THE RECESSION in the global economy has compelled the economists to think over various means to combat unprecedented problems before the agricultural and industrial sectors, especially in the underdeveloped and developing countries.
It is strange that millions of people throughout the world are victims of starvation despite surplus production of food grains in different countries. India itself is an example of such a situation. Political rivalry among the rich in developing countries has left the innocent people to die or suffer for no fault of their own.
In the industrial sector, a lot of changes are taking place every day with increasing output and decreasing demands. Industries have come down heavily on cutting down workforce and limit production. Survival of industries is at stake if such practices are allowed to continue. Agitations against such practices are continuing in almost all the countries demanding rehabilitation of affected people. No solution to the problem is in sight as yet.
Meanwhile, multinational companies (MNCs) having an access to the global markets are paralysing the functioning of indigenous industries. Drastic changes in marketing practices have rendered millions of people jobless in recent years. Exploration of human resources has begun taking advantage of prevailing situation.
With the entry of MNCs in India, a new concept of marketing has gained momentum, especially in the field of consumer goods. The Internet services are playing a key role in global marketing system to reach out consumer goods direct from the producers to the consumers. The idea behind the system is to eliminate middlemen between the manufacturers and the consumers and to provide maximum assistance to consumers in getting standard goods at competitive prices.
There is a widespread network in the country providing full or part time employment to the educated unemployed youths who are easily attracted by the promises of hefty remuneration for their services. The organisers of the network have gone a long way encouraging achievements in the field of marketing by creating a large workforce for introducing the products said to be having global standard.
The new concept in marketing does not insist on traditional sales practices adopted by Indian manufacturers of supplying their products through agents and dealers. Its sole motive is to change the habit of consumers by going for top class products in the world at cheaper and competitive prices. It claims that by eliminating middlemen, the benefit is directly passed on to the consumers. Further, the prices quoted by the MNCs have uniformity on global basis besides the quality.
Stress is given to sponsor more and more people and bring them in the network fold. Performance is considered as basis for seniority of network personnel. Because of the team work, the benefit is shared in a systematic way among the members. The seniors get better results for their efforts to initiate and bring more people under the system. The benefits are credited to respective accounts. The entire team keeps in mind the aims and targets to influence the consumers to go for the products under the network.
Association of an individual in the networking does not cost much on the face value. It requires only an amount to cover-up the cost of the face value, samples and literature pertaining to the products meant for marketing. But the extravagant expenditure for attending the business building seminars, weekly sales promotions meetings, which take major portion of expected earnings of the participants go unheeded. In fact, the network marketing system has created a team of ‘confused persons’, who wish to be rich in the shortest span of time without going into deep root of the scheme. Such marketing practices are not helpful or beneficial to the consumers in any way.
This system is creating a new class of middlemen by engaging young people, offering lucrative commission and bonus on their performance and by bringing new members into the network family. As the family grows, the income of members soars. The impact of income of network personnel ultimately falls on the purchase made by the consumers and accordingly the prices are kept higher to accommodate the commission and bonus payable to the network members.
It is difficult to convince the consumers under the present economic scenario in the country where a large number of manufacturers claim to supply standard goods of similar quality at the most competitive prices. It is yet to be seen how well the network marketing concept works. A number of organisations have come into the field and claim to have good response in the market.
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