POLYTECHNIC UNIVERSITY OF THE PHILIPPINES- SAN PEDRO

caCampus
ABSTRACT

The purpose of this study is to identify the distributor satisfaction

toward Multi-level marketing (MLM) in the Philippines, San Pedro City,
Laguna. The four influencing factors investigated are; methods of diffusing
business opportunity, perceived quality of recruitment process, perceived
quality of training program and up-line involvement. A proposed
conceptual framework that serves as the foundation in this research is
adopted from Delgado 2000 including the additional independent variable.
Among the five factors, only the demographic profile has no significant
difference in the level of satisfaction.

INTRODUCTION

Multi-level marketing (MLM) is also known as a direct selling or network

marketing in which products and services are sold by an agent or
distributor to an individual consumer even if they are in their own homes,
office and other non-retail stores. The distributors are rewarded for their
efforts through incentive schemes offered by the MLM companies. The
company also pays them for recruiting other people as distributors who
then duplicates their work of how they are selling a products or services to
others (Coughlan ^Grayson, 1998).

For you to be called as a distributor of a MLM company, an individual

should or required to purchase an initial start-up package. Distributors are
not employees in this company and thus, they are not receiving fixed
income/salary and benefits. They are completely independent and earn
only from reward plan and if they succeed in recruiting other people or
even selling their products or services (Taylor, 2012). When a recruiter
recruits another distributor, then the new recruits become the down-line

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while the recruiter becomes the up-line in the same network. Together,
their performance is measured of how the people will purchase their
products and recruitments that generate the volume for their network. A
distributor is paid according to the products or services that people
purchased as well as the group volume contributed by their network (Keep
& Nat, 2014).

Since MLM companies need their existing distributors to recruit new

distributors in order to grow the business, ensuring their satisfaction is
necessary to motivate them to be successful. While there is a wide
literature on employee satisfaction, studies on independent agents such as
distributors in MLM companies are very limited. Since distributors are not
salaried workers, the factors that affect their satisfaction are likely to be
different. Thus, the main objective of this study is to investigate the
distributor satisfaction towards multi-level marketing.

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THEORETICAL FRAMEWORK

Multi-Level Marketing came into existence and has spread all across the
globe in early 1890 which is an activity that anyone can take up at any time
and will generates income even if you are a housewife, executives,
corporation, retired persons, students as well as people from all walks of
life can engage in this kind of business while they’re pursuing their dreams.
Multi-level marketing is struggling of how they will satisfy their distributor
towards this kind of business. The distributor is a direct seller or
independent business proprietor who acts as a frontline sales force for
MLM companies. As they are not contractual employees, the company will
not terminate them even if they fail to achieve the envisioned target since
they are responsible for their own income or incentives (Kiyosaki, 2007).

According to Delgado (2000) the factors are identified from extensive

review of literature which indicates that they are relevant to the job
satisfaction and level of success in MLM Company. The influencing factors
of Distributor Satisfaction towards MLM are methods of diffusing business
opportunity, perceived quality of recruitment process, perceived quality of
training program and up-line involvement.

The influencing factors of Distributor satisfaction towards MLM can be

able to help the distributor to grow the network by using the word of
mouth in sharing it to the prospect but before that they must know that
recruiting is one of the most important activities in MLM so that they’ll able
to generate income immediately. In MLM industry, they must know that it’s
a very dynamic business and a sensitive one to the changes and movement
in the market. Thus, distributors must be trained and equipped with right
knowledge and skills because it’ll help them to be more convincing to
someone. They must be skillful when they’re dealing with the sales or

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marketing of the business opportunity and product services (Delgado,
2000). In the context of MLM industry, there is the up-line and down-line in
a network system where their two-way support is helping each other to
gain higher commission. Most of the time, the distributor hasn’t dealing
with the MLM company directly, rather, they’re always referring to the up-
line for guidelines in which the essential of the up-line is to help the down-
line in order for them to achieve the desire goal (Delgado, 2000).

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caCampus
CONCEPTUAL FRAMEWORK

The Conceptual Framework of the I.P.O of the Distributor Satisfaction

toward Multi-Level Marketing

INPUT PROCESS OUTPUT

1. The influencing 1. Demographic Distributor

factors of Profile Satisfaction

distributors 2. Methods of towards Multi-

satisfaction Promoting the Level Marketing

2. Questionnaire Business
3. Survey Opportunity
4. Statistical 3. The Process of
Treatment Recruiting People
5. Data Gathering 4. Understanding the
6. Quality of the
Training Program
5. The Up-line support

The figure above shows the proposed conceptual framework that will
serves as the foundation to study the process of satisfying the distributor
towards Multi-level marketing. In this figure, the output is the dependent
variable which is the Distributor Satisfaction towards Multi-level
Marketing. The input is the independent variables which are the
demographic profile, methods of promoting the business opportunity, the
process of recruiting people, understanding the quality of the training

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program and the up-line support. The use of the framework is to identify
the process of I.P.O which is the solution of the proper way of satisfying
your distributor towards MLM.

STATEMENT OF THE PROBLEM

1. Distributor’s Profile

1.1 Age

1.2 Sex

1.3 Marital Status

1.4 Years as MLM Distributor

2. What is the level satisfaction of MLM distributors in terms of:

a. The influencing factors of distributors satisfaction

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caCampus
b. Methods of Promoting the Business Opportunity
c. The Process of Recruiting People
d. Understanding the Quality of the Training Program
e. The Up-line support

3. Is there a significant difference in the level of Satisfaction of distributors

when grouped according to demographic profile?

Hypothesis: there is no significant difference in the level of satisfaction of

distributor when grouped according to demographic profile.

REVIEW OF LITERATURE