MULTI-LEVEL MARKETING METHOD

FOR RESOLVING ECONOMIC CRISIS IN

SPAIN

Ekaterina Novoseltseva

26th September 2013

Unemployment rate in Spain 27%

Youth unemployment 55%

Mortgage fraud

Drug related crimes by 2,2%

Violent crimes by 9,5%

ECONOMIC CRISIS IN SPAIN

Spanish economy is in a phase of market

instability

Private consumption

Domestic demand

Quality of life

Salaries

GDP

ECONOMIC CRISIS IN SPAIN

Austerity measures

Public wages are cut by 5 %

Cut in monthly subsidy for the long-term unemployed

Cut in benefit for new mothers

Raise a retirement age from 65 to 67 years

Measures will be even worse for the citizens

ECONOMIC CRISIS IN SPAINGOVERNMENT ACTIONS

Reduce spending on education ( more working hours and more students per class by 20% ) 10 billion by 2015

7 billion cut from central and regional health budgets

Elimination of 80 000 teaching jobs

Increase tuitition for public university by 50%

Freeze salaries and pensions

Increase in taxes

Thousands of people in more than 80 cities

Demonstrations

People sleep on the streets

Make fire on the rubbish bins

Blocking the streets

Break windows

ECONOMIC CRISIS IN SPAINSTRIKES AND PROTESTS

Spanish governmnet

• Coming years will be even worse

• The budget deficit will increase

• Even harsher austerity measures

• More violent protests

European central bank

• Weaker domestic demand

• Tight financial conditions

• Spain will sink deeper into recession

• Unemployment will be worse this year

FORECASTS ABOUT ECONOMIC CRISIS IN SPAIN

MULTI-LEVEL MARKETING

Multi- level

marketing or

Network Marketin

g

Uses direct selling and

social networking

relationships

Profit from distributor’s sale of the goods and also from sales of his agents, that he has recruited

Independent sales forceWOM

Massive advertising effortsRetail outlets

Bypass the middle man -> keep price lower, while quality is the same

Close to zero investment

Minimal costs

Distributor can freely choose when and how he wants to work

No need to hire employees

Possibility of working from home

Strong support from the sponsor

Great opportunity to earn good money

Unlimited income potential

Distributor works with people he likes

Being entrepreneur and work for himself

Create own highly profitable asset that can be sold or transferred by inheritanceJoin a team united by common goal

Equal opportunities for everyone

People believe more their friends than advertising

ADVANTAGES OF MULTI-LEVEL MARKETING

Significant growth during

economic crisis

More potential clients,

partners and

distributors

Sustainable

More job demand

then supply

-> offers jobs

MLM DURING ECONOMIC RECESSIONS

Economy

MLM

By 2015, it is estimated that 50% of homes will be involved in the MLM Industry (US)

In USA over 70 percent of the Direct Selling Revenues come from Network Marketing.

MLM SUCCESS IN THE US

From 500,000 millionaires in America, 100,000 (20%) of millionaires were MLM people.

198

5

From 850,000 millionaires in the United States, 40% of those millionaires were networkers.

1995

Professional magazines - MLM Insider - Downline News - Forbes - Fortune - USA Today - US News & World report - The Wall Street Journal - Success Magazine

DSA (Direct Sale Association)

MLM is studied by many scientists and students in US Universities.

Several recession

s

Now MLMGrowth

MLM SUCCESS IN RUSSIA

Recession in 1998

NowMLMGrowth

Many finance and business universities have MLM as a subject

Academies of MLM ->MLM education diploma

Many MLM newspapers and books - School of MLM Professionals - Academy of Network Marketing - MLM-Perspective

Relatively new term and it has tremendous opportunity for

growth

Gives freedom to people

Recommendations are more valued than advertising

Accessible to everyone

Has support from politicians, celebrities and well-known people

Fast growing phenomenon

Become one of the main methods of doing business( like

franchising)Modern consumers want speed,

choice, quality and customization

FUTURE OF MLM

Over 50 million people are engaged in Multi Level

Marketing all over the world

$125 billion in revenue

worldwide

300 000 new people around the world join a

network marketing

company every week

Network Marketing is in 150 countries

WELL-KNOWN INTERNATIONAL COMPANIES

MLM IN SPAIN

Bring people certainty, security and safety

Offer endless job

Regain financial control

Offer the same products, but with much lower price

Best time to capitalise on this trend

During economic crisis, MLM is the most sustainable business

Satisfy all people

Regular companies search for clients and MLM searches for the sellersGreat opportunity for young people to start their career

Offers massive employment

Spanish is a popular language, easy to broad the network

Spain is in the Eurozone, easy to distribute

MLM IN SPAIN

The global rise in global sales in the network marketing industry for period 2010 to 2011 was 16.26%

Consumption ability will increase

Lower costs – affortable products

Unlimited growth of distribution structure -> unemployment rate will decrease

Positive example – motivation

Now there are more supply then demand and MLM offers jobs

Positive government’s attitude – more jobs can be created in magazines, universities etc

New millionaires during economic crisis – will give optimism to the people

Crime and protests will decrease

Crisis is a way to find a new trend and become rich

Spanish Government will definitely benefit from it

Publicly speaking positively

about Network

Marketing

Open MLM faculties

and subjects in Universitie

s and Schools

Invite MLM leaders to give public speeches

Show MLM success

and opportunities in Spain

MLM magazines

SUPPORT FROM THE GOVERNMENT

CIRCULAR FLOW MODEL

Consumption is very important!

CONCLUSION

Valued at more than US$100 billion

dollar per year

Offers an accessible way for the average person in Spain to launch a

business

Substantial income.increases

purchasing power

Network marketing

MLM is not a panacea for solving economic crisis in Spain, but it is an important component of the process, that can improve the economic and social situations in Spain.

THANK YOU!