E-Commerce marketing practices
Prof. Abhishek A Khadtare
Network marketing
Direct selling method in which independent-agents serve as distributors of goods and
services,
and
are
encouraged
to build and manage their
own sales
force by recruiting and training other independent agents.
In this method, commission is earned on the agent's own sales revenue, as well as on the sales
revenue of the sales-force recruited by the agent and his or her recruits (called downline).
Also called multilevel marketing (MLM), cellular marketing, or by other such names, it is a
multi-billion dollar worldwide industry that
distributes
practically any portable
item,
although restricted or banned in several countries due to its history as a vehicle for consumer
fraud. Said to have been pioneered by the now-defunct California Vitamin Company in 1941,
it is a method employed by large firms such Amway, Melaleuca, Nikken, and ShakleeNagamuchi.
Advantages
1. Multi-level marketing allows you earn a passive salary. One can continue with his or her own
job and smoothly carry out this kind of marketing.
2. With multi-level marketing you can easily be your own boss and work according to your own
comfort. The model is such that even your down chain will be working independently.
3. You will not be required to do the same mundane task every day. There are different products
and services which are promoted through MLM, so you can choose the products and services
you would like to sell.
4. The rate of business growth can be exponential if smartly managed when it comes to multilevel marketing. There are few businesses in the world which can give one the opportunity to
scale up so fast.
5. This form of marketing has a very low start-up cost in fact negligible when compared with
other forms of marketing and doing business. You can start and manage this business working
from the comfort of from your home.
E-Commerce marketing practices
6. You can reach out to a wide number of people in MLM. There are no constrains of
Prof. Abhishek A Khadtare
nationality, geography as far as this form of marketing is concerned.
7. Once you have created a sizeable down chain and have climbed few notches up in the
hierarchy, you can earn a good remuneration from multi-level marketing without doing much
work yourself.
8. There is not much cost that you will have to incur while training your down chain. This
makes it easy to create a down chain and increase business revenue.
Disadvantages
1. The core of multi-level marketing is creating a long down chain. Close to 90% of the people
fail to go beyond the first level and wound up their business in first three months.
2. MLM requires great inter personal and communication skills and not everyone is blessed
with one which leads to business failure.
3. This form of marketing has a saturation point beyond which the rate of business growth is
marginal. It is impossible for everyone to get a lions share of profit.
4. Niche products and services are usually promoted through multi-level marketing which fails
to attract buyers often.
5. In multi-level marketing you need to have a wide social network to create a down chain.
Most people start with huge enthusiasm but the list of rejection.
Direct marketing -Impact of technology & Internet on distribution.
Direct distribution offers a company significant opportunities, but it also can present
numerous strategic uncertainties. Internet becomes the new way of providing the product in
to the market.
With the help of technology company can serve the product quickly to customer but also
there some disadvantages related to technology.
Prof. Abhishek A Khadtare
E-Commerce marketing practices
Following are the advantages and disadvantages over the traditional distribution channel
Advantages:Low cost, overhead
Higher profit potential
Instantly global if desired, wide exposure
Always current
Can target segments
Instant access for the customer, convenient
Easy to use
Can be cross-sold by other sites
Can obtain high visibility on right sites
Open 24/7/365, access growing w/wireless
Good source of customer feedback/research
Better and better security
Less data entry error
Free customer information
Educates customers
Can be customer friendly
Disadvantages:Limited audience (not everyone has it or will use it for shopping)
Lack of one-to-one interaction, impersonal
Spamming/laws
Security problems, trust
Requires a big logistics investment (inventory, warehousing, packing, shipping, record
keeping, billing, AR)
No human contact, not personal
So far limited to price-driven customers
Fear of fraud, ID theft, security
Product limitations
Lack of post-purchase service, returns an issue
May not reach late majority and laggards
Cannot touch, feel, smell products, concerns about colors, not tangible
Prof. Abhishek A Khadtare
E-Commerce marketing practices