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Network Marketing Industry Presentation Transcript:
1.Network Marketing Industry
2.Highlights of the Industry
It first popularized by Amway, in 1950s in USA
Total turnover estimated at Rs 301,044 crores
2005 with an annual growth rate of 25%
People have negative perception of direct selling organizations and network marketing organizations
The aggressive selling techniques, exaggerations of facts in recruiting, pyramiding scams and unethical way of exploiting relationships all together form a basis for this negative perception.
3.Introduction of Network Marketing
Long relied on direct marketing to target customers without spending a lot of money
Marketers have taken the direct model one step further, i.e. not only they do the sales, but recruit and train new distributors
The advantage 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.
4.According to the Direct Selling Association in the United States, 70% of the revenue from the direct selling industry was generated by network marketing companies
In the case of Pakistan, network marketing momentum was conspicuous in India during mid 90’s followed by the establishment of the Pakistan arm of Gold Mine International.
Total turnover of network marketing companies in Pakistan was estimated at Rs.30, 104 crores
5.In 2005 with an annual growth rate of 25% (Tribute, 2006). GMI, EMI, Tiens, Unaico site talk and Sky Aims are the major network marketing players in the Pakistani market.
Pakistani middle class was projected to grow from 1.1 crore households in 2001-02
1.7 crore households in 2005-06 and the figure is expected to be 2.8 crore by 2009-10.
6.There are others like Fahad,who have dubbed MLM schemes as unethical, and guilty of ‘instrumentalising’ relations rooted in love and affection and as such is socially and psychologically unacceptable to most people in our society.
The researchers in this study propose to explore whether such a phenomenal growth of network marketing in Pakistan is because of the exploitation of relationships with friends and relatives.
7.Objectives of the Study
To examine the exploitation of relationships in Network Marketing
To deny the wrong perception about earning in network marketing industry that one can earn without working.
To prove that as density or saturation of the members increased scope of working does not decreased.
8.Hypotheses
H1:The Network Marketing is not likely to exploit the relationships.
H2:The perception about network marketing that one can earn without working is wrong. Earning is only done by working.
H3:Scope decreases with the increase in density.
9.Defining Terms
Network Marketing is a subset of direct selling and is also known as “multilevel marketing”, “structure marketing” or “multilevel direct selling
First, sales people (distributor) may earn compensation from their personal sales of goods and services ”
Second, they may earn compensation from sales to or purchase from those persons whom they have personally sponsored or recruited into the network (down lines).
10.Hence Network Marketing
Buying products,
Selling products,
Finding other agents to buy and sell products
Mark up usually ranges from 20% to 50%.
Distributors receive a monthly commission for their ‘personal volume’,
11.Distributors receive a net commission on the sales of those they recruit into the network.
The sunflower and pyramid are the two common business models in network marketing
12.Relationship
For the purpose of our study, the researchers define relationships as those with the emotional attachment and/or intimacy existing among relatives and friends.
Relatives we mean closely related persons like siblings, parents, in - laws, cousins, nieces and such others.
By ‘friends’ the researchers mean those persons who are dependable, trustworthy and loyal.
13.Methodology
(Questionnaire).
to study the exploitation of relationships in network marketing, the researcher used the multi level marketing company, Sky Aims
Data was collected from 50 respondents using convenient sampling method
The sample was drawn from Sky Aims outlet at Lahore for 5 consecutive days while the channel members were in the outlets for getting products.
14.The sample of respondents were segmented and classified into three classes based on experience in Amway’s network marketing.
Out of 50 respondents, 17 were below 2 years,
20 between 2 to 5 years and
13 were above 5 years
10 relatives,20 friends, 15 Colleagues and 5 others are respondents.
15.Relation satisfaction with Upline
Network Marketing Industry Presentation Transcript:
1.Network Marketing Industry
2.Highlights of the Industry
It first popularized by Amway, in 1950s in USA
Total turnover estimated at Rs 301,044 crores
2005 with an annual growth rate of 25%
People have negative perception of direct selling organizations and network marketing organizations
The aggressive selling techniques, exaggerations of facts in recruiting, pyramiding scams and unethical way of exploiting relationships all together form a basis for this negative perception.
3.Introduction of Network Marketing
Long relied on direct marketing to target customers without spending a lot of money
Marketers have taken the direct model one step further, i.e. not only they do the sales, but recruit and train new distributors
The advantage 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.
4.According to the Direct Selling Association in the United States, 70% of the revenue from the direct selling industry was generated by network marketing companies
In the case of Pakistan, network marketing momentum was conspicuous in India during mid 90’s followed by the establishment of the Pakistan arm of Gold Mine International.
Total turnover of network marketing companies in Pakistan was estimated at Rs.30, 104 crores
5.In 2005 with an annual growth rate of 25% (Tribute, 2006). GMI, EMI, Tiens, Unaico site talk and Sky Aims are the major network marketing players in the Pakistani market.
Pakistani middle class was projected to grow from 1.1 crore households in 2001-02
1.7 crore households in 2005-06 and the figure is expected to be 2.8 crore by 2009-10.
6.There are others like Fahad,who have dubbed MLM schemes as unethical, and guilty of ‘instrumentalising’ relations rooted in love and affection and as such is socially and psychologically unacceptable to most people in our society.
The researchers in this study propose to explore whether such a phenomenal growth of network marketing in Pakistan is because of the exploitation of relationships with friends and relatives.
7.Objectives of the Study
To examine the exploitation of relationships in Network Marketing
To deny the wrong perception about earning in network marketing industry that one can earn without working.
To prove that as density or saturation of the members increased scope of working does not decreased.
8.Hypotheses
H1:The Network Marketing is not likely to exploit the relationships.
H2:The perception about network marketing that one can earn without working is wrong. Earning is only done by working.
H3:Scope decreases with the increase in density.
9.Defining Terms
Network Marketing is a subset of direct selling and is also known as “multilevel marketing”, “structure marketing” or “multilevel direct selling
First, sales people (distributor) may earn compensation from their personal sales of goods and services ”
Second, they may earn compensation from sales to or purchase from those persons whom they have personally sponsored or recruited into the network (down lines).
10.Hence Network Marketing
Buying products,
Selling products,
Finding other agents to buy and sell products
Mark up usually ranges from 20% to 50%.
Distributors receive a monthly commission for their ‘personal volume’,
11.Distributors receive a net commission on the sales of those they recruit into the network.
The sunflower and pyramid are the two common business models in network marketing
12.Relationship
For the purpose of our study, the researchers define relationships as those with the emotional attachment and/or intimacy existing among relatives and friends.
Relatives we mean closely related persons like siblings, parents, in - laws, cousins, nieces and such others.
By ‘friends’ the researchers mean those persons who are dependable, trustworthy and loyal.
13.Methodology
(Questionnaire).
to study the exploitation of relationships in network marketing, the researcher used the multi level marketing company, Sky Aims
Data was collected from 50 respondents using convenient sampling method
The sample was drawn from Sky Aims outlet at Lahore for 5 consecutive days while the channel members were in the outlets for getting products.
14.The sample of respondents were segmented and classified into three classes based on experience in Amway’s network marketing.
Out of 50 respondents, 17 were below 2 years,
20 between 2 to 5 years and
13 were above 5 years
10 relatives,20 friends, 15 Colleagues and 5 others are respondents.
15.Relation satisfaction with Upline
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