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