MULTI LEVEL MARKETING Prepared By:ABHISHEK KUMAR LBSIM PGDM(EVE.)
HISTORY MLM started in the US, in 1959, by business partners Rich DeVos and Jay VanAndel, originally with just one single product and a new and unique business vision. They believed that they should be paid relative to the benefit the company continued to get from their original work.
MLM Multi-Level Marketing(sometimes Marketing(sometimes called Network Marketing, Marketing, Referral Referral Marketing or Direct Marketing), multiple levels of people are marketing a product to consumers. A sales representative (also referred referred to as a distributor, member, affiliate, partner or associate) gets customers and recruits and trains another sales rep to get customers. The products and company are usually marketed directly to consumers and potential business partners by means of relationship referrals and word of mouth marketing.
Sales rep gets customers and trains another sales rep to get customers.
“Refer a friend and you’ll receive a discount on your next purchase,” this is multi-level marketing.
THE TRDITIONAL COMPANY In a non-MLM company, a sales manager and sales reps are hired by the company.
Once a sales manager is overwhelmed, the company can hire another manager or convert a sales rep into a manager.
Traditional companies (non-MLM) use “Multi-Width” Marketing.
The Multi Level Company An MLM company “starts” by recruiting one person who gets customers and recruits sales reps reps with the option to become a manager. The MLM company only pays commissions, not salaries. This is beneficial to the company because of rapid expansion by the number of trained sales reps. This is also beneficial to the sales reps because their income isn’t limited to only what they t hey can sell - they can also earn commissions for having trained other sales reps.
MLM is Organic Organically, the MLM industry is a fantastic model. Here’s why:
In its organic state one person shares a valuable product or service with another A person shares a business idea with another The person who shares the business with another ONLY ONLY profits IF the person they shared sh ared the business with succeeds.
These three steps are the organic concepts of MLM and are absolutely brilliant.
What kind of products are sold most in MLM? 1- Products Products should have a authentic presence presence other than mlm system also. 2- Price should not be over for repurchases. 3- Manufacturer of Product should have good reputation.
Criticism Of MLM The Federal Trade Commission(FT Commissi on(FTC) C) issued iss ued a decision, in 1979 in which it indicated that multi-level marketing was not illegal in the United States. AMWAY was found guilty of price fixing and making exaggerated income claims. MLM's are also criticized for being unable to fulfill their promises for the majority of participants The exploitation of personal relationships for financial gain
MLM Compensation Plan Unilevel Plan
Ø
Ø
Matrix Plan Stairstep Plan
Ø
Ø
Binary Plan
UNILEVEL Plan As the name suggests, the plan allows a person to sponsor one line Click to edit Master text styles of distributors, called a "frontline.“ Second level Third level ü There are no width limitations, Fourth level meaning there is no limit to the Fifth level amount of people one can sponsor in the frontline. ü
●
●
●
ü The common goal of this plan is to to recruit a large number of frontline distributors and then encourage them to do the same.
Use only one commission type, the
ü
STAIRSTEP Plan Sales volume is created by lick to edit Master text styles recruiting and by retailing product. §
econd level Third level Fourth level Fifth level ●
●
Various discounts or rebates may be paid to group leaders.
§
●
Once predefined personal and/or group volumes are achieved, a representative moves up a commission level. §
§ The original upline usually continues to be compensated through override commissions and
MATRIX Plan Matrix plans often have a maximum width and depth.
•
When all positions in a representative's representative's downline matrix are filled a new matrix may be started. •
Representatives in a matrix earn unlimited commissions on limited levels of volume with
•
BINARY Plan
It allows distributors to have only two front-line distributors. o
This "spillover" is one of the most attractive features. o
The primary limitation is that distributors must "balance" their two downline legs to receive receive o
MLM Companies in INDIA Attitue Trading (P) Ltd. q Amway q FLP q Tupperware q DXN q RCM q Modi Care q Oriflame q HLL q RMP q
WORKING Of MLM
RMP(Resource RMP(Resource of Money Money & Power) Choose your product among 12 different products
RMP has Binary Plan
SALES TECHNIQUES
Look for a prospect Attending Business Meeting/Seminar Convince prospect for the business profits
Take the joining
RMP BUSINESS POLICIES
Commission
Incentives
Ceiling
Car Loan
Intellectual Distribution Of Products Pr oducts Because intellectual distribution represents the best opportunity for network marketing companies and their sales forces to succeed, what it is called the METS Formula Motivate, Educate, Train, Support
What’s wrong with MLM…?? MLM Sales Sales Techniq Technique: ue: Rumors Rumors,, Slander Slan der,,
Defamation Math and Common Sense Learning the Hard Way(exploitation of personal relation) High-pressure Selling "Mother, Let Me Tell You About a Fantastic Opportunity..." Dubious Claims Motivation: Powerful but Misguided Exaggerated income claims
REWARDS
Commissions based on the ongoing sales volume of your downline group. Lots of personal recognitions, public recognition and
CAREER GROWTH IN Most MLM companies MLM provide career growth in terms of Levels and an d Target Target is i s ceiling. ce iling. Commission earnings are weekl These levels are, like: like: SILVER SILVER
GOLD
PRESIDENT PRESIDEN T CLUB CLUB
STAR STAR
DIAMOND DIAMO ND
DOBLE CROWN
CROWN
Check points for the legal MLM Company must have their own branded
products.
A good residual plan is must. Value for money mon ey should be there at the th e time of joining. Products should be of daily use or must have repurchase power. power. Quality should be good as it is word of mouth business.
THANK YOU
