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What is Network Marketing?

The advancement in human civilization has given new ways for the modification in marketing concept. Trade that initiated from the Stone Age has now reached the age of information technology. Development in the means of transportation has facilitated the movement of goods and services produced in one place so that they could be used by consumers elsewhere. And, the thought to effective management and distribution of the same to  consumers has given birth of the concept of Network Marketing. In the traditional marketing system, all consumers would not be distributors. Consumers were worried because those who made investment became distributors and owned a greater share of the profit while other were compelled to remain consumers only and truly had to pay higher price. Situations are unlike these days. Now, consumers can become distributors by merely making recommendations for distribution of goods and services using information technology and taking the help of online. Such business activities are possible under Network Marketing System. Thus, this system not only allows consumers to become independent just by the recommendation of products but they become distributors and gain their part of profit share as alternative income. As defined by WFDSA, "Selling of goods and services without retailing is termed as Network Marketing". In this system, consumers buy and use products manufactured by a company and make recommendations, oral advertisement and share satisfaction obtained from the use of products and services. Recommendations, oral advertisement and satisfaction sharing are done in order to increase the sale of the company's products and those who make recommendations get commission and bonus. It is also called "Dual Benefit System". This system is termed as Network Marketing System.

Although Network Marketing System has many advantages, it is equally important from the part of the government to be cautious and be well informed about illegal business activities in the name of Network Marketing System. It is imperative to monitor and explore the benefits that a country can get from the establishment of such business activities. It is the prime responsibility of the nation to formulate plans and policies to meet the planned national development objectives in the right track. It is also important to analyze the possibilities of industrial activities that meet the national economic goals.

The concept of Network Marketing System has emerged to replace the traditional marketing system. Direct sale and business activity through recommendation on the basis of human network is termed as Network Marketing System. Distribution of goods and services by customers without the linkage with producers, whole sellers, retailers and smaller outlets is Network Marketing System. In other words, the establishment of direct business dealings between producers and customers to create a sound consumer community is Network Marketing System. The recommendations made by customers to others about the usefulness of the products and economic gains from the company's manufacturing policies help in the extension of networks through Network Business Marketing.

When a nation can not adopt precise economic policy it cannot shoulder the burden of economic deterioration, and so, the rift between the rich and the poor widens. The acute unemployment problem, the quest for better opportunities and the desire to achieve better economic stability have given way to ordinary citizens to seek for alternative means. It has been for some time that the number of people who are involved in Network Business in Nepal is increasing. And thus, it is evident that such people are attracted to Network Marketing System.

The situation of Nepal is such that her industrial activities can't comply with the ever changing demands and they are at the brink of closure and escape due to the country's instable political condition, fragile economy, interference from foreign business activities, keen competitive market etc. Capitalists begin to bring in foreign products as agents. Open economy and economic liberalization policy adopted by developed countries towards developing and underdeveloped countries to control and monitor the expansion of market has not spared Nepal. Not to mention, the changes in the taste among Nepalese consumers for the use of foreign products have remarkably increased. It would not be wrong to speculate that such activities have given birth to Network Marketing System in Nepal. If the country can take advantage of this system, it is assured that the country's economic aspects will strengthen. Network Marketing System has proved as the backbone of the 21st century and it is high time that Nepal should accept this system to make her companies competent to battle in the international market.