emerging issuses

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Green Marketing

Green marketing involves developing and promoting products and services that

satisfy customers want and need for Quality, Performance, Affordable Pricing and

Convenience without having a detrimental input on the environment.

What is green marketing? Green marketing refers to the process of selling

products and/or services based on their environmental benefits. Such a product or service

may be environmentally friendly in itself or produced and/or packaged in anenvironmentally friendly way.

Green marketing must satisfy two objectives: improved environmental quality and

customer satisfaction. Misjudging

Many people believe that green marketing refers solely to the promotion or

advertising of products with environmental characteristics. Generally terms likePhosphate Free, Recyclable, Refillable, Ozone Friendly, and Environmentally Friendly

are some of the things consumers most often associate with green marketing. In generalgreen marketing is a much broader concept, one that can be applied to consumer goods,

industrial goods and even services. For example, around the world there are resorts that

are beginning to promote themselves as "ecotourism" facilities, i.e., facilities thatspecialize in experiencing nature or operating in a fashion that minimizes their

environmental impact .Thus green marketing incorporates a broad range of activities,

including product modification, changes to the production process, packaging changes, as

well as modifying advertising. But to define green marketing is not a simple task. Theterminology used in this area has varied, it includes: Green Marketing, Environmental

Marketing and Ecological Marketing. While green marketing came into prominence inthe late 1980s and early 1990s, it was first discussed much earlier. The AmericanMarketing Association (AMA) held the first workshop on "Ecological Marketing" in

1975. The proceedings of this workshop resulted in one of the first books on green

marketing entitled "Ecological Marketing". Green marketing is defined as "Green or

Environmental Marketing consists of all activities designed to generate and facilitate

any exchanges intended to satisfy human needs or wants, such that the satisfaction of

these needs and wants occurs, with minimal detrimental impact on the natural

environment."

This definition incorporates much of the traditional components of the marketing

definition, that is "All activities designed to generate and facilitate any exchangesintended to satisfy human needs or wants" Therefore it ensures that the interests of the

organization and all its consumers are protected, as voluntary exchange will not take

place unless both the buyer and seller mutually benefit. The above definition alsoincludes the protection of the natural environment, by attempting to minimize the

detrimental impact this exchange has on the environment. This second point is important,

for human consumption by its very nature is destructive to the natural environment. So

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green marketing should look at minimizing environmental harm, not necessarily

eliminating it.

The obvious assumption of green marketing is that potential consumers will view

a product or service's "greenness" as a benefit and base their buying decision accordingly.

The not-so-obvious assumption of green marketing is that consumers will be willing topay more for green products than they would for a less-green comparable alternative

product - an assumption that, in my opinion, has not been proven conclusively.

While green marketing is growing greatly as increasing numbers of consumers are

willing to back their environmental consciousnesses with their dollars, it can be

dangerous. The public tends to be skeptical of green claims to begin with and companiescan seriously damage their brands and their sales if a green claim is discovered to be false

or contradicted by a company's other products or practices. Presenting a product or

service as green when it's not is called green washing.

The green marketing has evolved over a period of time. According to Peattie

(2001), the evolution of green marketing has three phases. First phase was termed as

"Ecological" green marketing, and during this period all marketing activities wereconcerned to help environment problems and provide remedies for environmental

problems. Second phase was "Environmental" green marketing and the focus shifted on

clean technology that involved designing of innovative new products, which take care ofpollution and waste issues. Third phase was "Sustainable" green marketing. It came into

prominence in the late 1990s and early 2000.

Evolution of Green Marketing:

The green marketing has evolved over a period of time. According to Peattie

(2001), the evolution of green marketing has three phases. First phase was termed as

"Ecological" green marketing, and during this period all marketing activities wereconcerned to help environment problems and provide remedies for environmental

problems. Second phase was "Environmental" green marketing and the focus shifted on

clean technology that involved designing of innovative new products, which take care ofpollution and waste issues. Third phase was "Sustainable" green marketing. It came into

prominence in the late 1990s and early 2000.

IMPORTANCE OF GREEN MARKETING:

Man has limited resources on the earth, with which she/he must attempt to

provide for the worlds' unlimited wants. There is extensive debate as to whether the earthis a resource at man's disposal.. In market societies where there is "freedom of choice", it

has generally been accepted that individuals and organizations have the right to attempt

to have their wants satisfied. As firms face limited natural resources, they must developnew or alternative ways of satisfying these unlimited wants. Ultimately green marketing

looks at how marketing activities utilize these limited resources, while satisfying

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consumers wants, both of individuals and industry, as well as achieving the selling

organization's objectives.

When looking through the literature there are several suggested reasons for firmsincreased use of Green Marketing. Five possible reasons are as follows:

1.Organizations perceives environmental marketing to be an opportunity that can be used

to achieve its objectives. 2. Organizations believe they have a moral obligation to bemore socially responsible. Governmental bodies are forcing firms to become more

responsible. 3. Competitors' environmental activities pressure firms to change their

environmental marketing activities. 4. Cost factors associated with waste disposal, orreductions in material usage forces firms to modify their behavior.

OPPORTUNITIES:

All types of consumers, both individual and industrial are becoming more

concerned and aware about the natural environment. In a 1992 study of 16 countries,more than 50% of consumers in each country, other than Singapore, indicated they were

concerned about the environment. A 1994 study in Australia found that 84.6% of the

sample believed all individuals had a responsibility to care for the environment. A further

80% of this sample indicated that they had modified their behavior, including theirpurchasing behavior, due to environmental reasons. As demands change, many firms see

these changes as an opportunity to be exploited. It can be assumed that firms marketing

goods with environmental characteristics will have a competitive advantage over firmsmarketing non-environmentally responsible alternatives. There are numerous examples of

firms who have strived to become more environmentally responsible, in an attempt to

better satisfy their consumer need. McDonald's replaced its clam shell packaging with

waxed paper because of increased consumer concern relating to polystyrene productionand Ozone depletion. Xerox introduced a "high quality" recycled photocopier paper in an

attempt to satisfy the demands of firms for less environmentally harmful products.

This is not to imply that all firms who have undertaken environmental marketingactivities actually improve their behavior. In some cases firms have misled consumers in

an attempt to gain market share. In other cases firms have jumped on the green

bandwagon without considering the accuracy of their behavior, their claims, or theeffectiveness of their products. This lack of consideration of the true "greenness" of

activities may result in firms making false or misleading green marketing claims.

SOCIAL RESPONSIBILITY & GREEN MARKETING:

Many firms are beginning to realize that they are members of the wider

community and therefore must behave in an environmentally responsible fashion. Thistranslates into firms that believe they must achieve environmental objectives as well as

profit related objectives. This results in environmental issues being integrated into the

firm's corporate culture. Firms in this situation can take two perspectives; (1) they can usethe fact that they are environmentally responsible as a marketing tool; or (2) they can

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become responsible without promoting this fact. There are examples of firms adopting

both strategies. Organizations like the Body Shop heavily promote the fact that they are

environmentally responsible. While this behavior is a competitive advantage, the firmwas established specifically to offer consumers environmentally responsible alternatives

to conventional cosmetic products. This philosophy is directly tied to the overall

corporate culture, rather than simply being a competitive tool. An example of a firm thatdoes not promote its environmental initiatives is Coca-Cola. They have invested large

sums of money in various recycling activities, as well as having modified their packaging

to minimize its environmental impact. While being concerned about the environment,Coke has not used this concern as a marketing tool. Thus many consumers may not

realize that Coke is a very environmentally committed organization. Another firm who is

very environmentally responsible but does not promote this fact, at least outside the

organization, is Walt Disney World (WDW). WDW has an extensive waste managementprogram and infrastructure in place, yet these facilities are not highlighted in their general

tourist promotional activities.

COST OR PROFIT ISSUES:

Firms may also use green marketing in an attempt to address cost or profit relatedissues. Disposing of environmentally harmful by-products, such as polychlorinated

biphenyl (PCB) contaminated oil are becoming increasingly costly and in some cases

difficult. Therefore firms that can reduce harmful wastes may incur substantial costsavings. When attempting to minimize waste, firms are often forced to re-examine their

production processes. In these cases they often develop more effective production

processes that not only reduce waste, but reduce the need for some raw materials. This

serves as a double cost savings, since both waste and raw material are reduced. In othercases firms attempt to find end-of-pipe solutions, instead of minimizing waste. In these

situations firms try to find markets or uses for their waste materials, where one firm'swaste becomes another firm's input of production. One Australian example of this is afirm who produces acidic waste water as a by-product of production and sells it to a firm

involved in neutralizing base materials. The last way in which cost or profit issues may

affect firms' environmental marketing activities is that new industries may be developed.This can occur in two ways: 1) a firm develops a technology for reducing waste and sells

it to other firms; or 2) a waste recycling or removal industry develops. For example, firms

that clean the oil in large industrial condensers increase the life of those condensers,

removing the need for replacing the oil, as well as the need to dispose of the waste oil.This reduces operating costs for those owning the condensers and generates revenue for

those firms cleaning the oil.

Green Marketing Mix:

Every company has its own favorite marketing mix. Some have 4 P's and somehave 7 P's of marketing mix. The 4 P's of green marketing are that of a conventional

marketing but the challenge before marketers is to use 4 P's in an innovative manner.

Product

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The ecological objectives in planning products are to reduce resource

consumption and pollution and to increase conservation of scarce resources (Keller man,

1978).

Price

Price is a critical and important factor of green marketing mix. Most consumers

will only be prepared to pay additional value if there is a perception of extra product

value. This value may be improved performance, function, design, visual appeal, or taste.Green marketing should take all these facts into consideration while charging a premium

price.

Promotion

There are three types of green advertising: -

Ads that address a relationship between a product/service and the biophysical

environment

Those that promote a green lifestyle by highlighting a product or service

Ads that present a corporate image of environmental responsibility

Place

The choice of where and when to make a product available will have significant

impact on the customers. Very few customers will go out of their way to buy green

products.

SOME PROBLEMS WITH GREEN MARKETING:

There are a number of potential problems that must overcome. One of the main

problems is that firms using green marketing must ensure that their activities are notmisleading to consumers or industry, and do not breach any of the regulations or laws

dealing with environmental marketing. Green marketing claims must clearly state

environmental benefits. A problem of the firms face is that thos who modify theirproducts due to increased consumer concern must contend with the fact that consumers'

perceptions are sometimes not correct. For example the McDonald's case where it has

replaced its clam shells with plastic coated paper. There is ongoing scientific debatewhich is more environmentally friendly. Some scientific evidence suggests that whentaking a cradle to grave approach, polystyrene is less environmentally harmful if this is

the case McDonald's bowed to consumer pressure, yet has chosen the more

environmentally harmful option. When firms attempt to become socially responsible,they may face the risk that the environmentally responsible action of today will be found

to be harmful in the future. Take for example the aerosol industry which has switched

from CFCs (chlorofluorocarbons) to HFCs (hydro fluorocarbons) only to be told HFCs

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are also a greenhouse gas. Some firms now use DME (di-methyl ether) as an aerosol

propellant, which may also harm the ozone layer. Given the limited scientific knowledge

at any point, it may be impossible for a firm to have made the correct environmentaldecision. This may explain why some firms, like Coca-Cola and Walt Disney World, are

becoming socially responsible without publicizing the point. They may be protecting

themselves from potential future negative backlash; if it is determined they made thewrong decision in the past. While governmental regulation is designed to give consumers

the opportunity to make better decisions or to motivate them to be more environmentally

responsible, there is difficulty in establishing policies that will address all environmentalissues. For example, guidelines developed to control environmental marketing address

only a very narrow set of issues, i.e., the truthfulness of environmental marketing claims.

If governments want to modify consumer behavior they need to establish a different set

of regulations. Thus governmental attempts to protect the environment may result in aproliferation of regulations and guidelines, with no one central controlling body. Reacting

to competitive pressures can cause all "followers" to make the same mistake as the

"leader." Mobil Corporation who has followed the competition and introduced

"biodegradable" plastic garbage bags, as because technically these bags were biodegradable, the conditions under which they were disposed did not allow

biodegradation to occur. Mobil was sued by several US states for using misleadingadvertising claims. Thus blindly following the competition can have costly ramifications.

The push to reduce costs or increase profits may not force firms to address the

important issue of environmental degradation. End-of-pipe solutions may not actuallyreduce the waste but rather shift it around. While this may be beneficial, it does not

necessarily address the larger environmental problem, though it may minimize its short

term affects. Ultimately most waste produced will enter the waste stream, therefore to beenvironmentally responsible organizations should attempt to minimize their waste, rather

than find "appropriate" uses for it.

Principles and their Rationales:

Include power from emerging renewable resources (wind, solar, biomass,

geothermal).

Green marketing can improve the environmental profile of the U.S. electricity

supply if marketers sell a power product that includes a substantial fraction of wind,

geothermal, biomass (including landfill gas) and/or solar resources. The generation ofpower from these renewable resource technologies produces few or no air emissions, no

carbon (no net carbon, in the case of biomass), and do not cause irreparable damage toriver ecosystems. They will be most vulnerable in competitive markets and can mostbenefit from consumer support. While "green" is difficult to define, and arguments can be

made that natural gas and large hydropower are less environmentally harmful than coal,

oil, and nuclear power, green-customer demand is unlikely to exceed the supply of large,

existing quantities of gas and hydro resources. To make a difference in the amount ofemerging renewable resources in the electric system, "green" endorsements should be

limited to portfolios that include substantial amounts of wind, solar, biomass and

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geothermal resources. The balance of the product should contain no greater fraction of

nuclear- or coal-fired power than would otherwise be provided by the system mix.

Make a difference. Marketed renewables should be above and beyond any

renewables requirements. Ratebased resources should be marketed only under

certain circumstances.

Green marketing can make a difference by building total consumer demand for

renewables and ultimately increasing the supply of renewables in the marketplace. Thisargues against creating artificial distinctions among renewable resources (see next

principle). There are, however, some situations in which it would be inappropriate to

market certain renewable resources. These situations may include those in which: (a)

consumer purchases would clearly not make a difference in the total demand/supplypicture, (b) consumers would be treated unfairly, or (c) an unfair advantage for existing

power providers (i.e., utilities) would be created in competitive markets. All three could

occur at once.

Example 1 -- Mandated Renewables. Where a marketer is required by law to have a

certain amount of renewable power in its resource portfolio, marketing that power

separately at a premium would make no difference in the total amount of renewable

energy in the system. Similarly, consumers should not be asked to pay extra forenvironmental practices that are already required by law (e.g., hydro spills required to

protect fish). In these cases, green consumers would simply be picking up a larger share

of the tab that would otherwise be shared by all consumers, and markets for otherrenewables would be dried up. If the marketer wishes to sell the mandated resources to

consumers along with additional benefits (e.g., offering consumers a long-term fixed rate

in exchange for their purchase), it should clearly inform consumers that the renewable

power would be generated regardless of their purchase in order to avoid misleading them.

Example 2 -- Renewables Already Paid for by Ratepayers. In some cases, the cost of

renewable capacity and/or energy is included in the rates being paid by utility customers.

This may occur when costs are included in a utility's ratebase, when a utility passescontract costs through to ratepayers, or when ratepayers are paying the costs in a fixed

stranded-asset charge. (a) Where renewable resource costs are already being paid for by

consumers, they should be marketed at a premium only when the green sales result inadditional generation from those resources and a commensurate price is charged.

Otherwise, the green marketing would result in cost-shifting or double-charging. (b)

Resources that are already being charged to consumers by a utility should not be sold in

competitive markets outside of the utility's territory. A utility should be able to marketrenewable resources when they have been removed from rates and placed within an

unregulated subsidiary. Otherwise, utility shareholders assume no risk and gain an unfair

competitive advantage against companies who do not have access to ratepayer-subsidizedresources and must take additional risks to participate in the green market. Absent a rate

case or other adjustments to lower rates to reflect the green sales, utility shareholders

would gain at the expense of ratepayers, who would no longer have access to the greenresources they have paid for. In some cases, sale of the green resource could result in

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greater generation from local fossil fuel resources, leaving local consumers

environmentally disadvantaged.

Avoid distinctions between "existing" and "new" renewables.

Markets work effectively by rewarding the lowest-cost producers, whether theyare existing producers or new entrants. Building demand for renewable resources will

attract competitors and influence incremental investment decisions made in the power

industry in favor of a renewable resource (the investment may be in refurbishing existingequipment or in a new plant). Each purchasing decision can make a difference in pushing

toward that next investment in renewable energy supply. Some believe that the total

amount of renewables in the system can be increased the fastest by drawing a distinction

between "existing" and "new" resources, and by favoring the latter. We believe this isinappropriate for a number of reasons.

First, a new project may not need support while an existing project might. For

example, a new project whose "above market" costs are being fully covered by agovernment subsidy may not need additional consumer support, whereas an existing

project receiving market prices that are inadequate to sustain operations may. Second,

from an environmental perspective, it makes no sense to build a new project (new roads,

power lines, etc.) while an existing project languishes, if it is possible to maintain orrepower the existing project at the same or lower cost. Third, definitions of "new" are

problematic (e.g., when does "new" become "old"?). Fourth, it is unfair to penalize early

investors in renewable energy by classifying their product as somehow inferior. It is bestto allow the market to displace existing renewable resources when new ones of greater

value or lower cost are available.

This principle does not mean that marketers cannot tout a new project if that'swhat they are doing and selling. However, marketers should not imply that new is bettersimply because it is new, or that existing renewables are somehow unworthy of support

simply because of the fact that they were built earlier.

Fully disclose product contents and provide information to allow on-going product

verification (in the absence of uniform disclosure requirements).

In the absence of uniform public disclosure requirements, green marketers should

voluntarily disclose portfolio contents to consumers, including percentages of emerging

renewable resources, in all product advertisements and billing statements to the

maximum extent practicable. Marketers should also provide all necessary information togovernment agencies and private organizations seeking to verify those claims. Otherwise,

it will be difficult, if not impossible, for consumers to know what they are purchasing and

for interested parties to verify green claims.

Document claims that power from undesirable sources are not being supported.

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Where marketing and advertising claims involve the exclusion of nuclear- or coal-

fired power, those resources must not be supported in any way by the green purchase

(with the exception of incidental system power balancing requirements and ancillaryservices). Electrons and dollars are fungible, so the marketer must prove that consumer

dollars do not in any way support the bads.

Do not charge excessive prices.

Reasonable prices for renewable energy products would be a natural outcome of amarket that is vibrantly competitive and in which consumers have good information.

And, where consumers have choices, informed consumers can be trusted to decide

whether product benefits are worth the price. However, many consumers are unaware that

the cost of renewable energy has fallen dramatically in the last decade, and if excessiveprices are charged for renewable energy it will give the public the impression that

renewables cost more than they actually do, which could decrease support for public

policies promoting renewables and reduce the size of the market for renewables. Green

marketers that charge prices that are clearly out of proportion to the actual cost ofrenewable energy, after factoring in reasonable marketing costs and rewards for risks

taken, should expect some criticism.

Do not collect premiums in advance, and avoid donation programs.

Collecting premiums in advance invites abuse. Consumers should not be asked to

pay for someone else's investment when they get nothing in return. Green purchases that

are product- oriented rather than donation or promise-oriented are likely to be more

successful. Collecting expressions of interest or agreements to purchase power when itbecomes available are more appropriate methods of securing consumers.

Other Issues

Support a universal system of price, fuel mix and emissions disclosure.

To encourage a market in "green," consumers must have information that allowsthem to comparison shop among all suppliers on the basis of the costs and the

environmental characteristics of their resource portfolio. This necessarily requires

disclosure of price, fuel mix, and emissions on a consistent basisnot just for those

claiming "greenness," but for all suppliers. Without uniform disclosure requirements, theburden will fall on green marketers to investigate their competitors' portfolios and

educate consumers about thema difficult and expensive task. Even then, consumersmay be mistrustful of green claims. Any green marketer with a worthy product has aninterest in disclosure requirements because it will give legitimacy and value to its

product. In a truly competitive market with full disclosure, we can expect competitors to

"bid up" the amount of renewables to attract environmentally-concerned consumers.Disclosure mechanisms should be designed to minimize public and private administrative

costs, such as a "tradable tag" approach.

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Support public policies that advance sustainable energy goals.

Encouraging individuals to take responsibility for the environmental impacts caused

by their own personal electricity consumption is an important element of moving to amore sustainable electricity supply. Green marketing is also an important part of

advancing renewable energy in the marketplace. However, green marketing it is not anadequate substitute for public policies that correct the market failures that will hinder

renewables and cleaner fossil resources in the market and that set the electric industry ona sustainable course. Moreover, in order for consumers to have the choice of purchasing

renewable energy, we must have strong renewable energy industries. Given the high

entry barriers in the electric industry, we must ensure that a meaningful base ofrenewables is built into the system. The green marketer who is truly interested in

significantly advancing renewables will:

support transmission and system operation rules that treat intermittent renewable

resources fairly,

support strong renewable energy and environmental policies in the states andCongress,

not represent green marketing as an adequate substitute for either of the above.

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What Is Network Marketing?

Network Marketing is a subset of direct selling and is also known as multilevel

marketing, structure marketing or multilevel direct selling, Network marketing canbest be described as a direct selling channel that focuses heavily on its compensation plan

because the distributors (members of the network) may receive compensation in twofundamental ways. First, sales people (distributor) may earn compensation from theirpersonal sales of goods and services to the consumers (non-member of the network).

Second, they may earn compensation from sales to or purchase from those persons whom

they have personally sponsored or recruited into the network (down lines), these down

lines continue sponsoring or recruiting to the network sharing the benefits with theirsponsors or recruiters (up lines). Hence, the network marketing organization can be

defined as those organisation that depend heavily or exclusively on personal selling, and

that reward sales agents for (a) buying products, (b) selling products, and (c) findingother agents to buy and sell products.

Business organisation has long relied on direct marketing to target customerswithout spending a lot of money on retail distribution. However the Network (Multilevel)

Marketers have taken the direct model one step further, i.e. not only they do the sales, butrecruit and train new distributors i.e., independent sales persons who are members in the

network marketing company. This ingenious method was first popularised by Amway in

1950s. The big draw card in network marketing is the commission paid not only fordirect sales made by the sales person, but also from the sales made by the recruits made

by him. That is, if you get friends and relatives to join up, you get a commission not only

from the products your friends and relatives purchase, but also from the sales they maketo their friends. This wonderful opportunity attracts prospective candidates to join

network marketing companies. Studies reiterate the fact that a 100 percent annual

turnover rate among sales personnel in certain network marketing company is notunusual. According to the Direct Selling Association in the United States, 70% of therevenue from the direct selling industry was generated by network marketing companies

and most of this came from the better known companies, such as Amway, Nuskin or

Shaklee, that use multilevel instead of single level compensation plans. In the case ofIndia, network marketing momentum was conspicuous in India during mid 90s followed

by the establishment of the Indian arm of Amway Corporation. The total turnover of

network marketing companies in India was estimated at Rs.30,104 crores in 2005 with anannual growth rate of 25% . Amway India, Avon, Tupperware, Oriflame and desi

companies like Modicare, Hindustan Lever Network are the major network marketing

players in the Indian market. Indian Direct Selling Association (IDSA) facilitates

membership to genuine network marketing companies. The IDSA projection for 2010 forthe network marketing industry is Rs.8000 crores. According to National Council of

Applied Economic Research, the Indian middle class was projected to grow from 1.1

crore households in 2001-02 to 1.7 crore households in 2005-06 and the figure isexpected to be 2.8 crore by 2009-10. The above figures justify the rosy picture of

network marketing in India.

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How Does network marketing Work?

In network marketing, you share information and develop personal and

professional contacts. You are rewarded for sharing information that results in productsales. Network Marketing empowers you to build your own networking sales

organization from your personal and professional contacts, which also empowerseveryone to do the same, creating exponential growth of your network. You can earn

income from the successful efforts of your network of business associates. Unlikeconventional Corporations with one chief executive at the top, in Network Marketing

everyone is the CEO of his or her own independent organization.

A network marketing company supplies the product. Then they join in partnership

with a network of independent representatives, each one in business for themselves. Thecompany takes care of the research and development, finances, management, public

relations, production, warehousing, packaging, quality control, administration, shipping,

data processing, the accounting and payment of representative sales commission checks.

Passive income versus active income:

Active income is best described as having to continually work, trading hours for

dollars, in order to maintain that income. Passive income means that, in time, you dont

have to physically do the work but you can still maintain the income. Given the choice,most people would prefer passive income over active income. The majority of people

think of passive income in terms of the royalties paid to recording artists and authors, or

the returns on investment of property owners and shareholders. Further to these are the

entrepreneurial business owners who derive large passive incomes from their businesses.In some cases passive income can be established without much effort; in other cases a

certain amount of work may be required to maintain the flow of passive income. Thereare different models, but the concepts are the samedo the work now to build a long-term income stream. Passive income gives the recipients choice; they are not tied down to

working hours for dollars but are in the unique position of having control over what it is

they want to do with their time. Passive income provides the opportunity to have greatercontrol of what you want to do in your dayif you want to play golf, you can play golf;

if you want to do some work, do some work; if you want to go off on a holiday on a

whim, then go. Passive income represents control, freedom and lifestyle. Networkmarketing is a great opportunity to establish passive income. Many people who built

successful network marketing businesses now enjoy the passive income they bring. To

get to that point required effort and commitment, but the end result is worth it.

Working smarter, not harder:

There was a time when simply working hard meant that you had the opportunity

to get ahead of the average person who perhaps had a more relaxed approach to work.

Today that is simply not the case. Although a strong work ethic will always be important,it is no longer the only ingredient. Success is about being smarter and often doing things

differently to the way we would have done them in the past. Network marketing allows

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you to do just that, while at the same time giving you the opportunity to associate with

very successful people who understand this principle and who have made it work for

them.

Leverage and duplication:

Leverage and duplication are simply the ability to leverage your time and to

duplicate your efforts. If you are working in a traditional business, your income is largely

governed by the number of hours you can physically work in a week. In networkmarketing, as your network grows, the time collectively invested within the network is

dramatically increased, and your efforts are greatly duplicated and multiplied. Simply

put, you yourself, one person, can continue to work 40 or 60 hours per week, or you can

build a network where collectively, for example, 1000 people are working only 10 hourseach per week, meaning your earning hours now total 10 000. You need to understand

that this concept is not unique to network marketing, but is a key ingredient in most

successful entrepreneurial enterprises. Most successful entrepreneurs use it to build their

wealth. For example, those who have established large franchising businesses base theirsuccess on duplication and leverage of one successful store, repeating it nationally and,

ideally, globally.

Low capital investment

For many of those who dream of owning their own business, a major hurdle to beovercome is the costs and risks associated with buying an existing business or setting one

up in the first place, often representing hundreds of thousands of dollars and a lot of risk.

One of the attractive features of building a network marketing business is the low capital,or low entry cost, required to get started. The majority of network marketing companies

require very little upfront money to join; what moneys are required cover start-up costs

and some initial product purchase. If a person goes on to successfully develop theirnetwork marketing business, the return on such a low initial capital investment can be

significant.

Low operating cost

The ongoing operating costs required in the majority of network marketing

businesses are generally very low when compared with a traditional business producingsimilar turnover.

Costs often revolve around accessing educational and motivational material,acquiring business-building tools and attending seminars provided and organized as part

of the support system. Further to this are incidental costs such as phone, fuel and other

small home office operating costs. As the volume produced throughout the network isbuilt on the principle of leverage and duplication of a number of independent business

owners collectively establishing their own businesses and subsequent volume, the costs in

achieving that volume are greatly reduced by spreading them across each independent

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business owner. Therefore each business has low operating costs, minimising the need for

staff, infrastructure and other normally high overheads.

Part-time commitment still works:

One of the major advantages of being involved in network marketing is theopportunity to establish it part-time alongside your current occupation or business. For

those whose dream has been to own a business but who have feared taking the plunge due

to the risk involved in giving up a secure job and income to delve into the unknown, thispart-time aspect reduces that risk.

For those already running a traditional business that feel trapped and cant risk

simply walking away from it, the opportunity to develop something on the side with aview that some day it will replace their current income stream is also very attractive.

After building the network marketing business part-time to a point that the income

derived from it can safely replace that from the job or traditional business, one can then

comfortably move into working the network marketing business full-time.

Creating wealth:

Many people who have built a successful network marketing business have done

so by recognising the possibilities in using it as a vehicle to create a large passive income

and positive cash flow, and in using that cash flow to build their wealth. For many, notonly is it an opportunity to create a positive cash flow but it also gives them the ability to

associate with people who themselves have created wealth and therefore to learn from

their experience. Most successful network marketing business owners have foundfinancial independence through their network marketing business, and many have used

the positive cash flow to further build wealth through investments, property or the

purchase of other business ventures.

People make money out of other people:

People often remark that being in a network marketing business is just making

money out of friends or other people. But thats just what any business doesit makes

money from providing a product or service to other people. If you were a tradesperson,

for example, and your friends wanted to engage your services to have renovations done totheir home, would you decline the offer because you didnt want to make money from

them? Network marketing is no different from traditional business in that it has a

particular product or service available for purchase by those who choose it.

You will lose all your friends:

People involved in network marketing will often make many more friends as a

result of their involvement. Because you meet o many new people while developing your

network, and then work with many more as business associates over the life of your

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business, your circle of friends grows considerably, many of them remaining lifelong

friends.

This is not to say that there are not people who have lost friends. There have been,

and probably always will be, a minority involved in network marketing whose nature it is

to be pushy, to not take no for an answer, to be very demanding, sometimes downrightrude, even obnoxious. Usually these people are the ones that wanted to do it their way,

and wouldnt listen to advice or plug into the training and support system. Needless to

say, their involvement in network marketing is often short. If you were running atraditional business and were constantly pressuring your friends to buy from you, it

wouldnt take long to lose thembut as we know, most people owning a traditional

business have many friends. Why? Because they go about their business in a professional

manner. Your network marketing business is just that, a business. Go about your businessin a professional manner and you will not lose friends, you will go on to make many

more than you would have otherwise.

Is network marketing legal?

Network marketing is absolutely legal, and is governed by strict regulations inmost countries. However, be aware that some companies masquerade as network

marketing companies whilst failing to conform to the required regulations. In most

countries, the network marketing industry is regulated by the Direct Selling Association.

There are lots more information on their website regarding regulations and legal issues.They charge hefty fees for membership, so it is certainly possible that a legitimate

network marketing company might not be a member of the DSA.

What is the difference between network marketing and pyramid selling?

The short answer is very simple : Network marketing is a legitimate businessmodel, offering all participants the same opportunity to build a residual income in a

flexible way. Pyramid selling is an illegal scam, where the people at the top benefit from

the financial suffering of those they introduce into the organization. Both utilise thepower of exponential growth, but they use this principle in different ways and for very

different ends.

When people talk about pyramid selling, they may be thinking of many differentbusiness models. Most people will not be able to precisely define an illegal pyramid if

you ask them, regardless of how strongly they claim that network marketing is the same.

In reality, the difference between the two is very clear and well-defined, and it should become obvious why this distinction is so vitally important.

In the standard model of a pyramid scheme, people are rewarded purely forintroducing new people to an organisation. They are often charged very large joining

fees, and are told that this can be recovered easily by convincing others to do the same.

Sadly, this is quite a common scheme and many people lose a lot of money through such

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false hopes. Fortunately, this is absolutely illegal under the laws of most developed

countries.

In a pyramid scheme, no goods or services are offered for sale to people outside of the

pyramid organisation - money simply flows from the bottom to the top. This is one of the

most important differences between a pyramid scheme and a legitimate networkmarketing opportunity. The consequence of this is that there is no net cash flow into the

pyramid organisation, and therefore the people at the top make a quick fortune by taking

money from people lower down in the organisation. If people at the top get rich, then itfollows that people at the bottom mustlose out, because the net cash contained within a

static organisation stays constant. People find themselves trying to recruit new people to

bring new cash into the organisation, just so that they can cancel their debts. This is the

only way that new money can enter the pyramid. As soon as recruiting stops, the entireorganisation folds and those who got in too late lose everything.

In network marketing, goods or services are sold by distributors to those outside

of the organisation. This means that there is a net cash flow from outside to inside. Thismay sound like a small distinction, but in reality it is vital. It means that nobody in a well-

run network marketing organisation need lose out. The incoming cash is split betweenthose in the organisation based on retail sales and group-building success. Even if no new

distributors are introduced, everyone still makes money. The organisation could remain

entirely static indefinitely because money is flowing in from outside.

Note - it is possible to develop a network marketing organisation where the distributors

all buy their own products and nobody outside does. This is not in the spirit of network

marketing, but is still stable becausegoods or services of intrinsic value are still passing

into the business from outside. Of course, this is rather complicated, and assumes that the

distributors buy the products voluntarily and that they gain a more-than compensatory

value from that purchase. This is beginning to push the limits of the law, and anycompany which operates in this manner should probably be avoided.

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Event Marketing

More and more companies are interested in Event Marketing today. Event

Marketing can be anything from product tasting in stores to customer seminars witheducation on the schedule. The common factor of all activities is that they provide

experiences and stimulate all senses. The big difference between reading about fireworks

and experiencing them is the actual experience. The core of Event Marketing is the

possibility to give the consumer positive experiences in connection with the company orits products.

Event marketing encompasses a wide range of event types from exhibitions andtrade shows to publicity stunts, themed and created events and corporate entertainment.

In fact there are very few events which could not be used for a marketing purpose as all

communicate something to a target audience. Events can be used to perform a number ofmarketing functions (for example communications, relationship and loyalty building,

database compilation, targeting, brand enhancement and personal selling). Event

marketing is not, therefore, merely another form of promotion but a new way of

marketing which fits well with societys demands in this new millennium. It has theability to deal with small groups or individuals, to be customised, to create interactivity,

involvement and interest and to cut though the clutter of competing brands. Events can be

and often are related to worthy causes and social responsibility and take an audiencethrough from initial attention and interest to purchase, use and post experience

evaluation, reward and loyalty. Event marketing is experience marketing in its practical

form.

As marketing events range from product launches to trade shows, from mega-

event sponsorship to charity fundraisers the marketing implications are wide ranging and

varied. Examples of the areas to be included within the track are given below, althoughthis list is far from exhaustive.

The effectiveness of events as communication tools Experiential marketing through events

Relationship marketing and business to business events

Cause related events and social marketing Brand building through themed events

Leveraging the benefits of event sponsorship

Corporate entertainment and key account management Public relations, publicity events and press conferences

One of the greatest advantages with using Event Marketing is the possibility toadd more content to the traditional marketing mix. Events are not only communicating

information that should lead to increased values, but rather by using events a company

can actually do something that adds value to the customer and/or other external factors.An example is that if a company is sponsoring a soccer tournament for kids, the company

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not only spread their message but also brings value to the kids that attend the tournament.

This will contribute to the brand building on an overall level.

Event Marketing has several advantages with multiple purposes, which normal

marketing media do not have. For example, when advertising in a magazine, a company

needs to decide which message they want to communicate as well as with whom theywant to communicate. For companies using differentiation as a competitive advantage,

spreading several messages in many different magazines, the result might not cover

investment. On the other hand, for companies using focus as a basic strategy, the cost forgathering information about the specific target group must match the possibility to

actually reach the right segment. Depending on how Event Marketing is used both

differentiation and focus can be achieved.

Event Marketing can also be used when focusing on specific target groups. An

example is taken from Volvo Car Corporation in Thailand where they use Event

Marketing to reach a very specific segment. Since Volvo cars are rather expensive, only

the wealthy people can afford them. Also, in Thailand it is very expensive to go toconcerts. Therefore, Volvo Car Corporation has decided to sponsor famous world artists

that give concerts in Thailand. Selected consumers can buy these tickets with a gooddiscount at the dealers. By doing this Volvo Car Corporation in Thailand build relations

with the customers and get the prospects to visit the dealers.

While marketing an event, there are a few key tactics and methods that can beemployed to ensure that the event gains the maximum response and also that event is

managed in the minimum cost possible. Event marketing has been a concept that has only

recently been pioneered in India. But, though new, the concept has taken off very wellwith the Indian consumers who are evolving rapidly.

Some of the tactics and methods are listed below. Following them can ensure a cost

effective implementation of the event marketing.

Event Marketing Hint 1: If the event is meant to market a certain product, then it is

necessary to ensure that the purchase decision-maker attends the event. It is important to

get the message across to the target audience and therefore enough research about theprofile of the attendees is important to be able to communicate effectively to them about

the product. It is important that least 50-60% of the people attending the event are targets

of the product to be promoted.

Event Marketing Hint 2: It is also important to evaluate the value-added benefits that

the venue or the trade show organizer makes available to your business. Make sure you

find out if they allow access to the attendee mailing list so you can implement a pre-mailing process in order to promote your one-day trade show special, as well as the

location of your booth.

Make sure you get participant contact information before the event as well as after. Othervalue-added benefits that can be expected from the show organizer include: being

included in participant email distributions promoting the event, as well as an

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advertisement in the event show guide.

Event Marketing Hint 3: Before the event is undertaken, the cost effectiveness ofpromoting the product through the event should be questioned by asking yourself event

qualifying questions around the who" instead of the how many

Event Marketing Hint 4: The giveaways at the event should be relevant to the business

being promoted through the event. And make sure you don't give something away for

free just for the heck of it.

Event Marketing Hint 5: The location chosen for the event is perhaps the most

important aspect. Make sure you don't purchase a cheap booth at a popular exhibition

because there are strong chances that no one will be visiting you, since your booth will betucked away hidden from all eyes. The most ideal locations in any exhibition areas are

found at the entryway to the event and near the pathway to the food stations and

restrooms.

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Viral marketing

Viral marketing is a marketing strategy that relies on individuals rather than

traditional campaigns to pass along a message to others. It usually refers to marketing onthe Internet. Viral marketing is so named because of the tendency for messages to use

"hosts" to spread themselves rapidly, like a biological virus. Viral marketing is like asneezing into a crowded room without covering your mouth.

Viral Marketing has grown and matured since then and takes on all forms. Theseinclude "suggest this site to a friend" links, emails that are passed along, Internet movies

or jokes that people share with one another, and even software that is passed from one

user to the next. In all instances an initial viral concept must be developed and published either to a website, in an email, as a mobile phone message, or through

some new or emerging distribution channel. Viral began as an e-commerce and

marketing strategy to use the Internet to promote a product or service. It now describes

any strategy that encourages individuals to pass along a marketing message to others.

Viral marketing constitutes a form of advertisement. The consumer contributes to

the advertisement's propagation by redistributing the message to his surroundings on a

voluntary basis. With the development of Internet in Canada and throughout the world as

well as with the worldwide expansion of high-speed Internet, we have witnessed this newphenomenon develop exponentially. A viral advertisement could be a video, a simple

game or just a message at the end of a web page. The minute an Internet user forwards

the clip or the link, then we say its gone viral. Usually, the video is funny orentertaining, so the user wants to pass it on to someone else thats what makes it

different from normal advertising. It is only watched by someone who wants to watch it.

The term "viral marketing" first became prominent when used to describe amarketing campaign for the e-mail service Hotmail.com. When the company launched,every outgoing message contained an advertisement for Hotmail and a link to its website

at the bottom of the e-mail. As people e-mailed their friends and colleagues, they were

also advertising the service. Recipients could simply click on the link and signthemselves up, and as they e-mailed friends from their new account, the message spread

within existing social networks and was passed along with little effort from the company.

This example demonstrates all the key elements of viral marketing. Its cost to the

advertiser is minimal. Instead, it takes advantage of existing resources by makingeveryone who uses the product an involuntary spokesperson. It exploits common

behaviors, such as sending an e-mail.

Viral marketing uses communications networks that are already in place. In the

case of Hotmail, it implies endorsement from a friend. People who received an e-mailfrom a friend using the service learned that the product works and that their friends use it.

And most importantly, viral marketing offers the ability to spread a message

exponentially faster and to more people than conventional third-party ad campaigns.Word-of-mouth publicity is a centuries-old marketing technique. Once consumers had a

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good experience with a product, they would tell their friends, who would often buy and

use that product and then tell their friends, who would often buy and use the product and

then tell other friends via this social network.

There are different types of viral marketing, all using the same fundamental

principles. Pass-along messages encourage users to send them along to others, such as e-mails with instructions to forward at the bottom or humorous video clips. Incentive-

driven messages offer rewards in exchange for providing e-mail addresses. Undercoverviral marketing presents messages in an unusual page or false news item without any

direct incitement to pass it along, in the hopes that word-of-mouth will spread the

message. Gossip or buzz marketing seeks to get people talking about something bycreating controversy.

At its simplest level, viral marketing is word of mouth marketing. Word of

mouth (WOM) marketingoften referred to as the oldest form of marketingrelies

on social ties and preexisting connections to spread a marketing message through a

community. This is something familiar to all of us. If you love your new toaster, youmight tell two friends about it. Because of such a glowing review from someone they

trust (you), they might upgrade their toaster. Then, if they are also happy with thepurchase, they might tell their friends and the viral spread continues. We see this all the

time. For products, services, big things, and small things we all participate in

WOM (both recommending and receiving) more often than you might imagine.Viral marketing operates in this way: take a message (positive review of a product,

new features on a website, Gap's new line of jeans, etc...) and spread that message

from person to person. By talking about a new product with you, this person whom you

trust is lending that product their approval and that endorsement is an incrediblypowerful marketing tool.

But in the physical world using this phenomenon for marketing purposes is

plagued by nearly insurmountable problems of scalability. Prior to the internet and the

subsequent birth of increased interconnectedness, even a popular person might only have10 friends with whom they could share a message. Given that not everyone would have

as many friends with whom to spread the message, and that some people wouldnt spread

the message at all, the word-of-mouth process is likely to fade out after having reachedonly thousands of people. But marketers don't just want to reach thousands; they want

tens of thousands, hundreds of thousands, and millions!

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Word-of-Mouth + the Internet = VIRAL:

Advantages of Viral Marketing

It is an inexpensive way for marketers to promote their goods and services. It is

essence an e-mail that is sent to individuals on a mailing list with the intent that those

recipients will forward the message to their families, friends, colleagues, andconstituents. Viral marketing can be used very inexpensively with e-mail, chat-rooms,

and bulletin boards.

It is a very cost-effective way to reach large target audiences. It adds a personal

touch with the consumer, because in many cases the e-mail or information was forwardedto them from someone they know and/or trust. This third party endorsement is convincing

and powerful because we all rely on the opinions of trusted friends and family.

Encouragement to users spreads the information and creates the potential for

exponential growth for exposure, influence and demand.

Viral marketing is generally used in a discreet, subtle, and unique way. It

entertains the recipients and grabs their attention. It encourages e-mail sharing by placing

a message in a signature file, as well as, requesting referrals.

Incentives are used as rewards to consumers for using their product or service.This has proved to be an effective inexpensive way to reach their target market.

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Disadvantages of Viral Marketing

Viral marketing appears to be an open invitation to spammers to make some quick

money by using friendship to sell their goods and services. Another perspective of viralmarketing is that it is an e-mail pyramid or e-mail pyramid selling scheme.

What is interesting is if you check out a recent viral marketing message that you

have received, the numbers identifying the person who is supposed to get the referral

credit is supposed to get the credit were rarely repeated, which indicated that somebodywas keeping the spammers under control. Sometimes you will note that there is a list of

cancelled accounts, which include some of the identification numbers of those spammed

by readers.

Consumers lack of trust is illustrated by a recent privacy survey conducted byIBM in which 78 percent of responding U.S. consumers stated they did not complete on-

line purchases because they were concerned about their personal data might be used by

the site or identity theft. A similar survey conducted by Jupiter supported the IBMfindings. Jupiter found that 58 percent of respondents worry about companies selling

their personal information to others. So how can we as marketers, especially on-line

marketers, combat these perceptions?

Marketers face unique challenges created by e-commerce. To overcome thisnegative perception, marketers must gain the trust of consumers and identify their

privacy policies explicitly on their sites. Their customers should know what the seller

plans on doing with any personal information or indirect data such as IP addresses andcookies they divulge as a result of visiting interacting Websites.

Consumers are being overwhelmed by a significant number of viral marketingmessages, campaigns and promotions. Consumers are becoming annoyed and frustrated

at the number of e-mails addressed to them from viral marketers.

Incorrect or false information can spread like wildfire. This can be very damagingto many innocent marketers as well. Deliberate misinformation can be disseminated by

competitors damaging firms reputation and goodwill.

Viral marketing requires a tremendous amount of computer literate programming

support and viral marketers assume that the consumer has the technological skills andknow how to react positively to their viral marketing program.

Viral marketing has come under criticism from consumers, privacy advocates, and

marketing pundits because of concern over unsolicited e-mails. The best campaigns,

however, use the principles of viral marketing tactfully to avoid negative reactions andensure a high pass-along rate - the number of recipients that will pass the message to

others. Much like the common cold, effective viral marketing uses people to unwittingly

transmit a message within their social network. It takes the concept of word-of-mouth andenhances it with the instant global communication afforded by the Internet.

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Common Viral Marketing Mistakes

1. Being scared of viral, and not using it: if youre scared of using viral then youprobably dont fully understand the medium.

2 Not knowing why you want a viral: dont simply do a viral because it isfashionable, or because your competitors are doing it. Ensure viral fits in well with your

wider marketing strategy.

3 Misunderstanding the viral campaign process: viral campaigns can be boiled

down to 4 core activities:

Strategy: identify objectives, how viral fits in with the wider brand activity and how toachieve goals within budget.

Creative: development of creative ideas across different media formats (e.g. game / film

/ application).

Production: turning ideas into reality. The different media take differing amounts of

time to produce, and incur differing costs. Seeding and tracking: launching a campaign, seeding it into the relevant influencer

networks and tracking its success.Most campaigns take between 4 - 8 weeks to launch from a standing start. Game-based

virals are generally lower cost than film-based virals.

4 Choosing to use viral at the last minute: you will only get the most out of a viral

if its planned early on as part of the wider campaign.

5 Not using specialist viral web hosting: sure, you can get some good PR out ofthe project was so successful the server crashed, but wouldnt you rather people saw the

creative that your budget has been spent on? Viral projects need robust web hosting tocope with traffic.

6 Thinking viral is just about the internet: when planning your campaign you

should think about other media viral can reach out into: e.g. mobile (through Bluetooth)and offline press / TV. The best viral concepts should be capable of creating a cross-

media buzz.

7 Thinking viral is global and not local: were not talking global here, what we

are talking about is the ability of viral to work on both a global and local basis. Localized

virality is much more difficult to achieve (i.e. creating a Welsh or Leeds-based

campaign), however it is possible with the right strategy and creative.

8 Average creative: virals stand or fall according to their creative. When assessing

a creative, you need to think why would someone pass that on to friends? Simplycreating a splat or platform game involving your brand mascot will not go viral.

Remember a viral marketing campaign needs to be a talking point and to lead to a water

cooler moment.

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9 Ignoring simplicity: viral marketing doesnt have to be overly complicated.

Think about using simple marketing mechanics like competitions.

10 Not thinking long term: its important to consider the fact that virals are not just

for Christmas. Whereas traditional advertising media (e.g. TV / print) are largely limited

by media space cost, once you have launched a viral campaign it can work for you in anongoing way.

11 Understanding how seeding works: seeding is about placing your viral content infront of key influencers within your target networks. If the creative is positioned

correctly, your viral will then be passed between people within these networks. The more

influential networks often now charge for you to post your campaign on their site,

however there are 1000s of other sites that dont charge. One important thing toconsider in your seeding strategy is the Russian teenage factor mentioned in point 17, as

many of the most popular seeding sites are a haven for pre-pubescent geeks and not much

else.

12 Buying a mailing list: viral is not the same as a direct email campaign. A viral

campaign is designed to work through word-of-mouth / peer-to-peer self referralmechanics. Mailing lists can be effective in as part of the seeding mix, but should always

be clearly justified (i.e. in terms of specific targeting).

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