Network Marketing Seen As New Wave In Business

ANYONE who’s taken a business course is familiar with Philip Kotler, author of “Marketing Management: Analysis, Planning, Implementation and Control,” the book most widely used in business schools. But this review is not about his book. It’s about Richard Poe’s “Wave 3: The New Era in Network Marketing.

Kotler discussed comprehensively the basic principles of marketing. Poe, in his book, tries to do the same for network marketing. On this point, the similarity between the two authors end. In content and form, the books of Kotler and Poe greatly differ.

In content, Kotler’s book is about mainstream marketing. Poe’s book is about network marketing, more popularly known as multi-level marketing or MLM. MLM is a non-traditional marketing practice that allows independent sellers to recruit other sellers and to draw income from the sales of their recruits.

Kotler’s writing is strictly for students: cut and dried. Poe’s style is for dreamers: a cross between a novel and a how-to manual. Poe’s pages a brightened by the rags-to-riches stories of exceptional sellers who, by setting up their own distribution network, became millionaires in network marketing. It is also filled with guides for beginners in network marketing such as the seven deadly pitfalls of beginners; how to do wave-three selling, prospecting, persuasion and sponsoring; and how to spot a wave-three company.

Richard Poe is the former senior editor of “Success,” a business magazine published in the United States. In May 1990, his article, “Network Marketing: The Most Powerful Way to Reach Consumers in the 90s,” was published in this magazine.

Network Marketing Advocate

An unabashed advocate of network marketing, Poe nevertheless presents the good, the bad and the ugly stories in the business. Tracing the roots of MLM companies, Poe establishes the legitimacy of the business and provides red light signals to distinguish a stable MLM company from an unstable one.

Poe writes that network marketing has been around since 1941 when a chemist, Carl Rehnborg, set up Nutrilite Products Inc., to market nutritional food supplements in the United States. Poe calls the first phase of network ,marketing when it was just beginning as Wave One. This wave ended in 1979 when the US Federal Trade Commission ruled that Amway was legitimate business. Amway, founded in 1959, is one of the biggest MLM companies today. After 1979, new technology gave rise to the explosion of more MLM companies, signaling the start of what Poe considers as Wave Two of network marketing.

According to Poe, Wave Three of network marketing is already gaining momentum with the development of MLM companies that use Computers, Management Systems and Telecommunications that free the seller to do what he does best (which is to interact with other people) when he wants to and where he wants to. He can relate with his buyers or his recruits (called “downlink” in network marketing parlance) on a more personalized basis. In this sense, technology usually results in unemployment, career shifts and broken families.

Poe brings the dream of being able to retire a millionaire closer to the ordinary salary earner who longs for financial and time freedom. He provides a two-step ladder to reach this dream: a checklist of seven personal traits needed to succeed in network marketing and an 8-step guide to spotting a wave-three company.

Spotting a wave-three company is facilitated by Poe’s procedure: go by the facts, evaluate the product, check the publicity trail, consult industry watch dogs, find the skeletons, evaluate the support system, evaluate the compensation plan and consider the company’s growth phase.

In the Philippines, the earliest company to use network marketing has been Barclay, a Filipino firm manufacturing various personal care and household products. A number of foreign based ML< companies, such as Cosway, Nuways, Shaklee, Nutrition Express, and Forever Living, have also been operating in the country for some time now. This month, Amway launched its operations in the Philippines. For those who want to enter the business or for those who are already working in the business, Poe’s book deserves first reading.

Despite Poe’s fanfare on wave-three MLM companies a critical question needs to be asked: Is the Philippines ready to provide the technology infrastructure that will enable wave-three companies to fully operationalize their system? Looking at the state of our phones, power supply and traffic locks, the likely answer maybe no. However network marketing advocates take heart: As one of the region’s fastest growing economy, the Philippines may manage to catch up and enable Filipinos to pursue the network marketing dream the Filipino Way.

Wave 3: The New Era in Network Marketing by Richard Po. Published 1995 by Prima Publishing Rocklin, CA, USA

Author: Regina Galang Reyes. First published in the Philippine Daily Inquirer April 30, 1997.

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Founding Editor, People at Work, Business, Phiippine Daily Inquirer

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