Multilevel Marketing and its components: A detailed literature

review
Abstract:
A detailed literature review is done on the multilevel marketing. This includes defining of the
multilevel marketing in which every customer is also the marketer as he becomes the seller of the
product at the same time while add more customer through his or her chain he would get
percentage of profit. So as the customer increases the seller also increases and a chain reaction
would start. In this literature some of the ethical issues relating to the multilevel marketing or
also known as viral marketing and the trend of multilevel marketing have been discussed.
Introduction:
The Internet, a medium that has proven in marketing, changes occur at an astounding
rate. The recent explosion of social networking applications and the number of users has
captured the attention of vendors. Companies began to rethink their relationships with consumers
and adapt to the new online world. In this virtual world of social networks to the public is the key
element. Consumers perceive the social network as a personal space where they control the
content. They decide for themselves what they want to see and share with others. Therefore, in
order to manage effective marketing communications, marketers need to know the opinions of
consumers with regard to their presence in networks.
Network marketing has to reach the Internet and media, a new type of marketing by the
news of the words and interactivity of the internet marketing goals. In short, the Internet network
marketing as a primary means to achieve a specific goal of the marketing campaign to a different
kind of marketing hand-marketing cloud is different with network marketing, the marketing
techniques based on cloud computing is performed. For businesses, the biggest advantage of
cloud marketing is undoubtedly the cost advantages, the use of marketing and cloud, cloud
management can save a lot of advertising, sales promotion, marketing costs of the Company. On
the other hand, the benefits of cloud-Marketing: labor economics, cloud computing applications
on the computer on the basis of which is the core of great information about the computing
power that can be a big savings for businesses; lower the window light and easy to handle, cloud
computing, the principles of distributed computing, giving a personal service to every customer
that can adapt better to be consumption habits and consumer demand.
Keywords: Network Marketing, Viral Marketing, Internet, Social Media, Customers.
Methodology:
Secondary Data was collected for the given literature in the research articles. Only the
relevant material was picked for the literature. About 25 articles were studied thoroughly and
summarized in the form of brief summaries those summaries were then complied in the logical
order to get a better sense of the topic and also that to know what work has already been done.
APA style was used for referencing and citing the data. No primary data was collected and no
source other than research articles was used for the data collection was used.

Literature Review:
According to Dongpo, X et al. (2012) the direction of research analysis and optimization
on network arises based on how network marketing in television media by studying media
marketing development of television, network analysis and structure network settings.The
research content of marketing methods network television media surrounding how to expand the
business to the operation and management of the network, based on the client, bond, source
network marketing skills, information market, the potential of the network and other basics, the
4P "framework based on traditional customer differentiation, under the 4R category based on
relationship marketing and 3N tool that relies on exploring breaks the creation, dissemination
and transfer of the value of the network. in this work, the company, no matter inside or outside,
we believe that all actors are related to activities as a research value, paying attention the longterm development of the entire environment of network marketing television media, a new
research field opens.
Accroding to Yannopoulos (2011), the work process network marketing on the way to
lead and participate in developing new products through networking and dissemination of it also
manages to develop strong networks of supply chains to obtain abundant in improving supply
efficient to identify first and then meet customer demand for not only management but while also
managing the network so.
Similarly to Orzan, et al. (2012) that social networks are proving to be a key partner in
advocacy and communication for companies interested in taking by surprise the audience, but
consider them as savings solution designed to produce miraculous results in such a short time, is
an exaggeration. The Web is not the ideal way to promote and communicate so successfully
because its facilities are bad publicity for success and does not guarantee the sale of unsuitable
products. Whenever you have access to all sources of information, the company is able to reap
the benefits of promotion through social networks, while minimizing the drawbacks and the
Internet can be the most convenient form of action for the company in the search for solutions
alternative marketing.
In addition to that Yin & Lui (2014) proposed that the popularity of cloud marketing is
not as much as cloud computing so far, although cloud computing is a research topic. This
document summarizes the difference between marketing and traditional cloud marketing
network, and has marketing benefits of cloud marketing company to provide a theoretical basis
for the marketers to clouds is to implement. Companies and scientists need to spend more time
on cloud computing marketing project model to bring more profit for company.
Hunt et al. (1994) states that relationship marketing are to create all marketing
activities to develop and maintain successful relational exchanges between supplier, customer
and internal alliances. Some partnerships are much more successful than others. In fact, although
estimates vary, about one-third of all strategic alliances seem to be failures, and many others are
only moderately successful. In the era of network competition, companies need to traditional
relationships between independent parties with companies that have opportunistic tendencies and
to keep the development of partnerships with reliable companies. In all relationships,
disagreements are inevitable. The real problem is. as partners realize these differences as an
effective means to bring problems to light. This study suggests that suggests that the parties
mutually acquainted handle disagreements and conflicts in a positive way, working on ways to
identify to resolve the underlying issues that led to disagreements. Communication is an
important part of this process should readiness, timely and meaningful information to share a

primary concern in choosing a partner. When looking for reliable partners, past personal
experience with a potential partner is the most valuable guide. But in the case of new partners,
based on the assessment of the company's reputation in the industry
Constantinides (2004), found that the network organizations have several contact points,
because the formal and informal communication allows partners to align their expectations about
what the company can produce. Informal socializing establishing personal relationships is an
important contribution to the development of trust.
Meng and Cao (2009), identified marketing network problems These are: First, the
network infrastructure failure behind the network marketing needs, there is a lack of equipment.
After the procedure, protection is incomplete, difficult and develops the network marketing.
Protection methods are the laws and regulations against the contents of the associated marketing
network with inaccurate and construction of the same network backup firewall computer. Third,
no third party logistics perfectly built. (Lin, 2005) for the marketing network play the Third Party
Logistics an important role in the distribution of goods. In general, it is to win eyeball customers
in network marketing is the price advantage, and this advantage is also the capital. Fourth, the
lack of necessary network marketing talent. Compared with the traditional way of marketing
network marketing professionals should be required, the computer technology and Internet
marketing knowledge have, and these two aspects are important, not an independent division of
labor. Fifth, weaknesses concepts and understanding (Kong, 2007, pp. 9-10). Although network
marketing is not a new thing it finds early national marketing network that the development of
network marketing is to take a lot of detours. So after five proposed countermeasures: first
network marketing infrastructure needs to be developed to reduce the efforts for the differences
between East and West, as well as city and country. Second, improve the marketing network for
the safety of the design, including the required network security, legal certainty and the loan
collateral. Thirdly, to improve it, the development of third-party logistics, marketing network
guarantees favoring door. The provision is not only the final stage, but also the most important
task on the quality, safety and time of goods through network marketing. Fourth, the network
marketing talent system; strengthening cooperation with universities and scientific research
departments. Fifth, improve cognition, ensure the network marketing to, and change the
traditional way of thinking about the result. There is a big difference between traditional
marketing and network marketing.
Muncy (2004), worked on various ethical and moral issues in multilevel marketing. Since
there are so many possible ethical problems of the industry, educators can attempt, students are
advised to avoid multi-set-marketing. It's really what you should do? You should tell students to
skip the process of identifying and evaluating ethical issues in marketing environments? If the
students have learned ethical review process with the heuristics "are all thieves" to replace?
However, direct selling offers a wide framework for the assessment in the classroom, the ethical
issues in marketing. Systematically examines the ethical issues in any other area of marketing
can be as abundant as they are in direct sales. All the fields that our students ethical issues need
to be able to spot and assess. Marketing Educators should teach students that ethics through
practical examples how to evaluate the delivery of such a situation. If the best marketing

heuristics can will give educators "are all thieves", then they are not properly teach students to
navigate the minefield of ethical marketing successfully. The ethical issues related to multilevel
marketing were raised.
Wilson (2000), defined that a viral marketing strategy that encourages people to a
marketing message to others, so the potential for exponential growth of exposure and the impact
of the message. Like viruses, such strategies take advantage of rapid multiplication, the message
to thousands, millions explode. On the Internet, viral marketing as "word of mouth", "create a
buzz", "relying on the media" refers to "network marketing". But on the Internet, for better or for
worse, it's called "viral marketing". Marketing or viral marketing network program contains six
elements of viral marketing strategy that works. They are: the offered product or service ("Free"
is the most powerful word in the vocabulary of a viral marketing programs give more suppliers
of products or services to the attention of valuable information from free e-mail services to win
free buttons to make "cool .." free software programs, powerful features, but not as much as
possible. lead "" "pro cheap" or "inexpensive" may generate a wave of interest, but "free" often
much faster to do); Provides efforts to pass on to others (viral marketing works on the Internet
because instant communication is as simple and inexpensive too large.) (Spread quickly transfer
method must be of small scaled the very large fast) Slightly small to very large; Examines the
motivations and common practices (developing a marketing strategy based on motivation and
common behavior for transmission, and you have a winner.) Uses existing communication
networks (social sciences tell us that every person has a network of 8-12 people in their close
network of friends, family and associates of the farm that you can get what you want.) It uses
other resources (most creative viral marketing plans with other resources "to spread the word.
affiliate programs, for example, place text links or graphics on third party websites.)
Zhou & Dong (2014), This article examines the interaction of social networks in purchase
intent of consumers. Social networks have a great opportunity, whether online or offline channels
provide information products and distribution channels confronted ideal to fierce competition, to
know how consumers are affected by the media. It also provides an in-depth overview on the
consumption of social media, interaction and how to best use social networks are a powerful
reference.
Yazdanifard et al. (2011), found that the emergence and development of social media
brings a profound impact on the lives of people and even ways of thinking. This document
explains how the interaction network in social media on the purchase intention of consumers
from four aspects: the location, the interactivity occurs, content, interactive features and the
participants. The purpose of this article is to establish some preliminary theoretical model of
research on relevant issues and promote the most effective marketing with social media. On the
other hand, consumers benefit on their business model by understanding more, it may be more
appropriate.
Gupta et al. (1986), states that the introduction of a marketing innovation is the top end
without marketing management activities. However, it is a process of continuous improvement
cycle that was reinforced in the future of marketing innovation activities by a summary of the

latest marketing problems in innovation activities in order to improve the continued effectiveness
of the "marketing innovation.
Ab Hamid (2008), suggested that market innovation should be market-oriented, the
introduction of a marketing innovation. Multitask, to serve, and among the target market needs.
Customer demand is placed in the highest position to lead corporate marketing innovation
activities. In order to achieve customer satisfaction as the goal in everything and everywhere
around with personalized service to offer customers, increase their sales and maximize profits.
Corporate Marketing successful innovation model is not easy, not once and for all. Not only want
to follow the development of the market and the industry, but combine it with their own
resources and capabilities. We have the situation, system planning, actively and steadily, step by
step, to evaluate the model to achieve the processing and marketing of useful and effective
innovation.
Nadeem (2012), suggested that it is necessary to consider carefully how companies create
an experience that is on the mark SM offers unique customer benefits and uses the power of
social communities. This article states that SCRM is about people and relationships and requires
a customer focus. This study examines how social media (SM) is to be an undeniable impact on
the customer. The aim of this work is to study how to attract customers through social
communities have a profound impact on customer loyalty. Goldman note that the mighty SM
loyalty area allows merchants to expand their area of dialogue with customers to achieve
trialogue. Evans said retailers put their efforts, Facebook, Twitter and blogs for the rest of their
programs in accordance with the SM companies to understand. The study was conducted with
the studies of online content quality analysis method of research, interviews and case Operated.
This study examined three main themes:
(1) How businesses can take advantage of the SM to improve customer
(2) How the SM channels increases customer loyalty
(3) What are the consequences for the management and the benefits of these findings for
managers and researchers?
According to Merzbach & Picard there are many unexpected changes in the online world.
Viral marketing is a typical network of effective marketing method that gives birth to the
background of the Web 2.0 era. It is very concerned about clipping and the overall effect on
society. Study of the mechanism, in addition to speed, the rapid transmission method and wide
range of audiences, which depends mainly on the ideographic interactive participation and beat
Internet relationship. This article mainly summarizes the concept of viral marketing, viral
similarity Company Marketing, negative and tactical response. Although the term "virus" was
transformed from epidemiology to explain how the dissemination of information on the Internet,
the different types of viral on the Internet. The vast majority of spreading the virus unknowingly.
The reason why more and more businesses are loving viral marketing, while users use their
products, but also distributes the products.
With the development of Internet applications viral marketing companies are welcome. In
the implementation of viral marketing, companies must be combined with its own characteristics,
and selects an attractive topic to spread the "virus" in the network platform. In implementing

viral marketing strategies companies should methods that match its own station, select marketing
steps and processes in compliance with certain viral combined with innovative advertising
methods and channels that enable businesses and consumers win -Marketing get winning results.
According to Isac & Isac (2011), there is no doubt that in Malaysia the 21st century a
new era of globalization had entered. Among other things, Malaysia is the new challenge,
especially in the adoption of the new internet marketing business against. Formerly known as ecommerce term is practically a popular platform for the company that markets the product. This
study aims to analyze the company faces Akapiman obstacles, business owner Bumiputera
categories can be fishing equipment selling the business successfully in reality and virtual base.
This article describes the obstacles that emphasis Akapiman of online business for the company
to criteria related to the marketing strategy that may affect the business operations to determine
the criteria on barriers to successful online business and create model referring to identify one of
the results. This study will include qualitative and quantitative methods to look at the comments
bidirectional owners and also by customers. The interview session was the owner of the conduct
in question during informal survey was conducted by customers and distribute online. The
number of customers randomly selected, and there will be about 150 samples containing tools
buying online fishing assets
In addition Othman et al. found that Business marketing term is often an integrative
concept that applies, reflects a radical alternative perspective as marketing, marketing
expeditions There are still concerns about the effects of trust and intimacy of social life Pages.
They found seven key dimensions of MS and suggested a theoretical basis underlying based on
the theory of resource advantage. He also presented a conceptual model of the most important
factors that influence the corporate marketing phenomenon. Networking is a way to market their
products through small owner-manager businesses. People access to their networks to discuss the
prospects for the construction and operation of a business. They reported that the entrepreneurs
to build networks that make systematic change in the phase of entrepreneurship, the examination
of the caller's number, networking and time. A range of social networking sites and provides an
overview of the history of the definition proposed exploration sites such changes and important
developments, has been shown to possess two small world networks and scale functions can be
observed in the real world and artificial networks has been proposed a model to detect spammers
in cyberspace. This article analyzes the latest developments in online marketing strategy that
represents the rise of online communities to build brand reputation and customer relationships. It
was found that social networks could play an important role in the future of marketing and
replacement services customer engagement issues. There is also a summary of how MS is
thought developed in a possible new marketing school and offered some issues that could
stimulate future research in MS. Business information and easier if they have different
relationships with the support redundant relations. He noted that participants using the Internet,
social networking sites, especially the connection and connect with friends and family.
Similarly, Tanglertpanya and Popoya (2011), suggested the economic dynamics of the
distribution of goods and services through direct result of marketing and multi-level sales are
determined by a number of economic, technological and even social factors. The economic financial analysis is sometimes considered limited in the literature in this regard, and we believe
it is necessary for the diagnostic analysis is to be completed by the assessment of the stability of

the system of companies specializing in this type of distribution management. In short, one of the
fastest growing global sales and rapid methods of distribution through direct marketing,
multilevel marketing; Romanian seller is a possibility for the future development of enterprises,
higher standard of living.
The main lever by which the Internet contributes to the development of this industry are:
The Internet has direct sales and allows customers to connect outside of face-to-face; Direct
marketers have started blogging and social networking side; Direct marketing using email and
online access to brochures of products and services; Payment for Internet banking; Internet
Banking for payment; More and more people have expanded their direct sales professional
activities through the use of internet and social networks. The direct activity can be done at home
and does not require high investments. Some may even give electronic repeat business. From the
perspective of the seller, is the main attraction of direct selling, provides income equal
opportunities and flexible, the men and women of all ages, backgrounds and walks of life. In this
context, the trends in the direct selling industry will be directly affected by these benefits for the
merchant and the use and development of modern communication technologies.
Talebi et al. (2014), suggested that the Social networks are popular places for people of
all backgrounds and different experiences to meet. In addition, they can provide powerful tools
for companies to brand image, brand awareness and reduce advertising costs in tough economic
times. There are opportunities for business, increasing public awareness and participation in
communities and continue for other forms of advertising on social platforms such as the
integration of mobile devices to research in the model marketing. However, the company must
also take care to insert ethical issues such as privacy of the user, aggressive advertising and
spam, as well as their legal problems and issues of data mining. In addition, the company must
have a strategic plan for e-commerce, such as social networks are not quite up to the e-commerce
transactions height. Protecting the privacy and security of personal data of users users become
one of the most pressing goals of today's society. It is particularly important to a rapid expansion
period and immense popularity of social networking sites. Finally, the social network advertising
is flourishing in the age of the interaction of end users of Web 2.0. It is therefore recommended
that the company is aware of opportunities to jump and to expand its customer base.
Social networks allow users to communicate, share similar interests on knowledge,
favorite subjects, and to evaluate the products / services, etc. Although the social network
marketing is still discussing in its infancy, it considers an integrated care potential for success in
the marketing mix business. This article describes the benefits and risks, says social network
marketing. Future opportunities of social networks, especially mobile social networks are also
analyzed.
According to Bolotaeva and Cata (2010), examined the possibility of using the multilevel marketing as a relational marketing tool. The investigation was initially based on the
analysis of questions about the legality of MLM Techniques in the context of regulatory systems
of the European Union and the United States. These results emphasize the primary network
marketing has the right and as a person who wants to become independent partners as possible to
avoid working with illegal pyramid scheme. The second study is based on a case study on the
level of an insurance broker who could get the benefits of all parties involved in a transaction
points (agents, distributors and customers) based using a MLM
As a relationship marketing tool, the development of a downstream for each member of
the sales chain leads to a rapid expansion in the market with high profits for advocacy. The

company should have almost nothing in an advertisement invest their advertised with a "word of
mouth" technical products. This technique produces a high level of consumer confidence and the
organizers are friends or relatives. One of the main reasons for joining an MLM network is that
on one hand the collector that the products sold. In addition, the product must be for supplies and
good value as prerequisites for customers repeat purchases. We can exist in the insurance sector,
where broker representatives could, to find customers the best solution for your needs,
considering the price and the main characteristics of insurance. This is possible due to the
collaboration between the broker and insurance. Given the above, MLM may be considered as a
powerful tool for relationship marketing.
Constantin (2007), suggested that it is related to the impact survey created the current
economic crisis on the market to cover various risks that may affect individuals and businesses.
The main objective of the study was to determine the coordinates of the insurance market in the
EU countries could use solutions for the insurance company to avoid the negative effects of the
crisis and recovery market find local insurance. The results of our research has a weak
development of insurance market in Romania, as indicated by one of the lowest in the developed
markets of the EU. Given the psychological effects recorded by major accidents insurance
company in the world, the best solution for local businesses is the use of relationship marketing
tools that could develop customer confidence in the security services .dropoff window
The insurance market has a high value, it is necessary in practice began cumulative
measures as much as possible to avoid the negative effects of the economic crisis on the
economy as a whole. In these actions, the authorities should be of great importance, but it is the
insurer agrees to make their own decisions to use relationship marketing tools. While the crisis
has a very negative impact on the reliability of customer relationship marketing is much more
than a fashion, a powerful tool to build confidence positive effects on the recovery of insurance
sales. According to our research results, for the Romanian market, are the most appropriate
measures that there is a big gap in its position relative to the developed countries of the European
Union. The strong correlation that just insurance premiums and the number of people with
additional arguments to the potential of the local market, despite the current economic crisis. For
instructions, this research should be output to average statistical data, the real impact of the crisis
and the trends in the data and measure the long-term approach.
Monica and Balas (2014), describe software designed to measure the ROMI of marketing
organizations related to electronic commerce. It is based on the technology of web applications
and includes part of the database system for use by providing advice and guidance on their
customers marketing strategies you good advice. Structure complete solution for the database is
presented in easy to use interface, and the constellation of the network infrastructure. The first
tests in an ad for the Swedish company online, has been shown to significantly reduce the
analysis of return on marketing investment and effort in preparing the client time reports.
Tang (2014), Social networks are becoming increasingly common, and they literally
earn the World Wide Web. Facebook could in poor and remote areas apparently came nothing to
do with our history in the modern world to go. But only on the African continent, there are over
100 million active Facebook users, representing 50% of Africa's population has Internet access.
So it would be huge mistake of marketing, if the company does not consider this opportunity to
be in contact with potential customers. Social media is hot and has become an awareness "must"
for the brand companies. Therefore, techniques have recovered to win customers through social
networks highest degree of subtlety. At a time when the average Internet user to his / her social
network account to access at least fourteen times a day, companies can not afford to be absent

from the media. The purpose of this work is the concept and media features and how to present it
to be used to increase brand recognition.
Constantin (2009), seek a solution in the field of commercial communications in order to
ensure that an area is sufficiently covered by the introduction of elements, the media when to
find an immediate effect. We found it is possible to determine the number of elements in a given
coverage area density. The method is derived from the theory of stochastic random geometry and
mosaic. We give a mathematical formula based on two parameters; the first is the maximum
distance between the initial position resulting from each member and an arbitrary point on the
surface, and the second is the level of confidence. The model can be used quickly with a
population of a given area to trigger immediate action is an interest in the case of
communication.
Gangeshwe (2013), has sought a solution to a problem in the field of commercial
communication that has not been previously treated, that is to ensure that a sufficient area is the
introduction of support members when the effect is immediately covered are necessary. We
found it is possible to determine the number of elements in a given coverage area density.
Simply, a mathematical formula that takes two parameters; is the maximum distance between the
initial position resulting from each member and an arbitrary point on the surface, and the second
is the level of confidence. The model can be used quickly with a population of a given area to
trigger immediate action is an interest in the case of communication.
Discussion and Model:
Multilevel Marketing is diverse topic that include both technical and marketing side i.e. it
includes a software that run the marketing system and the marketing message and the product
that is to be marketed. Intially the Multilevel Marketing start with one customer who then
become or considered as a seller of the product that he or she has purchased. The customer
would add or give customer to the company. The company would add those customer in his
chain and the further those customer would add people in their chain by selling the product to
other and increasing the chain. As the number increases the chain begins to increase like a rolling
snow ball down the chain. This was the model that was persistent almost in all multilevel
marketing techniques. There are several Pakistani companies using multilevel marketing
techniques. This literature review can be used to find the impact of multilevel marketing because
of the increased use of internet and social media in Pakistan. Multilevel marketing can have
newer dimensions in this regard as more and more people are joining social media website where
the companies have easy access to draw a relationship through these social networking website
and as a result grow very big through the use of the multilevel marketing.

Social
media
and
Internet

Increas
ed
custom
er base
and
equitiy

Multilev
el
marketin
g

Proposed Model of Network marketing in Pakistani firms:

Conclusion:
Network marketing is the improvement of traditional marketing; cannot be separated
from the traditional network marketing. Thinking and traditional marketing methods are still in
network marketing. Network marketing is the development of traditional marketing; Companies
need to understand the need for network marketing and make a long-term preparation.
With the development of Internet applications viral marketing companies are welcomed.
In the implementation of viral marketing, companies must be combined with its own
characteristics, and selects an attractive topic to spread the "virus" in the network platform. In
implementing viral marketing strategies companies should methods that match its own station,
select marketing steps and processes in compliance with certain viral combined with innovative
advertising methods and channels that enable businesses and consumers win -Marketing get
winning results.

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