research on network marketing

2020 International Conference on Data Processing Techniques and Applications for Cyber-Physical Systems pp 953–959 Cite as

Challenges and Corresponding Strategies of Network Marketing in the Era of Big Data

• Yishu Liu 17  
• Conference paper
• First Online: 02 June 2021

Part of the Advances in Intelligent Systems and Computing book series (AISC,volume 1379 )

The twenty-first century is the era of information, and network marketing is also one of the most mainstream marketing means. Due to the rapid development of e-commerce, the previous network marketing methods no longer have advantages. Under the impact of capital and scale, technical breakthrough has become an important way to solve this problem. Therefore, this paper puts forward the challenges and corresponding strategies of network marketing. In this paper, combined with the current situation of online marketing in-depth study, analysis that the main problem is the lack of technical information analysis. Therefore, this paper introduces big data technology in the traditional network marketing mode. After analyzing the challenges of network marketing in the era of big data, this paper puts forward the strategies and measures of enterprise network marketing in the era of big data. According to the measures of this paper, the network marketing optimization reform. In order to verify the actual effect of the measures, this paper establishes the relevant investigation and research, and the analysis results show that network marketing with big data can effectively strive for the competitiveness of enterprises and improve the return rate of online marketing.

• Network marketing
• Marketing model
• Big data technology
• Strategy analysis

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School of Economics and Management, Fuzhou University of International Studies and Trade, Fuzhou, 350202, Fujian, China

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Huazhong University of Science and Technology, Wuhan, Hubei, China

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Liu, Y. (2021). Challenges and Corresponding Strategies of Network Marketing in the Era of Big Data. In: Huang, C., Chan, YW., Yen, N. (eds) 2020 International Conference on Data Processing Techniques and Applications for Cyber-Physical Systems. Advances in Intelligent Systems and Computing, vol 1379 . Springer, Singapore. https://doi.org/10.1007/978-981-16-1726-3_117

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DOI : https://doi.org/10.1007/978-981-16-1726-3_117

Published : 02 June 2021

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Home » Business Cycle » Network marketing?

4 steps to network marketing success

Do you want to become your own boss, work flexible hours and make money? Of course you do. One way to get to this stage in your professional life is via network marketing.

If you’ve heard of Mary Kay, Avon or Tupperware, you’ve heard of network marketing. These household names are all examples of this type of business, which can be a great fit for those with an entrepreneurial mindset. But what is network marketing exactly, and how does it work? It’s time to learn how you can get all the benefits of being a business owner without all the headaches and level of risk.

Ready to make the next big move for your business?

What is network marketing?

Network marketing in business is a model that’s dependent on person-to-person sales of a product or service. It involves developing a team of people who work together to deliver the product’s message to a wide range of potential customers. The leaders of these teams are compensated for the products they sell as well as the products their team members sell.

It’s also known as multilevel marketing, referral marketing and consumer direct marketing. No matter what you call it, these are businesses where the best entrepreneurs can succeed – and even find their true gift.

How does network marketing work?

You’ll start your network marketing business by signing up with a reputable company – some of today’s most popular are Scentsy, Younique Cosmetics and Young Living Essential Oils. You’ll typically receive a “starter kit” with promotional materials, supplies and other items you’ll need to get started. At first you’ll work underneath a sponsor who can show you the ropes, provide education and give you tips about the industry. Once you know everything there is to know about your product, you’re ready to start selling.

Most network marketing in business takes place face-to-face. All you need to do is talk to people! Let your passion shine through and use your communication skills to build rapport and get people interested in your product. Here’s where the “network” part comes in: When you sign someone up, they become part of your team. You earn commission on their sales and on sales of any people that they sign up – and so on. The more passionate people you can find, the better.

Advantages and disadvantages of network marketing

One of the best advantages of network marketing is that you will feel like your own boss – without taking on the responsibility of starting your own company. You’ll typically be able to work out of your home and make your own hours, giving you the flexibility that many entrepreneurs love, with none of the risks. Another advantage is that you’ll gain skills you can use in any future endeavor, like developing instant connections with others, making persuasive presentations, cultivating and leading a team and effective follow-through.

The disadvantages of network marketing are similar to those for any sales business: It will take time to build your business , and a lot of people will tell you “no” before you start hearing “yes.” Competition can be fierce, so you must always be a step ahead. Never forget that you are still an entrepreneur, even though you’re part of a network marketing business. You must strengthen your resilience, build your brand, market yourself and innovate – just as you would if you started a traditional business.

How to succeed in network marketing

Now that you know what network marketing is, it’s time to get started. Running a successful network marketing business doesn’t have to be time-consuming or complicated. You can create a breakthrough with a few simple steps – change your story, change your strategy and the rest will follow.

Step 1. Find your passion

According to Tony, network marketing is about “picking the right company and realizing you’re a value creator. Whatever you enjoy the most, you’ll do the most.” 

Your love and passion for a product or service drives you to properly tell its story , and that’s how you create value. Consider what products have improved your life in the past and what you want to learn more about. Is it supplements? Home décor? Cosmetics? When you choose something you have a deep interest in, that passion will shine through.

There’s another benefit to choosing something you love: more sales. Today’s consumer is bombarded with marketing, branding and advertising. They’re on high alert and know when they are being “sold” to. If you’re just doing this for the money, they will sense it right away – and react accordingly. The best network marketing entrepreneurs figure out how to combine their true passion with their ability to make money. What is network marketing at its most successful? It’s your chance to make a difference in the world – and make money while you’re at it.

Step 2: Choose the right company

Passion is the most essential ingredient to successful network marketing – and choosing the right company that matches your passion is equally vital. You’ll need to research carefully to locate a business whose message, story and products or services capture your image and make you want to join their ranks. The network marketing business you choose must also have the following traits:

At least five years in operation :

Fifty percent of businesses fail within the first year, and 80% fail within five years. Signing up with a business that hasn’t had its doors open for at least that long is an additional risk.

Steady cash flow :

Network marketing companies with nothing to hide disclose their financial statements. Take the time to read the statements and ensure the business is well-capitalized.

Professional development :

Make sure the business provides the coaching, technology and support you need, and will send you to any conferences and meetings required to advance your training.

Established customer base :

Sign on with an established company that already has raving fan customers . An existing customer base allows a network marketing business to shift gears as necessary.

Step 3. Put your resources to work

Succeeding at network marketing is largely dependent on how many resources you can cultivate. Start by discovering how you can leverage things you already have – connections, education and achievements – into business success. You may already have dozens of relationships that you can capitalize on to grow your network. 

As you consider turning to these people, remember that you want to add value to their lives with your product or service. Don’t pitch everyone in your phone book just because you can. Remember that the secret to living is giving . Those who thrive in network marketing understand that it’s not about selling – it’s about using the opportunity to cultivate an abundance mindset and improve the lives of others.

Step 4: Manage your mindset

  In network marketing, the way you think about yourself matters far more than your tactics. You might have plenty of strategies to deploy, but if you’re not in the right mindset, you won’t be able to execute them. However, even if you have no business experience, you can succeed in network marketing if you create the right mindset .

Before you even start network marketing, you need to learn how to cultivate positive emotions and control your reactions to situations. Choose how you feel rather than reacting to a situation. When you do this, life happens for you instead of to you, putting you firmly in the driver’s seat . You will face plenty of challenges as you learn about network marketing, and viewing each setback as something you can overcome and learn from will help you move on from temporary disappointments.

Figuring out how to succeed in network marketing doesn’t have to be time-consuming or complicated. You can create a breakthrough with a few simple steps – change your story, change your strategy and the rest will follow. Tony says, “Most of us get what we tolerate.” It’s time to stop tolerating anything less than being your own boss.

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What Is Network Marketing?

• How It Works
• Pros and Cons

Special Considerations

• Network Marketing FAQs
• Marketing Essentials

Network Marketing Meaning and How It Works

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

Investopedia / Ellen Lindner

Network marketing is a business model that depends on person-to-person sales by independent representatives, often working from home. A network marketing business may require you to build a network of business partners or salespeople to assist with lead generation and closing sales.

There are many reputable network marketing operations, but some have been denounced as pyramid schemes . The latter may focus less on sales to consumers than on recruitment of salespeople who may be required to pay upfront for expensive starter kits.

Key Takeaways

• Network marketing appeals to people with high energy and strong sales skills, who can build a profitable business with a modest investment.
• A network marketing business can be a single-tier program, whereby you sell the products, or multi-tier, where you also recruit additional salespeople.
• Beware of network marketing companies that create many tiers of salespeople or require you to purchase expensive products or training material up-front, Make sure to thoroughly research the company before you join.

How Network Marketing Works

Network marketing is known by a variety of names, including multilevel marketing (MLM) , cellular marketing, affiliate marketing , consumer-direct marketing, referral marketing, or home-based business franchising.

Companies that follow the network marketing model often create tiers of salespeople—that is, salespeople are encouraged to recruit their own networks of salespeople. The creators of a new tier (or "upline") earn commission on their own sales and on sales made by the people in the tier they created (the "downline"). In time, a new tier can sprout yet another tier, which contributes more commission to the person in the top tier as well as the middle tier.

Thus, the earnings of salespeople depend on recruitment as well as product sales. Those who got in early and are in a top tier make the most.

The FCC advises that that single-tier network marketing operations tend to be more reputable than multi-tier schemes.

Advantages and Disadvantages of Network Marketing

There is some stigma attached to the networking marketing business, especially those with multiple tiers, which can be characterized as pyramid schemes—that is, the salespeople in the top tier can make impressive amounts of money on commissions from the tiers below them. The people on the lower tiers will earn much less. The company makes money by selling expensive starter kits to new recruits.

The appeal of network marketing is that an individual with a lot of energy and good sales skills can create a profitable business with a modest investment.

A good rule of thumb, according to the Federal Trade Commission (FTC) , is that an operation that ensures compensation which is based on actual sales to real customers tends to be more reputable than multi-tier schemes, in which people make money based on the number of distributors they recruit.

Anyone considering joining a network marketing operation should do their research before making a decision. Consider these questions:

• Was it pitched as a chance to make money by selling products or by recruiting others?
• What is the track record of the company's founders?
• Are you personally enthusiastic about the products?
• Are people you know enthusiastic about the products?
• Is the product being promoted effectively?
• Do you foresee a relatively fast pathway to profits or a long time treading water?

Is Network Marketing a Pyramid Scheme?

While network and multi-level marketing programs have been accused of being pyramid schemes, there are some important differences. While those who are able to recruit more members into the program are often able to enjoy greater residual commissions, network marketing is a legitimate and legal business structure that offers real products and services sold to customers.

Will I Make Money by Joining a Network Marketing Program?

It is certainly possible, although not probable. Some people do enjoy great success at network marketing, largely due to their ability to recruit more members to the network. There are two main revenue sources: selling products, and commissions from sales made by team members downline. The more people there are downline from you, the more money you will accrue - the larger the team you can recruit, the more money you can make.

Most people who join legitimate network marketing programs make little or no money. People may actually lose money. Some may become involved in an illegal pyramid scheme and not realize that they have joined a fraudulent venture, and can lose everything they invest. Do your research and ask around before diving in.

What Are Some Examples of Network Marketing Programs?

Several MLM programs exist such as Tupperware, Avon products, Rodan + Fields, Amway, Herbalife, Mary Kay, among several others.

What Is the Top-Grossing Network Marketing Program?

Amway consistently tops the list. Top-selling brands for Amway are Nutrilite vitamin, mineral and dietary supplements, Artistry skincare and color cosmetics, eSpring water treatment systems and XS energy drinks—all sold exclusively by independent Amway Business Owners. In 2021, it brought in $8.9 billion in revenue.

Federal Trade Commission. " Business Guidance Concerning Multi-Level Marketing ."

Amway. " Amway Announces 2021 Sales of $8.9 Billion USD ."

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