Outline MULTI LEVEL MARKETING
Give examples about multilevel companies: oriflame ( famous website to earn money )
definition : Multi-level marketing (MLM), (also called network marketing ) is a term that describes a marketing structure used by some companies as part of their overall marketing strategy
The structure is designed to create a marketing and sales force by compensating promoter of company products not only for sales they personally generate, but also for the sales of other promoters they introduce to the company, creating a downline of distributors and a hierachy of multiple levels of compensation in the form of a pyramid.
The products and company are usually marketed directly to consumers and potential business partners by means of relationship referrals and “word of mouth” marketing
it has 5 different structures
o unilevel plans: This type of plan is often considered the simplest of compensation plans. As the name suggests, the plan allows a person to sponsor one line of distributors, called a "frontline”. Companies encourage frontline expand downline and frontline earn comissions from downline. This is due to the fact that commissions are normally paid out on a limited depth, which typically means sponsor can earn commissions on sales between 5 and 7 levels deep.
• stairstep breakaway plans: like unilevel plans however exist as a group , each member in group will creats their own downline . When they have enough downline they break old group and creat new group with their downline . However they earn money and comissions both from downline and old group. Disadvantage : frontline have responsibility when member in both old group and new downline group do something wrong .
• Matrix plans: This type of plan is similar to a Uni-Level plan, except there is also a limited number of representatives who can be placed on the first level. Moreover , downline is unlimited disadvantage : not easy to...