Network Marketing

Network Marketing: Franchising, E-Commerce & M-
Commerce
Network Marketing
Network marketing, also known as multi-level marketing (MLM), is a business model in

which a company distributes its products or services through a network of independent
distributors or representatives. Distributors earn commissions not only on their sales but also on
the sales made by the team they recruit, creating a hierarchical sales network.
1. Benefits of Network Marketing
1. Low Start-Up Costs: Minimal investment compared to traditional businesses.

2. Flexible Work Hours: Distributors can work part-time and set their schedules.
3. Residual Income: Earn ongoing commissions from team sales.
4. Skill Development: Enhances communication, leadership, and sales skills.
5. Wide Reach: Uses personal networks to expand reach rapidly.
6. Product Promotion: Offers direct customer engagement, boosting trust in products.
2. How Does Network Marketing Work?
1. Company Provides Products/Services: A parent company manufactures and supplies

products or services.
2. Independent Distributors Join: Individuals sign up as independent distributors, often by
purchasing a starter kit.
3. Direct Selling: Distributors sell directly to consumers, often through demonstrations or
personal recommendations.
4. Recruitment: Distributors recruit new members, forming a "downline."
5. Earnings: Income is earned through:
o Direct sales commissions.
o Bonuses on the sales generated by recruits (team sales).
3. Franchising
Franchising is a business model where a franchisor (the owner of a brand) grants a franchisee
(an independent operator) the rights to operate a business using its brand, trademarks, and proven
business methods.
Advantages of Franchising
For Franchisors:
1. Rapid Expansion: Expands market presence without large capital investments.

2. Steady Revenue Stream: Gains from franchise fees and royalties.
3. Brand Growth: Increases brand visibility and market share.
4. Motivated Operators: Franchisees are highly motivated as they own their business.
For Franchisees:
1. Proven Business Model: Reduces risks by operating an established concept.

2. Brand Recognition: Leverages an existing brand's reputation.
3. Training and Support: Access to business training, systems, and marketing.
4. Reduced Risk: Franchisors often assist with site selection and operations.
Disadvantages of Franchising
For Franchisors:
1. Loss of Control: Dependence on franchisees for quality and reputation.

2. High Support Costs: Ongoing training and marketing support required.
3. Legal Disputes: Potential for conflicts with franchisees over terms.
For Franchisees:
1. Lack of Autonomy: Limited control over business operations.

2. Initial Costs: High franchise fees and setup costs.
3. Ongoing Fees: Continuous royalty payments reduce profits.
4. Risk of Brand Damage: A single franchise's poor performance can affect the entire
brand.
4. E-Commerce
E-commerce refers to buying and selling goods or services through the internet. It includes
online marketplaces, retail websites, and platforms like Amazon or eBay.
Advantages of E-Commerce
For Businesses:
1. Global Reach: Access to international markets.

2. Lower Costs: Reduces expenses on physical stores and staff.
3. 24/7 Availability: Customers can shop anytime.
4. Data Analytics: Tracks customer behavior for better decision-making.
5. Personalization: Tailors recommendations and offers using AI.
For Customers:
1. Convenience: Shop from anywhere at any time.

2. Variety: Access to a wide range of products.
3. Price Comparisons: Easily compare prices across platforms.
4. Discounts and Offers: Often provides exclusive online deals.
5. Home Delivery: Saves time and effort.
5. Mobile Commerce (M-Commerce)
Mobile Commerce is a subset of e-commerce where transactions are conducted via mobile
devices such as smartphones or tablets.
Features of Mobile Commerce
1. Portability: Users can access services on the go.

2. User-Friendly Apps: Designed for ease of use on small screens.
3. Secure Transactions: Enhanced security measures for mobile payments.
4. Push Notifications: Alerts for discounts, order updates, and new products.
5. Integration with Social Media: Promotes products through social platforms.
Advantages of Mobile Commerce
For Businesses:
1. Broader Reach: Leverages the growing number of mobile users.

2. Cost-Effective Marketing: Uses apps and social media for promotions.
3. Faster Transactions: Simplifies payment processes with mobile wallets.
4. Enhanced Customer Engagement: Real-time interactions via notifications and chats.
For Customers:
1. Ease of Use: Access products and services anytime.
2. Quick Payments: Facilitates payments through apps like Google Pay or Apple Pay.
3. Personalized Offers: Receives tailored deals and recommendations.
4. Location-Based Services: Offers targeted promotions based on geographic location.
Summary
 Network Marketing offers flexible work opportunities but depends on effective

recruitment and sales strategies.
 Franchising provides a proven business model for franchisees but comes with limitations
in autonomy.
 E-Commerce and M-Commerce enable businesses to reach broader markets and
enhance customer convenience while driving innovation through technology.

Network Marketing

Uploaded by

Copyright:

Available Formats

Network Marketing

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Network Marketing

Uploaded by

Copyright:

Available Formats

Network Marketing: Franchising, E-Commerce & M-

Network marketing, also known as multi-level marketing (MLM), is a business model in

1. Benefits of Network Marketing

1. Low Start-Up Costs: Minimal investment compared to traditional businesses.

2. How Does Network Marketing Work?

1. Company Provides Products/Services: A parent company manufactures and supplies

1. Rapid Expansion: Expands market presence without large capital investments.

1. Proven Business Model: Reduces risks by operating an established concept.

1. Loss of Control: Dependence on franchisees for quality and reputation.

1. Lack of Autonomy: Limited control over business operations.

1. Global Reach: Access to international markets.

1. Convenience: Shop from anywhere at any time.

5. Mobile Commerce (M-Commerce)

Features of Mobile Commerce

1. Portability: Users can access services on the go.

Advantages of Mobile Commerce

1. Broader Reach: Leverages the growing number of mobile users.

 Network Marketing offers flexible work opportunities but depends on effective

You might also like