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Multi-level Marketing, or MLM, is a marketing strategy which creates a down line of distributors and a

hierarchy of multiple levels of compensation. The sales force is compensated not only for their own

sales but also for the sales of the people they help recruit. Firms, having a large product base, often

cannot employ equivalent sales force; and believe they would be better off without the traditional

approach. Hence, they implement MLM to survive competition from multi-nationals.

MLM is also known as Network Marketing because it utilizes a network of individual customers to hit

other potential customers. In other words, every individual customer serves as a sales representative.


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