Network Marketing PDF

MM (Topic 4) Sangameshwar College, Solapur CHAPTER 4: CONTEMPORARY ISSUES IN MARKETING # Network Marketing: Network marketing, also known as multi-level marketing, is a business model which involves a pyramid structured network of people who sel...

MM (Topic 4) Sangameshwar College, Solapur CHAPTER 4: CONTEMPORARY ISSUES IN MARKETING # Network Marketing: Network marketing, also known as multi-level marketing, is a business model which involves a pyramid structured network of people who sell a company’s products. The participants in this network are usually remunerated on a commission basis. That is, people in this network get commission every time they perform the specified task, like –  Make a sale of a product.  Their recruits make a sale of the product. In simple words, this model involves a pyramid structure of non-salaried participants who get paid whenever they or a person below them in the pyramid makes a sale. In this system, consumers are the participants, their family, friends, and acquaintances are their customers, and this cycle goes on. Characteristics of Network Marketing 1. Direct Sales: Network marketing organizations market and sell their product directly and don’t make use of any well-defined channel of distribution. The responsibility to sell the products is transferred to the non-employed individuals (the participants) who get the commission every time they make a sale. 2. Independent Business Owners (IBO): The participants are called IBO as they work as if they are promoting their own business. 3. Selling Philosophy: This model involves participants to use the selling philosophy of marketing. The main focus is on recruiting and selling as much as you can to earn more commission. No relationships are built. People may even trick you to buy the products or to join them. 4. System of Hierarchy: Suppose a person ‘A’ has a person ‘B’ under him. Now A will get the commission whenever he makes a sale and also a part of B’s commission when B makes a sale. Now, to earn more money, B will also try to recruit a person C under him and so on. This makes the system a big hierarchy. 5. Less or No Advertising: Dependency on direct sales helps the organization to rely less on advertising as personalized contact have more convincing power than advertisements. 6. No Fixed Salaries: This is a commission based network where participants (not employees) are paid commissions to perform the specific task. 7. Accountability: Everyone is accountable only to himself. The more he sells, the more he earns. 8. Benefits to the Participants: Participants are also the consumers of the network. Hence, they also get discounts and other attractive offers to when they join the network. 1 Gaurav Jugdar 9890355331 MM (Topic 4) Sangameshwar College, Solapur Examples of Network Marketing: Amway – been in business for around 57 years now, this company is one of the biggest examples of a successful MLM/network marketing company. Other companies that use network marketing model include – Tupperware, Nu skin, Juice Plus, etc Advantages of Network Marketing:  With network marketing you can work according to your comfort level and convenience.  If you are smart at your work and possess some great online marketing techniques, you can see an exponential business growth rapidly.  Through network marketing you can reach innumerable peoples irrespective of the region, nationality and geography. There are no constraints for people with different localities and languages when this form of marketing is concerned.  It can provide you a passive salary which is of a great importance. Nowadays people opt for some business simultaneously with their jobs, so here network marketing can provide you a passive income.  Once you attain a good number of downlinks and members in your network and you are on a much higher position of the hierarchy you can even earn good remuneration by doing some efficient work.  Capital for any business is a an important consideration and respectively the budget for marketing is decided, while here in network marketing it has a very low start-up cost which is comparatively nothing compared to budgets carried out for offline marketing strategies. Disadvantages of Network Marketing:  The biggest problem with network marketing is negativity once a member is negative about his job ultimately he could never jump beyond the first level and get tucked there left with no option than to wind up all things.  The most important thing in network marketing is interact with new people and communicate with them which require some good communication and interpersonal skills and not everyone is blessed with these skills.  “Sky is the Limit”, some believes some don’t but this actually happens in network marketing. There comes a saturation point beyond which your business growth gets steady.  As network marketing requires interaction with people, social networking is the best way to communicate with the masses and build up good networks. So you need a good social network to build your down chain where most people start with a high positive energy and soon gets vanished.  There are several products which are promoted through network marketing, some attracts the customers and some fail to do so. 2 Gaurav Jugdar 9890355331 MM (Topic 4) Sangameshwar College, Solapur # E- Marketing: Definition: E-Marketing: E-Marketing (Electronic Marketing) are also known as Internet Marketing, Web Marketing, Digital Marketing, or Online Marketing. E-marketing is the process of marketing a product or service using the Internet. E-marketing not only includes marketing on the Internet, but also includes marketing done via e-mail and wireless media. It uses a range of technologies to help connect businesses to their customers. Advantages of E-marketing Certain advantages of e-marketing are discussed as below: 1. Much better return on investment from than that of traditional marketing as it helps increasing sales revenue. 2. E-marketing means reduced marketing campaign cost as the marketing is done through the internet. 3. Fast result of the campaign as it helps to target the right customers. 4. Easy monitoring through the web tracking capabilities help makes e-marketing highly efficient 5. Using e-marketing, viral content can be made, which helps in viral marketing. Disadvantages of E - Marketing 1. If you want a strong online advertising campaign you have to spend money. The cost of web site design, software, hardware, maintenance of your business site, online distribution costs and invested time, all must be factored into the cost of providing your service or product online. 2. Almost over 60% of households now a day shop online. While that numbers are continuously growing, your company needs to reach maximum people. 3. Some people prefer the live interaction when they buy any product. And if your company has a small business with one location, this may also deter customers from buying who lives on long distances. 4. Your company should have updated information on your site. This requires research and skills and thus timing of updates is also critical. 5. Is your company web site secure? There are many incorrect stereotypes about the security of the internet. As a result, many visitors of your business web site will not want to use their credit card to make a purchase. So there is a fear in the minds of your visitors of having their credit card info stolen. 3 Gaurav Jugdar 9890355331 MM (Topic 4) Sangameshwar College, Solapur Types of E-Marketing 1. CONTENT MARKETING: According to the Content Marketing Institute, content marketing is “a strategic marketing approach focused on creating and distributing valuable, relevant, and consistent content to attract and retain a clearly-defined audience — and, ultimately, to drive profitable customer action.” Basically, content marketing is the ongoing process that focuses on communicating with your customers without always selling. Instead, businesses should use content marketing strategies to educate the consumer while delivering consistent, valuable information to buyers who, in turn, reward us with their business and loyalty. 2. SOCIAL MEDIA MARKETING (SMM): As an end user, many people already know a lot about social media, but their knowledge about social media marketing is typically more limited. Social media marketing is a great way for businesses to fulfill their objectives in terms of building brand equity, improving customer service, reaching new customers and collecting customer feedback. If companies can create social media content that provides value to others, they can connect with customers in a profitable way. 3. AFFILIATE MARKETING: Affiliate marketing is the process of earning a commission by promoting other people’s (or company’s) products. You find a product you like, promote it to others (usually through your blog), and earn a piece of the profit for each sale that you make. 4. EMAIL MARKETING: Email marketing has long been a pillar for any business attempting to generate sales via the internet. It provides direct contact with clients and allows you to drive prospective customers to your website. In a few simple steps, you can provide updates, exciting news, reminders, etc. to your customers in a matter of minutes. At the same time, you can use these newsletters as printable, direct mail pieces or even flyers. When using the right tools, sending out customizable emails that look professional and represent your business the way you want it can be so simple. 5. SEARCH ENGINE OPTIMIZATION: According to Search Engine Land, SEO stands for “search engine optimization.” It is the “process of getting traffic from the free, organic, editorial or natural search results on search engines.” By understanding how search engines rank websites, one can optimize a website to maximize its chances of ranking well for relevant searches. However, search engine algorithms continue to change, making it essential for online businesses to stay up-to-date with best practices to claim high rankings for relevant keywords. 6. SEARCH ENGINE MARKETING (SEM) & PAY-PER-CLICK ADVERTISING (PPC): SEM (Search Engine Marketing) is the process of gaining website traffic by purchasing ads on search engines. Google AdWords is by many measures the most popular paid search platform used by search marketers, followed by Bing Ads. Beyond that, there are a number of “2nd tier PPC platforms” as well as PPC advertising options on the major social networks. Typically, SEM and PPC advertising is carried out through search engines, who charge advertisers a predetermined amount every time their ad is clicked. While the search engines profit handsomely from this model, site owners benefit from being able to precisely target their potential customers. 4 Gaurav Jugdar 9890355331 MM (Topic 4) Sangameshwar College, Solapur # GREEN MARKETING Green marketing is the marketing of environmentally friendly products and services. It is becoming more popular as more people become concerned with environmental issues and decide that they want to spend their money in a way that is kinder to the planet. Green marketing can involve a number of different things, such as creating an eco-friendly product, using eco-friendly packaging, adopting sustainable business practices, or focusing marketing efforts on messages that communicate a product’s green benefits. This type of marketing can be more expensive, but it can also be profitable due to the increasing demand. For example, products made locally in North America tend to be more expensive than those made overseas using cheap labor, but they have a much smaller carbon footprint because they don’t have to fly across the globe to get here. For some consumers and business owners, the environmental benefit outweighs the price difference. Green Marketing Methods Beyond making an environmentally friendly product, business owners can do other things as part of their green marketing efforts. The following can all be part of a green marketing strategy:  Using eco-friendly paper and inks for print marketing materials  Skipping the printed materials altogether and option for electronic marketing  Having a recycling program and responsible waste disposal practices  Using eco-friendly product packaging  Using efficient packing and shipping methods  Using eco-friendly power sources  Taking steps to offset environmental impact Importance of Green Marketing: Green marketing affects positively the health of people and the ecological environment. People are aware of pure products and pure methods of producing, using, and disposing the products. It encourages integrated efforts for purity in production and consumption as well. 1. Now, people are insisting pure products – edible items, fruits, and vegetables based on organic farming. The number of people seeking vegetarian food is on rise. 2. Reducing use of plastics and plastic-based products. 3. Increased consumption of herbal products instead of processed products. 4. Recommending use of leaves instead of plastic pieces; jute and cloth bags instead of plastic carrying bags. 5. Increasing use of bio-fertilizers (made of agro-wastes and wormy-composed) instead of chemical fertilizers (i.e. organic farming), and minimum use of pesticides. 6. Worldwide efforts to recycle wastes of consumer and industrial products. 5 Gaurav Jugdar 9890355331 MM (Topic 4) Sangameshwar College, Solapur 7. Increased use of herbal medicines, natural therapy, and Yoga. 8. Strict provisions to protect forests, flora and fauna, protection of the rivers, lakes and seas from pollutions. 9. Global restrictions on production and use of harmful weapons, atomic tests, etc. Various organizations of several countries have formulated provisions for protecting ecological balance. 10. More emphasis on social and environmental accountability of producers. 11. Declaration of 5th June as the World Environment Day. 12. Strict legal provisions for restricting duplication or adulteration. 13. Establishing several national and international agencies to monitor efforts and activities of business firms in relation pollution control and production of eco-friendly products. Examples: 1. Samsung: Samsung India has always had a roaring range of LED TV screens and now they have come up with eco- friendly LED backlight. They use 40% less electricity have also no harmful chemicals like mercury and lead. 2. Tata Consultancy Services: TCS has a globally recognized Sustainability practice and has already topped the Newsweek’s top World’s Greenest Company title. It also has a global green score of 80.4% and this has mainly happened due their initiative of creating technology for agricultural and community benefits. 3. IndusInd Bank: One of the first banks in India to discourage the use of paper for the counterfoils in ATMs, and sending electronic messages, it has contributed a lot towards saving paper and reducing deforestation. 4. Wipro: Wipro, has not only helped in the creation of technology that helps in saving energy and preventing wastes, but its corporate headquarters in Pune is the most eco friendly building in this sector all over India. 5. MRF Tyres: MRF has launched the ZSLK series and this is all about creating eco- friendly tubeless tyres made from unique silica- based rubber and also offers extra fuel efficiency to those who drive their vehicles. 6. LG: LG India has been a pioneer is making electronic gadgets that are eco-friendly. Recently, it has launched a LED E60 and E90 series monitor for the Indian market. Its USP is that it consumes 40% less energy than conventional LED monitors. Also, they hardly used halogen or mercury, trying to keep down the use of hazardous materials in their products. 6 Gaurav Jugdar 9890355331 MM (Topic 4) Sangameshwar College, Solapur # Social Marketing Meaning: Social marketing is the systematic application of marketing along with other concepts and techniques to achieve specific behavioural goals for a social good. For example, this may include asking people not to smoke in public areas, asking them to use seat belts or prompting to make them follow speed limits. The primary aim of social marketing is ‘social good’, whereas in commercial marketing the aim is primarily ‘financial’. This does not mean that commercial marketers cannot contribute to achievement of social good. Applications of Social Marketing: 1. Health promotion campaigns in India, especially in Kerala and AIDS awareness programmes are largely using social marketing, and social workers are largely working for it. Most of the social workers are professionally trained for this particular task. 2. Anti-tobacco campaigns. 3. Anti-drug campaigns. 4. Anti-pollution campaigns. 5. Road safety campaigns. 6. Anti-dowry campaigns. 7. Protection of girl child campaign. 8. Campaign against the use of plastic bags. 9. Green marketing campaign. Advantages of Social Marketing: Social marketing—a new marketing tool—can be a great asset if used properly. Social marketing allows businesses and web sites to gain popularity over the Internet by using different types of social media available, such as blogs, video and photo sharing sites, social networking sites and social bookmarking web sites. 1. Promotes consumption of socially desirable products. 2. Promotes health consciousness in people and helps them adopt a healthier lifestyle. 3. It helps in green marketing initiatives. 4. It helps to eradicate social evils that affect the society and quality of life. 5. Social marketing is one of the cheapest ways of marketing. 6. One of the best advantages of social marketing is that anyone can take advantage of it, even from their own home. 7 Gaurav Jugdar 9890355331  MM (Topic 4) Sangameshwar College, Solapur Rural Marketing: Rural marketing in India refers to the strategies and processes employed to market products and services to rural consumers in the vast and diverse rural areas of the country. This aspect of marketing focuses on understanding the unique needs and preferences of rural populations, adapting products and promotional tactics accordingly. The significance of rural marketing cannot be overstated, given that a large proportion of India's population resides in rural regions, contributing significantly to the country's economic fabric. This segment of marketing has gained immense importance due to the vast population residing in these areas, which offers significant untapped business opportunities. In recent years, the role of technology in enhancing the efficiency and effectiveness of rural marketing has been pivotal, reshaping strategies and creating new pathways for reaching and engaging rural consumers. # Understanding Rural Marketing in India It involves more than just selling goods and services in rural areas. It requires a deep understanding of the rural consumer's mindset, which is influenced by factors such as cultural norms, seasonal income fluctuations, and limited access to technology. Unlike urban markets, rural markets in India are not homogeneous; they vary widely in terms of language, social customs, and economic conditions. This diversity necessitates tailored marketing strategies that resonate with the local populace. # Importance of Rural Marketing in India 1. Large Consumer Base: Rural India comprises over 65% of the country’s population. Tapping into this vast market is crucial for businesses looking to expand their reach and increase their market share. 2. Untapped Market Potential: Many sectors, including telecommunications, healthcare, and education, have relatively low penetration in rural areas. This presents a lucrative opportunity for businesses to grow by fulfilling unmet needs. 3. Increasing Rural Prosperity: With initiatives like increased minimum support prices for crops and better rural infrastructure, the disposable income of rural consumers is rising, making them an increasingly valuable market for a variety of products. 4. Government Initiatives: Programs such as Digital India, Make in India, and Skill India are improving rural infrastructure and connectivity, thereby making rural markets more accessible for businesses. Four A's of Rural Marketing in India 1. Affordability: Affordability is crucial in rural marketing. The majority of rural consumers in India have limited disposable income, making price a significant factor in their purchasing decisions. Companies must focus on creating cost-effective products without compromising quality to gain traction in the rural markets. This could involve smaller packaging, low-cost product versions, or products specifically designed to meet the financial constraints of rural consumers. 2. Awareness: Creating awareness in rural markets involves overcoming challenges such as diverse languages, literacy levels, and access to media. Effective rural marketing campaigns often use local languages and culturally relevant symbols and messages. Traditional media like radio, local television, and print, along with outreach programs such as roadshows and local influencer involvement, are critical in building product and brand awareness. 8 Gaurav Jugdar 9890355331  MM (Topic 4) Sangameshwar College, Solapur 3. Availability: For rural marketing in India, availability means ensuring that products are accessible to rural consumers where and when they need them. This can be challenging due to the often poor infrastructure and scattered nature of rural settlements. Companies may need to innovate their distribution and logistics strategies, such as using syndicated distribution involving local entrepreneurs or custom-built distribution networks that address the last-mile delivery challenge. 4. Acceptability: Acceptability refers to the extent to which a product meets the cultural and social norms of the rural market. Products and marketing messages must resonate with local values and lifestyles. This includes consideration of regional preferences, religious practices, and traditional uses of products. Engagement initiatives that involve community leaders or that contribute to community development can enhance a brand’s acceptability. 9 Gaurav Jugdar 9890355331