Mathematical Model for Network Marketing

Manufacturers are choosing direct marketing channels over conventional marketing channels to keep their distribution costs low. Network marketing or Multilevel marketing is a technique by which the companies recruit and use part-time representatives to sell their products on commission basis. Lot of debate exists as to whether a MLM is really a cheaper option and in reality gives the returns to the channel members as promised. In the present study an attempt has been made to mathematically explain the behavior of networks and to predict the probability of networks success at various levels.