Abstract
This study is about the stability of Multi-Level Marketing (MLM) systems.
MLM is an alternative selling method, not more or less ethical than any other ones.
This is not the possibility of getting rich quickly without work neither for MLM company nor for the involved entrepreneurs. But it is also not a swindle for ripping off the customer.
An MLM system is a network of independent entrepreneurs, each of whom builds his own network. They convey the product from manufacturer to customer. MLM uses a method of personal selling, and in this meaning it is a version of direct marketing, but it is certainly not a direct marketing channel.
It is a prefabricated business, which requires no starting capital, and no commercial experience.
In the first part of my thesis I have analyzed MLM by marketing-mix components. In addition having made a review of most common illegal MLM forms, I have examined the situation of MLM in Hungary.
The second part is about the possibilities of modeling MLM systems. Having taken a review of existing models, and I have made a suggestion for mathematical model based on psychological and sociological parameters of a person.
Building the model I have used statistical methods and Fuzzy-logic. The purpose is to answer the question, how successful would be a particular person in a particular MLM system.
The third part contains a review of applied mathematical methods (statistics and Fuzzy-sets), a table of MLM companies in Hungary, and a questionnaire used for building the model.
My most important conclusion is that MLM is an extraordinary efficient selling method which could become a remarkable factor in our country. Achieving this it is necessary to codify the activity of MLM systems.
MLM is an alternative selling method, not more or less ethical than any other ones.
This is not the possibility of getting rich quickly without work neither for MLM company nor for the involved entrepreneurs. But it is also not a swindle for ripping off the customer.
An MLM system is a network of independent entrepreneurs, each of whom builds his own network. They convey the product from manufacturer to customer. MLM uses a method of personal selling, and in this meaning it is a version of direct marketing, but it is certainly not a direct marketing channel.
It is a prefabricated business, which requires no starting capital, and no commercial experience.
In the first part of my thesis I have analyzed MLM by marketing-mix components. In addition having made a review of most common illegal MLM forms, I have examined the situation of MLM in Hungary.
The second part is about the possibilities of modeling MLM systems. Having taken a review of existing models, and I have made a suggestion for mathematical model based on psychological and sociological parameters of a person.
Building the model I have used statistical methods and Fuzzy-logic. The purpose is to answer the question, how successful would be a particular person in a particular MLM system.
The third part contains a review of applied mathematical methods (statistics and Fuzzy-sets), a table of MLM companies in Hungary, and a questionnaire used for building the model.
My most important conclusion is that MLM is an extraordinary efficient selling method which could become a remarkable factor in our country. Achieving this it is necessary to codify the activity of MLM systems.
| Translated title of the contribution | Examining stability of multi-level marketing systems |
|---|---|
| Original language | Other |
| Awarding Institution |
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| Place of Publication | Budapest |
| Publication status | Published - 1995 |
Keywords
- multi-level marketing
- marketing