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Network Marketing

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The Mantra

"Customer Service, Satisfaction and Ease".

The following lines of a famous leader-

"Today's illiterate won't be the persons who aren't educated, but instead they'll be the ones who aren't adopting themselves to changes”.

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Network Marketing

For many people, the words “network marketing” or “MLM” (multi-level marketing) conjure up images of hitting up your so-called “warm market” (those two or three hundred people near and dear to you as well as those unfortunate enough to have crossed your path at some time in the distant past) and pleading, cajoling, persuading, arguing and plain pressuring them to join your program or organizing house parties and presentations to make your pitch to a captive audience or having to approach complete strangers while standing in line at the supermarket

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History

• The history of network marketing originates back to the 1940’s where a company trading under the name of “California Vitamins”....... Nutrilite Food Supplement Corporation.

• In 1959 Richard DeVos and Jay Van Andel founded the company Amway. Almost 50 years later Amway is a well established network marketing company operating in more than 80 countries around the world and with more than 3 million business operators

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What is Network Marketing?

• Network or Multi Level Marketing may be defined as a distribution channel/ sales method wherein the manufacturer directly sells to the customer at a preferred rate and also gives the customer rights of selling the same product(s) for certain compensation/ incentive.

• Company does not employ full time salaried employees to sell and market its product offerings.

• The customers acting as independent agents/ distributors/ network marketers/ independent consultants on behalf of the company do this (very similarly like the life insurance companies have independent marketing agents to sell their insurance policies).

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Contd…….

• Network marketing is a general term for a type of marketing that is usually performed by an individual instead of a company.

• It refers to the use of interpersonal or social networks to market products and services for business purposes as opposed to the more traditional and common practices of wide-range advertising.

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The New face of Network Marketing

• Network Marketing is the Perfect Business…

• Every year, thousands of men and women leave established, lucrative careers to pursue new opportunities in the booming network marketing

• An industry that is now attracting former doctors, CEOs, and others, seeking independence and financial rewards.

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How Does the Model Work?

• The firm motivates the customers of the company to sell its products by way of Network Marketing (direct selling).

• The customer introduces other people to the system of MLM and sells to them his firm's products. Now, after purchasing, these new customers will automatically have agency rights for marketing the same products to other people, thereby increasing sales and recruiting more marketers (consultants).

• Hence this system of network marketing boosts sales and also brings in new and more marketers by way of existing customers working on behalf of the company and marketing its offerings + the great business opportunity available with the customer ship.

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Contd....

• The structure is designed to create a marketing and sales force by compensating promoters of company products not only for sales they personally generate, but also for the sales of other promoters they introduced to the company, creating a downline of distributors and a hierarchy of multiple levels of compensation.

• The products and company are usually marketed directly to consumers and potential business partners by means of relationship referrals and word of mouth marketing

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Model

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Advantages of N/W Marketing The 45 per cent or more of the margin or mark-up, which was

charged by the middlemen, is now given to the consultants. The consultant gets the product direct from the firm, hence the

material is always genuine. The products will be of superior quality at affordable prices and in

appropriate packaging. These products will not be available at retail outlets, hence there is exclusivity of selling rights.

A detailed computerized monthly statement of accounts, along with the payment is sent to the consultant. This statement also gives the names, addresses and phone nos. of all the consultants in your group.

The consultant gets a chance to do business without any investment or liability

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• The poor and middle class work hard for their money and the rich have their money work hard for them

I work for money My money works for me

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Prominent Network Marketing Firms in India

Global Marketing

GLOBAL MARKETINGOverview

Global marketers consider the world as their market and

different country markets as components of this world market

Defining Global Marketing

AMA’s Definition of Marketing:

Marketing is the process of planning and executing the conception, pricing,

promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational

objectives

Defining Global Marketing

Distinguishing Features of AMA’s Definition

1. Includes nonprofit and for profit activities

2. Includes products, ideas, and services 3. Includes activities that precede and

follow the production process 4. Includes the four P’s and regards

them each as equally important

Defining Global Marketing

Global Marketing Defined:

The coordinated performance of marketing activities to create exchanges across

countries that satisfy individual, organizational , and societal objectives

Defining Global Marketing Global marketing is conducted across

countries (not domestic or foreign) Global marketing coordinates activities

across different country markets Global marketing should be motivated by

individual, organizational, and societal goals

The Global Marketing Environment

• Focal Point--Consumer• Use the Four P’s to Satisfy Consumers• Economic, Financial, Political, and Cultural

Environmental of Each Country Affect marketing

• Regional and Global Environments Affect Marketing

Why Should Firms Engage in Global Marketing?• To Survive and Grow 1. Learn to satisfy consumers in diverse

conditions 2. Manage marketing tasks more efficiently

and effectively 3. Preempt or counter competitive attacks

in more than one market 4. Expand customer base to include

developed and developing nations

Why Should Firms Engage in Global Marketing?

• To Diversify Product and Market Portfolios

and Improve competitiveness

1. Effects of seasonal and cyclical

fluctuations in one market offset by others

2. Diversification increases market size

and enhances economies of scale

Why Should Firms Engage in Global Marketing?

To Capitalize on the Attractiveness of Additional Country Markets 1. The U.S. is attractive-but won’t

accommodate unlimited growth 2. Expand market size by expanding into

other countries 3. Maurice G. Hardy: Why expand into other

countries? A. Keep competitors in their own countries; b. Take advantage of growing opportunities in Europe and the Pacific

Why Should Firms Engage in Global Marketing?• To Operate Within a Global Marketplace 1. Goods, services, capital, technology,

and labor are going global 2. Reduced government restrictions are

affecting global marketing 3. Bilateral and multilateral negotiations

are reducing restrictions

What is Unique about Global Marketing? Country market environments different

Economic Environment ( Purchasing Power, Competitive Intensity, Economy’s Health) 1. Fiscal policies - tax rates and spending

programs of government 2. Monetary policies - regulate money

supply

What is Unique about Global Marketing? Country market environments different

• Financial Environment

1. Exchange rate - price of one currency in relation to another

2. Exchange rate fluctuations can adversely or favorably affect performance of a firm

What is Unique about Global Marketing? Country market environments different • Political Environment 1. Tariff barriers - taxes on imports paid to customs

officials - include a. Specific - fixed amount per physical unit of

import b. Ad -valorem ( on the value ) - percentage of

estimated value of import 2. Nontariff barriers include a. Import quotas b. Exchange controls c. Buy-domestic policies d. administrative red tape

What is Unique about Global Marketing?Country market environments different ?

Cultural Environment 1. Differences encourage marketing

adaptations 2. Similarities encourage standardization 3. Balancing the two is a key to success

Marketing Mix Politics - How Do Government Influence the Four P’s ?

• Product - Local Content Law• Price - Government Approval for Price

Changes• Promotion - Permissible Budget

Determined by Local Authorities• Place - Mandated Distribution Channel or

Territory

Why Should We Study Global Marketing ?

• Influences Product Choices of Consumers• Influences standard of living• Influences Job Opportunities• Influences the society

Thank You!