Monday, December 18, 2006
Wednesday, November 09, 2005
Franchising
Redirected from Wikipedia, the free encyclopedia.
"Franchising (from the French for free) is a method of doing business wherein a franchisor licenses trademarks and methods of doing business to a franchisee in exchange for a recurring royalty fee.
According to Financial Times, if sales by US franchise businesses were translated into national product, they would qualify as the 7th largest economy in the world."
Overview
"The parties involved typically enter a franchise agreement. This is an arrangement whereby someone with a good idea for a business (the franchisor), sells the rights to use the businesses name and sell a product or service to someone else (the franchisee), in a given territory. The agreement is usually arranged by contract.
A franchise agreement will usually specify the given territory the franchisee can use, as well as the extent to which the franchisee will be supported by the franchisor, such as through training and marketing campaigns.
The term "franchising" is used to describe a wide variety of business relationships which may or may not fall into the legal definition provided above. For example, a vending machine operator may receive a franchise for a particular kind of vending machine, including a trademark and a royalty, but no method of doing business."
Overview
"The parties involved typically enter a franchise agreement. This is an arrangement whereby someone with a good idea for a business (the franchisor), sells the rights to use the businesses name and sell a product or service to someone else (the franchisee), in a given territory. The agreement is usually arranged by contract.
A franchise agreement will usually specify the given territory the franchisee can use, as well as the extent to which the franchisee will be supported by the franchisor, such as through training and marketing campaigns.
The term "franchising" is used to describe a wide variety of business relationships which may or may not fall into the legal definition provided above. For example, a vending machine operator may receive a franchise for a particular kind of vending machine, including a trademark and a royalty, but no method of doing business."
Advantages
"As practiced in retailing, franchising offers franchisees the advantage of starting up a new business quickly based on a proven trademark and formula of doing business, as opposed to having to build a new business and brand from scratch (often in the face of aggressive competition from franchise operators).
As long as their brand and formula are carefully designed and properly executed, franchisors are able to expand their brand very rapidly across countries and continents, and can reap enormous profits in the process, while the franchisees do all the hard work of dealing with customers face-to-face. See customer service. Additionally, the franchisor is able to build a captive distribution network, with no or very little financial commitment."
"For some consumers, having franchises offer a consistent product or service makes life easier. They know what to expect when entering a franchised establishment."
Disadvantages
"For franchisees, the main disadvantage of franchising is a loss of control. While they gain the use of a system, trademarks, assistance, training, and marketing, the franchisee is required to follow the system and get approval of changes with the franchisor.
In response to the soaring popularity of franchising, an increasing number of communities are taking steps to limit these chain businesses and reduce displacement of independent businesses through limits on "formula businesses." "
"Another problem is that the franchisor/franchisee relationship can easily give rise to litigation if either side is incompetent (or just not acting in good faith). For example, an incompetent franchisee can easily damage the public's goodwill towards the franchisor's brand by providing inferior goods and services, and an incompetent franchisor can destroy its franchisees by failing to promote the brand properly or by squeezing them too aggressively for profits."
"Because litigation is expensive, the majority of franchisors have inserted mandatory arbitration clauses into their agreements with their franchisees. Since 1980, the U.S. Supreme Court has dealt with cases involving direct franchisor/franchisee conflicts at least three times, and two of those cases involved a franchisee who was resisting the franchisor's motion to compel arbitration. Both of the latter cases involved large famous restaurant chains (Subway and Burger King)."
Legal aspects
"In the United States, franchising falls under the jurisdiction of a number of state and federal laws. Contrary to what might be expected, there is no federal registry of franchising or any federal filing requirements for information, but franchisors are required by the Federal Trade Commission to have a Uniform Franchise Offering Circular to disclose potential franchisees about their purchase. Instead, states are the primary collectors of data on franchising companies, and enforce laws and regulations regarding their spread.
In Russia, under ch. 54 of the Civil Code (passed 1996), franchise agreements are invalid unless written and registered, and franchisors cannot set standards or limits on the prices of the franchisee’s goods. Enforcement of laws and resolution of contractual disputes is a problem: Dunkin Donuts chose to terminate its contract with Russian franchisees that were selling vodka and meat patties contrary to their contracts, rather than pursue legal remedies."
History
"Franchising dates back to at least the 1850s. One early example resulted in the characteristic look of historic hotels (bars) in New South Wales, with franchising agreements between hotels and breweries. Early American examples include the telegraph system which was operated by various railroad companies but controlled by Western Union, and exclusive agreements between automobile manufacturers and operators of local dealerships."
"Modern franchising came to prominence with the rise of franchise-based restaurants. This trend started initially in the 1930s with traditional sit-down restaurants like the early Howard Johnson's, and then exploded in 1950s with the development of fast food chains, of which McDonalds has been the most successful worldwide. Many retail sectors, particularly in the United States, are now dominated by franchising to the point where independently-run operations are the exception rather than the rule."
"Franchising (from the French for free) is a method of doing business wherein a franchisor licenses trademarks and methods of doing business to a franchisee in exchange for a recurring royalty fee.
According to Financial Times, if sales by US franchise businesses were translated into national product, they would qualify as the 7th largest economy in the world."
Overview
"The parties involved typically enter a franchise agreement. This is an arrangement whereby someone with a good idea for a business (the franchisor), sells the rights to use the businesses name and sell a product or service to someone else (the franchisee), in a given territory. The agreement is usually arranged by contract.
A franchise agreement will usually specify the given territory the franchisee can use, as well as the extent to which the franchisee will be supported by the franchisor, such as through training and marketing campaigns.
The term "franchising" is used to describe a wide variety of business relationships which may or may not fall into the legal definition provided above. For example, a vending machine operator may receive a franchise for a particular kind of vending machine, including a trademark and a royalty, but no method of doing business."
Overview
"The parties involved typically enter a franchise agreement. This is an arrangement whereby someone with a good idea for a business (the franchisor), sells the rights to use the businesses name and sell a product or service to someone else (the franchisee), in a given territory. The agreement is usually arranged by contract.
A franchise agreement will usually specify the given territory the franchisee can use, as well as the extent to which the franchisee will be supported by the franchisor, such as through training and marketing campaigns.
The term "franchising" is used to describe a wide variety of business relationships which may or may not fall into the legal definition provided above. For example, a vending machine operator may receive a franchise for a particular kind of vending machine, including a trademark and a royalty, but no method of doing business."
Advantages
"As practiced in retailing, franchising offers franchisees the advantage of starting up a new business quickly based on a proven trademark and formula of doing business, as opposed to having to build a new business and brand from scratch (often in the face of aggressive competition from franchise operators).
As long as their brand and formula are carefully designed and properly executed, franchisors are able to expand their brand very rapidly across countries and continents, and can reap enormous profits in the process, while the franchisees do all the hard work of dealing with customers face-to-face. See customer service. Additionally, the franchisor is able to build a captive distribution network, with no or very little financial commitment."
"For some consumers, having franchises offer a consistent product or service makes life easier. They know what to expect when entering a franchised establishment."
Disadvantages
"For franchisees, the main disadvantage of franchising is a loss of control. While they gain the use of a system, trademarks, assistance, training, and marketing, the franchisee is required to follow the system and get approval of changes with the franchisor.
In response to the soaring popularity of franchising, an increasing number of communities are taking steps to limit these chain businesses and reduce displacement of independent businesses through limits on "formula businesses." "
"Another problem is that the franchisor/franchisee relationship can easily give rise to litigation if either side is incompetent (or just not acting in good faith). For example, an incompetent franchisee can easily damage the public's goodwill towards the franchisor's brand by providing inferior goods and services, and an incompetent franchisor can destroy its franchisees by failing to promote the brand properly or by squeezing them too aggressively for profits."
"Because litigation is expensive, the majority of franchisors have inserted mandatory arbitration clauses into their agreements with their franchisees. Since 1980, the U.S. Supreme Court has dealt with cases involving direct franchisor/franchisee conflicts at least three times, and two of those cases involved a franchisee who was resisting the franchisor's motion to compel arbitration. Both of the latter cases involved large famous restaurant chains (Subway and Burger King)."
Legal aspects
"In the United States, franchising falls under the jurisdiction of a number of state and federal laws. Contrary to what might be expected, there is no federal registry of franchising or any federal filing requirements for information, but franchisors are required by the Federal Trade Commission to have a Uniform Franchise Offering Circular to disclose potential franchisees about their purchase. Instead, states are the primary collectors of data on franchising companies, and enforce laws and regulations regarding their spread.
In Russia, under ch. 54 of the Civil Code (passed 1996), franchise agreements are invalid unless written and registered, and franchisors cannot set standards or limits on the prices of the franchisee’s goods. Enforcement of laws and resolution of contractual disputes is a problem: Dunkin Donuts chose to terminate its contract with Russian franchisees that were selling vodka and meat patties contrary to their contracts, rather than pursue legal remedies."
History
"Franchising dates back to at least the 1850s. One early example resulted in the characteristic look of historic hotels (bars) in New South Wales, with franchising agreements between hotels and breweries. Early American examples include the telegraph system which was operated by various railroad companies but controlled by Western Union, and exclusive agreements between automobile manufacturers and operators of local dealerships."
"Modern franchising came to prominence with the rise of franchise-based restaurants. This trend started initially in the 1930s with traditional sit-down restaurants like the early Howard Johnson's, and then exploded in 1950s with the development of fast food chains, of which McDonalds has been the most successful worldwide. Many retail sectors, particularly in the United States, are now dominated by franchising to the point where independently-run operations are the exception rather than the rule."
Direct Marketing
"Direct marketing is a form of marketing that attempts to send its messages directly to consumers, using "addressable" media, such as mail. Therefore, direct marketing differs from regular advertising in that it does not place its messages on a third party medium, or in the agora, such as a billboard or a radio commercial would. Instead, the marketing of the service or commodity is addressed directly to the consumer.
Direct marketing is attractive to many marketers, because in many cases its effectiveness can be measured directly. For example, if a marketer sends out one million solicitations by mail, and ten thousand customers respond to the promotion, the marketer can say with some confidence that the campaign led directly to the responses. By contrast, measurement of other media must often be indirect, since there is no direct response from a consumer. Measurement of results, a fundamental element in successful direct marketing, is explored in greater detail elsewhere in this article."
"While many marketers like this form of marketing, it is sometimes criticized for generating unwanted solicitations, which are sometimes referred to as junk mail and spam."
Direct marketing channels
"Any medium that can be used to deliver a communication to a customer can be employed in direct marketing. Direct marketers often refer to such media as "addressable" to distinguish them from "mass" media, such as television, radio, and print."
Direct mail
"Probably the most commonly used medium for direct marketing is direct mail, in which marketing communications are sent to customers using the postal service. In many developed countries, direct mail represents such a significant amount of the total volume of mail that special rate classes have been established. In the United States, for example, there are bulk mail rates that enable marketers to send mail at rates that are lower than regular first-class rates. In order to qualify for these rates, marketers must format and sort the mail in particular ways.
Direct mail permits the marketer to design marketing pieces in many different formats. Indeed, there is an entire subsector of the industry that produces specialized papers, printing, envelopes, and other materials for direct mail marketing. Some of the common formats, include:
Catalogs: Multi-page, bound promotions, usually featuring a selection of products for sale.
Self-mailers: Pieces usually created from a single sheet that has been printed and folded. For instance, a common practice is to print a page-length advertisement or promotion on one side of a sheet of paper. This is then folded in half or in thirds, with the promotional message to the inside. The two outside surfaces are then used for the address of the recipient and some "teaser" message designed to persuade the customer to open the piece. "
"Postcards: Simple, two-sided pieces, with a promotional message on one side and the customer's address on the other. "
"Envelope mailers: Mailings in which the marketing material is placed inside an envelope. This permits the marketer to include more than one insert. When more than one advertiser is included, this is often called "marriage mail." Valpak is one of the largest examples of a marriage mail service.
Snap Mailers: Mailers that fold and seal with pressure. The sides detach and the mailer is opened to reveal the message. "
"Dimensional Mailers: Mailers that have some dimension to them, like a small box.
Intelligent Documents: Programmable mail pieces built dynamically from database information, and printed digitally for faster production. "
Telemarketing
"In telemarketing, marketers contact the customer via telephone calls. One of the original attractions of telemarketing was the speed with which marketing campaigns could be executed. While direct mail is cost-effective, it is relatively slow, since marketing pieces must be shipped by mail.
Telemarketing also lends itself well to products and services that are complex to buy, such as switching to another telephone company or purchasing a financial service. Certain types of transactions may also be subject to government regulation; telemarketing permits a company representative to walk the customer through the purchase, while ensuring compliance with laws."
"While not as varied as direct mail, telemarketing can take several forms."
"Outbound telemarketing: Calls made to customers. By using autodialers and predictive dialers, call centers can call a large number of customers. "
"Inbound telemarketing: Promotions and offers made when a customer calls the center. "
"Voice messages: A number of firms employ special technology to call customers' answering machines.
In the United States, this medium became increasingly popular in the 1990s, as telephone deregulation and competition among telecommunications companies led to decreased costs."
E-mail
"Email has proven to be a popular medium for direct marketers, in large part because of its relatively low cost, but also because customer responses can be generated rapidly. When sent to customers who have given their permission to receive such marketing material, email marketing can be an effective communication vehicle. However, when performed without permission, or used to send inappropriate messages, the result is e-mail spam, which most Internet users and administrators consider an abuse of network resources and a nuisance. Spam is prohibited by the fair-use policies of almost all Internet service providers and increasingly is the subject of laws and regulations aimed at curbing the practice."
Emerging channels
"Two new media have received attention from analysts and industry promoters as potential channels for delivering direct marketing. In both cases, their use has not yet become as widespread as established channels, and both still have technological hurdles to overcome. And the longer-term question of whether they will be prone to such abuses as spam may not be answered until wider adoption of the media by marketers."
"Digital cable - For many years, cable television has been promoted as an emerging addressable medium, although no large-scale implementation that would permit highly targeted direct marketing has been successful. Digital cable is being held up as the technology solution that will make the delivery of personalized marketing content via television possible. "
"Wireless - Much as with cable, wireless service providers have promised delivery of direct marketing to cell phones and other wireless devices, but early efforts were sporadic. More recently, and particularly in Europe where consumer adoption has been higher than in the United States, marketers have begun seeing success at delivering marketing communications to wireless devices. To date, much of this marketing was constrained to text-based messages sent using the Short message service, or SMS, but the roll-out of 3G technology holds the promise of delivering richer content, and therefore gaining more interest from marketers.
Direct marketing typically relies heavily on computer databases and is therefore an example of database marketing. Most direct marketing is done by companies whose only function is to manage and perform direct advertising, rather than by the advertised entity itself. The services provided by these companies includes the maintenance of mailing lists and the production of the direct mail pieces themselves in a factory called a lettershop."
"Direct marketers have been long-time customers of computer databases, and they often have very sophisticated criteria of inclusion and exclusion in their mailing lists. Recently, political campaigns have begun to appropriate the methods of direct marketers (or to employ direct marketing firms) to raise money and create activism."
Direct response
Main article : Direct response marketing
"A related form of marketing is direct response marketing. In direct marketing, the marketer contacts the potential customer directly, but in direct response marketing the customer responds to the marketer directly. Its most common form today is infomercials. They try to achieve a direct response via television presentations. Viewers respond via telephone or internet, credit card in hand. Other media, such as magazines, newspapers, radio, and e-mail can be used to elicit the response, but they tend to achieve lower response rates than television."
"Order forms or coupons in magazines and newspapers are another type of direct response marketing. Mail order is a term, seldom used today, that describes a form of direct response in which customers respond by mailing a completed order form to the marketer. Mail order is slow and response rates are low. It has been eclipsed by toll-free telephone numbers and the internet."
Legislation
"In the United States, the United States Postal Service maintains that direct marketers pay the majority of the costs of mail. Bulk mail thereby subsidizes low cost stamps for letter, magazine, and book mailing. No such compensatory relationship exists with e-mail or faxes, which require the receiver to pay for bandwidth, storage space, or paper and toner, and some of the solutions to e-mail spam in the United States have involved instituting a freight cost on mass e-mail to make it productive. Such solutions have not been universally lauded, as they leave the recipients of unsolicited e-mail with the problem of storage and bandwidth consumption and would increase costs to companies that send only solicited mass mailings.
The United States telemarketing industry was affected by a national do-not-call list, which went into effect on October 1, 2003. Under the law, it is illegal for telemarketers to call anyone who has registered themself on the list. People can register for the list on the web at donotcall.gov. After the list had operated for one year, over 62 million people had signed up [1]. The telemarketing industry opposed the creation of the list, but most telemarketers have complied with the law and refrained from calling people who are on the list."
The above written is redirected from wikipedia.
Direct marketing is attractive to many marketers, because in many cases its effectiveness can be measured directly. For example, if a marketer sends out one million solicitations by mail, and ten thousand customers respond to the promotion, the marketer can say with some confidence that the campaign led directly to the responses. By contrast, measurement of other media must often be indirect, since there is no direct response from a consumer. Measurement of results, a fundamental element in successful direct marketing, is explored in greater detail elsewhere in this article."
"While many marketers like this form of marketing, it is sometimes criticized for generating unwanted solicitations, which are sometimes referred to as junk mail and spam."
Direct marketing channels
"Any medium that can be used to deliver a communication to a customer can be employed in direct marketing. Direct marketers often refer to such media as "addressable" to distinguish them from "mass" media, such as television, radio, and print."
Direct mail
"Probably the most commonly used medium for direct marketing is direct mail, in which marketing communications are sent to customers using the postal service. In many developed countries, direct mail represents such a significant amount of the total volume of mail that special rate classes have been established. In the United States, for example, there are bulk mail rates that enable marketers to send mail at rates that are lower than regular first-class rates. In order to qualify for these rates, marketers must format and sort the mail in particular ways.
Direct mail permits the marketer to design marketing pieces in many different formats. Indeed, there is an entire subsector of the industry that produces specialized papers, printing, envelopes, and other materials for direct mail marketing. Some of the common formats, include:
Catalogs: Multi-page, bound promotions, usually featuring a selection of products for sale.
Self-mailers: Pieces usually created from a single sheet that has been printed and folded. For instance, a common practice is to print a page-length advertisement or promotion on one side of a sheet of paper. This is then folded in half or in thirds, with the promotional message to the inside. The two outside surfaces are then used for the address of the recipient and some "teaser" message designed to persuade the customer to open the piece. "
"Postcards: Simple, two-sided pieces, with a promotional message on one side and the customer's address on the other. "
"Envelope mailers: Mailings in which the marketing material is placed inside an envelope. This permits the marketer to include more than one insert. When more than one advertiser is included, this is often called "marriage mail." Valpak is one of the largest examples of a marriage mail service.
Snap Mailers: Mailers that fold and seal with pressure. The sides detach and the mailer is opened to reveal the message. "
"Dimensional Mailers: Mailers that have some dimension to them, like a small box.
Intelligent Documents: Programmable mail pieces built dynamically from database information, and printed digitally for faster production. "
Telemarketing
"In telemarketing, marketers contact the customer via telephone calls. One of the original attractions of telemarketing was the speed with which marketing campaigns could be executed. While direct mail is cost-effective, it is relatively slow, since marketing pieces must be shipped by mail.
Telemarketing also lends itself well to products and services that are complex to buy, such as switching to another telephone company or purchasing a financial service. Certain types of transactions may also be subject to government regulation; telemarketing permits a company representative to walk the customer through the purchase, while ensuring compliance with laws."
"While not as varied as direct mail, telemarketing can take several forms."
"Outbound telemarketing: Calls made to customers. By using autodialers and predictive dialers, call centers can call a large number of customers. "
"Inbound telemarketing: Promotions and offers made when a customer calls the center. "
"Voice messages: A number of firms employ special technology to call customers' answering machines.
In the United States, this medium became increasingly popular in the 1990s, as telephone deregulation and competition among telecommunications companies led to decreased costs."
"Email has proven to be a popular medium for direct marketers, in large part because of its relatively low cost, but also because customer responses can be generated rapidly. When sent to customers who have given their permission to receive such marketing material, email marketing can be an effective communication vehicle. However, when performed without permission, or used to send inappropriate messages, the result is e-mail spam, which most Internet users and administrators consider an abuse of network resources and a nuisance. Spam is prohibited by the fair-use policies of almost all Internet service providers and increasingly is the subject of laws and regulations aimed at curbing the practice."
Emerging channels
"Two new media have received attention from analysts and industry promoters as potential channels for delivering direct marketing. In both cases, their use has not yet become as widespread as established channels, and both still have technological hurdles to overcome. And the longer-term question of whether they will be prone to such abuses as spam may not be answered until wider adoption of the media by marketers."
"Digital cable - For many years, cable television has been promoted as an emerging addressable medium, although no large-scale implementation that would permit highly targeted direct marketing has been successful. Digital cable is being held up as the technology solution that will make the delivery of personalized marketing content via television possible. "
"Wireless - Much as with cable, wireless service providers have promised delivery of direct marketing to cell phones and other wireless devices, but early efforts were sporadic. More recently, and particularly in Europe where consumer adoption has been higher than in the United States, marketers have begun seeing success at delivering marketing communications to wireless devices. To date, much of this marketing was constrained to text-based messages sent using the Short message service, or SMS, but the roll-out of 3G technology holds the promise of delivering richer content, and therefore gaining more interest from marketers.
Direct marketing typically relies heavily on computer databases and is therefore an example of database marketing. Most direct marketing is done by companies whose only function is to manage and perform direct advertising, rather than by the advertised entity itself. The services provided by these companies includes the maintenance of mailing lists and the production of the direct mail pieces themselves in a factory called a lettershop."
"Direct marketers have been long-time customers of computer databases, and they often have very sophisticated criteria of inclusion and exclusion in their mailing lists. Recently, political campaigns have begun to appropriate the methods of direct marketers (or to employ direct marketing firms) to raise money and create activism."
Direct response
Main article : Direct response marketing
"A related form of marketing is direct response marketing. In direct marketing, the marketer contacts the potential customer directly, but in direct response marketing the customer responds to the marketer directly. Its most common form today is infomercials. They try to achieve a direct response via television presentations. Viewers respond via telephone or internet, credit card in hand. Other media, such as magazines, newspapers, radio, and e-mail can be used to elicit the response, but they tend to achieve lower response rates than television."
"Order forms or coupons in magazines and newspapers are another type of direct response marketing. Mail order is a term, seldom used today, that describes a form of direct response in which customers respond by mailing a completed order form to the marketer. Mail order is slow and response rates are low. It has been eclipsed by toll-free telephone numbers and the internet."
Legislation
"In the United States, the United States Postal Service maintains that direct marketers pay the majority of the costs of mail. Bulk mail thereby subsidizes low cost stamps for letter, magazine, and book mailing. No such compensatory relationship exists with e-mail or faxes, which require the receiver to pay for bandwidth, storage space, or paper and toner, and some of the solutions to e-mail spam in the United States have involved instituting a freight cost on mass e-mail to make it productive. Such solutions have not been universally lauded, as they leave the recipients of unsolicited e-mail with the problem of storage and bandwidth consumption and would increase costs to companies that send only solicited mass mailings.
The United States telemarketing industry was affected by a national do-not-call list, which went into effect on October 1, 2003. Under the law, it is illegal for telemarketers to call anyone who has registered themself on the list. People can register for the list on the web at donotcall.gov. After the list had operated for one year, over 62 million people had signed up [1]. The telemarketing industry opposed the creation of the list, but most telemarketers have complied with the law and refrained from calling people who are on the list."
The above written is redirected from wikipedia.
Pyramid scheme
"A pyramid scheme is a non-sustainable business model that involves the exchange of money primarily for enrolling other people into the scheme, usually without any product or service being delivered. Pyramid schemes have been in existence for at least a century. In addition, other methods of conducting business known as multi-level marketing (MLM) and as "matrix schemes" often closely resemble pyramid schemes (although unlike pyramid schemes, which are almost always frauds, MLM and matrix schemes are in many cases regarded — at least legally — as legitimate business methods)."
"Most pyramid schemes are attempts to confuse potential consumers into complicated but convincingly fool-proof money making scams. The essential idea behind each scam is that the individual only makes one payment, but somehow they are promised to receive exponential benefits from other people as a reward. A common example might be that a victim is enticed with an offer that, for a fee, allows them to sell the same offer to other people. Each sale includes a fee to the original seller. Clearly, the fundamental flaw is that there is no end benefit; the money simply travels up the chain, and only the originator wins in swindling his followers. Furthermore, the people in the worst situation are the ones at the bottom of the pyramid: those who subscribed to the plan, but were not able to accrue any followers themselves. To embellish the act, most such scams will have fake referrals, testimonials, and information."
History
"Pyramid schemes come in many variations. The earliest schemes involved a chain letter distributed with a list of 5–10 names and addresses on it. The recipient was told to send a specified small sum of money (typically $1 to $5) to the first person of the list. The recipient was then to remove this first person from the list, move all of the remaining names up one place, and to add his own name and maybe more names to the bottom of the list. Then he was to copy the letter with new name list to the individuals listed. And hopefully this procedure was to be repeated and pass on and then he would be moved to the top of the list and receive money from the others."
"Success in such ventures rested solely on the exponential growth of new members. Hence the name "pyramid", indicating the increasing population at each successive layer. Unfortunately, simple analysis will reveal that within a few iterations the entire global population would need to subscribe in order for pre-existing members to earn any income. This is impossible, and the mathematics of such schemes guarantees that the vast majority of people who participate in these schemes will lose their invested money.
Very large scale pyramid schemes were initiated in post-Soviet states, where people had little familiarity with stock market and were led to believe that returns in excess of 1000% are feasible. Particularly notorious were the MMM Pyramid scheme in Russia and pyramid schemes in Albania."
Legal status
"Although pyramid schemes have been declared illegal in many countries, they still persist in various forms. While schemes simply involving the blatant exchange of money have generally disappeared, many schemes persist that purportedly "sell" a product to mask the primary intention of simply enrolling new members; these are sometimes called "matrix schemes" or "multi-level marketing"."
Identifying features
"The distinguishing feature of these schemes is the fact that the product being sold has little to no intrinsic value of its own or is sold at a price out of line with its fair market value. Examples include "products" such as brochures, cassette tapes or systems which merely explain to the purchaser how to enroll new members, or the purchasing of name and address lists of future prospects. The costs for these "products" can range up into the hundreds or thousands of dollars. A common Internet version involves the sale of documents entitled "How to make $1 Million on the Internet" and the like. Another example is a product sold at higher than ordinary retail price for the same or similar products elsewhere. The result is that only a person enrolled in the scheme would buy it and the only way to make money is to recruit more and more people below that person also paying more than they should. This extra amount paid for the product is then used to fund the pyramid scheme. In effect, the scheme ends up paying for new recruits through their overpriced purchases rather than an initial "signup" fee."
The key identifiers of a pyramid scheme are:
A highly excited sales pitch
"Little to no information offered about the company unless an investor purchases the products and becomes an IBO. "
"Vaguely phrased promises of limitless income potential "
"No product, or a product being sold at a price ridiculously in excess of its real market value.
An income stream that chiefly depends on the commissions earned by enrolling new members or the purchase by members of products for their own use rather than sales to customers who are not participants in the scheme. "
"A tendency for only the early investors/joiners to make any real income. "
"Assuring that it is perfectly legal to participate. "
"The key distinction between these schemes and legitimate MLM businesses is that in the latter cases a meaningful income can be earned solely from the sales of the associated product or service to customers who are not themselves enrolled in the scheme. While some of these MLM businesses also offer commissions from recruiting new members, this is not essential to successful operation of the business by any individual member. Nor does the absence of payment for recruiting mean that an MLM is not a cover for a pyramid scheme. The distinguishing characteristic is whether the money in the scheme comes primarily from the participants themselves (pyramid scheme) or from sales of products or services to customers who aren't participants in the scheme (legitimate MLM)."
Is the US Social Security system a pyramid scheme?
Economist Thomas Sowell argues:[1]
"Social Security has been a pyramid scheme from the beginning. Those who paid in first received money from those who paid in second — and so on, generation after generation. This was great so long as the small generation when Social Security began was being supported by larger generations resulting from the baby boom. "
"The issue is discussed in the section Are national retirement programs Ponzi schemes? of the Ponzi scheme article."
Financial pyramids in post-communist states
"After the collapse of the Soviet Union and communist states in East Europe, population in many of these states fell victims to numerous financial pyramid schemes. It is safe to assume that a significant factor was lack of capitalist financial experience of population that was exposed primarily to socialism before.
Notable examples are Albania (see Sali Berisha article), Romania (Caritas - in fact it is considered a Ponzi scheme) and MMM pyramid in Russia."
The above passage is redirected from wikipedia.
"Most pyramid schemes are attempts to confuse potential consumers into complicated but convincingly fool-proof money making scams. The essential idea behind each scam is that the individual only makes one payment, but somehow they are promised to receive exponential benefits from other people as a reward. A common example might be that a victim is enticed with an offer that, for a fee, allows them to sell the same offer to other people. Each sale includes a fee to the original seller. Clearly, the fundamental flaw is that there is no end benefit; the money simply travels up the chain, and only the originator wins in swindling his followers. Furthermore, the people in the worst situation are the ones at the bottom of the pyramid: those who subscribed to the plan, but were not able to accrue any followers themselves. To embellish the act, most such scams will have fake referrals, testimonials, and information."
History
"Pyramid schemes come in many variations. The earliest schemes involved a chain letter distributed with a list of 5–10 names and addresses on it. The recipient was told to send a specified small sum of money (typically $1 to $5) to the first person of the list. The recipient was then to remove this first person from the list, move all of the remaining names up one place, and to add his own name and maybe more names to the bottom of the list. Then he was to copy the letter with new name list to the individuals listed. And hopefully this procedure was to be repeated and pass on and then he would be moved to the top of the list and receive money from the others."
"Success in such ventures rested solely on the exponential growth of new members. Hence the name "pyramid", indicating the increasing population at each successive layer. Unfortunately, simple analysis will reveal that within a few iterations the entire global population would need to subscribe in order for pre-existing members to earn any income. This is impossible, and the mathematics of such schemes guarantees that the vast majority of people who participate in these schemes will lose their invested money.
Very large scale pyramid schemes were initiated in post-Soviet states, where people had little familiarity with stock market and were led to believe that returns in excess of 1000% are feasible. Particularly notorious were the MMM Pyramid scheme in Russia and pyramid schemes in Albania."
Legal status
"Although pyramid schemes have been declared illegal in many countries, they still persist in various forms. While schemes simply involving the blatant exchange of money have generally disappeared, many schemes persist that purportedly "sell" a product to mask the primary intention of simply enrolling new members; these are sometimes called "matrix schemes" or "multi-level marketing"."
Identifying features
"The distinguishing feature of these schemes is the fact that the product being sold has little to no intrinsic value of its own or is sold at a price out of line with its fair market value. Examples include "products" such as brochures, cassette tapes or systems which merely explain to the purchaser how to enroll new members, or the purchasing of name and address lists of future prospects. The costs for these "products" can range up into the hundreds or thousands of dollars. A common Internet version involves the sale of documents entitled "How to make $1 Million on the Internet" and the like. Another example is a product sold at higher than ordinary retail price for the same or similar products elsewhere. The result is that only a person enrolled in the scheme would buy it and the only way to make money is to recruit more and more people below that person also paying more than they should. This extra amount paid for the product is then used to fund the pyramid scheme. In effect, the scheme ends up paying for new recruits through their overpriced purchases rather than an initial "signup" fee."
The key identifiers of a pyramid scheme are:
A highly excited sales pitch
"Little to no information offered about the company unless an investor purchases the products and becomes an IBO. "
"Vaguely phrased promises of limitless income potential "
"No product, or a product being sold at a price ridiculously in excess of its real market value.
An income stream that chiefly depends on the commissions earned by enrolling new members or the purchase by members of products for their own use rather than sales to customers who are not participants in the scheme. "
"A tendency for only the early investors/joiners to make any real income. "
"Assuring that it is perfectly legal to participate. "
"The key distinction between these schemes and legitimate MLM businesses is that in the latter cases a meaningful income can be earned solely from the sales of the associated product or service to customers who are not themselves enrolled in the scheme. While some of these MLM businesses also offer commissions from recruiting new members, this is not essential to successful operation of the business by any individual member. Nor does the absence of payment for recruiting mean that an MLM is not a cover for a pyramid scheme. The distinguishing characteristic is whether the money in the scheme comes primarily from the participants themselves (pyramid scheme) or from sales of products or services to customers who aren't participants in the scheme (legitimate MLM)."
Is the US Social Security system a pyramid scheme?
Economist Thomas Sowell argues:[1]
"Social Security has been a pyramid scheme from the beginning. Those who paid in first received money from those who paid in second — and so on, generation after generation. This was great so long as the small generation when Social Security began was being supported by larger generations resulting from the baby boom. "
"The issue is discussed in the section Are national retirement programs Ponzi schemes? of the Ponzi scheme article."
Financial pyramids in post-communist states
"After the collapse of the Soviet Union and communist states in East Europe, population in many of these states fell victims to numerous financial pyramid schemes. It is safe to assume that a significant factor was lack of capitalist financial experience of population that was exposed primarily to socialism before.
Notable examples are Albania (see Sali Berisha article), Romania (Caritas - in fact it is considered a Ponzi scheme) and MMM pyramid in Russia."
The above passage is redirected from wikipedia.
E. Excel International
The Philosophy
Your body is equipped with a powerful immune system, a defense mechanism which can be strengthened and improved through proper nourishment and care. The immune system's sole function is to protect the body from disease and infection. When working properly, it has everything it needs to do its job. It destroys invading agents, consumes harmful pathogens, and battles against pollutants and toxins. The immune system does more than modern medicine and drugs could ever do. However, if it is denied the most essential nutrients, it becomes weak and inefficient, leaving the body vulnerable to attack. In fact, most of today's degenerative disease are the direct result of immune dysfunction and can often be traced to poor dietary habits.This relationship between nutrition and the performance of the immune system is the key to improved health. In fact, this special science of building the immune system on a day-to-day basis with proper fuel is called nutritional immunology. For example, plant foods such as fruits and vegetables have been shown to provide more than just basic nutrition. They contain amazing phytochemicals which can do wonders for the body. Phytochemicals can inhibit the growth of cancer cells; prevent the buildup of dietary fat; reduce the probability of colon, breast, and prostate cancers; decrease the growth of microorganisms; and improve blood lipids and serum cholesterol levels. And who knows what other advantages will emerge for these recently discovered phytochemicals? Simply put, nutritional immunology is the study of these and similar effects of plant foods on the functioning of the immune system. This science is the answer to poor health. Redirected from eexcel.
Your body is equipped with a powerful immune system, a defense mechanism which can be strengthened and improved through proper nourishment and care. The immune system's sole function is to protect the body from disease and infection. When working properly, it has everything it needs to do its job. It destroys invading agents, consumes harmful pathogens, and battles against pollutants and toxins. The immune system does more than modern medicine and drugs could ever do. However, if it is denied the most essential nutrients, it becomes weak and inefficient, leaving the body vulnerable to attack. In fact, most of today's degenerative disease are the direct result of immune dysfunction and can often be traced to poor dietary habits.This relationship between nutrition and the performance of the immune system is the key to improved health. In fact, this special science of building the immune system on a day-to-day basis with proper fuel is called nutritional immunology. For example, plant foods such as fruits and vegetables have been shown to provide more than just basic nutrition. They contain amazing phytochemicals which can do wonders for the body. Phytochemicals can inhibit the growth of cancer cells; prevent the buildup of dietary fat; reduce the probability of colon, breast, and prostate cancers; decrease the growth of microorganisms; and improve blood lipids and serum cholesterol levels. And who knows what other advantages will emerge for these recently discovered phytochemicals? Simply put, nutritional immunology is the study of these and similar effects of plant foods on the functioning of the immune system. This science is the answer to poor health. Redirected from eexcel.
Multi-level marketing
Redirected from Wikipedia:-
"Multi-level marketing (MLM) (also called network marketing (NM)) is a business model which utilizes a combination of direct marketing and franchising. Typically, individuals become associated with a parent company in an independent contractor relationship. Sellers are compensated based on their sales of a product or service, as well as the sales of those they bring into the business."
"Multi-level marketing has a recognized image problem because of difficulties in making a clear distinction between legitimate network marketing and illegal "pyramid schemes" or Ponzi schemes. Nonetheless, many NM/MLM businesses operate legitimately in all fifty U.S. states and more than 100 foreign countries. Because of this image problem many new NM/MLM businesses do not use the words "multi-level marketing" or "network marketing" and instead use terms like "affiliate marketing," "home-based business franchising," etc. See List of network marketing companies for more information."
"In a legitimate MLM company, commissions are only earned on the sale of products or services to the end consumer who, in many cases, is also a distributor. No money may be earned on a "sign up fee" or for recruiting alone. Critics contend that some companies produce revenue primarily by attracting new participants, as opposed to selling products. Analysis of the compensation plan is often required to determine whether participants are paid based on actual sales of products to customers versus new recruit bonuses and sales of business support materials."
"Distributors of Amway in particular often receive criticism for generating considerable revenue from selling instructional and motivational materials to its participants. The FTC filed suit against Amway in 1976 (FTC v. Amway) but lost the case, paving the way for many companies to adopt a multi-level distribution system."
"A major shift in MLM occurred during the 1980s when companies began allowing their members to focus solely on marketing rather than handling the tasks of stocking/distributing products as well as taking care of commission payments to their sales organizations. Today, most MLM companies act as fulfillment companies by taking orders, shipping products, calculating and paying commissions, etc."
"Often, victims of fraudulent or illegal MLM schemes are required to purchase expensive inventories of products. These schemes are often quick to collapse, when the merchandise cannot be resold, leaving all but those at the top of the pyramid with sometimes staggering financial losses."
Compensation plans
Over the course of decades, companies have devised various MLM compensation plans:
Stairstep Breakaway plan or Unilevel Plan.
"The oldest and most popular plan features two types of distributors: managers and non-managers and three types of pay:
Baseshop overrides are overrides of managers from their subordinate non-managers, collectively called a baseshop. This is no different from any sales organisation.
Generational overrides are overrides of managers from the baseshop of managers who were previously their subordinate. Most plans compensate at least three generations of such managers."
Executive bonuses.
"Additional commission to managers who exceed a sales quota. For example, 2% of the total company sales revenue goes to a bonus pool which is shared monthly pro-rata to managers who exceed $10,000 in that month.
Matrix Plan. This plan limits the width of each level in a distributor's group, hereby forcing strong distributors to pile ("spillover") their recruits over people who did not sponsor them."
Binary plan.
"This plan limits the width of each level to two legs. Commissions are based on "cycles" where a distributor is paid a fixed amount whenever both legs achieve a certain number of sales units each. Commissions are paid incrementally when the sales volume in each leg matches. "
"Matrix scheme or Elevator scheme. This plan features a game board or a list where each distributor would pay in one or more product units to participate. When a certain number of units have been paid in, the structure splits and the earlier participant receives consideration. See the main article regarding the legality of this plan."
List of network marketing companies:-
Amway is the most famous company for network marketing.
Avon Products, Inc., the corporation behind the "Avon ladies".
Equinox
Excel Communications claims to be the fastest-growing company in the history of multi-level marketing.
Fortune Hi-Tech Marketing
Herbalife
Kirby specializes in door-to-door vacuum cleaner sales.
Kleeneze, the Oldest Network Marketing company in Europe, trading since 1923.
Krystal Planet specializes in clean energy products and services.
Nu Skin sells cosmetics, nutritional supplements and Internet-related services.
Mary Kay is the company with the best-recognized name and was founded by Mary Kay Ash.
Omegatrend is an Australian company that formed as a schism from Amway.
Pre-paid legal services
Primerica
Quixtar Sister company to Amway.
Shaklee, seller of nutrition and personal hygiene products.
Tupperware Corporation, famous for the Tupperware parties.
Vector Marketing sells Cutco knives. Most of the yellow "Summer Work" flyers found on college campuses are from Vector.
Weed music distribution service
World Financial Group
"Multi-level marketing (MLM) (also called network marketing (NM)) is a business model which utilizes a combination of direct marketing and franchising. Typically, individuals become associated with a parent company in an independent contractor relationship. Sellers are compensated based on their sales of a product or service, as well as the sales of those they bring into the business."
"Multi-level marketing has a recognized image problem because of difficulties in making a clear distinction between legitimate network marketing and illegal "pyramid schemes" or Ponzi schemes. Nonetheless, many NM/MLM businesses operate legitimately in all fifty U.S. states and more than 100 foreign countries. Because of this image problem many new NM/MLM businesses do not use the words "multi-level marketing" or "network marketing" and instead use terms like "affiliate marketing," "home-based business franchising," etc. See List of network marketing companies for more information."
"In a legitimate MLM company, commissions are only earned on the sale of products or services to the end consumer who, in many cases, is also a distributor. No money may be earned on a "sign up fee" or for recruiting alone. Critics contend that some companies produce revenue primarily by attracting new participants, as opposed to selling products. Analysis of the compensation plan is often required to determine whether participants are paid based on actual sales of products to customers versus new recruit bonuses and sales of business support materials."
"Distributors of Amway in particular often receive criticism for generating considerable revenue from selling instructional and motivational materials to its participants. The FTC filed suit against Amway in 1976 (FTC v. Amway) but lost the case, paving the way for many companies to adopt a multi-level distribution system."
"A major shift in MLM occurred during the 1980s when companies began allowing their members to focus solely on marketing rather than handling the tasks of stocking/distributing products as well as taking care of commission payments to their sales organizations. Today, most MLM companies act as fulfillment companies by taking orders, shipping products, calculating and paying commissions, etc."
"Often, victims of fraudulent or illegal MLM schemes are required to purchase expensive inventories of products. These schemes are often quick to collapse, when the merchandise cannot be resold, leaving all but those at the top of the pyramid with sometimes staggering financial losses."
Compensation plans
Over the course of decades, companies have devised various MLM compensation plans:
Stairstep Breakaway plan or Unilevel Plan.
"The oldest and most popular plan features two types of distributors: managers and non-managers and three types of pay:
Baseshop overrides are overrides of managers from their subordinate non-managers, collectively called a baseshop. This is no different from any sales organisation.
Generational overrides are overrides of managers from the baseshop of managers who were previously their subordinate. Most plans compensate at least three generations of such managers."
Executive bonuses.
"Additional commission to managers who exceed a sales quota. For example, 2% of the total company sales revenue goes to a bonus pool which is shared monthly pro-rata to managers who exceed $10,000 in that month.
Matrix Plan. This plan limits the width of each level in a distributor's group, hereby forcing strong distributors to pile ("spillover") their recruits over people who did not sponsor them."
Binary plan.
"This plan limits the width of each level to two legs. Commissions are based on "cycles" where a distributor is paid a fixed amount whenever both legs achieve a certain number of sales units each. Commissions are paid incrementally when the sales volume in each leg matches. "
"Matrix scheme or Elevator scheme. This plan features a game board or a list where each distributor would pay in one or more product units to participate. When a certain number of units have been paid in, the structure splits and the earlier participant receives consideration. See the main article regarding the legality of this plan."
List of network marketing companies:-
Amway is the most famous company for network marketing.
Avon Products, Inc., the corporation behind the "Avon ladies".
Equinox
Excel Communications claims to be the fastest-growing company in the history of multi-level marketing.
Fortune Hi-Tech Marketing
Herbalife
Kirby specializes in door-to-door vacuum cleaner sales.
Kleeneze, the Oldest Network Marketing company in Europe, trading since 1923.
Krystal Planet specializes in clean energy products and services.
Nu Skin sells cosmetics, nutritional supplements and Internet-related services.
Mary Kay is the company with the best-recognized name and was founded by Mary Kay Ash.
Omegatrend is an Australian company that formed as a schism from Amway.
Pre-paid legal services
Primerica
Quixtar Sister company to Amway.
Shaklee, seller of nutrition and personal hygiene products.
Tupperware Corporation, famous for the Tupperware parties.
Vector Marketing sells Cutco knives. Most of the yellow "Summer Work" flyers found on college campuses are from Vector.
Weed music distribution service
World Financial Group
Thursday, September 01, 2005
Attitude
What defines your altitude is not your aptitude. It is your attitude that makes your altitude.
Be a sincere not naive.
Be a smart not cunning.
Have a good will, make good statement along your journey of life.
Have positive attitude that makes your future a brighter path.
Walk with confidence.
Speak with confidence.
Be confident not snorbish.
Be happy.
Be hardworking.
Do not greed.
Make friends not enemy.
Make love not war.
Be a healthy person.
A good person.
Be a sincere not naive.
Be a smart not cunning.
Have a good will, make good statement along your journey of life.
Have positive attitude that makes your future a brighter path.
Walk with confidence.
Speak with confidence.
Be confident not snorbish.
Be happy.
Be hardworking.
Do not greed.
Make friends not enemy.
Make love not war.
Be a healthy person.
A good person.
Wednesday, August 31, 2005
Main Consideration of Joining MLM
There is three main thing in consideration that is important in joining a multi level marketing.
1. product
2. marketing plan
3. partnership
Without a marketable, good product the networking would not grow.
You earn through your marketing plan.
Your partner, is actually the one who owns the company, has the very basic, fundamental concept that runs the company. Is the mastermind behind the scene is business minded? A caring person? A technologically sound person? Who is the mastermind behind? How do they think actually affects your own mindset as well.
MLM is about cloning.
What kind of reputation do you want?
Choose the one that suit you most.
1. product
2. marketing plan
3. partnership
Without a marketable, good product the networking would not grow.
You earn through your marketing plan.
Your partner, is actually the one who owns the company, has the very basic, fundamental concept that runs the company. Is the mastermind behind the scene is business minded? A caring person? A technologically sound person? Who is the mastermind behind? How do they think actually affects your own mindset as well.
MLM is about cloning.
What kind of reputation do you want?
Choose the one that suit you most.
Friday, August 26, 2005
Respect
Respect your downline.
When you are pushing too hard to certain stage, try to listen what your prospect is saying. Maybe situation will better. When he stated that he needs time for his own career planning. Try to listen. Pushing too hard because of dateline may end up failure. MLM is a business of networking. When you are dealing with people. Respect is important. Of course there is another kind of approach where you stab him down, get him to the get the worst part of feeling, get the rebellion reaction. This may end up succeeding or get your self impression in bad shape.
I prefer the respect part. Don't you?
When you are pushing too hard to certain stage, try to listen what your prospect is saying. Maybe situation will better. When he stated that he needs time for his own career planning. Try to listen. Pushing too hard because of dateline may end up failure. MLM is a business of networking. When you are dealing with people. Respect is important. Of course there is another kind of approach where you stab him down, get him to the get the worst part of feeling, get the rebellion reaction. This may end up succeeding or get your self impression in bad shape.
I prefer the respect part. Don't you?
Wednesday, August 24, 2005
Ambition
Everyone has an ambition.
Everyone, anyone, should have been asked, once in a life time.
Where is your ambition?
Your kindergarten teacher would have asked :"What is your ambition?"
And ask yourself, what are you doing now? Is it your ambition?
What do you want to do?
Most people would have been lost. Lost in the world of constrain.
You tied to something, you own someone something, you have something that you must support that refrained you from doing what you want.
Maybe one day, when I have the money, I can do this, I can do that, I can ...
If you do not have any refrain or constrain, what do you want to do?
Ask yourself.
Do it, however, plan it first.
See how far you are away from your targeted aim.
If it is a matter of cash. Just earn it.
MLM is another path, additional revenue that generates itself through exponential growth.
Generate your income by ways that it can be self sustain.
Everyone, anyone, should have been asked, once in a life time.
Where is your ambition?
Your kindergarten teacher would have asked :"What is your ambition?"
And ask yourself, what are you doing now? Is it your ambition?
What do you want to do?
Most people would have been lost. Lost in the world of constrain.
You tied to something, you own someone something, you have something that you must support that refrained you from doing what you want.
Maybe one day, when I have the money, I can do this, I can do that, I can ...
If you do not have any refrain or constrain, what do you want to do?
Ask yourself.
Do it, however, plan it first.
See how far you are away from your targeted aim.
If it is a matter of cash. Just earn it.
MLM is another path, additional revenue that generates itself through exponential growth.
Generate your income by ways that it can be self sustain.
Tuesday, August 23, 2005
Sharing
Sharing is another great thing to do. It doesn't meant to have any motive behind it and it works all the time. It is simply because your intension is just to share, to bring information to the others that actually benefits them. Sharing makes everyone a happy person.
Selling through sharing is very effective and everyone does it all the time. When you enjoyed a good meal in somewhere, you will sure introduce it to your friend the next day, to your siblings or your collegues. So, when you learn something, or gain something, share it. It is an effort that make you shines.
Selling through sharing is very effective and everyone does it all the time. When you enjoyed a good meal in somewhere, you will sure introduce it to your friend the next day, to your siblings or your collegues. So, when you learn something, or gain something, share it. It is an effort that make you shines.