Very important: gurus are rarely wrong, at most they become outdated
Posted: Thu Jan 30, 2025 10:38 am
“The science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit. Marketing identifies unfulfilled needs and wants. It defines, measures, and quantifies the identified market size and profit potential.”
This is the case here (see the first sentence above) with the evolution of new business models based on accelerated growth methodologies that do not necessarily depend on being profitable in the first years of operation… These are startups like Facebook, Uber and DropBox, for example, that practice GREAT marketing without even making a profit! The last two, for example, will go public on the stock exchange only this year!!!
Very well. Having adjusted the concept of “marketing”, we will now look at the different ways (still practiced) and strategies to achieve your goals in the different stages that lead the target audience to the delivery of value through a product or service provided. There are basically 10 types:
Note that the list is extensive and many of these approaches overlap in the different business strategies that can be adopted by companies… Question: is there a different marketing approach missing from this list? Let's get straight to the point. Does multilevel marketing deserve to be treated as a new marketing approach???
This is a business model created in the US in the 1940s by bc data Carl Rhenborg and which is already well known (not to say exhausted) in developed countries… It applies the so-called “network effect” in which a reseller (or rather, a distributor) gains a share of the profits obtained by him and also from his network of resellers. The big idea, therefore, is to encourage resellers to attract new distributors to the company up to a maximum limit of 5 layers to prevent recruitment from becoming more important than the sale of the product itself…
Another important issue is the financial one! Would a good product have that much margin to be distributed? If the money spent on commissions were allocated to quality assurance and/or R&D&I (Research, Development & Innovation), wouldn't we have much better products??? Think about it. I understand that it was exactly for this reason that this model had its applicability limited to some types of products and markets... It's no wonder that the few companies that survived using this model are from the cosmetics and nutritional supplements sector!!
As incredible as it may seem, this outdated model has been consolidating itself in Brazil, having moved R$40.4 billion in 2016, according to a survey conducted by the Brazilian Association of Direct Sales Companies (ABEVD). Note that the companies that lead the sector are no exception to the rule: Hinode, Herbalife, AMWAY (Alticor Group), Mary Kay and Boulevard. All of them have found even more fertile ground in a country that recently emerged from the crisis with millions of unemployed people eager to find a quick and apparently easy source of income…
And that is exactly where the risk lies! There are even people in this market (“disguised” as serious companies) promoting a so-called multilevel marketing of food… [see the website of the company SCI at the end of the post] The equation simply does not add up! How can a “commoditized” sector like the food industry accept a model like this, paying with cascading commissions?!?
Controversies aside, the fact is that multilevel marketing is nothing more than a direct sales method based on a network of distributors who directly serve the retail customer, through their personal relationships (without wholesale intermediaries) and forming their own network of distributors, according to the rules specific to each company.
This is the case here (see the first sentence above) with the evolution of new business models based on accelerated growth methodologies that do not necessarily depend on being profitable in the first years of operation… These are startups like Facebook, Uber and DropBox, for example, that practice GREAT marketing without even making a profit! The last two, for example, will go public on the stock exchange only this year!!!
Very well. Having adjusted the concept of “marketing”, we will now look at the different ways (still practiced) and strategies to achieve your goals in the different stages that lead the target audience to the delivery of value through a product or service provided. There are basically 10 types:
Note that the list is extensive and many of these approaches overlap in the different business strategies that can be adopted by companies… Question: is there a different marketing approach missing from this list? Let's get straight to the point. Does multilevel marketing deserve to be treated as a new marketing approach???
This is a business model created in the US in the 1940s by bc data Carl Rhenborg and which is already well known (not to say exhausted) in developed countries… It applies the so-called “network effect” in which a reseller (or rather, a distributor) gains a share of the profits obtained by him and also from his network of resellers. The big idea, therefore, is to encourage resellers to attract new distributors to the company up to a maximum limit of 5 layers to prevent recruitment from becoming more important than the sale of the product itself…
Another important issue is the financial one! Would a good product have that much margin to be distributed? If the money spent on commissions were allocated to quality assurance and/or R&D&I (Research, Development & Innovation), wouldn't we have much better products??? Think about it. I understand that it was exactly for this reason that this model had its applicability limited to some types of products and markets... It's no wonder that the few companies that survived using this model are from the cosmetics and nutritional supplements sector!!
As incredible as it may seem, this outdated model has been consolidating itself in Brazil, having moved R$40.4 billion in 2016, according to a survey conducted by the Brazilian Association of Direct Sales Companies (ABEVD). Note that the companies that lead the sector are no exception to the rule: Hinode, Herbalife, AMWAY (Alticor Group), Mary Kay and Boulevard. All of them have found even more fertile ground in a country that recently emerged from the crisis with millions of unemployed people eager to find a quick and apparently easy source of income…
And that is exactly where the risk lies! There are even people in this market (“disguised” as serious companies) promoting a so-called multilevel marketing of food… [see the website of the company SCI at the end of the post] The equation simply does not add up! How can a “commoditized” sector like the food industry accept a model like this, paying with cascading commissions?!?
Controversies aside, the fact is that multilevel marketing is nothing more than a direct sales method based on a network of distributors who directly serve the retail customer, through their personal relationships (without wholesale intermediaries) and forming their own network of distributors, according to the rules specific to each company.