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IN NETWORK MARKETING COMPANIES: THE PARTICIPATION FACTORS THAT INFLUENCE THE PART-TIME MOTIVATIONAL DISTRIBUTORS IN KUCHING, SARAWAK. NG GEK KEUN This project is submitted in partial fulfillment the requirements of for the degree of Bachelor of Economics and Business Honours (Marketing Program) Faculty of Economics and Business UNIVERSITI MALAYSIA SARAWAK 2004 ABSTRACT PARTICIPATION IN NETWORK MOTIVATIONAL FACTORS DISTRIBUTORS MARKETING THE PART-TIME INFLUENCE THAT IN KUCHING, THE COMPANIES: SARAWAK. By Ng Gek Keun The main aim of this study is to determine whether there are significant relationships between the respondents' of becoming decision making and the four motivational factors distributors in network (financial satisfaction, marketing companies flexibility, job satisfaction and social satisfaction). Besides, it intends to determine the differences differences demographic between the distributors' and the four motivational factors (gender and age) factors as well as the relationships them. The scope of this study is limited to the active part-time among distributors of in Sarawak. Kuching, A direct do licensed to selling network marketing companies from female) 128 the total (142 270 selected were total of and male respondents population motivational had linear that the The 5370. of shown all of regression results of factors are having significant relationships with the respondents' decision making of becoming distributors. There are significant differences between differences gender factors while and the motivational for age differences, financial satisfaction shows no significant differences with the motivational ANOVA One-way when only factors had Correlation Pearson Results shown of out. was carried that all of the four motivational factors are having positive relationships between factor in influencing dominant is the Overall, the most social satisfaction each other. decision making of respondents while financial satisfaction is the least dominant one. iv ABSTRAK DALAM PENYERTAAN ORGANISASI MOTIVASI FAKTOR-FAKTOR SEPARUH PENGEDAR NETWORK MARKETING: PARA YANG MEMPENGARUH MASA DI KUCHING, SARAWAK. Oleh Ng Gek Keun Penyelidikan ini bertujuan mengkaji sama ada wujudnya perhubungan bermakna di antara keputusan para pengedar untuk menyertai marketing organisasi network kepuasan dengan keempat-empat faktor motivasi (faktor kewangan, kefleksibelan, di ia itu, bertujuan Selain kepuasan dan antara perbezaan mengkaji sosial). pekerjaan ketidaksamaan maklumat demografik responden (jantina dan umur) dengan semua faktor motivasi ini kepada kajian Skop terhad serta perhubungan antara mereka. berlesen dalam marketing network organisasi pengedar separuh masa yang aktif (142 270 Seramai Sarawak. di Kuching, langsung jualan orang responden membuat lelaki dan 128 orang perempuan) telah dipilih daripada jumlah populasi 5370 orang. Regression bahawa faktor Keputusan Linear mempunyai keputusan Terdapat dengan bermakna para responden. perhubungan membuktikan semua motivasi faktor dengan jantina ketidaksamaan di ketara responden semua antara perbezaan motivasi, ketara dengan kewangan kepuasan hanya tiada perhubungan manakala ketidaksamaan umur responden Keputusan Pearson Correlation apabila ujian ANOVA satu hala menyatakan semua faktor motivasi dijalankan. mempunyai kepuasan keseluruhannya, Secara sosial adalah perhubungan positif antara mereka. faktor utama bagi responden, manakala kepuasan kewangan adalah faktor yang paling tidak diutamakan. V ACKNOWLEDGEMENTS First and foremost, I would like to convey my heartfelt thanks and gratitude to Cik Siti Hasnah and Puan Norzaidawati Zaidin, my supervisors, for their expert in the this throughout year. out study carrying and encouragement advice, assistance My sincere thank to all my friends and course mates, who have provided me with moral support, encouragement, guidance and assistance in my quest for knowledge. In particular, I would like to thank Mr. Bong Kuet Foong, for his help, Also, I during this the would study. process of completing comments and advices like to thank all the respondents who have been very co-operative and candid in their views during the administration of questionnaires. Finally, my deepest thank to my family, for giving me the warmest supports and advices in my life. vi TABLE OF CONTENTS Pages LIST OF TABLES xi LIST OF FIGURES xii CHAPTER 1-9 1: INTRODUCTION 1.0 Introduction I 1.1 Background of Research I 1.2 Problem Statement 7 1.3 Objectives of Research 7 1.5 Scope of Research 8 1.6 Significant of Research 9 CHAPTER 2: LITERATURE 10-26 REVIEW 2.0 Introduction 10 2.1 Direct Selling 10 12 2.1.1 The Direct Selling Industry 14 2.2 Network Marketing as a Type of Direct Selling 16 2.2.1 The System of Network Marketing 2.2.1.1 Duplication and Multiplication 2.3 The Advantages of Network Marketing in Network Marketing 17 18 2.3.1 Flexibility 18 2.3.2 Quality and Quantity of Information 19 2.4 The Concept of Motivation 20 2.4.1 Work Motivation 20 vii 2.4.1.1 Distributors' Motivation 2.5 Model of the study CHAPTER 21 25 3: METHODOLOGY 27-37 3.0 Introduction 27 3.1 Research Design 27 3.2 Population and Sample 27 3.2.1 Population 28 3.2.2 Sampling 28 3.3 Data Collection 30 3.4 Research Instrument 31 3.5 Pre-test 32 3.6 Data Analysis 33 3.6.1 Descriptive Statistics 33 3.6.2 Hypotheses Testing 34 3.6.2.1 Linear Regression 34 3.6.2.2 One Way Analysis of Variance (ANOVA) 34 3.6.2.3 Correlation coefficient 35 3.6.2.4 Factor Analysis 35 3.7 Research Hypotheses 35 3.8 Conclusion 37 CHAPTER 4: RESEARCH FINDINGS 38-55 4.0 Introduction 38 4.1 Frequency Distributions 38 viii 4.2 Descriptive Statistics: Measures of Central Tendencies 44 4.3 Findings 47 Relationships between respondents' decision making and the four 4.3.1 47 income factor factors based monthly on current motivational Differences between demographic factors (gender and age) 4.3.2 differences and the four motivational factors of respondents factors 4.3.3 Relationships among the four motivational 4.3.4 The dominant factor among the four motivational CHAPTER 50 53 factors 54 56-69 5: DISCUSSIONS 5.0 Introduction 56 5.1 Respondents' Demographic Profile 56 5.2 The Dominant Factor among the Four Motivational 5.3 Relationships Between the Four Motivational Factors Factors and Respondents' 57 59 Decision Making Based on Current Monthly Income Factor Factor 5.4 Discussion on Each of the Motivational 60 5.4.1 Discussion on Financial Satisfaction 60 5.4.2 Discussion on Social Satisfaction 62 5.4.3 Discussion on Job Satisfaction 63 5.4.4 Discussion on Flexibility 65 5.5 Differences Between Demographic Factors (Gender and Age) and the Four Motivational 66 Factors of Respondents 5.5.1 Differences Between Gender Differences and the Four Motivational Factors of Respondents ix 66 5.5.2 Differences Between Age Differences and the Four Motivational 67 Factors of Respondents 5.6 Relationships Among the Four Motivational CHAPTER 6: CONCLUSION Factors AND RECOMMENDATIONS 68 70-75 6.0 Introduction 70 6.1 Conclusion 70 6.2 Recommendations 71 6.3 Recommendations for Future Research 74 of Research 74 6.3 Limitations REFERENCES APPENDIXES Appendix A: Result of Reliability Analysis Appendix B: Result of Pre-test Appendix C: Survey Questionnaire X LIST OF TABLES Pages direct sales 6 Table 1.1 Number of salespeople based on countries (Worldwide data, 2003) Table 4.1 Means and standard deviations of the total scores for the four motivational factors among the respondents 44 Table 4.2 Means and standard deviations of the total scores for every question 45 Table 4.3 Results of Regression Linear for determination of the relationship between distributors' decision making and financial satisfaction based on current monthly income factor 47 Table 4.4 Results of Regression Linear for determination of the relationship between distributors' decision making and flexibility based on 48 factor income current monthly Table 4.5 Results of Regression Linear for determination of the relationship between distributors' decision making and job satisfaction based factor income monthly on current 48 Table 4.6 Results of Regression Linear for determination of the relationship between distributors' decision making and social satisfaction based on current monthly income factor 49 Table 4.7 Results of One-way ANOVA for differences between gender and financial differences satisfaction among respondents and age 50 Table 4.8 Results of One-way ANOVA for differences between gender and flexibility differences among respondents and age 51 Table 4.9 Results of One-way ANOVA for differences between gender and job differences and satisfaction among respondents age 51 Table 4.10 Results of One-way ANOVA for differences between gender and age differences and social satisfaction among respondents 52 Table 4.11 Results of Pearson Correlation for determination of relationships among the four motivational factors 53 Table 4.12 Result of Factor Analysis for determination of the most dominant factor among the four motivational factors 54 X1 LIST OF FIGURES Pages Figure 1.1 Statistic of American Business List 1 Figure 1.2 Estimated global sales force (2002) 4 Figure 1.3 Total distributors in Malaysia (August, 2003) 5 Figure 2.1 Model of the study 26 Figure 4.1 Distribution of respondents based on gender 38 Figure 4.2 Distribution of respondents based on age group 39 Figure 4.3 Distribution of respondents based on marital status differences 40 Figure 4.4 Distribution of respondentsbased on highest education level completed differences. Figure 4.5 Distribution of respondents based on occupation differences 41 Figure 4.6 Distribution differences of respondents based on types of company 42 Figure 4.7 Distribution of respondents based on current monthly income differences. 42 Figure 4.8 Distribution of respondents based on current household monthly income differences. 43 Figure 4.9 Component plot in rotated space 55 xii 40 Chapter 1: Introduction 1.0 Introduction This chapter provides a general idea of this research. It discusses the research background, brief history of network marketing, problem statements and objectives of the research. Model of the study, research scope and significant of research are also discussed in the later part of this chapter. 1.1 Background of Research Over the years, many have dreamed of being one's own boss, seeking financial fact, independence. In them beauty health, freedom, can of not many time and and income the time, dreams great earning same successfully and at really achieve their American's Based lifestyle. the of statistic on and enjoy a relaxing for 40 years, many United States of America, by the age of 65 and after working people will fall into the following categories: - Figure 1.1: Statistic of America Business List 60%- ool Business List in ý LEMMA 1 50%- .-I 40%- loll 3M 20% 10% 0% r ýI ý ii Rich Financial Working Independent 1 11 Passed away In Debt This statistic showed that only 4 out of 100 of them will actually be financially independent and only one will get rich after working for so many years. This means that people have been trying to find the easiest way for them to really achieve lifestyle. enjoying easy and successful Nowadays, many have found that network marketing is a way to produce extra incomes through effort part-time business their full-time have them made this part-time of and most focus. In a study done by Kearney and Bandley (1991) stated that everyone has only 168 hours in a week and these 168 hours are used up through a rather similar pattern for each of us: living hours 40 a plus earning c 49 hours sleeping home dressing, hours at 21 and working commuting, personal pursuits eating, c Therefore, most of us have about 20 to 30 hours left at the end of week. Some have decided to take part of that left over time and use it to build network marketing businesses because it can ultimately lessen their burden and increase their satisfaction for is is It all about. a strategy People may question what network marketing selling products whereby independent draw to commissions and salesmen Whilst Bauer and Miglautsch salesmen are permitted to recruit from the sales of their recruits (Poe, 1999). (1992) explained that network marketing as a type of direct selling that usually performed by an independent distributor representing the differentiate In franchisor to order service. of a product or manufacturer or the traditional other businesses, Kiyosaki it from (2001) positioned network marketing as a way 2 it is because becoming a revolutionary rich of new way of sharing the wealth with anyone who truly wants to acquire great wealth. The development of the network marketing concept and its first use has been credited to Nutrilite, the mid a United States of America based direct selling organization. In 1940s, the company was involved in the production it had developed for a very particular which supplements, and sale of food and unique method of marketing. In network marketing, companies move their products through a group of independent distributors who buy wholesale, sell retail and sponsor other people to do the same. In turn, overrides can be earned on multi-levels of people in the organizations. According to American Direct Selling Association (DSA), approximately one in four Americans will give network marketing a try at some point in their lives and it but those try ten less who will of than one year, percent about most will quit after because industry to direct it. The word of grow continues sales make a career of mouth and personal recommendations informing people about products. are one of the most powerful from Apart that, with corporate ways of downsizing increasingly job becomes for be the elusive. security to search a reality, continuing For those who have jobs, there has been an accelerating 1999 National benefits and wages. Based on the DSA's trend towards cutting Sales Force Survey, the direct for becoming sales representative a most common reasons are to increase income, obtain high quality products and to receive products at discounted prices. According to World Federation of Direct Selling Association', the estimated of increasing from 8.48 force (figure 1.2) has been million continuing global sales Founded in 1978, is a non-governmental, voluntary organization globally representing the direct selling industry as a federation of national Direct Selling Association. 3 people in 1988 to 43.84 million in 2001. This shows that there are getting more and more people joining in direct sales companies. Figure 1.2: Estimated Global Sales Force (2002) Estimated Global Sales Force 1988-2001 In millions (As of November 2002) 43:84 39,71 3aES 3s.Sa, 3U9 21.68 21 17.67 15 ý 10 1988 1989 1990 1991 1992 1993 1994 1996 1996 1997 1998 1999 2000 2001 Based on an International Statistic of Worldwide Direct Sales Data2 dated on 21 s` August 2003 (refer to table 1.1), direct sales companies have been operating in 51 increased has been from 43.84 The total the salespeople of world. all over countries in 2003. In Malaysia 47.28 in 2001 to alone, there are million people million people 3 million 13% of the total population are about which salespeople, of Malaysia. Currently, the total population of Malaysia is 24014.2 people3. Z Source: http: //www. wfdsa. org/statistics/index. cfm? fuseaction=display_stats&number-1. 3 The World Gazetteer: Current population figures of cities, towns and places of all countries. Population in [1000] for 2003. Source: http://www. world-gazetteer. com/home. htm. 4 Figure 1.3: Total Distributors in Malaysia (August, 2003) There are many companies that were founded on the network principle marketing and have continued to thrive using this marketing method. Most of them are direct sales and insurance companies that operating locally and internationally. According to the Ministry of Domestic Trade and Consumers Affairs, as of January 2003, there are 402 companies licensed to do direct selling, of which 225 companies are in multi-level companies marketing, in a combination 125 in single-level marketing, 25 via the post and 27 of postal and single-level Among them, the most popular mode is multi-level marketing marketing, in Malaysia. with most of them health dealing in herbal supplements. Today, there are a few well and products are known network marketing companies that can be found in Malaysia such as Amway, Nu Skin, Avon Cosmetics, Tupperware, Sunrider, Elken, CNI Enterprise, Cosway, Omegatrend and so on. Thus, it is interesting to discover the true power behind network marketing and the reasons why more and more people want to get involved with it. 5 Table 1.1: Number of Salespeople Based on Countries Sales Data, 2003) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 r 23 24 25 (Worldwide Worldwide Direct Sales Data (August 21,2003) Number of Salespeople Countries 570,000 Argentina 650,000 Australia 11,946 Austria 15,077 Belgium 1,174,583 Brazil 891,469 Canada 205,000 Chile 310,000 Colombia 177,014 Czech Republic 75,000 Denmark 12,258 Estonia 52,720 Finland 300,000 France 337,000 Germany 80,000 Hong Kong 140,667 Hungary 806,000 India 4,765,353 Indonesia 260,000 Ital 2,000,000 Ja an 3,050,000 Korea Mala sia Mexico Netherlands 3,000,000 1,820,000 38,000 New Zealand 97,000 26 Norway 68,000 27 Peru 28 Philippines 29 Poland 30 Portugal 31 Russia 32 Singapore 33 South Africa 34 Spain 35 Sweden 36 Switzerland 37 Taiwan 38 Thailand 39 Turkey 40 Ukraine 41 United Kingdom 42 United States 43 Uruguay 44 Venezuela 45 Others TOTAL 136,000 2,000,000 510,000 44,595 1,146,573 255,000 400,000 109,000 100,000 8,543 3,200,000 3,800,000 210,260 281,715 501,000 13,000,000 31,171 502,000 253,214 47,276,158 6 Direct Statement 1.2 Problem Network marketing offers its distributors many advantages and opportunities. Anyone can get involved little done it be it time or as much with can and with commitment as one likes. Generally, the problem is that the activity of recruiting is socially and psychologically marketing schemes people into network in to people most unacceptable it brings In the with some the society. process of network marketing other words, highly behavior that types problematic are of perceptions, situations, attitudes and and doubtful in terms of its nature of business which involved recruiting or is happening kind day This day to of scenarios selling. sponsoring new prospects and in all kinds of direct sales or network marketing companies locally or even globally. However, evidence have shown that there are still lots of people willingly to become distributors in network marketing companies, either in part-time or in full-time basis. So, what are the motivating marketing in influence to them that network participate reasons distributors? as companies Are the chosen motivational factors really having significant relationships with their decision making? 1.3 Objectives of the Research To determine the significant relationships between the respondents' decision factors (financial four distributors becoming the motivational and making of based flexibility, job on satisfaction) social satisfaction and satisfaction, current monthly income factor. 7 To determine the differences of distributors' ii. the four motivational gender and age differences and factors. iii. To determine the relationships among the four motivational factors. iv. To verify the dominant factor among the four motivational factors. 1.5 Scope of Research The scope of this research is to determine influence the participation Kuching flexibility, City. of the distributors in network marketing companies in factors (financial In this research, four motivational satisfaction, job satisfaction and social satisfaction) will be tested whether there is having significant relationships with the distributors' Therefore, Kuching factors that the motivational decision making. the subject of this research is the present distributors area who are currently participate in any of the network it is direct do licensed multi-level to regardless whether selling, companies level marketing. The examples are Amway, Nu Skin, Elken, Omegatrend, Avon Cosmetics, Sunrider, Nutrimetics, CNI within marketing or singleEnterprise, Tupperware, Cosway and so forth. Most of the products that they are dealing in are nutritional supplement from household Apart hair products. and care products products, cosmetics, skin and business by in involved building their they own networks are also selling activities, distributors. new sponsoring or recruiting Network marketing is a kind of business that can be built in either full-time or is basis. In targeted to this to research result, order obtain more accurate part-time those part time distributors only. This is because the intention of being part-time distributors has significant differences from those who work in full-time. It is 8 undeniable that there are many kinds of part-time businesses offered in the market. Somehow, those part-time distributors have decided to involve in network marketing businesses. Hence, there must be some reasons behind it that motivate and influence them to do so. However, not all of them have the same motivational factors. Therefore, the result that is going to be obtained will be more obvious and precise in determining the relationships between the variables. In addition, the most influential motivational factor can be identified as well. 1.6 Significant of Research This study aims to present a clearer picture of why these financial satisfaction, flexibility, job satisfaction and social satisfaction are the influential factors in inspiring the part-time distributors companies. Moreover, each of the motivational to participate motivational in network marketing the weight that is given by those part-time distributors on factors can be verified. It is crucial for network marketing distributors to understand the real needs and motives why most people participate in such businesses. By integrating these motivational factors, it will be more essential in finding a better way to convince new potential prospects to involve in network marketing businesses. Apart from that, it also intends to expose to those none network marketing distributors concerning on the opportunities, strengths and potential of network marketing. By this way, it helps to reduce those negative and doubtful perceptions as well as attitudes and behaviors among the society on network marketing. 9 Chapter 2: Literature Review 2.0 Introduction This chapter presents some of the important concepts regarding the topic of this research based on previous research studies. At the outset, the meaning of direct industry, direct the concept of network marketing selling selling, and its working system are discussed. This then followed by the benefits and advantages of network marketing. Finally, the motivation factors that motivate or influence the distributors, to participate in network marketing are discussed. 2.1 Direct Selling First and foremost, it is important to seek out the difference between direct in direct order to get a clearer and more precise understanding marketing selling and on direct selling. According to World Federation of Direct Selling Association (2001), direct selling should not be confused with terms such as direct marketing or distance selling, which may be described as an interactive system of marketing that transaction to at a measurable response or affect media advertising more or uses one database. For location, this example, some commonly stored on a activity with any known types of direct marketing and distance selling techniques are telemarketing, direct mail, and direct response. Besides, Kustin and Jones (1995) also claimed that direct selling is differentiated defined as a relational from direct marketing, of which direct marketing is process where products are sold directly using direct mail, telemarketing and direct response advertising solicitation. 10 to the consumer such as television On the other hand, direct selling may best described as the marketing of in face in face directly to to generally manner, a consumers products and services their homes or the homes of others, at their workplace and other places away from by demonstration locations, through or personal explanation usually permanent retail 1978). They added that direct selling (WFDSA, direct independent salesperson an important provides benefits to individuals who desire an opportunity to earn an income and build a business of their own; to consumers who enjoy an alternative to like; department the stores or and to the consumer products centers, shopping market. It offers an alternative to traditional flexible income earning opportunity whose responsibilities employment to supplement for those who desire a their household income, or full for do or part-time regular not allow or circumstances time employment. Direct Selling is being considered as a vehicle for marketing to consumers or (2002) Wotruba Stanworth Brodie, 1996). Wotruba, buyers (Peterson and and end defined that Direct Selling is a marketing method exhibiting substantial growth in it involves because is so many particularly noteworthy sales revenues and independent Direct contractors, not are usually salespeople salespersonparticipants. direct In the selling companies are with opportunities company employees. addition, open to persons from all backgrounds, experience levels, and personal characteristics. Peterson and Wotruba (1996) on the other hand defined direct selling as faceto-face selling away from a fixed retail location. Whilst Kustin and Jones (1995) individual direct that one-to-one sales presentations rather selling requires explained than indirect presentations. Additionally, Lee (1999) defined that direct selling is a distribution system where products from a manufacturer or national distributor flow 11 directly distinguishing The body of sales people. a to the purchasers through characteristic of this method of marketing is that the seller arranges to meet the buyer in order to create a sale instead of waiting for a buyer to come to him at a shop. Furthermore, direct selling had been further as to gain full discussed (1996), Wotruba Peterson there According to the are and concept. of understanding three perspectives "strategic". of direct Operationally, selling, designated as "operational", direct selling is a straightforward "tactical" personal selling activity interpersonal form it be known in communication. of as a can other word, or tactical perspective, From a direct selling can be considered as a way organizing Strategically, function. the selling and activities channel or mode of distribution, and sales direct selling can be viewed as a in which it is a mean of gaining access to a market doing business. of or a way Thus, it is comprehensible that direct selling is wholly differentiated from direct marketing, in which it is a distribution method for product or service directly fixed business from through a contact away personal to the end users or customers location. 2.1.1 The Direct Selling Industry It has been a shift in the nature of direct selling organizations. involves the relative incidence of the two types of organization identified as multi-level Peterson and Wotruba, The shift structures that are 2002; Stanworth Wotruba, (Brodie, level and and single 1996). They noted that in a multi-level organization, direct become direct train part of and other salespeople who recruit, supervise salespeople 12 down the recruiter's line and in return, the recruiting salesperson receives her his down line the own sales. or as on as well members sales of compensation on the salespeople do not build their own Whereas in a single level organization, organizations via recruiting but rather, they focus their efforts on and training, selling and achieving compensation based on their own sales. Moreover, Butwin (1997) claimed that there are two very different direct selling companies: the direct sales companies and the multi-level Direct sales companies are known as "seller-based", types of companies. which means that they give These he distributor income vehicles to the at retail. a sale she makes or when more usually market higher-ticket, one-time-sale or durable items such as durable in initial inventory in invest have to He that more one added automotive products. these direct sales companies because each individual unit of products costs more and in addition, income. In little is contrast, multi-level there or no residual usually companies usually offer reasonably priced products that people consume within a month or two and then re-order. The author highlighted that in multi-level is is lesser because involved there become the and cost companies, more people can information, For income promised. residual multi-level networks are built by a lot of bit. little is doing them a people where every one of According to another researcher,Bloch (1996) stated that multi-level firms sell but distribution and retail outlets, system their goods not through a conventional For friends, individual their to and strangers. acquaintances through people, selling has but from direct for is that sales made, one sales this, commission paid not only he by or she recruits as well. made Furthermore, Pratt (2000) explained that a large network marketing organization also known as network direct selling or multi-level 13 marketing organization in which it organization uses individual is a social structure through which a sponsoring members or distributors to sell its products and services face-to-face, as well as outside of a central business location. In addition, according to the World Federation of Direct Selling Associations, one crucial element of the direct selling industry is multi-level over many proven compensating direct services directly years to be a highly successful sellers for the marketing and effective and distribution to consumers. Where as, multi-level network marketing, marketing and it has method of of products and marketing also known as in which it is one type of non-store retailing methods. (Kustin and Jones, 1995). 2.2 Network Marketing As a Type of Direct Selling Network marketing as a type of direct selling had been supported by a several researchers with network definitions. various marketing is a type of direct independent distributor service. According Bauer and Miglautsch selling (1992) claimed that that usually performed by an franchisor the of a product or or manufacturer representing to Barrett (2000), network marketing is a form of direct sales in by in homes, their distributors independent customer's sell products, usually which telephone, or through the Internet. In theory, the distributors can make money not but from from those of the people they recruit. their sales also own only Besides that, Walsh (1999) in his article titled "Multi-Level Marketing Skirts Legal Lines" stated that the strength of multi-level marketing in a corporate distribution is it the traditional that mechanism with all of shortcuts retail perspective its attendant support costs such as marketing, sales, inventory and distribution. 14