Thursday, November 11, 2010

Missouri Temporary License

Сетевой Маркетинг


Введение

Рыночные и организационные неудачи, низкая эффективность общепринятых форм кооперации при решении сложных проблем хозяйственной стратегии вызвали инновационную активность в области сетевой организации. Созданию нетрадиционных структур - так называемых безграничных companies - also contributed to inter-organizational information systems and communications, as well as the desire for autonomous forms of work. One of the ways доставки готовых  изделий от предприятия-изготовителя конечному потребителю является сетевой маркетинг , представляющий собой особую разновидность товарораспределительной системы , используемой в современной предпринимательской деятельности.

Эта система сбыта позволяет потребителям стать распространителями и создавать новые уровни – сети. При этом все сети участвуют в прибылях своей сети и нижележащих сетей. Данная система зародилась в Соединенных Штатах Америки и носит название Multilevel Marketing (МЛМ) (дословный перевод: «многоуровневый маркетинг»). В экономической литературе она стала именоваться сетевым маркетингом (СМ).

1. История сетевого маркетинга

История сетевого маркетинга, неразрывно связана с именем американца Карла Ренборга (1887 - 1973), чьи реализованные идеи превратились в индустрию Сетевого маркетинга с более чем 200 миллиардным оборотом.

Двенадцать лет Ренборг прожил в Китае, working in various American companies (oil, shipbuilding) and had already started thinking about the system of proper nutrition and the human role in it витаминов. В середине 20-х годов он среди многих других иностранцев оказался в тюрьме, когда к власти в Китае пришли революционные силы под руководством генерала Chiang Kai-shek. It was then that he began to practice to check various diets, as the prison food was not conducive to the preservation of health. But where was to take the necessary для организма элементы? Например, железо? Карл нашел выход - первой пищевой добавкой стали... ржавые гвозди! Частички от них Ренборг добавлял в тюремную пищу, потом договорился с охранниками, чтобы те приносили ему различные травы...Карл Ренборг и те, кто следовал его примеру, смогли не только выжить, но и вернуться на родину.

В США, где Ренборг оказался в 1927 году, он вплотную приступил к созданию различных пищевых добавок, основой для которых избрал люцерну, содержащую множество витаминов, минералов, белка и других полезных компонентов. Созданные на её основе препараты Ренборг предложил для испытания своим знакомым, раздав продукцию бесплатно. Результатов не было - никто не стал пробовать полученные пищевые добавки. Тогда Карл стал брать за них деньги, поняв, что ничто бесплатное не ценится. Результаты тотчас появились, причём самые позитивные. Информация о полезных добавках получила широкое распространение (у каждого из знакомых Ренборга нашлось много своих знакомых), люди просили Ренборга о встречах, чтобы получить больше информации о новом продукте. Удовлетворить все заявки Карл, разумеется, не мог. И тогда ему пришла в голову гениальная мысль.

Ренборг предложил друзьям самим давать информацию о пищевых добавках своим знакомым, and if they buy them, he promised to pay the fees. He decided to pay and so familiar to his friends, who, in turn, will promote his product on, используя уже свои связи.

Так родился Сетевой Маркетинг и в 1934 году Карл Ренборг основал компанию "California Vitamins" и благодаря новой системе продаж, когда потребители продукта становились и его распространителями (дистрибьюторами), компания быстро достигла оборота 7 миллионов долларов, не вложив ни одного доллара в рекламу (это принципиально важное обстоятельство необходимо помнить, когда мы дойдём до вопроса, откуда в сетевом маркетинге берутся такие большие деньги).

In 1939, Carl Rehnborg renamed his company "Nutrilite Products" (product name), preserving the principle of distribution of food additives. His staff themselves invited to start for beginners, giving them the necessary information about the product and offered to each build their own network by inviting their friends in the business. Company обеспечивала всех дистрибьюторов своей продукцией и выплачивала каждому комиссионные не только за проданные им самим товары, но и за каждую продажу, совершенную лично привлечённым дистрибьютором.

Торговый представитель компании, который стал называться "спонсор", то есть поручитель, пригласивший на работу новичка, брал на себя обязательство обучать его и помогать ему совершать как можно больше продаж - от этого зависели его собственные комиссионные. Причём они могли быть больше от групповых объёмов продаж, чем от личных.
  Таким образом, Ренборг ввёл практику классического бизнеса " Одноуровневый маркетинг".
  Дальнейшая история сетевого маркетинга связана с именами сотрудников "Nutrilite" Рич Де Воса и Джей Ван Эндела , которые после десяти лет успешного бизнеса в структурах Ренборга в 1959 году создали свою собственную компанию "American Way Corporation", сокращённо "AMWAY" (Американский Путь) , которая сегодня является самой крупной сетевой компанией в мире с годовым оборотом 8 миллиардов долларов.

Заслуга этих людей состоит в том, что они, во-первых, вышли за рамки реализации только одного продукта, включив в свой ассортимент, помимо пищевых добавок, хозяйственные товары домашнего употребления (сегодня в прайс-листах "AMWAY" более 3000 различных товаров). Во-вторых, они стали использовать многоуровневый маркетинг-план в этом бизнесе, то есть стали выплачивать вознаграждение за объёмы продаж дистрибьюторов всех уровней, а не только привлечённых лично. Это привело к быстрому росту компании и распространению продукции за пределы США - в Канаду, Австралию, Японию и другие страны. Сегодня "AMWAY" можно встретить в 24 странах мира и миллионы людей получили возможность значительно улучшить своё материальное положение через сотрудничество с этой компанией. Компания "AMWEY" - классика сетевого маркетинга.

Были в истории сетевого маркетинга и трудные времена. В 1975 году в Америке развернулась борьба с финансовыми пирамидами и под флагом этой компании вместе с водой чуть не выплеснули и ребёнка. В Федеральной комиссии по торговле нашлись чиновники, которые попытались объявить незаконной пирамидой и компанию AMWAY". Четыре года шла проверка деятельности компании, завершившаяся судебным award recognized network marketing legitimate way the sale of goods. Immediately after the federal government, most states have also recognized the network marketing is a legitimate one. In 1980 he founded the company "Herbalife, which has become by now one of the flagships of the global network marketing business, annual turnover its the year 2000, ie just 20 years of existence, has reached astronomical figures 2,3 billion dollars. Herbalife is the official representative and official work 52 countries. This company is registered in the Guinness Book of Records as the fastest growing networking company in the world.
to start a real Boom network marketiga. Thousands of companies have used network marketing to market their products. Especially, it has become attractive for small and medium-sized firms that do not have a lot of money on advertising - the best advertisement for getting themselves distributors consumer goods, have the satisfaction from his own personal use. The range of networkers were a variety of products - insurance policies, household chemicals, plastic cards, jewelry, housewares, computers, tractors, and much, much more. Network marketing was used and major companies such as Ford, Colgate, Canon, Lipton, Coca-Cola and many Other flagship business. In the practice of distributors firmly established the most modern business technologies related to telecommunication systems and computer ensuring the sales process. Speed \u200b\u200bnetworking companies are growing annually by 20 - 30%, while the number of distributors is approaching 30 million people. In the U.S. distributor-hitter can be found in one in nine families and more than 100 million Americans each year to make at least one purchase through network marketing.

Processes taking place in America, could not but affect other countries. Many countries have adopted legislation that gave "green light" this kind of business. Currently, network marketing thrives in 125 countries in all continents. In Japan, more than 2 million distibyutorov sell products worth U.S. $ 30 billion a year. In Taiwan, every twelfth inhabitant of the country is a specialist in network marketing. Sales in Taiwan and Korea is approaching to $ 2 billion a year. In Malaysia more than 1 million professionals in the MLM brought in 1998 sales to $ 1 billion. In Australia, sales via a network Marketing has exceeded 1,5 billion U.S. dollars a year. In order to get on the network conferences and training seminars, Australians spend on the road 5-7 hours - That is the attraction to this business. Sales in the EU countries (Germany, France and Italy) has exceeded 2 billion dollars a year, and in the UK - $ 1 billion. Rapid development of network marketing is happening in Eastern Europe. In just one year after entering the Romanian market of U.S. networking companies, they joined more than 1% of the population. Growth in Slovenia, Poland, the Czech Republic and Hungary also occurs with surprising speed. In Spain, the networker for sale products valued at over $ 700 million per year, with sales in Austria reached 300 million dollars in Switzerland is 200 million dollars, hundreds of millions of dollars measured by net sales in Sweden, Norway and Finland. In Brazil, operates nearly one million distributors who sell products over $ 3 billion dollars per year. In Argentina, the annual sales approaching one billion dollars. Sales in South Korea reached $ 400 million.

Now can be called the largest networking companies such as Vision, Primerica, MaryKay, Excel Communication, NuSkin.

On segodgya in the world there are more than 4000 only major network companies, the total turnover where in the world exceeds 300 billion dollars. In the U.S., currently operates more than 2500 major networking companies, 65% of production in the U.S. is moving precisely through network companies and employment in this sector by about 15% of the population, ie, approximately every ninth inhabitant. Approximately 500,000 people became millionaires in the world, working namely the system of network marketing. (Remember the famous movie "About a lucky man" - the protagonist who works in a period of distributor sales coffee.) In Japan, sales of products through network marketing to reach 90%, that Japan and due to its rapid economic growth. In Europe, the works More than 700 network companies, in Asia Minor - more than 800 in Russia over 70 only large. Daily in the world, more than 100 thousand people become independent distributors companies. Network companies exist in 125 countries. How to predict economic analysts, in the 21 th century about 70% of goods will be sold in the world is in system of network marketing.

Historically, that network marketing begins with personal hygiene items, vitamins, food supplements, items Household goods, goods for recreation and learning. Since 1980, the share attributable to services, especially in telecommunications. Among Other services include: service on credit cards, financial services, insurance and travel services. Taking into account the decentralization utilities, the process of transition it into a system of network marketing - the nearest future.
2 The nature and mechanism of functioning of network marketing

assumed that network marketing - a form of multilevel marketing ( multi - level marketing - MLM ). The concept of "multilevel marketing" covers the variety of businesses, whose growth is based on the creation of new levels or areas for development, involving people acting independently themselves invited to cooperation of other people, that network marketing is called «sponsorship. In other words, Human
issues in this case involved not a company, and individuals acting on their own initiative. It should be noted that at present while clear border between the multilevel and network marketing is not detected. Often the two are used as synonyms. Meanwhile, some marketers in addition to the network marketing produce other kinds of multi-level marketing, such as the so-called pyramid sales .
consider the nature, mechanism and specificity of network marketing.
While a traditional marketing system consists of elements wholesale and retail, network marketing, these structural components of the elements are replaced by independent distributors who are engaged in distribution of goods and selling them. And some firms are taking orders from distributors and direct them to deliver the products, others prefer That the orders were carried out through persons who engage in the business of distributors, referred to as sponsors, and so continued until, until distributor not get right to work with the company directly. In any case, the general rule is that payment for goods ordered are received in the firm, together with orders.



therefore confidential nature of the relationship between distributors to avoid internal wars that are constantly maintained in the traditional business. Moreover, in network marketing, the competition is transformed into cooperation distributors who sincerely want to help each other in the conduct of the business.
Network marketing is the kind of direct sales and assumes sale of product to end consumers in their homes or place of their work.
noteworthy that the traditional marketing system built primarily on a geographical basis, with each party's product distribution operates on a strictly defined territory , the so-called zone of responsibility. Typically, in each territory operates the only seller (agent, broker, solicitor, etc), the extension of a certain product manufacturers, operating under the traditional scheme sales. And no other sellers of this company is not normally allowed to engage in this area selling the same products, and working Here the seller, to sell goods in the territory assigned to the other seller of the company - the manufacturer.
other merchandise based firms adhere to the concept of network marketing. In this case, a separate independent distributors have the right of the territory throughout the country, and if the firm is multinational, then throughout the world. When operating in this mode distributors grow their businesses, interacting with all people regardless of where they live or work. "Recruited" by them in this business people, in turn, may also work with all types of people and in any territory, continuing the same way the process of engaging in network marketing new members
Thus, the market segment of party network marketing is the so-called warm market , ie, persons whom he knows well, such as relatives, friends, neighbors, etc. , Regardless of where they live. Consequently, even the people who live next door to each other can have different warm markets. In this regard, almost always independent distributors operating side by side, never compete with each other, which is difficult to achieve when traditional the organization of commodity circulation, where it is necessary to avoid disordered competition, clearly delineate the territory, each of which operates a seller or agent. And it costs time and money on issues unrelated to business.

Another undoubted advantage of sponsorship should be called the efficiency of constructing its distributor chain in network marketing. This is due to the fact that engaging in this business a few participants, distributor says they spent the rules and intricacies of the activity, to learn that you can pretty quickly, and then raised people just as quickly begin to create their own branch network. This leads to the fact that the process of building a network takes place very rapidly. However, In no case can not be discounted that simply attract business people, even very good in terms of further expansion of the chain enough. You can not leave him to act in a free swimming, it is necessary to prepare and direct his efforts, provide him with appropriate motivational background for the job.

Thus, in network marketing distributor can expand the business much faster than the traditional approach and start earning money based on the principle "better to receive one hundred percent on the efforts of people than one hundred percent of their own labors." In fact, as a rule, it is even not one but about three - five percent. The actual figure depends on how much the distributor can bring in network marketing associates, who it is very important to work conscientiously and effectively.

expand the mechanism of network marketing in practice. I must say that any distributor can attract as many people as you want, but to simplify the calculations and review the work of network marketing has been assumed that each distributor attracts business is only two people who in turn do the same (see table number 1).
Table № 1



two-tier distribution network in which each distributor "recruits" the two men, all of whom remain in business
In this model, the work of the distributor will be constructed as follows:
Level 1 operates only distributor 1 and 2.
At level 2 works 4 people already involved in business distributors 1 and 2, whose total number is called the nearest lower level. Each party to the second level in its turn involves in the business of two people and therefore, at level 3 has been operating for 8 members of the network. The collection of deuces in the third level is the closest the lower level for the relevant party of the second level. Eight members of a network of third-level attracted two new distributors, increasing total number of participants at the fourth level of the network up to 16 people. These 16 distributors that make up the fourth tier of the system to attract 2 new network members, the total number of participants at the fifth level of up to 32 people.
stimulating all participants in a network of distributors 1 and 2, which have involved themselves in business only two people, we find that ultimately in the network operates 64 partners, including themselves. And the number of elements all previous levels combined. Indeed, in the demonstrated example, the number of distributors of the fifth level is 64 people, and it is more than the number of distributors in the four previous levels, amounting to 32 participants. It follows from this. that when the distributor 1 and 2, built their the fifth level, their income is at least doubled, if we assume that the average order for each distributor are the same, and proceed from the assumption that all involved in network marketing members are there to work.

The dynamics of business growth in mathematics called geometric progression or an exponential growth curve and is one of the most important foundations of the system of network marketing.
Meanwhile, in reality, not all participants networks are active, their dropout rate may occur in different levels of the network. And as people drop out of network marketing, the remaining rise the hierarchical ladder.
give another example, describing the operation of the network for the case when a distributor every month attracts business only one new party and all the distributors of his group are doing the same. Then the growth dynamics of network marketing in that branch within a year as follows (with the proviso that all new members are involved in the business). (see table number 2)

Table № 2
business growth, where each distributor for a month "recruits" in the business of one new party


01. (1) = 1 + 1 = 2
02. 2 + 2 = 4
03. 4 + 4 = 8
04. 8 + 8 = 16
05. 16 + 16 = 32
06. 32 + 32 = 64
07. 64 + 64 = 128
08. 128 + 128 = 256
09. 256 + 256 = 512
10. 512 + 512 = 1024
11. 1024 + 1024 = 2048
12. 2048 + 2048 = 4096


Based on the analysis presented in the table of growth the number of distributors, you must say the following. First a distributor has involved 12 participants in the business, nobody else in his network did not attract More than 11 participants, each distributor involved per month for only one new person. Second, before the onset of the tenth month there was enough weak growth dynamics of the network, but then the growth has gone to thousands.

For example, if the number of groups after three months was only 8 people, but at the end , the creation of businesses that gave 4,096 people. Even if the proportion of drop-out in such a network will reach 90% by the end of the year, under the distributor (1) will consist of about 400 participants. For the company, which has 400 partners, who themselves enjoyed a commodity, is already a lot.

Added to this is that if we apply the same approach to growth dynamics of network marketing, when the coefficient of involvement in the business of 5 people (each draw by 5 people) that the scope of business are grandly attractive since the onset of the fifth month.

yet will be a process of creating an extensive network - the team of distributors, it is natural the question arises: who will sell the goods? » However, the construction of the network and assumes that each of forming a network of functionaries and a seller he is himself and the buyer (depending on the company), located on the first level of the hierarchy of the company. The example suggests that in order to increase geometrically achieved notable quantities required, just simply, time. Even if every member of the Distributor (1) will involve in the business of just one new member for five months, and here you can reach a level of 4,096 people, although it will take five years.

Based on the above said, You can note the following: engaging in business 1 - 5 people who seriously want to create your own business, practically forms the basis - the foundation Network Marketing.

At the same time, it must be borne in mind that in network marketing there is a certain level of saturation, ie, after sufficient rapid growth in the number of distributors in the network more or less stabilized and the growth becomes insignificant.

3 Pyramid sales (depending on company)

considering the issues associated with network marketing and its regulation, we can not neglect such an economic phenomenon, like a pyramid sales. The most revealing in terms of regulations and restrictions of this business is the UK legislation. It defines all forms of multilevel marketing as pyramid selling, even though according to some marketers, the term "pyramid sales" refers only to the unacceptable defective forms of multilevel marketing.

At first glance, the pyramid selling used seemingly traditional forms of distribution where products steady progress on the distribution network until it reaches the consumer. But while there is a seemingly small, but in the meantime a very significant difference: in contrast to retail sales in the pyramid does not set retail prices, so the movement of goods through the chain of distributors can theoretically be infinite. The result of this marketing system was not a financial crisis and as a result - the formation of negative relation to this concept.

What is problematical pyramid selling? Consider the path that moves the product through distributors, who intends to get some profit, then farther on the network is moving product, so it is by escalating the price becomes more expensive.

So in a pyramid sales each link sooner or later doomed to fail, because there comes a time in which the distributor at a certain link is unable to sell the product to the following link, ie he is left with unsold consignment and a similar system could collapse.

therefore should not be confused with multi-level marketing trade pyramid - it is not suited to promote products and services. And if the product does not move, can not talk about marketing, especially on a multi-level. Although pyramid and is characterized by multi-level, but at each level is to cheat the wholesale price of goods, which in the presence often does not happen.

In Network marketing, most distributors, as noted above, purchases products directly from its supplier, but some firms suppliers based on the fact that at the beginning of its activities until the distributor does not come loose, he has to purchase products not directly from the supplier And the sponsor. Since distributor (Anya) receives products from a distributor (1). Gradually distributor (Anya) reaches a certain level of turnover products, and then he can refuse service distributor (1) and obtain products directly from a company vendor. It is impossible for this not to note that in building business distributor (Anya) is interested and distributor (1), too, because he will continue to receive commissions from the sales distributor (Anya) and may even on some schemes to get wholesale shipments, which will include a product obtained directly distributor (Anya), ie merchandise which generally does not pass through a distributor (1).

Some pyramid schemes, and sales are related to another problem: they can be constructed so that most of the Distributor receives no revenue from product sales, and from engaging in the business of new members, ie through their entrance fees. Given the foregoing, we can notice that the pyramid sales loses two major benefits of network marketing.

First, in network marketing is no direct correlation Growth Distributor of the volume of purchased goods. This means that a person who does not have more money, has the same chance to succeed in Network marketing, as well as one that is already rich. In contrast, in a pyramid selling more products than its party gets, the more a higher level of the pyramid it reaches, ie for effective business requires large investments of personal or borrowed funds.

Secondly, in network marketing, business promotion in occurs automatically, with the growth of the distribution network (this is the driving force behind the promotion of party network marketing). As for the pyramids sales, then here is the only way to move to the top of the pyramid - inserting as much money, which buys more products for subsequent implementation

4 Legal regulation of network marketing in Russia.

should be noted that despite the relative newness of the network marketing of Russian business, public administration has highlighted the need for state leadership of the activity in order to regulate relations between employers, organizers and participants in a multilevel network marketing, protection from penetration to market substandard products and services, as well as the limitations of conditions for the occurrence of fraudulent pyramid formations.

Meanwhile, while regulatory acts in this sphere are taken only at the level of individual subjects of the Russian Federation, where tovaroraspredelenie in the form of network marketing was most prevalent. Most closely to the introduction of elements of state regulation of marketing is the Moscow government, which on the newest business areas, including on issues of network marketing, issues appropriate regulations and creating special governments.

present terminological device, developed in the Moscow city government for regulatory network marketing. It contains the following concepts.

Multilevel Network Marketing (MSM) - business activity of legal entity or individual entrepreneur, a party to a distribution agreement, which based on it creates a tiered network of distributors for the sale of goods and services by paying fees to distributors at different levels for the sale of goods or services to end customers, as well as recruitment of potential distributors. that on this basis creates a tiered network of distributors for the sale of goods and services, paying distributors at different levels of remuneration for the sale of goods or services to end customers, as well as for recruiting potential distributors.

Distribution Agreement (hereinafter Agreement) - a system of contractual relations entrepreneur with a distributor of commercial representation distributors entrepreneur in the implementation of actions within the IMS.
Entrepreneur- organizer and leader of a multi-level network is party to the contract with the rest of the multilevel network.

Distributor- party multi-level network.

multilevel network- structure based on a system of civil law relations, which are determined by the contract. Levels of networks are formed on the basis of the dependence remuneration of the distributor of the party recruited him and later recruited all participants involved in activities recruited.

Recruitment- Distributors under the treaty, which consists of attracting potential distributors to participate in a tiered network.

Award- stipulated in the contract payment activities of the distributor, which is expressed in the payment of money or another form, as well as to provide benefits, privileges, discounts, status, etc.

final buyer- buyer of goods and services distributed through a multilevel network, not a distributor.

third party- person acting in the interests of the entrepreneur outside the contract (agents, warehouses, etc.)

In order to regulate the activities of multi-level marketing network in Moscow and raising collection of taxes created the Moscow committee for the Mayor of Moscow on October 2, 1998 № 998-RM.
Commission will organize a comprehensive analysis of status and trends in a multilevel network marketing and direct sales (PP), work out and submit for approval by the Government of Moscow of its strategic position in MCM and PCB and provides the coordination of executive bodies of Moscow enterprises and organizations in addressing the socio-economic problems associated with IMS and PP, preparing proposals on the need to take measures to ensure the stimulatory efficiency of taxation activities for IMS and PT.
The main function of the Commission is the protection of the rights and interests of all stakeholders of MSM, including consumers, prevent market penetration of structures, leading illegal, unskilled, and dangerous for human activity.
Commission works under the direct direction of the chairman of the Commission, appointed by the Mayor of Moscow. The Chairman manages the activities of the commission, is responsible for execution of tasks assigned to it, approve the work plan of the Commission. Commission decisions taken within its competence shall be reported to the executive power in the form of extracts from the minutes of meetings of the Commission and recommended for execution. Where necessary, the Commission may initiate and put questions on the issue of orders of the Mayor, Premiere and regulations of the Government of Moscow. In its deliberations, the Commission follow the principles of human and freedoms of man and citizen, the rule of law, transparency, separation of powers, collegiality, responsibility for decisions.

main objectives Commission are:
• Ensure coordination of executive bodies of Moscow, the services concerned and departments, enterprises and organizations irrespective of their departmental affiliation t organizational form in solving socio-economic issues with the implementation of the IMS in Moscow;
• Preparation and submission of proposals in the prescribed manner to improve the legislative and other legal acts related to MSM;
• Organization of preventive measures to prevent the occurrence of fraudulent entities Organized on the principle of MSM;
• Review of prospective areas of the industry MCM and PCB on the territory of Moscow;
• Develop proposals to improve the quality and efficiency of enterprise network through the use of companies MCM and PCB of e-commerce on the Internet.

to perform its tasks the Commission may:

1.Vnosit the executive bodies of Moscow's proposals on issues within its competence;
2.Poluchat from the executive authorities in Moscow, information on matters pertaining to the Commission (it is obliged to perform statutory requirements on the use of information obtained);
3.Privlekat to the Commission in the prescribed manner of interested executive authorities in Moscow and other organizations;
4.Sozdavat working groups, sections, headed, as a rule, members of the commission to develop proposals to address the problems associated with the industry MSM in Moscow.
The Regulations shall provide for the formation of the Commission that inclusion in its membership and the exclusion from it by order of the Mayor's chairman of the Commission.
organizational, technical and information-analytical ensuring the Commission's activities by the Office of the Mayor. If necessary to carry out these functions, the Commission may decide the establishment of the Commission staff. The position of the device must be approved by the Mayor.
Organization of the Commission in detail the above Position on it.
In accordance with the Centre of the State in Moscow on August 25, 1998 № 20 Health Committee of Moscow Government issued an order on October 15, 1998 № 563 prescriptive organize and implement self-financing basis in the conduct of regional health authorities Moscow medical records of MSM participants relating to the decreed groups such as employees of enterprises and organizations, the nature of activities related to production, storage, transportation and sale of food products.
the Annex to this order set list medical examinations of participants multilevel network marketing. The results of medical examinations are made parties to the IMS in personal medical book a single specimen, issued and registered in the Centre of the State in Moscow. It also conducted hygiene training and certification participants' knowledge MSM.Prinyato believe that network marketing - a form of multilevel marketing (multi-level marketing-MLM). The concept of "multilevel marketing" covers variety of businesses, whose growth is based on the creation of new levels or areas for development, involving people acting on their own and independently, inviting themselves to cooperation of other people, that network marketing is called "sponsorship". In other words, human resources in this case involved not a company, and individuals acting on their own initiative. It should be noted that at present a clear boundary between multilevel and network marketing is not detected. Often the two are used as synonyms. Meanwhile, some marketers in addition to the network marketing produce other kinds of multi-level marketing, such as the so-called pyramid selling.
consider the nature, the functioning mechanism and specificity of network marketing.
While a traditional marketing system consists of the elements of the wholesale and retail, network marketing, these structural components of the elements are replaced by independent distributors who are engaged in distribution of goods and selling them. Moreover, some firms take orders from distributors and direct them to deliver the goods, while others prefer to have orders carried out by persons which involve distributors in the business, called sponsors, and so continued until, until distributor does not receive the right to work with the company directly. In any case, the general rule is that payment for goods ordered are received in the firm, together with orders.
Network marketing is the kind of direct sales and involves the implementation of the goods to final consumers in their homes or their place of work.
noteworthy that traditional marketing systems are built primarily on a geographical basis, with each party's goods movement operates on a strictly defined territory, the so-called zone of responsibility. Typically, in each territory is valid only seller (agent, broker, solicitor, etc), the extension of certain products company Producer, acting on the traditional pattern of sales. And no other sellers of this company is not normally allowed to engage in this territory sales of the same products, and working here-seller to sell goods in the territory assigned to the other vendor companies - The manufacturer.
other merchandise based firm, adhering to the concept of network marketing. In this case, a separate independent distributors granted the right to work throughout the country, and if the firm is multinational, then throughout the world. When operating in this mode Distributors expand the business, interacting with all people regardless of where they live or work. "Recruited" by them in this business people are in turn can also work with any types of people and in any territory, continuing the same way the process of engaging in network marketing new members
Thus, the market segment of the party network marketing is the so-called warm market, ie People, whom he knows well, such as Relatives, friends, neighbors, etc., regardless of where they live. Consequently, even the people who live next door to each other, can have different warm markets. In this context, almost always independent distributors operating side by side, never compete with each other, which complicated achieved with the traditional organization of commodity circulation, where it is necessary to avoid disordered competition, clearly delineate the territory of each of which runs a seller or agent. And it costs time and money on issues unrelated to business.

5. Principles of networking Company
consider the alleged pros and cons of network marketing on the example of a typical company network. For this, first get acquainted with the basic provisions this organization.

• Step number 1: you become a member of the firm - the category of "dealer", "partner" that is, you begin to engage in the business of the Company;
• Step number 2: do you engage in a band 1.5 new members ("dealers", "Partner") become a "sponsor", "mentor", "business coach";
• Step number 3: you have a group of from 15 to 25 people - become a "manager", the "leader"
• Step number 4: you become a "senior manager", "Business Leader", that is, gathered a group of 35 to 60 people even have the opportunity to move into his own office.

revenue each distributor of the Company consists of 2 components - income from personal sales, from personal consumption of products and% the percentage of sales and consumption of your network of distributors.

income from personal sales - is the difference between the price of which the partner sells the products, and selling price. (20% of product value)




Conclusion


past 55 years of network marketing business into a legitimate and effective channel of distribution, is ideally suitable for the new wave that will soon engulf the world of business.

Network Marketing, based on the unrestricted development of human capacities and capabilities are widely spread throughout the world, capturing both the developed and developing countries, has become one of the most important socio-economic factors of our time. Designed more than half a century ago, it gives anyone with the desire to become an entrepreneur and start your own business with minimal investment.

Unfortunately, in the domestic commercial practice has wrong view that the MLM almost underground business, its institutional framework - the pyramid is in many ways defines several skeptical customers.

obvious indication that the network marketing has matured as a business is the fact that currently trading the shares more than 20 network companies conducted within the Automated Quotations National Association of Securities Dealers (USA), as well as on the New York Stock Exchange. There are still many companies willing to issue its own shares, as the fact that the financial situation network companies in nearly two times better than the same period of traditional corporations, is an unusual interest among investors.



References

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