Multi-Level Marketing, What Businesses Can Do?

Anh Nguyet Nguyen

Writing

Problem-Solution

Dec 11th, 2015

Multi-level Marketing, What Businesses Can Do?

According to Emily Maltby and Angus Loten (2012), in the article “Fewer Start-Ups? Depends Whom You Ask,” “approximately 543,000 businesses get started each month” (para 15). In the beginning, new businesses are unable to compete with large companies in the form of marketing and advertising. In general, multi-level marketing is the fastest way for smaller companies to bring products to consumers. In Kaul’s (2012) book “Business Organization and Management: Text and Cases,” he explains that multi-level marketing, or network marketing, is a term that describes a marketing structure that is similar to the form of a pyramid, which is compared with the “pyramid scheme” (129). Multi-level marketing (MLM) can simply be understood as a system for selling goods or services through a network of distributors. MLM, the ideal business form, offers a variety of attractive benefits to the people who willing to participate in the business, such as low cost of entry, high level of residual income, financial freedom, quality time with family, and working from home. Many people today doubt joining a business that is using multi-level marketing as the main method of advertising because a few companies have misused it by mentioning and promising very high returns. To address this issue and help future business men and business women to understand more about what multi-level marketing is, the multi-level marketing companies should build trust by having a three step program at the beginning that first introduces a concept of what exactly legitimate multi-level marketing is, then trains in the program offers of a company, and finally shows the benefits that are offered when joining the company.

Benefits, multi-level marketing is very useful when people really understand the benefits it brings to society and the individual as a distributor. First, multi-level marketing is actually an opportunity for people to communicate better and to improve personal skills which is why it can be called “business development training.” In Ionuţ Constantin’s (2007) article “What is MLM system,” he discusses how there are successful people in network marketing who have developed all their skills, such as an attitude of success, leadership, communications, overcoming personal fears, developing confidence, overcoming fear of rejection, money management, investing, accountability, time management, goal setting, and systemization (111, 112). Then, it also offers businesses a cheaper way to introduce products to consumers and actually retain those customers. According to Cristinel Constantin (2009), in the article “Multi-level Marketing – a Tool of Relationship Marketing”, when the product is sold directly from “the parent company” to the consumers, the distributor does both jobs as seller and promoter; therefore, the company can avoid the cost related to promotional activities (32). Third is there are still many big corporations that successfully apply multi-level marketing as their main method of reaching the customers and helping customers get good products that are delivered by people who have actually experienced and support the product. In his paper, Constantin (2009) concluded that the important factor for distributors joining a multi-level marketing network is they understand and like the product they are going to sell (36).