Marketing is such a broad topic to cover in today's world that there is absolute confusion between the types / form of Marketing Strategy that is adopted by the corporates. It is interesting as well as annoying to see masses resorting to common definitions for the various types of Marketing. Interesting because they are naive to understand the difference and annoying because it may hurt the business sentiments.
It therefore is very important and critical for the Marketers to define the boundaries and explain the difference. They need to be savy about taking this training and awareness to the masses in one or other form. It is important that they educate the masses between the difference and remove that commonality from the definition perspective.
With this article, I am trying to instigate that process to help marketers create that awareness drive for the masses to understand the difference between the most common Marketing Strategies that corporates use: viz - Reseller Marketing; Direct Marketing; Multi-Level Marketing; Pyramid Marketing. The terms used are some of the commonly misunderstood aspects of marketing.
Reseller Marketing: The form of Marketing that follows a Wholesale to Retail Chain of Command that can be a Multi-Level or Pyramid from the perspective of Geographical Territories as may be defined and distributed by the Corporate. This type of Marketing Strategies require large quantities to be ordered, processed, stored and exchange multiple hands before reaching the final consumer. The reason I have categorized this into Multi-level / Pyramid marketing because in this right from the Origin of the Product to Final Consumer the product moves from following layers -
a.) Company
b.) Distributor
c.) Wholesaler
d.) Retailer
Now, it is important to note that Right from the Company to Retailer, it forms Multiple Layers as well as Pyramid, with the Company making the most margin and Retailer making the least margin. The Money and product have reverse path where product moves from Company to Distributor to Wholesaler to Retailer to Consumer, whereas Money movers in reverse form. However, be cautious that there is a chance of Duplicate products getting introduced in the lot with negative customer sentiments hurting the company due to quality issues in the duplicate products.
Direct Marketing: This is probably considered as the unconventional marketing route as in this case the company cuts out every and every layer between them and the consumer. Certainly, the profit maximization works for the company and the company is able to pass on that cost arbitrage to the Consumer either directly or indirectly. The way this marketing initiative is organized and used is pretty subjective to perception, but the corporates who have actually implemented this in near perfect form, have made fortune. No doubts, the ghost of being Unconventional has always haunted this form of Marketing and the way the Cost arbitrage has been passed on to the consumers have been questioned multiple times. For instance, the referral bonuses paid for successful conversions have often been referenced with negative marketing gimmicks. But one thing needs to be noted for Direct Marketing - You could be a Reseller or Reference Provider, but the Company ships product directly to the consumer with company liability for any order processing/storage/shipment/payment etc. Unlike Direct Marketing, the money doesn't flow from consumer to retailer to wholesaler to distributor to company. Chances of Duplicity and Poor Quality is ruled out to a large extent with a Direct channel between the company and the consumer. Direct Marketing's success is more from the enablement to consume and sell rather than hire/recruit resellers
Multi-Level-Marketing: This could be either Reseller Marketing or Direct Marketing, but the thin line that separates it from the Direct Marketing initiative is - In Direct Marketing there is no concept of Recruitment for the downline reseller. There is a choice of being a Reseller based on one's interest and wish to succeed; a Direct Marketer would certainly not want to reduce one's margin by recruiting a downline reseller. However, in Multi-Level-Marketing there indeed is a Recruitment aspect hidden somewhere in the overall business theme. Recruit and build a team to expand the business. This turns out to be the similar aspect as the Reseller Marketing with top level running the whole chain as his kingdom. Success at the top depends on how many have been recruited by the guys down below. Sales is an after-effect.
Pyramid Marketing: I tried to put my mind behind this aspect, but haven't really been able to understand this from the core marketing perspective. What I have seen in this case of marketing is Top is heavy with Profits and the lower ranks are heavier with the overall sales numbers. From where I see this one, how-much-ever one would sell, the most benefit would be for the guy at the top. Not something that see a long term success and not something where the downstream businesses stay for a longer term.
