made up your mind to be a part of this business networking, make sure that you have a sound marketing strategy. I hope this article would have helped you get an insight to what is MLM and some of the effective MLM strategies.

Social Marketing
How far has mankind gone in understanding the universal phenomenon of betterment and welfare for one and all. There are increasing inputs in the theories and strategies that have been successful. Social marketing is one strategy intended for individual and public contentment. Let us understand the in-depth meaning of social marketing as a concept.
What is Social Marketing?
In simple words, social marketing is a strategy or method or way of marketing, meant solely for the development of individuals and society. It projects improvement in the physical, social and economical backgrounds of their environment. It aims for bringing awareness, changing the behavioral pattern, lifestyle, social environment for good and more. Social marketing covers various aspects of welfare, safety, security, environment and awareness. Its objective is to influence the audience for good values and responsibilities. The techniques used in social marketing are inspired from commercial or profitable marketing. Unlike commercial marketing strategies that are meant to draw huge profits only for the marketer or producer, social marketing aims to give profit to the audience, as individuals and as society altogether.
Social Marketing History
Social marketing was introduced as a discipline in the 1970s. Marketing gurus Philip Kotler and Gerald Zaltman, introduced the idea of implementing commercial marketing principles to be used to persuade people buy good attitude and behavior. They believed that the major interest should focus on understanding what the audience wants. They defined social marketing as ‘consumer centric’, where the profit maker is the consumer himself. This strategy was later widely introduced for social awareness in health and similar areas. In the last decade, this has largely grown in a mature and effective strategy.
Pillars of Social Marketing
When planning social marketing, the focus is on the audience and not the product. The mix of commercial marketing theories are used to implement the consumer focused goals and profits. The social marketing theory revolves around a combination of long term improvement perceptions with current marketing strategies. There are four major ideas or principles of commercial marketing that help in framing social marketing goals. We can refer to them as the four Ps. The social marketing mix adds a few more principles to enhance implementation.
Product
The term ‘product’ does not have a literal physical meaning in social marketing. It may not necessarily mean a physical (tangible) product like any certain ‘thing’. There are myriad range of products that are introduced. Behavioral changes and practices, like encouraging a healthy habit, lifesaving or self improving attitudes, etc. Basically, they are the strategies that help in social development. Examples of products are: following a healthy diet, encouraging the use of condoms, conserving water, etc. The best way to find the most effective products is research. Research not only helps to address the need of the hour, but also helps in understanding the concerns of the consumer, so as to introduce the product that is in demand.
Price
In social marketing, price does not necessarily mean price as in monetary terms. It means the investment of efforts, time, the strength to face embarrassment and guilt, the low feeling of denial of enjoyable things, and changes to adapt to the product or to implement the product in his / her life. It refers to more emotional and social costs that a consumer has to pay. The price should not dominate the outcome of the product / benefits of the product. The objective is to keep the price to the lowest as possible to expect consumers buy the product. If the strategy communicates of the benefits being of good value for the price / investment, the goal of social marketing becomes easier to achieve.
Place
The place here describes the way or medium to communicate the product, or make it reachable to the audience in the best possible, and least hassled way. In case of elusive products like awareness and improvements, etc., there is a larger scope as various channels can be chosen to deliver the products to the consumer, like in house demonstrations, shopping malls, public places, offices, and other media options. In case of tangible (definite) products, place can refer to the method of distribution and the place of distribution of the product. Consumers will not search for the messages or products. One has find ways to provide the opportunity to the consumer, and make it reachable easily.

Marketing Concept
Societal marketing evolved as a concept by Phillip Kotler (often referred to as ‘father of marketing’) in the 1970s. However, it is only in the past couple of decades that this form of marketing has matured into a reality, with every company trying to incorporate this marketing style in their products and services. So ‘what is social marketing concept’? Social marketing concept is firstly, way different from the traditional form of ‘commercial marketing’. Although, every form of marketing aims to boost sales of products and services of a firm, and help a company earn profit, societal marketing concept is a bit different in origin. By following marketing ethics incorporated in societal marketing, firms not only ensure that there is profit in the business, they also take care of the fact that there is a well-being and growth of the society, on a whole. To quote Kotler and Alan again:
“The societal [social] marketing concept holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors, in a way that preserves or enhances the consumer’s and the society’s well-being.“
Understanding Societal Marketing
Social marketing concept has become one of the big differentiators in the success of products in the recent years. The reason being that the past two decades have led to tremendous degradation of the environment. The issue of global warming has become the central topic of debates in almost all international conferences. Moreover, increasing awareness about pollution has created a mass awareness (to some extent) in citizens of various nations. Now as aware customers, people are purchasing products that are eco-friendly. From light bulbs to plastics, today’s consumers ensure that they can at least, to some extent, contribute in curbing of the threats of pollution.
In such pressing situations, marketing concepts have gone through numerous transformations. Every company has expanded its Corporate Social Responsibility (CSR) works and they’re trying to ‘Go Green’ in the manufacturing of their products. Many industry experts relate the societal marketing as an off shot branch of corporate social responsibility. By contributing in the manufacturing of products that are environmental friendly, safe to use and economical, firms are doing their bit to ensure success of their marketing campaigns and polish theircorporate branding image.
So, in essence, societal marketing aims mutual benefits of the marketer, consumer and the society on a whole. By purchasing products and services marketed through societal marketing, citizens feel a sense of accomplishment and they can relate to the concept of ‘good corporate citizenship’. In today’s scenario, only companies adopting societal marketing concept are able to thrive in the competition of developing more efficient, more innovative and nature friendly products.
One of the brilliant concepts related to societal marketing is the initiative taken by IDEA Cellular Ltd., a leading Indian mobile operator, with nearly 58 million subscribers under the brand IDEA and having global presence in 20 countries. This mobile operator firm has taken a great step to educate the whopping 500 million mobile customers in India, to use mobile judiciously and save paper. By making Ads that appeal people to creatively use mobile phones and save paper, IDEA has carved a niche for itself in marketing its telecoms services. Similarly, many companies are recycling their products and reselling them at cheaper prices to ensure the environment remains safe.

Marketing Theory
Human behavior gives rise to a social environment. The nature of this environment has two parts. Just like yin-yang, there is a good and bad social culture. The aim of social marketing theory is to focus on the reasons / causes of the bad or harmful social behavior, and eradicate it to spread good will, good attitude, and a better social nature among the people. To define social marketing, it is to analyze, design and implement the ideas that will affect the social mass, individually and socially as well. Social marketing is the change that influences the economic, social, physical and emotional circle in an individual or in a group. It follows and addresses these issues by the theories and principles used in commercial marketing.
Social Marketing Theory
Social marketing theory is deeply influenced by the marketing philosophy, that people will make efforts to change their behavior, thinking and attitude, if they perceive the give and take between the social marketer and them being of good value to their investments. Social marketing concept is just like other commercial marketing or profitable marketing that convinces people to buy the product. It focuses on the concepts like research, the structure of ideas, market segmentation, communication, execution and provision of their services. Unlike commercial marketing that profits the marketer or producer, social marketing profits the consumer / audience. The primary goals of social marketing include welfare, safety, security, environment and awareness. It strongly determines to bring out behavioral changes and practices for good.
Social Marketing Principles
The theory of social marketing relies on basic principles, we can term them as the four Ps – Product, Price, Promotion and Place. Let us understand a little more about these techniques and their nature of work.
Product: Product in social marketing plan can be described in two parts- 1. Tangible products like some ‘thing’, for example, oral contraceptives, vaccines, condoms etc. and 2. Non tangible (conceptual) products like behavior, addictions, attitudes, for example, eating fruits and vegetables for good health, quit smoking etc. It is important to understand the needs, demands and the nature of the issues to mold them in products. Effective research plays an important role here.
Price: The economic definition of price contrasts the social marketing meaning of price. Here the price refers to investment by the consumer/ audience. This investment or price can be non monetary like efforts, time, psychological and social costs, the embarrassment and guilt, the feeling of not being able to enjoy a certain habit, etc. The price the consumer has to pay should not be higher than the benefits that he will reap from the product. Low costs ensure the selling of the product. The strategy should convey the benefits being of full value to the cost or price the consumer pays, this will draw more audience and hence the sale.
Place: The distribution of products requires a platform to ensure good and smooth distribution. To make the product reachable and available to the consumer, a wide and effective platform should be chosen. For tangible products, place means the method of distribution, whereas for non tangible products a better platform is achieved, as the place can be in house demonstrations, shopping malls, public places, offices, and other media options. The place should be visible to your consumer, as they will not hunt for your products and messages.
Promotion: Selling of a product hugely relies on its promotions. In social marketing, promotions means the various methods used to create visibility of the product. This can be closely related to promotions of commercial marketing as well, where various streams are used for promotions. Examples of promotions are using advertising, media events and programs, coupons, etc. A large view of promotions is gathered by advertising, public relations, personal selling and encouragement by the media. Enhancing the product value, creating and sustaining the market position of the product also is a major responsibility in promotions.
Apart from these main principles, other factors like funds for the product and campaign, partnerships for wider and better social marketing, policies that mark the standard of social marketing, are also an integral part of social-marketing theory. Social marketing examples are strikingly visible in health care and social awareness sectors today. They have almost covered a lot of issues and have been successful in resolving them as well.

The Misconception of Multi-Level Marketing

The Misconception of Multi-Level Marketing

Have you ever wondered why people are so turned off at the mention of Multi-Level Marketing? Is it legal? Is it a pyramid? Who benefits the most? Where does the money flow? In this article we will examine basic differences between Multi-Level Marketing and a Corporate Structure.

Let's take the corporate structure first. Almost all of us work in this type of hierarchy everyday. A CEO heads the corporation or company. Below him/her are upper management people i.e. Vice President, Controller, Senior Sales Exec...etc. Below them are middle management people i.e. Department Heads, Retail Directors, Consultants and various Supervisors.

Finally we reach the Sales Representatives, Customer Service Representatives, Stockers, Cashiers, Cleaners, Drivers, etc.

So who makes the most money in this type of structure?

If you were to draw a flowchart this, it would look like a “Pyramid” The CEO makes the most money as he/she sits at the top. Below them are a few upper management people, then more middle management, then most of the workers. It is the person at the “top” of this “pyramid” that makes the most money, because in this type of structure, you are paid based on “where you are” in the structure. So, how do you make more money here? The only ways you can truly increase your earnings are if someone in the structure is promoted, gets fired, dies, or quits. As a result, everyone in the structure can move up.

So.... Let's take a look at a Network Marketing Structure and then compare. On the surface, both structures are mirror images of each other. BOTH look like a “Pyramid” structure. Flowchart it out again. An affiliate will sponsor someone, they sponsor more, they sponsor more...etc. But...who makes the money here? The worker at the top? Possibly, but most likely not. Here's why:

Even though this structure looks identical to a corporate structure pyramid, in the MLM structure you get paid STRICTLY on what you produce and the work you do, not on where you are within the structure. Wouldn't it seem fair that if you do more work, you should get paid more money? This structure is simply a structure of business owners. Pay is based ONLY on what you do, not your position within the network. This is what differs Network Marketing from a typical “Corporate Structure Job”.

In the MLM structure YOU are in control of your income. In the corporate world, someone else will always be in control of your income. Always!

The Truth About Building a Network Marketing Business Online

So, you are ready to start your network marketing business, and you want to build your business online. Great! The Internet offers almost boundless opportunity for finding and contacting excellent prospects for your new business. But, beware - beneath all that potential there are a few things you need to consider, to ensure that your new venture is successful.

Network Marketing - a People Business

No matter what anyone tells you, a successful and long-lasting network marketing income is not going to be built around anonymous online marketing. Putting up a website and then expecting people to just sign up and make money for you isn't realistic. Internet prospecting is just a tool that enables you to identify people who have an interest in a home business. It will still be up to you to personally contact these people and help them. You have to be willing to pick up the phone and talk to people. You may think, "but I hate selling". I hate selling too. I don't consider calling someone who has contacted ME to be selling - I think of it as providing information. I never "close" anyone on my business - my online tools provide the information, I fill in the gaps by talking to interested prospects, then let them make the decision. If you have to "sell" the business to someone, they won't likely pursue it for long. You don't want that.

The Reality of Online Advertising

I see it all the time - "blast your ad to 500,000 classified ad sites". So goes a typical pitch that many marketers use to sell their submission software and service. The reality is, blasting ads to FFA link sites and free classified ad sites rarely, if ever produces a real prospect for you. How many people really look at these sites, anyway? How many times have you personally looked for opportunities among hundreds of links plastered on a web page somewhere? Effective online promotion of your network marketing business will require spending some money to put ads where people will actually view them. One strategy I use is to purchase keywords in pay-per-click search engines - keywords directly related to my home business. I get many of my prospects this way. I also have small, inexpensive ads on several "work from home" business sites that receive a lot of traffic. With online advertising, you get what you pay for.

Online Sales Tools

Whatever network marketing company you join, if you are going to promote and build it online, you will need a web site. Some companies provide free sites to help you. Some even provide turn-key prospecting systems that collect information about your prospect and guide them through presentations that help them to make a positive decision to join your business. The company you choose should provide these tools for you, and they will if they are serious about supporting online marketing efforts.

Consistent Follow-Through and Commitment

Whatever network marketing company you join, remember that your success will be measured in large part by how much time you spend following up with prospects, and how well you do it. I've seen many people come into my business, set up their free web site, and then sit back and wait for something to happen. It won't - you have to take whatever tools you've been provided, and make something happen.

Why Do You Want to Build Your Business Online?

This is a big one. Think about why you want to build your business online. There are many great reasons, a few of which I outlined above. One BAD reason to desire an online network marketing business: you don't like to talk to people, or you want to do everything by email and never have to talk to anybody "live". You must enjoy working with people to be successful in this business. Your online tools can be of GREAT help to you in building your business, but that personal touch is still critical to your success.

The Best Thing

To me, the best thing about online marketing is that you get to talk to prospects who have contacted YOU and who are ready to talk about starting their business. This sure beats the old way, where you were prompted to contact every friend and relative and told to drag them into home meetings and such. Few of us have the time or desire to build a business in this way - which is what makes online networking so special! But always bear in mind - network marketing is still a people business, and you need to always approach it as such.

In his book, "Super Prospecting: Special Offers and Quick-start Systems", Tom "Big Al" Schreiter tells the story of an old lumberjack who observed a young lumberjack laboring to chop down a tree. After watching the youngster work himself to nearly exhaustion without accomplishing much, the old man said, "Looks to me like it'd be easier if you sharpened the axe."

To which the younger man replied before returning to his attack on the tree, "I don't have time to sharpen the axe, I have to get this tree cut down."

Now, it seems obvious to most of us that a sharp axe would probably make the work go faster and easier. The young lumberjack would be able to cut down more trees with less work just by taking a few minutes to sharpen his axe. Prepare his tools. Learn his trade, you might say!

You know, it's funny. Most of us have no problem seeing the point of that story, but everyday, people sign up for network marketing programs and then start hacking away with very blunt axes! Most of these folks have no idea of what network marketing is, how to go about it, or how to measure success.

I recently received an email from a gentleman interested in getting into network marketing. He asked some very insightful questions, but one demonstrated his misunderstanding of most genuine network marketing programs.

He asked, if I remember correctly, how long it would take to make a significant income from a certain network marketing program, and seemed to indicate that he would expect a sucessful program to generate an income of about $48,000 or more within a relatively short period of time. Otherwise, he would consider it a scam.

Well, honestly, I guess my two friends who I often hold up as examples somehow missed that point. It took each of them about three years in perfectly legitimate programs to begin making money anything like what my correspondent expected. At that point, by the way, their incomes began to grow exponentially until they were taking home over $100,000.00 a month. We'll say nothing about countless Avon ladies who are network marketers who consider themselves successfully affiliated with an honest company but whose income is less than $20,000.00 a year.

Or, I guess I should be concerned about my affiliation with a nationally recognized company (you've probably seen their commercials on prime time). The first year, I only made a few hundred dollars. The second year a few thousand. I'm in my fifth year with them, and I am now making the magical number...a six figure income from that program alone. I presently have over 200 fully satisfied customers and tons of repeat business. What a scam!

I don't mean to insult the gentleman who sent me the question. His questions were valid, and I understand his concerns and applaud his attempt to gain some insight into network marketing. However, it appears his understanding of network marketing is limited to a desire to find a program that will in some way do the work for him...make income for him. Unfortunately, network marketing is a business...albeit a special kind of business...and it works best when worked certain ways. Many successful network marketers have written many excellent books and articles on the subject, and there are marketing and internet marketing training programs available for those who wish to learn. Some colleges are even offering courses and classes on network marketing and internet marketing.

People going into network marketing should be doing more than simply listening to the person who recruits them and scanning the company literature. If they were hired to do any job they had never done before, no matter how menial, they would recognize the need to familiarize themselves with the business and how it is conducted. Especially if they intended to rise in the business and succeed.

A few books the beginning network marketer might want to read are:

Super Prospecting: Special Offers & Quick-Start Systems by Tom "Big Al" Schreiter

Your First Year In Network Marketing by Mark and Rene Yarnell

The Wave 4 Way To Building Your Downline by Richard Poe

The Greatest Networker In The World by John Milton Fogg

Off-The-Wall Marketing Ideas by Nancy Michaels and Debbi J. Karpowicz

These tend to be a little old but can probably be found thru Amazon, and they are excellent education for the beginning network marketer.

The person who fails to educate himself or herself about network marketing in general and their chosen business in particular, has chosen to fail. Like the young lumberjack, they will flail at the tree until their strength or motivation fails them, and then they will wander into the forest...perhaps complaining loudly about trees, axes, lumberjacks...anything but themselves. They will not know why they failed, how they could have succeeded, or how to measure success.

Multi-level marketing is an enterprise system which puts emphasis on recruiting distributors. It is commonly used by the industry, and this term implies that success depends on building a distributor interconnection and that payouts occur at two or more levels. In some cases, this is also used to indicate that there are links of product suppliers enabling distributors to offer a broader selection of products.

In a typical multi-level marketing or network marketing arrangement, individuals associate with a parent company as an independent contractor and are compensated based on their sales of products or service, as well as the sales achieved by those they bring into the business.

In a legitimate MLM company, commissions are earned only on sales of the company's products. No money may be earned from recruiting alone ("sign-up fees"). Some less legitimate companies produce revenues primarily by attracting new participants or selling them marketing services, as opposed to selling actual products. One must analyze the compensation plan to determine whether participants are paid from actual sales to customers and not from new-recruit bonuses or business support sales.

Multi-level marketing has a recognized image problem due to the fact that it is often difficult to distinguish legitimate MLMs from illegal scams such as pyramid or Ponzi schemes. MLM businesses do operate legitimately in most countries, and new businesses may use terms like "affiliate marketing" or "home-based business franchising". However, many pyramid and Ponzi schemes try to present themselves as legitimate MLM businesses.

A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, usually without any product or service being delivered. Ponzi schemes, however, is a fraudulent investment operation that involves paying abnormally high returns ("profits") to investors out of the money paid in by subsequent investors, rather than from net revenues generated by any real business.

Most of these schemes take advantage of confusion between genuine businesses and complicated but convincing moneymaking scams. The essential idea behind each scam is that the individual makes only one payment, but are promised to somehow receive exponential benefits from other people as a reward.

Multi-Level Market scams generally have extremely elaborate marketing materials, such as professionally directed and produced audio-video tapes to show potential commissioned sellers, conventions with "guest speakers" who offer testimonials about how much they have made on the scam and how wonderful the product is, and awards and prized for the commissioned seller with the most sales.

Clearly, the fundamental flaw is that there is no end benefit; the money simply travels up the chain, and only the originator (or at best a very few) wins in swindling his followers. Of course, the people in the worst situation are the ones at the bottom of the pyramid: those who subscribed to the plan, but were not able to recruit any followers themselves. To embellish the act, most such scams will have fake referrals, testimonials, and information.

The scams that have mushroomed have been very damaging to legal MLM companies. To avoid illegitimate multi-level marketing, we should be wary if the start-up cost for the investment is too expensive. Know the consumer market for the products and its officers. If the company seems to be making money by recruiting alone, there certainly is a bluff. And the surest way to distinguish false MLM companies is to contact your local business bureau.

Multilevel marketing is picking up a lot of steam. This is due to the large amount of people online that are hyping multilevel marketing and all of the profits that go along with it. the number of interested parties began to increase. And with this has come the notion that multilevel marketing is not going anywhere.

If you are not familiar with the business, you should bone up on the details as soon as possible. Generally speaking, it is a way to make money when you sign people up for a certain service or product. And to take this a bit further, with this business you can also make money when the people that you sign up recruit members of their own. So in general terms, you will make money with a pyramid type effect.

For people that are interested in multilevel marketing, the best place to start searching is online. There are hundreds of companies that you can sign up with in order to make money. Just make sure that what you are doing is legal. There are a lot of busineses out there that are not legal in the majority of the states. You can avoid this without any complications by getting hooked up with a campaign that is run by a reputable company.

If you are not sure if this opportunity is right for you, look into the benefits that it offers. There are many online forums devoted to multilevel marketing. By becoming a member you can ask questions to more experienced marketers. They will be able to give you advice on where to start and how to progress.

Simply put, you will want to read up as much as you can on multilevel marketing before you get started. Just like anything else, the more that you know about something the better chance you have of being a success. Since it is relatively new, it is very important that you are familiar with the industry as a whole.

Multilevel marketing is definitely here to stay. There are enough people out there making money with this opportunity that the popularity will always be high. For people that are searching for a way to make cash online, multilevel marketing is always a good option.

Overall, check it out if you are interested in a new way to make money online.

Making Money with MLM

In every MLM program, there are inevitably those who profit more than others. These elite few are also those most often identified to such programs. They drive fancy cars, live in large mansions, and cash in massive commission checks every month.
In contrast, there are also those who never seem to get anywhere with their programs. They work hard enough, but their work just does not seem to translate to real results. This is because they are missing a key ingredient: technology.

In recent years, multi level marketing has gone high tech. Some of the most successful companies in recent memory, were those that introduced cell phones or internet based products in to the MLM mix. However, the contribution of the technology seems to have stopped there for some members, to their detriment. They simply have not been able to tap into what is available.

If you wish to make it big in the marketing world, you must learn to do a few things very well. One, you must learn how to sell the largest number of your products to the largest number of possible people. Two, you must learn to attract and utilize skilled people that can help you grow your marketing venture. Both skills are certainly attainable using conventional methods but technology would make them far easier to master.

The big secret to making money from multi level marketing is to learn how to use technology to your advantage. At the top of the technology list is the internet, which is the centerpiece of the new world economy. As we go deeper and deeper into the new millennium, expect the internet to grow at exponential rates and for internet business to become more and more successful. As the global market made possible by the internet consolidates, more and more financial opportunities will come up.

The growth of the internet is there for you to take advantage of, and if you are really serious about making it big in the MLM game, you will not ignore it. Embrace technology as it comes and learn to utilize it to suit your ends. There are various ways you can do this. You can start selling web based products, place ads for partners, write a newsletter, create a content website, all things that you can do as part of a multi level marketing program. Additionally, recruiting and related activities can be facilitated by the instant communication made possible by the worldwide web.

By taking advantage of todays high powered technology, you will put yourself on the fast track to MLM success
If you are looking to make money online without doing anything you are not alone as the common misconception is that tarting an online business will have you rolling cash in a matter of days. That just is not how it works. The people offering you ideas for a home business at one time had to groom an idea into a working model and then bring in other people to help their idea blossom.

Affiliate networking can be good business from both sides of the financial network both the affiliates advertising a business and the business recruit affiliates to push their products for them. Unlike the old days when a person pays for advertising and hoped for results, in todays affiliate marketing they pay for the results of the advertising. The affiliates can even make money recruiting others to advertise their website, which brings then more visitors resulting in more sales for those whose advertising they carry.

That may sound confusing but breaking it down you can see how it makes sense, as well as dollars. A person can start a website to offer their own products or services and to bring in a little more income and help pay the maintenance on their site, they become affiliates of other businesses. By placing the ads on their sites, they are promised a share of the profits on any sales resulting from that placement. They now recruit another person with a website to promote their website, offering payment based on the sales from their site and if a customer buys something, they both make a percentage of the profit.

This creates an affiliate multilevel marketing network in which everyone makes a small amount of money from the sale of one item. It becomes a profitable business when more visitors come to your or your affiliates website and make purchases. Advertising costs are contingent on sales being made so it is to everyones financial benefit to promote their site to improve sales. For example if you make $5 a month by successfully promoting your site and allowing visitors to pass through and make purchases from someone else, you may not believe it to be worth the effort.

Consider you have 100 businesses you are affiliated with and make $5 a month from each one. Now consider having 100 affiliates bringing another 1,000 visitors to your site each month and those people also make purchases. You could be realizing an income of over $5,000 a month for maintaining and updating the links coming from your affiliates and those links to the sites of which you are affiliated. A few hours a week can lead to a good income. You may consider starting a second site to grow into another income stream that could double your effort as well as your income.

Network Marketing (MLM) FOR SOCIO-ECONOMIC DEVELOPMENT

Multi Level Marketing (MLM) is embracing more and more arenas today. Insurance business is just one among them. Selling Insurance policies, traditionally, is considered as a de-motivating and dragging job. Well, not until you discover the power of MLM to boost policy sales. With the competition heating up in the Insurance sector, companies are looking for innovative methods to spread the message and garner maximum business in shorter time. Many local MLM companies having quite large spread in the market are joining hands with leading insurance brands to promote their products along with an assortment of their own products. Insurance sector makes available long term debt for the economic development of the country. At the same time, the MLM route provides employment opportunities to lakhs of people and enhances their social status. The MLM members also get tremendous opportunity to develop themselves personally. This multiple role of MLM companies can be looked at as a social contribution and these companies or cooperatives are emerging as a development oriented social movement. This article studies the economic and social impact of MLM as a tool which can influence society through employment generation, mobilizing long term funds and improving quality of life of people.

INTRODUCTION

Business organizations have long relied on direct marketing to target customers without spending a lot of money on retail distribution. However the Network (Multilevel) Marketers have taken the direct model one step further, i.e. not only they do the sales, but recruit and train new distributors i.e., independent sales persons who are members in the network marketing company. This ‘ingenious’ method was first popularized by Amway in 1950’s [1]. The big draw card in network marketing is the commission paid not only for direct sales made by the salesperson, but also from the sales made by the recruits made by him. That is, if you get friends and relatives to join up, you get a commission not only from the products your

Tuesday, 21 February 2012

Distinguishing Pyramid Schemes and Multilevel Marketing

The number of multilevel marketing organizations has been increasing, and the number of people involved is increasing exponentially. As more people become a part of the multilevel marketing business model, the negative impacts of some multilevel marketing organization practices on people’s lives is growing due to the high potential for moral hazard amongst multilevel marketing organization leadership. It is my contention that new legislation to protect people involved in this type of organization is critical to dramatically reduce the potential for moral hazard. This paper contends that the practices of some multilevel marketing organizations currently can be comparative to pyramid schemes, which is known to have high moral hazard. But the franchise model, which originally had the potential for similar moral hazard, has been greatly reduced through prudent legislation. The ability of this model to minimize the potential for moral hazard maximizes fairness for all parties involved. Therefore, the franchise model guidelines will be examined to provide for a new model for dramatically reducing the potential moral hazard issues posed currently by multilevel marketing organizations.

MLM-NETWORK MARKETING - HISTORY & CONCEPT

The world, as we know of today, has evolved through three phase which we call primary, secondary and tertiary economies. Initally all activities were based on agriculture and related activities. Then came the industrial revolution and people started coming into cities for manufacturing and related activities/ industries. But with the advent of technology, manufacturing has largely automated and manufacturing costs have been consistently dropping over the ages.

Today, you will not find people excited about setting up a manufacturing unit. Today is the time, when everything is oriented around the service industry, where the large sector today is the distribution industry. The No.1 company in the world today is not from manufacturing, or oil, or even software but Wallmart, which is involved in the business of distribution, Let me give you an example.

Earlier, if a product costed Rs.100/-, its manufacturing cost would be 60-70/- Rs. And 30-40 Rs was consumed in distribution. But with emerging technologies and countries like China playing a major role, the product cost today has come down to Rs.30-40 and the bulk cost has shifted to distribution. In fact, even large companies, that used to manufacture and sell, are today outsourcing manufacturing and focusing on just distribution, which is the key to wealth in the future.

There are two ways in which distributions happen. Today, if you go to buy a television / car, the sales man who is promoting the sale is himself most probably not using that product. This is where the difference comes in between network marketing and normal distribution. Network Marketing is done person to person by someone who is himself using the product, unlike the car salesman. . This is an industry that is relatively new and is growing at a pace, which is faster than any other industry. To give you an idea, let me give you an example. The first IBM PC came out in 1981and by 1990 PC sales exceeded automobile sales. In 1990 no one knew what the internet was. By 2000 most of the new millionaires in the US and Europe were being created by the internet.

Best MLM in India