Marketing

Network Marketing: What Is It? Is It The Right Option For You?

Soumava Goswami

Marketing

Published on: September, 09 2023 Last Updated on: December, 12 2023

Network Marketing is a type of business model that constitutes a group of people forming a network to earn from sales commissions, as well as through new joinings to the network. This system creates a flexible approach to the business, where a new member (as a salesperson) also becomes a business owner. The system has been in existence for many decades and has evolved multiple times since.

In this article, you will learn the essential details about network marketing (also known as multi-level marketing). You will also learn how network marketing works, as well as the types of network marketing options with the help of which businesses operate. Finally, we will also look at some of the major advantages and disadvantages of network marketing for businesses. Hence, to learn more, read on through to the end of the article.

What Is Network Marketing?

According to Investopedia,

“Network marketing is a business model that depends on person-to-person sales by independent representatives, often working from home. A network marketing business may require you to build a network of business partners or salespeople to assist with lead generation and closing sales. There are many reputable network marketing operations, but some have been denounced as pyramid schemes.”

The network marketing businesses that run through pyramid schemes focus more on the recruitment of salespeople. This is because new salespeople are required to pay upfront for expensive starter kits. For these payments, the people up the order in the pyramid get commissions.

Most companies that you will come across run through pyramid schemes. Hence, if you are looking to join a network marketing company, make sure that it is not a scam. Most companies with pyramid schemes have been banned due to running scams. Therefore, research is essential before you are looking to join a network marketing business.

Some of the most famous network marketing companies are Amway, Avon Products, Tupperware, Herbalife Nutrition, etc.

How Does Network Marketing Work? – Types Of Network Marketing

Every network marketing business focuses on sales as the most important factor. In such a business, a core sales team specializing in sales starts selling products and brings in new salespeople.

Here, each of the salespersons in the core team brings in new salespersons, thus creating a new tier. Each of the salespersons in the new tier creates another tier in the same way. This is how the team takes the shape of a pyramid as the tiers increase. With more tiers, the team gets more salespeople, who add to more sales of the business.

The salespeople earn commission based on the number of items they sell. however, there is an interesting catch in this business model. With each sale, the people up the order get commissions based on their rank. However, this feature is different in many companies.

Types Of Network Marketing

The following are the major types of network marketing options:

1. Single-Tier

Here, the salespersons in the team earn based on direct commission. Getting another tier of people is not compulsory. Here, affiliate marketing strategies come into play.

2. Two-Tier

In this case, apart from earning direct sales commissions, salespersons also earn through commissions for new recruits.

3. Multi-Tier Marketing

It consists of more than two tiers of people. Both direct sales commissions and indirect recruitment commissions are available in this case.

Network Marketing – Scam Or Legit?

Many network marketing businesses had their rise during the COVID-19 lockdowns. As people were locked in their homes, they were looking to make more money. Since the internet was a huge relief for many, and social media users grew, many people started online counterpart to advertise their products and brands.

This led to many such businesses getting bigger. However, there were many scams as well.

According to Wall Street Mojo,

“By recognizing the potential for such gig works, many businesses exploited the people looking for jobs by making them pay upfront for training materials. Their objective is to earn money from people in the name of a business. Thus, the pyramid schemes focus not on customers but on workers who become the bait.”

What Are The Advantages Of Network Marketing?

Here are some of the major advantages of network marketing that you will benefit from:

It helps to bring together people who are sales enthusiasts.
For many people, it offers a secondary source of income by acting as an affiliate.
They only pay those who contribute to sales, which is a gain for the business.
The company does not need to think about recruitment or providing additional benefits to employees.
In most cases, the business supplies quality products.

What Are The Disadvantages Of Network Marketing?

According to Entrepreneur.com,

“Things can get sticky when a network marketing network compensates participants primarily for recruiting others rather than for selling the company’s products or services. A network marketing system in which most of the revenue comes from recruitment may be considered an illegal pyramid scheme.”

The following are a few disadvantages of network marketing, which you must be aware of:

It is difficult to predict the production targets for the business.
Manufacturers have a limited role in facilitating the distribution of the products.
Too much focus on creating a pyramid of salespersons and earning through commission leads the business to trouble.
New distributors have to spend a lot at the start.
Many businesses are found to be scams.

Wrapping Up

Hope this article was helpful for you to get a better idea of what network marketing is and how it works. You might have already understood that it is mostly suits those people who have high energy and top-end sales skills. If you are confident about building a profitable business with a modest investment, network marketing can be a good option for you.

You can choose a single-tier, two-tier, or multi-tier approach based on what you are comfortable with. However, research well before you join a network marketing company. Do you think this can really help in achieving financial independence? Share your thoughts on the matter in the comments section below.

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Soumava Goswami

A passionate writer and an avid reader, Soumava is academically inclined and loves writing on topics requiring deep research. Having 3+ years of experience, Soumava also loves writing blogs in other domains, including digital marketing, business, technology, travel, and sports.

10 Types Of Content Marketing You Can Use

Blog Posts: Blogging is one of the most popular types of content marketing, and it can be a great way to attract and engage with an audience. Blogs can be used to share industry news, insights, and tips, as well as to promote products and services. Infographics: Infographics are a visually appealing way to present complex information in an easy-to-understand format. They can be used to educate and inform an audience about a particular topic. Videos: Video content is becoming increasingly popular and can be used to share product demos, tutorials, and other types of content. You can create an engaging video content for your platforms with the help of a web video editor, which contains pre-made templates to make it easy to create product demo videos. Webinars: Webinars are live or recorded presentations that can be used to educate an audience about a particular topic. They can also be used to promote products and services. Case studies: Case studies are a great way to showcase the success of a particular product or service. They can be used to demonstrate how a business has helped its customers solve a specific problem. E-books: E-books can be used to provide in-depth information about a particular topic. They are a great way to demonstrate thought leadership and establish a business as an authority in its industry. White papers: White papers are similar to e-books, but they tend to focus on a specific problem or solution. They can be used to provide detailed information about a particular product or service. Social Media Posts: Social media platforms like Facebook, Instagram, Twitter, and LinkedIn can be used to share all types of content, including blog posts, videos, and infographics. Podcasts: Podcasts are audio recordings that can be used to share information about a particular topic. They can be used to provide interviews and other types of content to an audience. Interactive content: Interactive content like quizzes, polls, and surveys can be used to engage an audience and gather valuable data and feedback. These are just a few examples of the types of content marketing that businesses can use to attract and engage with an audience. The key is to find the content formats that work best for your business and your target audience. In conclusion, content marketing is a powerful tool for businesses looking to attract and engage with their target audience. There are many different types of content marketing that businesses can use, including blog posts, infographics, videos, webinars, case studies, e-books, white papers, social media posts, podcasts, and interactive content. By finding the right mix of content formats and topics, businesses can effectively communicate their message and establish themselves as thought leaders in their industry. Ultimately, effective content marketing can help businesses to generate leads, increase conversions, and drive revenue growth. Additional: How To Find The Best Content Creators To Work With What Is Network Marketing And How To Do It In 2021 Top 7 Best Types Of Marketing On Which You Should Focus In 2021 Top 5 Best B2B Marketing Strategies For The Entrepreneurs In 2021

The Rise Of Interactive Email Strategies In Modern Brand Campaigns

How many times have you stared at your inbox, quickly skimming through subject lines, hoping something would jump out and grab your attention? It’s a universal feeling, right? Today’s brands are battling it out for that coveted spot of "must-read" amidst a sea of ignored messages. And guess what? Modern brands are rapidly incorporating interactive features in their campaigns to boost user engagement. In fact, some of the most captivating examples out there give us a clear picture of where the future of email marketing is heading. You might wonder, “Why all this fuss about interactive emails?” Well, there’s a certain kind of magic that happens when you engage with your audience in a way that’s more than just asking them to buy something. It’s like starting a conversation instead of giving a monologue. Why The Shift Towards Interactivity? Interactive content is a game-changer. It’s not just about reading; it’s about experiencing. Polls, quizzes, and even mini-games inside emails can transform the way users perceive a brand. They’re not just subscribers; they’re participants. And participation fosters loyalty. Yet, despite all these benefits, only a surprising 23% of content marketers considered investing in interactive content last year, according to Semrush. It's curious, isn't it? Why the hesitation? Could it be the perceived complexity or maybe doubts about ROI? Whatever the reasons, they're missing out. Content Marketing In The Post-Covid Era Speaking of trends, did you know that the COVID-19 pandemic significantly shifted the content marketing landscape? Everything turned on its head as businesses across the globe tried to navigate this unprecedented situation. But here’s an intriguing piece of info: content marketing, which was always the underdog, suddenly took the lead. It’s also worth noting, as per a report by the CMI and MarketingProfs, that 28% of both medium-sized and large-sized B2B companies redirected their paid advertising budget to content marketing last year. Check the details here. It makes sense, doesn’t it? With more people at home, online content consumption skyrocketed. Brands recognized this shift and adjusted accordingly. Real-Life Instances Of Engaging Content Now, let’s get real. Imagine this: you receive an email from your favorite travel agency. Instead of the usual scenic photos and offers, there's a short interactive quiz titled "Discover Your Next Dream Destination." By answering a few fun questions, the email directs you to a personalized travel package. Wouldn't you be intrigued? That’s the potential of interactivity. Similarly, a fashion brand might include a mix-and-match game in their emails, allowing subscribers to create their outfits. By doing so, the brand isn’t just selling products; it’s offering an experience. The Bigger Picture In this fast-paced digital age, where distractions are many and attention spans are short, interactive emails can be the bridge that connects brands with their audience on a personal level. By fostering engagement, brands aren’t merely seen; they’re remembered. But remember, like all trends, interactive emails should be approached thoughtfully. It's not about using every new feature available but choosing the ones that align with your brand’s message and resonate with your audience. After all, in the world of marketing, authentic connections always triumph over fleeting gimmicks. Strategies To Boost Interactivity As we delve deeper into the realm of interactive emails, it becomes essential to explore some proven strategies that can truly set your campaigns apart. After all, knowing the "why" behind interactivity is only half the battle; the "how" is equally significant. 1. Personalization Is Key No one likes generic emails. Personalizing your email content can make subscribers feel valued. Think about it. Isn't it delightful when an email newsletter addresses you by your name or suggests products based on your browsing history? The added touch of familiarity not only grabs attention but also increases the likelihood of engagement. 2. Gamify Your Emails Incorporate mini-games or challenges that pique the subscriber's interest. Brands could use trivia quizzes, spin-the-wheel games, or even jigsaw puzzles relevant to the content. Gamification can effectively drive engagement and offer a fresh, fun perspective to mundane emails. 3. Incorporate Real-Time Interactions Real-time elements like countdown timers for sales or live product availability counters can create a sense of urgency and nudge subscribers to take immediate action. These dynamic components can make your emails stand out and feel incredibly current. 4. Use Interactive Surveys And Polls What could be more human than directly communicating with your audience to comprehend their needs and preferences? Infuse your strategy with short surveys or quizzes to collect feedback, views, or even data for market understanding. The reflections received can provide priceless understanding for upcoming campaigns. 5. Embed Videos With Playable Ctas Instead of redirecting subscribers to another platform, embed videos directly into your emails. Enhance them with clickable CTAs, ensuring that the subscribers can interact or shop without ever leaving the email. 6. Emphasizing Mobile-First Design In fact, a recent study from Statista highlighted that mobile devices accounted for a staggering 58.33% of global website traffic in the early parts of 2023. It's a figure that has been consistently around the 50% mark since 2017 and took a permanent leap beyond it in 2020. Now, imagine the number of people reading emails on their phones! Hence, if you're thinking of dazzling your audience with interactive email elements, ensuring they shine on mobile is not just advisable; it's essential. Because even the most splendid desktop email design can lose its charm on a mobile screen if not optimized correctly. Looking Ahead: The Future Of Interactive Emails So, what kind of future should we anticipate? The current trends suggest that as tech advances, what we can achieve within a simple email will continue to push the limits. The road ahead may reveal experiences in augmented reality, a heightened level of personalization through deeper AI integration, or even the chance to virtually try on items from our favorite online stores. It promises a world where our common human experiences are enhanced by the seamless fusion of reality and digital innovation. However, at the heart of it all, the essence remains unchanged: building genuine connections. No matter how advanced or interactive emails become, they must resonate with the human at the other end. Interactivity isn't about mere clicks or swipes; it's about evoking emotions, sparking interest, and fostering genuine brand loyalty. In wrapping up this exploration of interactive email trends, one thought stands out: Interactivity is more than a trend. It's an evolution. Brands that dare to evolve, engage, and excite are the ones that will remain etched in the minds of their audience. How will your brand leverage this powerful tool? Additional: how to find the best content creators to work with what is network marketing and how to do it in 2021 top 7 best types of marketing on which you should focus in 2021

Market Orientation – What Is It, And How Does It Work?

Most companies look to convince their target customers of the value of their products and services so as to sell the product. However, many companies use the Market Orientation technique. It is a process through which a business identifies the needs of its target customers and uses that data to create products and develop services. Learning this marketing approach can help you decide whether it suits your business or not. In this article, you will learn about the market orientation approach, how it works for businesses, and how businesses use this technique to market their products and services. In addition to that, we will discuss the major stages of the market orientation approach. Finally, we will share with you some of the major advantages and disadvantages of market orientation. Hence, to find out more, read on through to the end of the article. What Is Market Orientation? According to Investopedia, “Market orientation is an approach to business that prioritizes identifying the needs and desires of consumers and creating products and services that satisfy them. Companies that have a market orientation consider the opinions and needs of their target market as a critical component of their research and development (R&D) for new products.” In this concept, the company’s focus is on identifying the needs and preferences of its customers. With those needs and preferences, the company designs and develops its products and services with the primary objective of earning profits. In this marketing and product development strategy, the job of the business is to interact more with its customers and observe their needs and requirements. To become profitable, the business turns its focus to the preferences of the customers. The business makes use of its variety of resources to fulfill the needs of its target customers. The businesses that use this method are also aware of their competition in the marketplace. They make use of different techniques to identify different threats. The enterprises that follow the market orientation strategy invest a lot in innovation and product development so that they keep up with the changing demands of their customers. Read More: What Is A Venture Capitalist, And What Are Their Functions? How Does Market Orientation Work? Market orientation is a strategy for marketing that businesses use to focus on their customer base, and create and sell products on the needs of the customers. According to the Wall Street Mojo, “The strategy involves analyzing and researching the customers’ requirements, concerns, and suggestions concerning the particular product or service the enterprise deals with. This way, the enterprise will be aware of the trends in customer preferences. It will enable the company to modify or design its product or services according to customer preferences.” A company that follows this strategy first does market research to find out its customer preferences. They make use of data analysis techniques to predict the desires of their customers. However, businesses that are already established and have good sales of their products use this strategy to improve their products or expand their product line. Apart from that, using this strategy helps businesses to address issues associated with customer retention. Today, most companies follow the market orientation approach, as it helps them understand the needs and demands of their target customers better. What Are The Stages Of Market Orientation? The following are the stages of the market orientation strategy: 1. Initiation In this stage, the business identifies all the potential threats for its business which might affect it. Apart from that, the business also researches what steps to take to handle the threats. 2. Reconstitution Here, the researchers present the plans for the initiation stage to the employees of the business. With the managers point out to the employees about what steps to follow. Here, the organization also needs to ensure that all employees are ready for the change to happen. 3. Institutionalization Here, the organization puts the plan into action. Here, they train employees and provide them with instructions on what steps to follow. This helps the employees to follow a pattern so that the business is able to cater to the needs and demands of the customers. Here, the plank is basically executed. 4. Maintenance In this stage, the business continues the process and meets the customer requirements and demands, as per the initial plan. Here, the business tries to ensure that the plan is effective and everyone follows it to meet the business’s goal. What Are The Advantages And Disadvantages Of Market Orientation? According to Indeed.com, “A market-oriented approach to business can help a company earn the trust and loyalty of its customers by showing them they're a priority and that the business exists to serve them. It contrasts with conventional marketing, which attempts to convince customers of a product's value while not necessarily prioritizing consumer preferences during product development.” The following are the major advantages and disadvantages of market orientation: Advantages Of Market Orientation Here are the advantages of market orientation: It helps to increase the overall revenue. The business sees an increase in the market. The customers are well-connected to the company. Helps in innovation and product development. It helps the business to enhance its market reputation, as the customers are happy with the products and services of the company. Disadvantages Of Market Orientation Here are the disadvantages of market orientation: Continuous change is required, as the needs of customers change with time. The company invests a lot in investment. Research gets difficult as it is difficult to predict the preferences of the market. Read More: Private Equity Vs. Venture Capital: Key Differences Final Thought Hope this article was helpful for you to get a better idea of the market orientation approach. You can see that it is really helpful for different companies to identify the needs and demands of their target customers. This helps them in developing new products and eventually sell them. Many top businesses use these principles to expand their products and services. Even some of the major impractical demands from consumers help businesses make decisions in the long term. Hence, market orientation helps businesses to plan for the long term. What do you think of the market orientation approach’s importance for business? Share your thoughts and opinions in the comments section below. Read Also: Why Business Continuity Planning Is Essential For Your Company? Project Management: What Is It? – Major Types, Examples, And More What Is Risk Management? – Find Out How To Manage Risks in Business

Market Cannibalization – Definition, How Does It Work, Example, And More

Market cannibalization is one of the worst things that a business can face with its products and services. It mostly happens when a company comes in with a new product for the market, and because of this, the demand for its original product starts to decline. This leads to the business experiencing losses not only in sales but also in revenue and market share. Hence, due to this fear, many companies hesitate to develop new products. In this article, you will also learn about market cannibalization, how it works for businesses, and the ways in which it affects a business’s market as well as its product line. We will take a look at the phenomenon with the help of a simple example. Finally, we will provide you with tried-and-tested steps to prevent market cannibalization in business. Hence, to learn more, read on through to the end of the article. What Is Market Cannibalization? According to Investopedia, “Market cannibalization is a loss in sales caused by a company's introduction of a new product that displaces one of its own older products. The cannibalization of existing products leads to no increase in the company's market share despite sales growth for the new product.” It works in most cases where the earlier product, as well as the new product of the business, share a common base of customers. It can also happen when a fast food outlet or chain store loses its customers after a store of the same brand starts operating nearby. It also happens when the new product is almost the same as the product that is already existing. Both these products have the same target audience. However, the introduction of the new product in the market puts the existing products of the business out of the market. This, in turn, affects the business a lot, as the business faces stagnant growth in the market despite an increase in sales of the new product it launched. Despite enticing new customers with the new products, the phenomenon results in attracting the already existing customers towards the new product as well. As an outcome, the sales and growth of the company get a major hit. Read More: Market Orientation – What Is It, And How Does It Work? How Does Market Cannibalization Work? According to Indeed.com, “Even with a detailed marketing plan, cannibalization may occur depending on how the general customer base reacts to the new product. Whether or not the products are competitive, customers may prefer the new one. A common reason why this happens is that two products may be too similar.” Let’s say a technology company sells smartphones. And they introduce a new one which is similar to the old one. The customers that were attracted to the old one now start liking the new one and purchase it. Hence, the new product was sold at the cost of the sales of the old one. Therefore, although the new product got major sales, the sales of the old product were affected. Hence, there is no increase in sales of the company. In fact, considering a new product was launched, the sales actually got affected. In various marketing campaigns, companies unintentionally, however, discourage their existing customers from using previous products. The tone of the marketing here suggests that the product has become obsolete as compared to the new one. Example Of Market Cannibalization Corporate Finance Institute gives a simple explanation of market cannibalization - “There are certain situations where market cannibalization cannot be avoided. For example, we now see tons of department stores that operate as online businesses as well. The store owners already understand the risk that its online sales can jeopardize those of its brick-and-mortar stores.” Let’s take an example of a well-known company - Apple Inc. When Apple releases a new iPhone with new features, it never shies away from explaining why the product is better than before. Furthermore, the company also ensures that the new iPhone reaches all Apple stores throughout the world. Hence, many people are attracted to the new one since they know that the latest one is better than the previous one, despite it being more expensive. As a result, the sales of the older iPhones start dropping. However, Apple makes up for this loss amazingly. It increases the price of the new one and also captures the current customers of its competitors. This helps in increasing Apple’s customer base. How To Prevent Market Cannibalization? - Steps To Follow The following are some of the major steps that you will need to take if you want to prevent market cannibalization in your company: 1. Determine Your Market Goals Before launching a product, have a clear idea of what are your goals with that. What do you want to achieve - customer loyalty? eliminate competition? filling a market-gap? - Find out through research. 2. Analyze Your Market Never ever launch a product without properly understanding your customers’ behavior and market dynamics. Always research the performance of your existing products and how much do customers like them. 3. Test Your Customers Before Extending The Product Find out your potential customers, and test the product beforehand. Ask for genuine feedback from the customers. You can do so by surveys, interviews, experiments, etc. Validate your assumptions based on results. 4. Monitor The Product’s Performance Monitor the performance of the product after its initial launch. You can use various metrics like - customer satisfaction, market share, profit, sales, etc., to evaluate the product’s extension. 5. Focus On Innovation Constant innovation and differentiation are required for your products if you want to avoid cannibalization. Keeping up with the needs and demands of customers might help. Read More: Matrix Organizational Structure – What Are Its Pros And Cons? Summing Up Hope this article was helpful for you in understanding the phenomenon of market cannibalization and how it affects businesses. In many cases, companies use it as a deliberate strategy to blow out competition, while sometimes, it results in the failure of the company itself to reach its target market. To stop market cannibalization from happening, consider following the aforementioned steps in the previous section. What is your opinion on market cannibalization, and do you have any recommendations to stop the same? Share your insights on the matter with us in the comments section below. Read Also: Matrix Organizational Structure – What Are Its Pros And Cons? Business Continuity Plan – What Is It, And How Does It Work? What Is Continuity In Business, And Why Is It Important?

Network Marketing: What Is It? Is It The Right Option For You?

What Is Network Marketing?

How Does Network Marketing Work? – Types Of Network Marketing