Journal Details
Direct Marketing against Multi-Level Marketing, Pullback and Implication
Open AccessJournal Type: Research ArticleSubject: Business StudiesSubject Field: Business and ManagementVolume:63, Issue: 1, October, 2020Publish Date: 6 November 2020
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Pages: 61-82
Abstract
The goal of this paper is to further explain the process of direct marketing and multi-level
marketing. Direct marketing is a type of advertising that uses tangible materials such as catalogs
and fliers to communicate information about a particular product or service to potential
customers. The information is aimed at potential customers, thereby allowing for a more accurate
forecast of sales. This means a cost-effective means of advertisement to corporations or
organizations with a small advertising budget. Multilevel Marketing (MLM) is, on the other
hand, a technique for sales distributors to concentrate more on recruiting new members who will
become sales distributors themselves. However, good recruiting is crucial for the very survival of
most direct selling companies, including multi-level marketing organizations, because the
viability of these entities depends on the ability to make more and more new hires to replace
those who have ceased to be hired. MLM distributors may have a partnership with both their
"upline" sponsor and their "downline" contractors. They often regularly cooperate through joint
recruitment meetings and sales training sessions. Distributors of multi-level marketing
companies foster a mixture of friendship and instrumentality in expanding networks, and the
long-term incentive of these MLM chains is that, with each new individual recruited, the
recruiter will receive a certain amount of money each time their downline sells something. The
balance is used to pay the salaries of higher-level officials in the MLM hierarchy. ?Some MLM
initiatives have all the implications and characteristics of the pyramid scheme, but the MLM
industry has nevertheless been allowed to continue and flourish, and this paper concludes that,
while the MLM industry is controversial, it must be evaluated and assessed from a number of
points of view, such as morality, culture and the country in which it is implemented.