Multi Level Marketing is a method of selling products or services by joining persons in a chain method systematically by building in a pyramid or hierarchical manner.

All your desire to join the group of multi level marketing starts simply “to get rich by making easy money in a short time”. MLM appeals even lucrative to those who are greedy. Typically, MLM marketers reach to the people who are jobless, undereducated, and poor. Or who wants to become rich quickly “in any which way”, and the victim is doomed if they have a wide network of friends.

How it starts?
Mainly two types of people join multi level marketing schemes. First type wants to pursue it as full time job, taking it as their full time activity. Others enroll to the scheme to do in their free time as a part time activity.

People who are in the first type are generally poor, unemployed, and undereducated. They are mostly from villages, small towns without any proper exposure, as MLM companies also deliberately target this segments, as they are easy bait. They initially boost themselves that multi level marketing is a self-employment/ entrepreneurial opportunity to make easy money. However they don’t understand that Multi level marketing is a complex hierarchical system on which they have no control.

The other type people are working segment looking for other ways of income. They are deceived in different ways, by advertisements, by watching videos, by reading tutorials, by colorful catalogs, and even with interactive website with operational branches globally. Soon after the second type of people join MLM, they start looking every person they know as a potential prospect. Every moment is a potential selling opportunity. Capitalizing on some free time becomes full time investment on MLM. As a result, they start thinking about to take as a full time activity, leaving the current job and taking MLM full time desperately as the job is effected when they become poor performers by overly focusing on MLM activities. People get deeply involved counting on to exploit their relationships as the story continues.

Why it is a scam?
Businesses exist to provide value to customers, distributors, employees, and to economy. Most of the multi level marketing companies does not make any significant contribution and starts with a sole purpose of making money. However, very less than 1% of all Multi level marketing distributors hardly ever make profits, mostly except the founder and a very few people who joined at the time of founding!

MLM marketers motivate with slick videotapes and pumping sessions periodically. They make to fully focus on making more people to join in your group. In addition, they will entertain you showing different people on videotape who got benefited by joining X Multi level marketing company. They dazzle you and say, they were like YOU at one point of time and they became rich and living luxury life after being part of MLM. Some times even you may meet a person whom the person over you worships, coming in a fancy car to give tips on how to do MLM. With all the sessions and drama, one will be pulled neck-deep into the Multi level marketing.

Almost in all pyramid schemes of multi level marketing the millions of top-level distributors, money is raised from new joinees at the bottom level. More than 90% of the money raised as sign-up fee for new joinees, training materials in form of CDs, cassettes, events and tutorials. Also, on aggregate models like shampoos and cosmetics free volunteers consuming add up to 50% of the total volume is generated.

Multi level marketing is identified as illegal in many countries as exploiting human relationships. Still many multi level marketing organizations exist without making any contribution to the society.

One of the rules mentioned by FTC on multi level marketing is that sales made by MLM firms from non-distributors should be more that 70%. However, most MLM firms said they get only 18% business from non-distributors, which implies that all MLM firms are illegal.

How people are exploited?
In most cases, they buy the material provide by the MLM firms with a hope that they can make money in the near future. Soon they get to know that the sales they make becomes less than 5% of what they spend as an investment to do better sales.

With multi level marketing, many people are exploited, lost valuable time, deceived in order to create a long-term career. Multi level marketing created deep wounds and many people are exploited. Most of the people soon or later realize that it is not a career choice. When people eventually get out of multi level marketing they fully keep quiet. Even people around that person also keep quiet, as they know that he/she is a loser. This continues with thousands of people while the multi level marketers sell one success at the top since thousands of failures unseen.

Multi level marketing is a disease that reinforces the wrong beliefs about business. It is exploiting vulnerabilities in different socio-economic segments and creates deep wounds for people that take long while to recover from.

Avoid getting into Multi level marketing schemes. They are everywhere Amway, many insurance companies, health, and almost into every kind of category. If you are already involved, the sooner you realize the truth, the quicker you can reconcile in your life.

Steven Paul “Steve” Jobs (born February 24, 1955) is the co-founder and CEO of Apple Inc and a Silicon Valley icon. Jobs also founded NeXT Computer Company now part of Apple Inc. and served as CEO of Pixar Animation Studios now part of Walt Disney Company. As Philip Kotler rightly said, “Marketing’s work should not be so much about selling but about creating products that don’t need selling”, Steve Jobs has just did this time and again. Jobs captivated everyone including his rivals with his elegant line of products such as the Apple, iMac, iTunes, iPod, iPhone and the new iPad. He is habituated to revolutionize the market in whatever he is interested in.

In the late 1970s, Jobs, teamed with Apple co-founder Steve Wozniak, Mike Markkula and others to design, develop, and market some of the first commercially successful lines of PCs including the Apple II series and Macintosh. In the early 1980s, Jobs was among the first to vision the market potential of the GUI. However, in 1985, Jobs resigned from Apple because of internal power struggle. He was not part of the Apple Inc. until he came back in 1997, and has been serving as its CEO since then. Jobs is also a Board of Director of Walt Disney Company.

Steve Jobs – a marketing genius

Made masses to feel and enjoy the digital technology
Steve Jobs envisioned that a software program can do wonders rather than just be dry codes and instructions in PCs. His creativity brought digital technology to the reach of a commoner and introduced new experiences that were only seen in the science fiction movies. As a marketing genius, he introduced elegant products that captured consumers’ imaginations that immediately smashed the existing products. As a perfectionist, he came up with unmatched improvement in the existing products that raised the bar for rivals.

Products that don’t need selling
Once Steve Jobs said, “It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.” He has done just that four times. The first is the Apple II. It is the first PC to reach the classrooms and offices, which was till then seen mostly at advanced science and technology institutions operated by techies. His Pixar Animation redefined the cartoon movies till then which was popular mostly with kids. The ‘incredible’ animation starting with ‘Toy Story’ in 1995 made the animation as an important part of the Hollywood mainstream. Four of the six animation films nominated for Academy awards have won it. Thirdly, he stunned the music industry with iPod and iTunes online store. The combo laid the blueprint for the new generation music business in the Internet era. Finally, it’s the iPhone that revolutionized the smart-phone segment with its futuristic design and technology. Apple recently released tablet PC called iPad, which is set to stir the markets of tablet PC and net books.

Destructive innovation
Industry experts attribute the success of Apply to the job done by Steve Jobs who has no parallel in the technology innovation. Jobs is termed as a master marketer with more than 30 years of experience of creating stylish products with great design that works. Jobs lured Disney to takeover Pixar and made agreements with music companies and Hollywood studios to create the market for iTunes music store that already sold more than 8 billion songs online. Apple leads the industry in technology innovation also with Mac PCs and software. Apple is also leading the digital music revolution, by already selling more than 240 million iPods and entered the smart phone market introducing iPhone.

One should remember that none of the products’ idea or concept is completely invented by them. There is animation existing before Pixar, there were mp3 players before iPod and similar case with the other products. All the products and service ideas already existed in the market. Nevertheless, what Steve Jobs did is, visualizing the future of certain capable products and services in the next 5 to 6 years and introduce a completely new way of interaction with technology to the customers. It’ll be more appropriate if we call it destructive imagination or creativity rather than innovation.

Steve Jobs’ Best Quotes

• It comes from saying no to 1,000 things to make sure we don’t get on the wrong track or try to do too much.
• A lot of companies have chosen to downsize, and maybe that was the right thing for them. We chose a different path. Our belief was that if we kept putting great products in front of customers, they would continue to open their wallets.
• Be a yardstick of quality. Some people aren’t used to an environment where excellence is expected.
• Design is not just what it looks like and feels like. Design is how it works.
• Innovation distinguishes between a leader and a follower.
• To turn really interesting ideas and fledgling technologies into a company that can continue to innovate for years, it requires a lot of disciplines.
• You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new.

Dr. Karsanbhai Khodidas Patel is the founder of the present Rs. 3550 crore Nirma group with main activities in detergents, soaps, cosmetics, and salt. If marketing is to find the gaps and fill them, Karsanbhai Patel just hit the bull’s-eye.

Karsanbhai Khodidas was born in 1945, in Ruppur village in north Gujarat in a family of farmers. He graduated in Chemistry at the age of 21. Initially, he worked as a lab technician and later served the state Government. In 1969 at the age of 24, Karsanbhai started manufacturing phosphate free detergent powder, Nirma (named after his daughter Nirupama) in his backyard. He dedicated after office hours for manufacturing Nirma and sold on his bicycle while going to his work place, which is 17km from his home. The handmade detergent packets were sold at Rs. 3 per kg, which was one-third of then least priced popular detergents.

Karsanbhai Established Nirma with Simple Yet Superior Marketing Strategy

Product Positioning
Karsanbhai found a massive market segment that was starving for a good-quality detergent at an affordable price. He Kept his margins very low, and was happy to get anything between three and five percent. Eventually, this strategy made him to discover the fortune from the volumes. Nirma was much cheaper than the existing multinational products like Surf and almost equally performing well. On the other hand, Nirma was far superior to that of the cheap washing soaps that were the only alternative to costly detergents until then. Thus, Nirma found its place between the expensive detergents and inferior washing soap slabs. The Nirma brand was quickly recognized in Gujarat and neighboring parts of Maharashtra and the rest is history.

Pricing
Nirma transformed the face of Indian detergent market by staging the strength of low-cost detergent powder segment. For hassled homemakers struggling to balance their monthly budgets, the product was a boon. At the time, detergent and soap markets were dominated by multinational corporations with products like Surf by Hindustan Lever (Indian arm of UniLever – a British-Dutch FMCG giant). They were priced above Rs. 13 per kg, which was out of the reach of the middle class homemakers. Seizing the opportunity, Nirma was priced at one-third of the leading detergents’ price that rapidly conquered the detergent market share. In less than ten years, Nirma became the top selling detergent in India.

Karsanbhai stayed focused on cost reduction strategies to cement the slot for Nirma in the market. Consequently, Nirma adopted backward integration strategy while introducing latest technology to its production facilities to offer a better product at a reasonable price.

Distribution
Karsanbhai knew the popular maxim – ‘the product should be available within an arm’s length of the desire’, but the local retailers did not support him initially. He had to recruit local housewives to sell his product which was innovative and very effective. Once he gained strength, he took a massive expansion of the width and depth of the distribution network. As a result, Nirma began sprouting everywhere in Gujarat, in little shops at the street corners, and even in the remotest villages. It took no time to catch wild fire of word of mouth publicity that gained the trust of the agents and distributors across the country. As a result, Nirma reached those uncharted markets that were alien to its predecessors. At present Nirma has 450 exclusive distributors and over 1 million retailers. The marketing strategy applied here is – Target disruptive products at non-consumers i.e. Nirma targeted non-users of Surf thus avoided the attention of HLL and later grew rapidly and was unstoppable once it is in the right mode.

Challenging established multinationals needs extreme courage and to win in the long run needs marketing foresight. Karsanbhai Khodidas Patel, once a government servant with the knowledge and experience as a chemist offered a good product and was aggressive in marketing strategy. He made the multinationals to follow Nirma and introduce substitutes such as Wheel. In this respect, the Nirma case can be compared to those of Ford, Apple, Sony, and Honda, all one-of-a-kind entrepreneurs who built their empire on gut feeling rather than following the classical patterns taught in business schools. This is a genuine road from rags-to-riches one would like to follow. The story of Nirma has become a classic marketing case study.

Let’s start with a basic but key criterion. They have to be comfortable spending time with and listening to consumers. A fundamental starting point for any great marketer is: get out of your office and spend time in the places and spaces where your consumers experience the product, no matter how senior or ‘important’ you consider yourself.

-Do you have six-pack to be a great marketer? By Mark Ritson

• Visit the places where your customers experience your products/services
  Listen to the feedback, reviews and experiences on the products/services from a diverse group of customers. Avoid third parties as much as possible while you are in contact with the customers. Try to be as close as possible while your customers are using the product.
• Observe the usage –why-where-when-how
  Keep your eyes wide open when your customers using the product. You may come across some simple ideas to improve your product that have a great impact and design new products. Note each and every aspect such as why your customers are using your product (in some cases the usage may not reflect the actual purpose of the product), where they are using the product often, when they are using i.e. at what time, location etc, and finally how they are using. Always look for the strange patterns in the customer usage or experience.
• Ask questions and listen to answers from the horse’s mouth
  Try to listen unbiased and objectively what the customers meant while they give the feedback rather than just what you heard or perceived. Avoid structured customer feedback environments as much as possible as this may influence and hamper the quality of the opinions of the customers.
• Spend time with the customers
  Listening and understanding a customer is not a one time or a yearly programme. It is a constant and continuous process. Often the executives decrease the time spent on to listening to customers as they grew in their position and influence the business decisions.
• Act on the feedback
  Don’t make listening to customers a namesake activity. Not valuing the information gained from the customers is a symptom of change aversion for the improvement. Make sure that the result of the action taken based on the feedback serve the purpose.

One out of the three golden Dell rules emphasis on customer feedback- Always listen to the customer.

Dell Computer was the first company to build and operate itself around the customer feedback. “Our attitude is diametrically opposed to the engineering-driven thinking of ‘Let’s invent something and then go push it onto customers who might be willing to buy it.’ Instead, I founded the company with the intention of creating products and services based on a keen sense of the customer’s input and the customer’s needs. I spend about 40% of my time with customers”, says Michael Dell

The following is a brief on the evolution of marketing from primitive techniques to modern/sophisticated techniques-

Level 0 – Sales organisation
The existence of sales organizations can be aptly compared to civilization in the barbaric ages. Sales organizations exist primarily in premature or primitive markets where there is no need of marketing. They exist in two types of market situations – 1. Monopolistic markets and 2. When there is huge demand–supply imbalance. This could also cover government projects awarded by politicians for their cronies. This can be seen in the socialistic economies where a handful of companies attain the business licenses from the government. In these situations, the seller or provider has great advantage, as people do not know the difference between marketing and sales.

The companies do not show interest in reaching out the customers, as they largely focus on making a sale rather than adding value to the customers. As a result, the customers are at the companies’ mercy for the service. The concept of marketing simply does not exist in a sales organisation. Moreover, innovation does not exist in socialistic structures.

A good example for this is purchasing a Bajaj Chetak or applying for a BSNL landline connection in the 70s and 80s. One was supposed to wait for years together (it is said 10 years for a Chetak) to get their application cleared and receive products or services.

Level 1 – Advertising
The goal of advertising is to leverage the latent demand and then convert it towards company’s products. Advertising in a national TV or paper conveys a sense of reliability to customer. A company that uses advertising as the only marketing tool is practicing a primitive way of marketing. Here advertising starts appearing to ‘promote’ the product. The companies resort to advertising only to make the customer aware of the product. The companies blindly push the products into the market neglecting the product improvement and the customer’s needs. They may try to show product differentiation by highlighting Unique Selling Proposition or Point popularly known as USP, which was coined in 1940s. This may not work well in today’s market, as the requirements of all the customers are not same.

Level 2 – Market Research
Market research is a slightly less primitive marketing. At this level, market research is only confined to the basic aspects of market such as market size, which product/brand is selling, who is buying and media planning g targeting right media for advertising. It could be to discover where customers are willing to pay more for a service. It is to find the size of the most attractive market. Market research will not play a role in designing the products as it is done based on the companies’ strengths. Though the companies get the signals from the customers with a specific need, they are insensitive. Market research exists in such situations where there are intentions to serve the customer.

Level 3 – Customer Relations
Customer relation is the next level of marketing where the companies resort to communicate with the customer. The communication is mostly one-way as they only try to make customer comfortable by the lip service rather than listening to the customers and their needs. At large, they pretend to respond or serve the customer just by asking for a feedback that is often scrapped. At this level, the customer ‘relationship’ will be weak and is not functionally helpful to the customer as still the product/service quality is inferior. A simple example for this is a company offers low quality products, which needs heavy maintenance and provides free annual maintenance checks just to make the customers ‘feel’ emotional comfort.

At this level Primitive Marketing ends

Level 4 – Customer centric marketing
Customer centric marketing is essential to move an organization from a primitive to a sophisticated form of marketing. In customer centric marketing, businesses strive to ensure their customers get a fair deal. The companies will be primarily customer focused and use feedback from customers to improve the product/service that functionally helpful to the customer. This means the needs and wants of customers and potential customers drive most of the firm’s strategic decisions. The companies resort to marketing research, emphasize product benefits rather than features, and have innovative marketing techniques to reach out the customers.

Customer centric marketing creates new markets and changes how businesses market their products. Best examples for the products created by Customer centric marketing are Chick shampoo sachets, Marico’s Parachute oil, Wheel detergent powder, and Thumps Up. Thumps Up appeals better to Indians who eat spicy food, as it tastes better when taken along with the spicy food. In all these examples, these companies had a clear understanding of the customers’ needs and their constraints. Based on these they created new offerings to better serve their customers.

Only off late, due to increased competition, customer awareness, and changing buyer preferences, companies have started realizing that increased production does not translate into higher sales. Since sales has been called as marketing in India, when a real position has been created it causes much confusion.

Here is an approach to let you know what Marketing actually mean. Marketing and sales are two separate and distinct processes, but they are very much intertwined. Marketing exists to support sales.

Marketing is the wide range of activities involved in focusing on customer needs before developing the product, aligning all functions of the company to focus on those needs and realizing a profit by successfully satisfying customer needs over the long-term.

The marketing cycle is composed of four segments:

• Market research,
• Planning,
• Visibility, and
• Client development.

The marketing research includes knowing the marketing environment (external and internal), gathering the market information (about competitors, commodities, supply and demand situations), studying the market segments and market trends. Once the research is completed, it can be used to make a plan to determine how to market your product.

Would you start a business without a proper plan? If you are among the majority of business owners you probably answered no, similarly marketing also needs planning. The Marketing plan includes setting clear objectives and explaining how to achieve them.  This will help in identifying new product areas and new or potential customers and also helps in identifying the competitors, their advantages and disadvantages to stay ahead of the competition.

After execution of the plans there must be a proper visibility/communication to the outside world is required and is called Marketing Communications. It is the actions of a firm to communicate with end-users, consumers, and external parties.

Marketing communications consists of four channels, which include:

• Advertising: Advertising is getting the attention of potential and current customers towards a product (or service). It mainly focuses on attracting the customer and is done by using signs, brochures, commercials, direct mailings or e-mail messages, personal contact, etc.,

• Public Relations & Publicity: Public relations include communicating the information to the investors and public to understand the company and its products/services. The higher authorities of an organization will play an important role in building public relations. It is generally done in the times of crisis. Public relations and publicity are not similar; publicity is the spreading of information to gain public awareness for a product, person, service, cause or organization. We can say that publicity is an unpaid advertisement.
• Promotion: Promotion includes the ongoing activities of advertising, sales and public relations. It tries to project the image of the product in the minds of the customer and encourages demand for the product.

Sales: Sales mainly focus on product/service. It involves directly interacting with the people to persuade them to purchase the product by conveying the features, communicating the advantages and benefits of a product or service, and closing the sale. It may also involve delivering the product and collect the payment.

In most situations there are many companies offering similar products in any specific product/service category. Sales involves finding potential buyers and selling their company’s product despite the competition from other companies having similar product.

The sales goal simply is to beat the competition to get as many customers as possible the sale with little regard to customer satisfaction.

Locate many potential buyers and contact each one on a one-to-one basis through phone calls or personal visits. Understand their company’s product features, advantages, and benefits. Find the issues, problems, and challenges that can be solved by the product. Explain how that particular company’s product is a better choice for the issue or the problem. Convince the customer to buy the product explaining how it can be helpful comparing with the competitor’s product. Get the orders, deliver the product, raise the invoice, and collect the payment.

Good marketing facilitates the success of the sales. Marketing plus sales is the winning equation.

• Holistic prospective.
• Understanding LT & ST implications.
• Create opportunities for others in organization to follow-up and work on the most challenging and key issues including opportunities for growth.
• Asymmetric challenges rather than linear challenges that need to thank outside the box.
• Prepares work on strategic issues rather than tactical / follow-up issues.
• Needs appreciation, understanding of all functional areas.

Courtesy: Internet marketing India

In today’s competitive atmosphere, it is vital

• To have a superior offering.
• To monitor competitive offerings.
• To identify opportunities for growth / profitability/ develop customer target.

Courtesy: Offshore internet marketing consultant

Only off late, due to increased competition, customer awareness, and changing buyer preferences, companies have started realizing that increased production does not translate into higher sales. Since sales has been called as marketing in India, when a real position has been created it causes much confusion.

See what professionals do or don’t do in Sales, Marketing & Advertising Jobs.