Network marketing as a form of business organization
Recently in our country disappeared kilometer queue was a prerequisite for the acquisition of anything. Buyers have gone hunting for food to eat. Became lazier and calmer. In trade, new technologies are introduced and the performance of the implementation of Russia catches up with Europe and America. Customers of the new Millennium is very resourceful. Not only do they not want to stand in queues for food – they do not want to go shopping. Much easier to sit at home and wait until the seller himself will bring everything you need. And that’s fine. Because today these needs udovletvoren.
Today you can sit in a chair and flipping through the catalog, and then on the phone to order any of the goods. You can go to the Internet: this is where you can find everything! The last decade has made the global economy. On methods of production and marketing had a huge impact of new computer and telecommunication technologies. The network is a logical result of the technological revolution, the highest stage of entrepreneurial activity. Any businessman in the world that has Internet access, has the opportunity to present their products to the world 24 hours a day. In Economics it is believed that demand creates supply. We are seeing a slightly different pattern such sophisticated needs of the people would never have arisen if not for the scientific-technical progress (STP). With the advent of new technologies on the needs of the people is strongly influenced by the information that circulates about yourself manufacturer or from which the buyer knows how he can really get the chosen product (service). A person absorbs a lot of different information, and then reflect: and whether to buy? Thus, NTP came up with people, but now he manages us in a greater degree than we are.
Any society is a consumer co-operation, that is, the Association of consumers for the joint production and sale of certain goods and services. The totality and variety of social and consumer technologies and methodologies determines the level of development of any society and the level and style of life of large groups of people United in this historically developed forms of joint life and activity. Thus, it becomes quite natural that the progress was in trade. Advanced technology in manufacturing is such technologies that allow the consumer not to worry about tomorrow.
Today, the search for new ways to attract customers concerned about the spoiled merchants. Previously, it was enough to offer them a special range of goods, convenience store, the service is better than the competitor. Now this is clearly not enough: sold everywhere practically the same, because producers seek to maximize sales volumes and throw their products in all possible outlets for about the same price. Differences smooths the appearance of the wonders of technology. Because the stores, as we have seen, is not convenient for customers of the new Millennium had to come up with a new “distribution channels”. In marketing channels of distribution is called a chain of interdependent organizations that make product or service available for use by consumers. All probably encounter them: infomercials, catalogs, Internet-auctions, sales via phone, service delivery within home… the less the body makes thus the consumer, the more advanced is the channel. Marketing specialists estimate that in this way (i.e. not in stores) in the first half of the XXI century will be sold half of all available goods. In 2001, 12% of goods and services to consumers outside the retailers. Bibliography, source №4, p.24.
Among consumers around the world quickly gained popularity another way of distribution – network marketing (CM), or MLM (Multi-level Marketing). And although our life has been simplified long ago, so not everyone wants to see it. Unfortunately, the people, all the forces opposed to the new and clinging to the old, have always been, everywhere and in everything. Including in business. “Meaningless, frivolous, reckless, ineffective…” – familiar epithets which these guardians of the foundations of the economy are awarded CM is one of the most dynamically developing directions of modern business activity. Rejection network, or rather, a lack of understanding of the fundamental laws of micro – and macroeconomics, one way or another, facing each hitter. Perhaps someone it seems incredible, but a negative attitude towards the network business is not only for Housewives (and millions and millions of potential consumers of MLM products, among other things, component of at least 70% of the population of Russia), but also for the representatives of the so-called academic and business environment. Bibliography, source No. 3, p.3.
What is the major cause of blindness, suddenly struck our fellow citizens, or rather, why it is so important to understand the hidden essence of a unique phenomenon called “CM”? First, the rejection of “simple” methods and technologies due to the fact that people prefer complex solutions to simple, not only in business. It is an axiom. To convince them otherwise, or taught to use in everyday life, the fruits of NTP sometimes takes decades, if not centuries! Secondly, it is important to learn not to fall into the clutches of fraudsters and always be able to distinguish a legitimate business from illegal. Thus, the purpose of this research for me personally is to thoroughly understand all the nuances, SEE below.
1) not to become a victim of fraud structures, hiding behind network marketing.
2) take advantage of the companies, SEE for yourself.
I . The network business as a form of ENT and nimatullah.
1.1. The occurrence and characteristics of network marketing.
Network marketing is a system of product promotion from producer to consumer, without intermediaries. The inventor of the network business is Carl Rehnborg. Chemist for the major. In 1920, while in the camp is integrated, and having trouble eating, he invented a food Supplement. Bibliography, source No. 3, p. 10 in 20 years, he created the company “Nutrilite Products Inc.”, in the state which was assigned a lawyer, an accountant, and he himself – and no staff! Instead of trading employees he hired an army of independent distributors.
The main advantage was the fact that Renborg not had to pay a civilian to distributors until they made their first sales. Rehnborg, relying on the known statement of John Paul Gety: “I Prefer to use one percent effort from each of hundreds of my people than 100% of their own…”, a List of references, source No. 3, pp. 11 – rapidly became rich by providing a chance to enrich themselves and their distributors. Thus, the “Nutrilite Products Inc.” was the first direct sales company of group of companies of network marketing.
The essence of network marketing is different from traditional approaches to business. It is also called MLM, is Multi-level Marketing. The expression Multi-level (“bottom-up”) means a system of encouragement of the people who deliver the product to the consumer.
There are two main ways prod and LM products.
1) Retail trade – the product comes from the manufacturer to the wholesale trade where there are multiple intermediaries, then to the retail trade Department stores, vegetable stores, pharmacies, and so on.
2) Direct sales – selling of products to the end consumer at his home or at his place of work.
The same is isolated.
3) mail Order, online shopping, teleshopping.
4) the Hidden pyramid schemes – they are often confused with MLM, but pyramid is illegal. More about it we will tell next.
There are several features in MLM.
1) In MLM, the distributor is due to personal interest, but is never left alone, help him.
2) a Distributor buys products at wholesale price from a company that deliberately chose and is. Therefore, purchased the goods he can use.
3) Buying goods at wholesale and selling at retail, the distributor earns a profit.
4) some network marketing companies there are a few programs that necessarily require the achievement of a certain retail quotas to get more discount. Quota – share, portion, norm of anything acceptable. That is, in some companies, the distributor is obliged to buy a certain amount of goods to make your next wholesale purchase cheaper.
5) an Important goal of the distributor is to sell as a result of moving goods to market.
6) In MLM needs to move product. Otherwise, the system illegal because not performed its function. It turns into a pyramid scheme.
7) This material success will only bring organisation – building a consumer network.
8) the Distributor needs to sponsor, that is to teach MLM, creating a stable circle of customers, retailers and networkers.
9) MLM are not spending big money on traditional advertising.
10) After moving to another region of the country distributor continues to sponsor people without losing the values created by his group.
Thus, the American chemist Carl Renbor became the founder of network marketing. This new business is under development. According to scientists, it is the fourth stage in the development of commodity-money relations. So what is the product moves in the system CM.
Network business – one of the components of the global economy, and the development of network marketing is not a sterile environment and in a constantly changing market space. Therefore, the trends of the market to a greater or lesser extent are characteristic of MLM.