Multi level marketing / network marketing is a marketing strategy in which a distributor gets a commission by selling a product or service. mlife talk show discuss about the legal side , positive and negative aspects of multilevel marketing.
Network marketing refers to that marketing in which marketing is done by individuals for companies through the network of individual and not through the network of the company. Hence in case of network marketing companies do not market their products through channels like television, newspaper, pamphlets and so on rather it is the individuals who market their products through individuals own network that is family, friends, neighbors and people in the workplace. In order to understand this concept better let’s look at some of the advantages and disadvantages of network marketing
Advantages of Network Marketing
1. The first and foremost advantage of it is that company saves a lot of costs due to networking marketing because marketing is done through individuals which is less expensive as compared to traditional method of advertising like television, online medium, newspaper and so on.
2. As far as individuals are concerned they also benefit from this marketing because they get the opportunity to work from home and be their own boss. Hence individuals who have the strong network of friends and family can make a lot of money by just selling or marketing the product to their network. Hence in a way this marketing helps the individuals to become entrepreneurs without too much investment as this type of marketing requires strong network rather than capital or money.
3. Another benefit of it is that it does not require any professional degree or experience like MBA to start network marketing and hence it gives the opportunity to all types of people whether they are pensioners or students or housewives and even working people can start it on part time basis. Hence in a way network marketing gives flexibility to people thinking of earning extra income without doing too much effort.
Disadvantages of Network Marketing
1. The biggest disadvantage of this type of marketing is that majority of companies and schemes are fraud and it is very difficult to trust on such schemes and companies which in turn make the task of genuine companies also difficult as individuals treat every company as fraud and therefore they will not market the products of the companies easily to their networks.
2. Another disadvantage of it is that individuals who do network marketing are amateur and not professionals and that results in even good products being marketed badly resulting in overall bad impression about the company and in case of marketing 1 dissatisfied customer will lead to company losing 10 customers and hence in a way network marketing can create more bad image than good image due to lack of experience and expertise of individuals doing network marketing.
3. Another limitation of it is that people believe what they see and since in the case of network marketing there is no use of marketing channels like television, newspapers and internet people are uncomfortable with products which are sold through network marketing as they have never seen the products before. Hence in simple words, lack of awareness about the products make this type of marketing a tough job for the companies doing this marketing.