Significance of Relationship in Multilevel Marketing and its effect on Business Outcome

Abstract

The concept of Multilevel Marketing or network marketing is a method of product distribution. The products are moved through independent distributors. The distributors are given an opportunity to introduce other distributors to the business. Instead of incurring massive media advertising and sales promotion cost, the savings are passed on to distributor consumers. At the same time products are available to consumers at wholesale prices. However, effective recruiting is essential for the very existence of the majority of direct selling companies including multilevel marketing organisations since the survival of these organisations depend on the ability to make more and more new recruits to replace those who have discontinued. MLM distributors can have a relationship with both their "upline" sponsor and their "downline" recruits. They also often work cooperatively by holding common recruitment meetings and sales training sessions. Distributors of multilevel marketing companies foster a combination of friendship and instrumentality in developing networks. This paper describes the problems and sets out a research paradigm to investigate the influence of relationship in building network which is a prerequisite for the better performance of distributors in multilevel marketing in Kerala's environment.