1.1 Background and Motivation
Relationship marketing is an approach which aims at retaining customers. Throughout history, people have used relationship marketing to expand their businesses. Moreover, some producers began to sell their products without intermediary trade directly to final consumers with the help of sales representatives. In order to gain a
competitive and strategic cost advantage, the producers dispensed with traditional advertising. This procedure shows the positive aspects of relationship marketing. The original concept of NWM is based upon trust amongst people and the importance of personal recommendations. Moreover, network marketing is a marketing approach
which benefits from relationships. The objective of this approach is to create a positive image of NWM through customer satisfaction. This procedure ensures the economic success of any network marketing company. NWM, in general, is conceived of a constantly growing business. Nevertheless, an ambivalent societal perception of network marketing exists. “The problem, in general, is that the activity of recruiting people […] is socially and psychologically unacceptable to
most people in our society (Bloch, 1996, p. 18).” It cannot be concluded if the success of NWM is due to relationship marketing.
Within this thesis, I analyse if network marketing is enrichment for people - this means how the perception of network marketing is in the society as well as from people within NMO and further, whether NMO deceives people in order to achieve profit.
1.2 Problem
According to Bhattacharya and Mehta (2000, p. 361), “Network Marketing Organisations (NMO) [...] has grown in importance over the last few decades.” For example, Avon, a well-known network marketing company, is ranked number 67 in the Best Global Brands 2009 (Interbrand, 2009). Furthermore, over “70 % of direct-sales
revenues are generated by network marketing organizations (Bhattacharya and Mehta (2000, p. 361).” Network marketing is a huge global industry, “a personal selling away from fixed retail locations (Muncy, 2004, p.47),” where strong social networks and relationships are the basis for the success. The estimated worldwide sales resulting from network marketing approaches is $90 billion (Muncy, 2004, p.47). The focus of NWM is on people and congenial and trustful encounters. Relationships between people are one reason why network marketing is a growing business in recent years.
Inhaltsverzeichnis (Table of Contents)
- INTRODUCTION
- Background and Motivation
- Problem
- Purpose of the Study
- Limitations
- THEORETICAL FRAMEWORK
- Economical Perspective
- Current Situation of German Retail Trade
- Current Trends in the Retail Industry
- Future Developments in Retail Industry
- Future Developments in the Wholesale Industry
- Future Trade Strategies
- Channels of Trade
- Trade function
- Development of Trade
- Retail Industry
- Definition
- Types of retailers
- Wholesale
- Definition
- Types of wholesalers
- Direct Marketing
- Definition
- Objectives and Advantages
- Types of Direct Marketing
- Facts about Direct Marketing
- Future Development of Direct Marketing
- Network or Multi-Level Marketing
- Definition
- The History of Network Marketing
- Facts about Network Marketing
- From a company's perspective
- Customers
- Sales Partners
- Selection of Network Marketing Companies
- Demarcation of Direct Marketing
- Delineation of Franchise
- Delineation of Pyramid Scheme
- Difference of NWM from Traditional Sales channels
- Differentiation of ethical and unethical companies
- Opportunities and Risks
- Opportunity in Network Marketing
- Risks in Network Marketing
- Relationship in NWM
- Strategies in Network Marketing
- Internet Usage
- Industry-choice
- Customer retention
- Business Ethics
- Relationships the Core of Network Marketing
- METHODOLOGY
- Literature Search
- Research Approach
- Data Collection
- Data Analysis
- Methodological Problems
- RESULTS
- Web based Questionnaire
- Results
- Respondents
- First part general questions
- Second part people working for network marketing business
- Third part people who left the network marketing business
- Personal interview
- Introduction
- Results
- ANALYSIS AND DISCUSSION
- Web based-questionnaire
- First part - general questions
- Second part people within a network marketing business
- Third part people who left the network marketing business
- Personal Interview
- Combined Analysis
- SUMMARY AND CONCLUSION
- The Economic Impact of Network Marketing: The study explores the role of network marketing within the broader context of the retail industry, including its evolution and potential future trends.
- Ethical Considerations: The study delves into the distinction between ethical and unethical network marketing practices, highlighting key factors that determine the integrity of such businesses.
- Opportunities and Risks for Participants: This study examines the potential benefits and drawbacks of engaging in network marketing, providing insights into the various opportunities and risks associated with this business model.
- Consumer Perception: The study explores how consumers view network marketing, analyzing their attitudes and perceptions regarding its legitimacy and effectiveness.
- Relationships within Network Marketing: The study investigates the role of relationships and social networks in the success of network marketing businesses, examining the dynamics of trust, collaboration, and influence within these structures.
- Introduction: The study sets the stage for its exploration of network marketing, providing background information, outlining the problem, and defining the purpose and limitations of the research.
- Theoretical Framework: This chapter delves into the theoretical underpinnings of network marketing, analyzing its position within the broader economic context of the retail industry and exploring various types of marketing channels, including direct marketing and traditional sales methods.
- Network or Multi-Level Marketing: This chapter focuses on network marketing, providing a definition and outlining its historical development. It explores various aspects of network marketing, including company perspectives, customer experiences, and the selection process for network marketing companies. The chapter also discusses the distinction between ethical and unethical practices, highlighting the potential opportunities and risks associated with this business model.
- Methodology: This chapter outlines the research methodology employed in the study, including the methods used for data collection and analysis. It also discusses any methodological challenges encountered during the research process.
- Results: This chapter presents the findings of the research, including the results of the web-based questionnaire and the personal interviews conducted with individuals involved in network marketing. The chapter provides detailed information on the responses gathered, analyzing the various perspectives and experiences shared by participants.
- Analysis and Discussion: This chapter analyzes the findings presented in the previous chapter, drawing conclusions and insights from the data collected. It provides a deeper understanding of the complexities of network marketing, examining the interplay of economic, ethical, and social factors within this business model.
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This study examines the nature of network marketing, exploring its potential for both enrichment and deception. It aims to analyze the various aspects of this business model, considering its economic impact, ethical considerations, and opportunities and risks for individuals involved.Zusammenfassung der Kapitel (Chapter Summaries)
Schlüsselwörter (Keywords)
The primary focus of this study is network marketing, examining its potential for both enrichment and deception. Key areas of investigation include: retail industry, direct marketing, ethical practices, opportunities, risks, customer perceptions, relationships, and the economic impact of this unique business model.- Quote paper
- Gunnar Schuster (Author), 2010, Network Marketing - Enrichment or deception?, Munich, GRIN Verlag, https://www.grin.com/document/182520
