Mlm System in Bangladesh
1
Journal of Business Studies, Vol.XXVII, No. 1, June 2006
Social Scenario of Multi-Level Marketing in Bangladesh
Samina M. Saifuddin1 Mohammad Nazmul Huq2 Abu Hena Reza Hasan3 Abstract
Multilevel Marketing (MLM) is a recent trend added to the business notion of Bangladesh. It is a concept used by many countries around the globe, with United States of America practicing it for almost fifty years. MLM not only operates as direct marketing channel but also it is being practiced by many companies to increase their customer base. The concept of MLM in Bangladesh was introduced by Global Guardian Network (GGN) in 1998. Since then many of the firms have ventured into the MLM practices with particularly one company having an exponential growth ‘Destiny 2000’. As the number of people operating as members/ distributors of MLM companies are increasing, this paper attempts to identify the social scenario of the MLM industry on the lifestyles of those involved in the industry. The MLM industry can offer much to the Bangladesh economy, and has the opportunity for considerable growth, judging from the overseas experience. Thus the government needs to concentrate on formulation of policy issues that will regulate the MLM industry and protect the interest of people involved in such practices. Keywords: Multi-Level Marketing, Network Marketing, Direct Selling.
1.1 Introduction Multi-level Marketing (MLM) is a business opportunity that goes by many names – network marketing, direct selling, person-to person marketing, matrix marketing, or one to one marketing. Network marketing often called Multi Level Marketing is perhaps one of the least understood methods of moving products and/or services into the market place. It is a system whereby the company producing the product or service rewards the people who make word of mouth referrals. The people who operate as components in the chain are referred to by any of the following names - Members, Independent Salespeople, Network
Journal of Business Studies, Vol.XXVII, No. 1, June 2006
Social Scenario of Multi-Level Marketing in Bangladesh
Samina M. Saifuddin1 Mohammad Nazmul Huq2 Abu Hena Reza Hasan3 Abstract
Multilevel Marketing (MLM) is a recent trend added to the business notion of Bangladesh. It is a concept used by many countries around the globe, with United States of America practicing it for almost fifty years. MLM not only operates as direct marketing channel but also it is being practiced by many companies to increase their customer base. The concept of MLM in Bangladesh was introduced by Global Guardian Network (GGN) in 1998. Since then many of the firms have ventured into the MLM practices with particularly one company having an exponential growth ‘Destiny 2000’. As the number of people operating as members/ distributors of MLM companies are increasing, this paper attempts to identify the social scenario of the MLM industry on the lifestyles of those involved in the industry. The MLM industry can offer much to the Bangladesh economy, and has the opportunity for considerable growth, judging from the overseas experience. Thus the government needs to concentrate on formulation of policy issues that will regulate the MLM industry and protect the interest of people involved in such practices. Keywords: Multi-Level Marketing, Network Marketing, Direct Selling.
1.1 Introduction Multi-level Marketing (MLM) is a business opportunity that goes by many names – network marketing, direct selling, person-to person marketing, matrix marketing, or one to one marketing. Network marketing often called Multi Level Marketing is perhaps one of the least understood methods of moving products and/or services into the market place. It is a system whereby the company producing the product or service rewards the people who make word of mouth referrals. The people who operate as components in the chain are referred to by any of the following names - Members, Independent Salespeople, Network