Intention To Join Network Marketing

Lebanese University
Faculty of Economic Sciences
And Business Administration
Branch First
Network Marketing in Lebanon: What Encourage or

Discourage Youth to be Involved
A Thesis Prepared in the Fulfillment of the Requirement for the Master’s

Professional Degree of Business Administration in Marketing
Prepared by:
Samar Sahily
Supervisor: Dr. Inaya Wahidi
Reader: Dr. Groerges Jreij
Reviewer: Dr. Jana Badran
Academic Year 2020-2021

Copyright
The Faculty of Economics and Business Administration at the Lebanese University does not
intend to give any approval or disapproval to the opinions expressed in the dissertations and in
the senior projects: these opinions must be considered as specific to their authors.
Abstract
Network Marketing or Multi-level Marketing concept has been rising significantly in Lebanon
during the past years. NM refers to the process of selling products and services directly to the
customers through network of people. In fact, due to the continuous crisis, more Lebanese youth
are searching for opportunities which present an easy and fast way of generating money, getting
experience and exposure. In the recent years, there have been reported several fraudulent cases
from certain alleged NM companies. The main problem is that there is a lack of information
(according to our knowledge) about Network Marketing companies in Lebanon; specially
regarding the factors which motivate or demotivate youth to be part in them. Based on the
findings of the empirical approach using qualitative approach to reflect to the Lebanese context
and quantitative analysis with questionaries, our study implicated that there is a significant
relation between the encouragement and between the discouragement factors, and the intention
of Lebanese youth to be involved in NM companies. This paper encourages officials to raise
awareness about these companies, educate youth on how to get involved, and impose certain
laws for NM in Lebanon to operate in a legal, transparent, and clear way.
Keywords: Network Marketing, Multi-Level Marketing, Ponzi Scheme, Pyramid Scheme,

encouragement factors, discouragement factors.
‫ تشير التسويق‬.‫ المستويات ارتفاعا ً ملحوظا ً في لبنان خالل السنوات الماضية‬N‫شهد مفهوم التسويق الشبكي أو التسويق متعدد‬
،‫ بسبب األزمة المستمرة‬،‫ في الواقع‬.‫الشبكي إلى عملية بيع المنتجات والخدمات مباشرة للعمالء من خالل شبكة من األشخاص‬
‫ تم‬،ً‫ مؤخرا‬.‫يبحث المزيد من الشباب اللبنانيين عن فرص تقدم طريقة سهلة وسريعة لتوليد األموال واكتساب الخبرة والتعرض‬
‫ المشكلة الرئيسية هي أن هناك نقص في المعلومات (حسب‬.‫ من حاالت االحتيال من بعض شركات مزعومة‬N‫اإلبالغ عن العديد‬
.‫ خاصة فيما يتعلق بالعوامل التي تحفز أو تثبط رغبة الشباب للمشاركة فيها‬،‫معرفتنا) حول شركات التسويق الشبكي في لبنان‬
‫ أشارت دراستنا‬،‫بنا ًء على نتائج المقاربة التجريبية باستخدام المقاربة النوعية لتعكس السياق اللبناني والتحليل الكمي مع األسئلة‬
.‫ ونية الشباب اللبنانيين للمشاركة في شركات التسويق الشبكي‬،‫إلى وجود عالقة كبيرة بين عوامل التشجيع وبين عوامل التثبيط‬
‫ وفرض‬،‫ وتثقيف الشباب حول كيفية المشاركة‬،‫تشجع هذه الورقة المسؤولين على رفع مستوى الوعي حول هذه الشركات‬
.‫قوانين معينة على التسويق الشبكي في لبنان للعمل بطريقة قانونية وشفافة وواضحة‬
‫ عوامل‬،‫ عوامل التشجيع‬،‫ مخطط الهرم‬،‫ مخطط بونزي‬،‫ التسويق متعدد المستويات‬،‫ التسويق الشبكي‬:‫الكلمات المفتاحية‬
.‫اإلحباط‬
List of Abbreviations
NM: Network Marketing
MLM: Multi-Level Marketing
PS: Pyramid Scheme or Ponzi Scheme
WFDSA: World Federation of Direct Selling Associations
DSA: Direct Selling Association
FTC: Federal Trade Commission
WOM: Word of Mouth
ROI: Return on Investment
B2C: Business to Consumer
S.A.L: Société Anonyme Libanaise (Joint Stock Company)
S.A.R.L: Société Anonyme à Responsabilité Limitée (Limited Liability Company)

Acknowledgement
This research paper didn’t only take long time, efforts, and patience; but also loads of tears,
pressure, and anxiety. However, after three years, I finally reached the moment where I wrote my
last word with eyes filled with tears of happiness and pride of how I was able to conclude an
important chapter in my life after all what I have been through. It wasn’t an easy journey at all,
but a worthy one.
I would like to share my deepest gratitude to my supervisor Dr. Prof. Inaya Wahidi, who
believed in my capabilities and vision. You have been such a support to me. Your guidance,
feedback, mentoring, and time spared to me were the reasons of my accomplished milestone.
You have always pushed me beyond my limits to achieve unique result, and here we are.
I am also grateful to Dr. Georges Jreij, the reader of my project, and Dr. Jana Badran, the
reviewer of my project, for taking the time to review my thesis, provide added value comments,
and advise me to develop my project more. I truly appreciate your valued contribution.
Lastly, I kudos every expert, manager, friend, lawyer, and each person for their time invested in
me to provide me the needed data to contribute to my research. I wouldn’t be able to do it
without you; so, thank you for your help.
Dedication
This dissertation is dedicated to my beloved little sisters Fatema and Yasmine. You have always
looked up at me as your inspiration and role model of how strong and independent a female can
be and supported me all the way long. This milestone in my life is dedicated to you; for every
time you believed in me, worried about me, cheered for my successes, and enjoyed my
achievements more than me. You have pushed me far from my comfort zone to keep working on
myself and reach my goals.
To my parents, thank you for giving me the space to become who I am today and entrusted me to
be a successful daughter that you are proud of. Every accomplishment in my life is dedicated to
all your sacrifices you have done to see me succeed.
To my partner and future husband Hasan, I dedicate this milestone to you. You have been such
an inspiration and vital support to me. I definitely wouldn’t be able to complete this journey
without your continuous motivation, encouragement, and help. You always push me to become a
better version of myself and believe I am capable of doing so many things. You can now add this
to your ‘proud list of me’. Thank you for being my partner for the last five years and I promise to
keep you proud and your head high.
To every person who have been part of my journey to complete my study, I want to thank you
for your added value and for sparing the time to be there for me.
Table of Contents
Copyright.........................................................................................................................................ii
Abstract..........................................................................................................................................iii
List of Abbreviations......................................................................................................................iv
Acknowledgement...........................................................................................................................v
Dedication.......................................................................................................................................vi
Table of Contents..........................................................................................................................vii
List of Tables..................................................................................................................................xi
List of Figures................................................................................................................................xii
Chapter One: Introductory Chapter...............................................................................................13
1.1. Introduction.....................................................................................................................13
1.2. Problem statement...........................................................................................................15
1.3. Research Objectives........................................................................................................16
1.4. Research Question...........................................................................................................17
1.5. Research Hypotheses......................................................................................................18
1.6. Methodology...................................................................................................................20
1.7. Study Contents................................................................................................................21
Chapter Two: Literature Review...................................................................................................22
2.1. Importance of NM Concept in Lebanon.............................................................................22
2.2. Historical Overview of Network Marketing.......................................................................23
2.3. Traditional marketing versus network marketing...............................................................24
2.4. Network marketing definitions...........................................................................................25
2.5. Compensation plans............................................................................................................26
2.5.1 Uni-level.......................................................................................................................27
2.5.2 Binary...........................................................................................................................29
2.6. Importance of Network Marketing.....................................................................................31
2.6.1 Economic impact:.........................................................................................................33
2.6.2 Personal impact.............................................................................................................33
2.6.3 Social Impact................................................................................................................33
2.7 Ponzi Schemes / Illegal pyramid:........................................................................................34
2.7.1 History..........................................................................................................................35
2.7.2 Ponzi Scheme Definitions.............................................................................................35
2.7.3 Ponzi schemes vs network marketing...........................................................................36
2.8 The Lebanese context..........................................................................................................37
2.9 Determinants of encouragement and discouragement for youth participation in Network

Marketing organizations............................................................................................................44
2.9.1 The Reality of the world we live in..............................................................................44
2.9.2 Determinants of encouragement for youth to participate in NM companies................46
2.9.3 Determinants of discouragement for youth to participate in NM companies...............52
Chapter Three: Research Methodology.........................................................................................61
3.1 Research Methodology........................................................................................................61
3.2 Research Approach..............................................................................................................64
3.3 Type of data.........................................................................................................................66
3.4 Choice of land......................................................................................................................68
3.5 Bias......................................................................................................................................69
3.6 Qualitative research.............................................................................................................69
3.6.1 Qualitative tools............................................................................................................69
3.6.2 Data collection..............................................................................................................70
3.6.3 Study sample.................................................................................................................71

3.6.4 Qualitative data analysis...............................................................................................73
3.7 Quantitative research...........................................................................................................73
3.7.1 Quantitative advantages and disadvantages..................................................................73
3.7.2 Data collection..............................................................................................................74
3.7.3 Study sample.................................................................................................................74
3.7.4 List of variables............................................................................................................75
3.7.5 Measures for the questionnaire.....................................................................................75
3.7.6 Data treatment – SPSS..................................................................................................78
3.7.7 Regression Analysis......................................................................................................78
3.7.8 Reliability and Validity Tests.......................................................................................80
Chapter Four: Data Analysis.........................................................................................................82
4.1 Qualitative data analysis......................................................................................................82
4.1.1 Demographic characteristics.........................................................................................82
4.1.2 Data analysis.................................................................................................................83
4.2 Quantitative data analysis....................................................................................................88
4.2.1 Demographic Characteristics........................................................................................88
4.2.2 Descriptive statistics.....................................................................................................92
4.2.3 Validating Hypotheses..................................................................................................95
Chapter five: Discussions and interpretations.............................................................................110
5.1 Summary of results............................................................................................................110
5.2 Discussion related to the literature review.........................................................................111
5.3 Managerial Implications....................................................................................................114
5.4 Conclusion.........................................................................................................................115
5.5 Recommendations..............................................................................................................117
5.6 Limitations.........................................................................................................................118
5.7 Future research perspectives..............................................................................................119
References....................................................................................................................................120
Appendix A: Pilot interviews with different experts and experienced individuals.....................132
Appendix B: Questionnaire.........................................................................................................142
Appendix C: Interview questions................................................................................................149

List of Tables
Table 1: Reliability Statistics.........................................................................................................80

Table 2: KMO and Bartlett's Test..................................................................................................81
Table 3: Age descriptive................................................................................................................88
Table 4 Gender Descriptive...........................................................................................................89
Table 5 Education Descriptive.......................................................................................................90
Table 6 Status Descriptive.............................................................................................................91
Table 7 Salary Descriptive.............................................................................................................91
Table 8 Attitudes toward Network Marketing Entry and other variables.....................................93
Table 9: ANOVA and table of coefficients for Regression one....................................................95
Table 10: ANOVA and table of coefficients for Regression two..................................................96
Table 11: ANOVA and table of coefficients for Regression three................................................97
Table 12: ANOVA and table of coefficients for Regression four.................................................98
Table 13: ANOVA and table of coefficients for Regression five.................................................99
Table 14: ANOVA and table of coefficients for Regression six.................................................100
Table 15: ANOVA and table of coefficients for Regression seven.............................................101
Table 16: ANOVA and table of coefficients for Regression eight..............................................102
Table 17: ANOVA and table of coefficients for Regression nine...............................................103
Table 18: ANOVA and table of coefficients for Regression ten.................................................104
Table 19: ANOVA test for multiple regression...........................................................................105
Table 20: Model summary for multiple regression.....................................................................105
Table 21 Multiple Regression......................................................................................................107
List of Figures
Figure 1: Uni-Level Model Structure............................................................................................28

Figure 2: Binary Model Structure..................................................................................................30
Figure 3: Registered trademarks for Jeunesse...............................................................................38
Figure 4: Registered trademarks of Oriflame................................................................................38
Figure 5: Registered Trademark for NU SKIN.............................................................................38
Figure 6: Registered Trademarks for FOREVER LIVING...........................................................39
Figure 7: Registered trademark for AMWAY...............................................................................39
Figure 8: Registered trademarks for NUTRILITE........................................................................39
Figure 9: Registered trademarks for Herbalife..............................................................................40
Figure 10: Registered representative company for Herbalife........................................................40
Figure 11: Registered representative office for BONOFA............................................................41
Figure 12: Registered representative office for GMI....................................................................42
Figure 13: Registered representative office for QNET..................................................................42
Figure 14: Towards a first modeling about encouragement and discouragement factors for youth
participation in network marketing................................................................................................59
Figure 15 The research onion........................................................................................................62
Figure 16 pie chart represents Age Descriptive.............................................................................88
Figure 17 Histogram represents Gender Descriptives...................................................................89
Figure 18 pie chart represents Status Descriptive..........................................................................90
Figure 19: Towards a new modelling about encouragement and discouragement factors for
Lebanese youth participation in network marketing...................................................................109
Chapter One
Introductory Chapter
1.1. Introduction
Direct selling is a dynamic business structure that is rising rapidly domestically as

well as internationally. According to the WFDSA, this industry has achieved 189.6
billion dollars’ worth of sales volume in 2017. The world is sectioned into five regions in
terms of their sales’ volume: Africa/Middle East (1%), Europe (20%), Americas (33%),
and Asia/Pacific (46%). Also, the 10 direct selling leaders in the world are: United States
& China head with 18% of the global market, Korea & Germany with 9%, Japan 8%,
Brazil 6%, Mexico & France & Malaysia 3%, and Taiwan with the lowest of 2%
(Ozmorali, 2018).
In fact, direct selling is the selling of a product or service, where no fixed retailing store
is available, and the procedure is done face-to-face or online, towards an individual or
more, with demonstration of the product or service by the seller. In most cases, the
products sold are financial (new trending), cosmetics, houseware, skincare, nutrition, and
others related to the wellbeing. According to the WFDSA Global Statistical Report,
cosmetics & personal care have the highest global sales with 36%, wellness products with
22%, household goods with 7%, and clothing & accessories with 8%. Some sales are
done at home, at work, or even on the streets (Emmert, 2012).
With more than 116 million direct sellers existing globally, out of which 74% are female
distributors (Unknown, 2018), and women are at the top 20% earners. This might indicate
that women are more interested and involved in direct selling than men. Also, direct
selling industry is occupying a large market share globally. Usually, people who work in
direct selling are not employees, but rather independent individuals who are well trained
to persuade you of a product that you may or may not need but will buy after the
presentation and long conversation. Foremost, the products sold are not cheap; that’s why
you need to think straight about whether it can offer you an added value or not before
buying it.
Direct Selling is a billion-dollar industry spread across the globe . It has been proven that
it is more profitable than retail selling, which has driven most of the existing and new
companies to shift into direct selling for its advantageous appearance. Swaroopa (2016)
mentioned that the flexibility advantage is what gives the direct selling the attractive
package, where the representatives set their own schedule and targets, and keep their
work-life balance. It is like investing in a business to be called theirs, and they are the
leaders.
Nevertheless, a new concept has been developed in the early 1940s, in extension to the
direct selling industry, Network Marketing. NM is considered a recognized model where
the products and services of the company are sold by a network of representatives.
According to Blanchard (1993), it is a chain of people who are connected in a certain way
and are selling these products and services through their networks.
With its development, NM became one of the top used direct selling models globally, as
it uses the social network to expand and distribute the products and services in the retail
industry (Coughlan & Grayson, 1988).
It encourages the independent distributors to create and lead their own sales force via a
network, where they earn their commissions as a percentage of their own sales revenues,
along with sales revenues accomplished by the sales group recruited by the distributor
and their recruits as well (named downline).
Statistics showed that from 1945 until today, more than 150 thousand NM companies
were formed, but only 1000 survived until now (Long Asia, 2016).
Network marketing is also called Multi-Level-Marketing, and it has been receiving

negative feedback due to its twin ‘Pyramid Schemes’ or ‘Ponzi Schemes’. As Whiting
(n.d.), explains that pyramid schemes are channels of distributing products and services
via multi-level marketing, however, it is by recruiting new members in the network
which would be considered the ultimate profit generators. In order to survive and prevent
losing the invested money, the members need to keep recruiting new joiners, but at a
certain point it becomes harder, and the chain fails.
However, Sahli (2013) described how these companies entered the Lebanese market with
the propaganda of generating easy and fast income. Companies like Herbalife, Qnet,
Jeunesse, Live Free, Avon, and Tupperware, and many more have been operating in
Lebanon for years, some are old, and some are new to the Lebanese market. In fact, the
companies are attracting hundreds of young people, and there are no legal grounds to shut
them down as their business is considered legal and abides by Lebanese laws, according
to Fayza Abdel Rahim, a lawyer interviewed by Sahli (2013). Yet, they are making a
huge buzz these days; people are talking about them, news stations are reporting about
fraud cases, some are making money and others are losing high amounts of money, there
isn’t enough evidence to explain it. Are these companies operating based on network
marketing or are they practicing pyramid schemes? Are Lebanese people accepting or
refusing their allegations and joining their alleged network? And how are they being
motivated if they participate or not?
The biggest problem in Lebanon specifically is that there is no significant data, studies,
research, or investigations about these types of firms and their business models, or
number of members involved. Therefore, this research paper will try to find whether
these companies are legal or not, how do they really work, whether individuals are
getting involved in, and what is encouraging them to join and what is not.
1.2. Problem statement
Lebanon’s situation has been deteriorating, with the progression of economic

decline, pandemic, and the declining social status, where more than half of the Lebanese
citizens live under the poverty limit, according to the World Bank (Nassour, 2021). Also,
there are up to 35000 Lebanese graduates each year with job supply of approximately
5000 vacancies, which puts the rest under the unemployed umbrella joining the others
from previous years, according to the Lebanese Labor Minister Mohammad Kabbara
about the situation (Kadi, 2017). In addition to that, the global and national situation have
aided in increasing the challenges for youth.
These aspects have forced people and young individuals particularly to blindly seek easy
money paths without pre-considerations and research. With the currency losing more than
90% of its worth during the past two years, more than half of the Lebanese people are
facing poverty (Unknown, 2021).
‘Get rich quick! Become a Millionaire in two years! ….’ These are the schematic
attractions NM companies have been advertising for years and people have fallen for and
lost more than financial matters by getting involved with illegal companies which turned
to be fraudulent and scammed people for their money. With that, lawsuits are being
raised against these companies, but there are no real investigations behind them, as they
aren’t registered properly or legally in Lebanon and they work privately in most cases.
There aren’t even enough directories for them or legal data. Why, as much as we hear
negative things about them, they still grow more and more? Why, isn’t there enough data
or research? Shouldn’t there be awareness about their legality and Pyramid Scheme
practices? Thus, the problem statement is the following: According to our knowledge,
there is a lack of information about Network Marketing companies in Lebanon;
especially regarding the factors which motivate or demotivate youth to be part in them.
1.3. Research Objectives
Every company generates its revenues from the sales of its products or services as
a collaborative process from all departments in the organization. Network Marketing
companies try to sell larger and higher quantities in quicker and shorter duration, by the
recruitment of a high number of members within a network. Mainly, their targets are
young people who are eager to find a job or money-making path especially recently
graduated and unemployed. However, in some and recent cases, it is questioned whether
they are really producing sales and revenues based on their products, or on the
recruitment process. Despite the importance of this topic, unluckily, no data or research
(according to our knowledge) has been developed to tackle the NM / MLM companies in
Lebanon.
The research objectives are:
1. To identify the MLM companies operating in Lebanon

2. To find out what encourages or discourages Lebanese youth to work for these
companies
3. To figure out whether they are doing business legally or not
4. To test if they are Pyramid Schemes or not
5. To focus on the importance of legal monitoring and evaluation of any
international company penetrating the domestic market before giving the right to
operate
6. To identify how individuals are making money or losing in these types of
businesses
7. To stress on the importance of awareness for youth before jumping to any virtual
business opportunity
8. To help related companies in Lebanon not to fall in any schematic practice that
would harm their image, performance, and identity
9. To create a foundation that will trigger further studies related to this topic to carry
on, expand, and reach deductions that will grow their sector
1.4. Research Question
From the problem stated above, the research question is the following:
What are the determinants which encourage and discourage individual youth to
participate in Network Marketing companies?
To answer this question, we will present the following two parts: Part I titled “NM
Literature Review adapted to Lebanese context” and Part II titled “An empirical study on
factors which encourage and discourage college students to participate in Network
Marketing companies”. Part I is composed of three chapters: “The importance of
Network Marketing concept in the literature” (Chap1), Determinants of encouragement
and discouragement for participation in Network Marketing organizations (Chap2), and
“The exploration of NM determinants which encourage or discourage individuals to get
involved in NM companies in Lebanon” (Chap3). Part II is composed of three chapters:
“Research methodology” (Chap1), “Results and Analysis” (Chap2), and
“Recommendations, Limitations, and Contributions” (Chap3).
1.5. Research Hypotheses
During our study, supported by the literature review and the interviews conducted, our
hypotheses be deduced as a guide to further tackle our research question and find the
appropriate results. These hypotheses will be either validated or rejected upon out finding
at the end of the study. The hypotheses can be listed as follows:
H1: There is a significant relationship between the determinants of encouragement for

youth involvement in network marketing companies and their intention of participation.
 H1a: According to Danuwidjaja (2017), Attard (2017), Effiom & Effiong (2015),
and Marian (2017), there is a significant relationship between the low-cost
investment as an encouraging factor for youth involvement in network marketing
companies and their intention of participation.
 H1b: According to Danuwidjaja (2017), Attard (2017), Marian (2017), and Vance
(2019), there is a significant relationship between flexibility of time as an
encouraging factor for youth involvement in network marketing companies and
their intention of participation.
 H1c: According to Attard (2017), Marian (2017), and Danuwidjaja (2017), there
is a significant relationship between no required experience option as an
encouraging factor for youth involvement in network marketing companies and
their intention of participation.
 H1d: According to Danuwidjaja (2017) there is a significant relationship between
expanding one’s network and professional connections as an encouraging factor
for youth involvement in network marketing companies and their intention of
participation.
 H1e: According to Attard (2017), Effiom & Effiong (2015), and Marian (2017),
there is a significant relationship between getting easier and faster access to
financial returns as an encouraging factor for youth involvement in network
marketing companies and their intention of participation.
H2: There is a significant relationship between the determinants of discouragement for

youth involvement in network marketing companies and their intention of participation.
 H2a: According to Zwilling (2011), Albaum and Peterson (2011), and Cohn
(2021), there is a significant relationship between generating money through
recruiting people as discouraging factor for youth involvement in network
 H2b: According to Cohn (2021), Zwilling (2011), and Babu (2017), there is a
significant relationship between propaganda of getting rich quick as discouraging
factor for youth involvement in network marketing companies and their intention
of participation.
 H2c: According to McKay & McKay (2018), Koroth & Sarada (2012), and Cohn
(Cohn, 2021), there is a significant relationship between abusing family and
friends relations for business benefits as discouraging factor for youth
involvement in network marketing companies and their intention of participation.
 H2d: According to Zwilling (2011), Cohn (2021), and Albaum & Peterson
(2011), there is a significant relationship between putting pressure on individuals
to stock inventories to access rewards as discouraging factor for youth
 H2e: According to Babu (2017), and McKay & McKay (2018), there is a
significant relationship between demanding long-term commitment to achieve the
advertised financial status as discouraging factor for youth involvement in
network marketing companies and their intention of participation.
1.6. Methodology:
In order to make this research worth all the efforts, time, stress, depression, late
nights, back pain, and headaches invested in, and answer the main research question, a
descriptive survey has been used. In addition, historical data was extracted, previous
research were adopted, interviews have been done, and google was there for me when I
needed help the most.
Due to the lack of data and research in Lebanon about NM/MLM companies, I had to
develop both quantitative and qualitative methods:
1. The quantitative method is illustrated by:
a) A detailed questionnaire which gets the insights of

youth to identify the factors which encourage or
discourage them to be involved in NM
organizations.
b) SPSS software to help analyze the data collected in
a statistical manner and determine which
proposition to take or discard.
2. The qualitative method is reflected by interviews with high ranked individuals in

different NM companies in Lebanon, experts in NM, and ex-members. It was
used to reflect the variables identified in the literature review according to the
Lebanese context.
1.7. Study Contents
This research paper involves 5 chapters that consists of designing and developing the
main structure of the research, the literature review, the methodology and tools, the
analysis and evaluation, discussions in addition to the recommendations to be offered by
the researcher. Here is a summary of the content material of each chapter:
 1st Chapter: chapter one includes the main structure of the study. Moreover, this
chapter covers the problem, the significance of the study and its objectives, the
research questions and suggested hypotheses to be studied later in this research
paper. As well as, general idea of the main topic, introducing the main variables
and the work done in this paper.
 2nd Chapter: chapter two will present the literature review of the topic.
 3rd Chapter: chapter three provides information about the population and the
sample size and will elaborate the details of the selected methodology to be used
in this research.
 4th chapter: chapter four discuss the significance relationships of the hypotheses
projected by the researcher in the first chapter using SPSS software, and analyze
the findings of this study.
 5th chapter: chapter five communicates the conclusions, recommendations and

limitations faced during this study. In addition to future researches section.
Chapter Two
Literature Review
2.1. Importance of NM Concept in Lebanon
In Lebanon, a regular job is never enough to cover the monthly expenses; a regular
job can’t pay the high fees of schools and universities; a regular job can’t afford a saving
account. People are searching for alternatives to increase their income; part time, nights
shifts, online trading, home-based, investing, or other ways to make money. Along with
that, young college individuals are seeking fast and easy access to the workplace even
before graduation, due to the hardship of getting a job with no previous experience aside
the diploma, as well as generating money to live the average Lebanese life (which in
most cases is tiring and expensive). In fact, there are several options that could help
generate extra money to the pocket, but the option with the most attracting package wins.
In Lebanon, the first interesting side work was direct selling targeting housewives to
generate extra money from home. Then, a more interesting concept appeared, with the
promise of generating more money from a regular direct selling process. Network
Marketing penetrated the Lebanese market with the promise of giving the opportunity for
young individuals to be part. However, at that time and until today, this concept has been
misused by fraudulent companies, misjudged by people, and the true profile of NM
wasn’t clear. So, Chapter1 will disclose the following: Historical overview of Network
Marketing (1.1), Traditional versus Network Marketing (1.2), Network Marketing
definitions (1.3), Compensation plans (1.4), Importance of Network Marketing (1.5),
Ponzi Schemes / Illegal pyramid (1.6), and Lebanon in context (1.7).
2.2. Historical Overview of Network Marketing
Network Marketing is an old business concept with more than 50 years of operations
worldwide. It was initially created by Nutrilite (previously known as California
Vitamins), which was operating as a direct selling company, selling vitamins, minerals,
and dietary products since 1934. Meanwhile in the early 1940s, the company noticed that
the new sales force is mainly composed of family, friends, and relatives of the existing
sales representatives, for the main purpose of getting products for lower prices. They also
agreed that it is better to have low sales from large quantity of people, than to have high
sales from small quantity of people. As a result, they established a compensation plan,
with commissions on the sales done by recruited network members, which encourages
their sales representatives to invite new members who are already using the products and
satisfied and grow the network exponentially. Then, in 1956, the company was registered
as a Network Marketing company by Shaklee company to get broad distribution globally
(Constantin, 2007).
Surprisingly, Rich DeVoss and Jay Van Andel, past Nutrilite distributors, started Amway
(short for American Way), as a new network marketing firm in 1959, to sell health,
beauty, and home care products. Then in 1972, Amway bought Nutrilite, and became the
largest network marketing company globally (Biggart, 1990). After that, Amway was
accused of operating a Pyramid Scheme by the FTC in 1975, and stayed four years
fighting the lawsuit, with stable revenues stream (Trunks, 2015). In 1979, Amway won
the lawsuit and was declared as a legal network marketing company by the FTC (Nocera,
2015).
After that, these companies “quickly learned the potential of international markets.
Amway began its international expansion by entering Australia in 1971; Herbalife,
founded in 1980, began its international expansion by entering Canada in 1982; and Nu
Skin, founded in 1984, entered Canada in 1990” (Keep & Vander Nat, 2014).
Direct selling companies have increased globally and expanded, and several of them are
network marketing companies and some aren’t. However, there hasn’t been a clear
understanding of how legitimate network marketing companies work and operate; some
companies practiced frauds, which caused resistance, lawsuits, and bad publicity, and the
large leaders strive to fight against. Through time, network marketing has held different
names; multilevel marketing, referral marketing, relationship marketing, pyramid selling,
chain marketing, cellular marketing, dual marketing, affiliate marketing, or consumer
direct marketing (CDM). It is true that all these names have similarities in their general
outlines, but differences present in terms of context.
2.3. Traditional marketing versus network marketing
For every existing organization in the world, its ultimate target is to sell its products or
services; but the approach varies depending on the system each company uses. With
development of technologies and businesses, companies had to adapt and change their
strategies to survive in competitive markets. One of their major shifts focused on the
selling process from manufacturers to end users, i.e., from traditional to network
marketing approach. Here are the major differences between these two concepts
according to Boora (2017):
 In traditional process, there are different players in the selling chain, and the
buyer and seller have distinctive characters. In contrary, the representative in
the network plays different roles, from buyer, seller, to sponsor.
 Traditionally, the selling chain consists of manufacturer, wholesaler, retailer,
distributor, and end user; whereas all these parties are eliminated by network
marketing and only holds manufacture to end user parties.
 Advertisement channels for traditional concept were based on huge
investments on mass media, sales promotions, ads, and campaigns, which
results in the increase of the cost and price of their products or services. Yet,
these networks are built on word of mouth of its members, which removes all
other additional advertising costs, to drop the prices down.
 In traditional marketing, there is no opportunity for consumers to earn money,
but in network marketing, it offers consumers the chance to generate returns
and build their own team (or small business)
 The risk associated with the large investment in traditional marketing is high,
compared to the low risk associated with the low investment in network
marketing.
This comparison shows the positive advantages Network Marketing has on the traditional
way. Nevertheless, when it comes to NM, the main secret ingredient for the success of
the chains is the collaboration and unity the members put together.
2.4. Network marketing definitions
For decades, since its creation in 1940s, there have been various attempts done by
experts, analytics, professors, businesspeople, and others in order to give Network
Marketing or Multi-Level Marketing a proper definition or emphasis.
As simple as it could be, Wolfe (2018) outlines NM as a professional work frame which
depends on a chain of representatives to develop and increase the sales and revenues.
“Multilevel marketing is a way of distributing products or services in which distributors

earn income from their own retail sales, and from sales made by other direct and indirect
recruits, that is, people they have recruited to sell, and people their recruits have
recruited, into the direct selling organization as distributors” (Keep & Vander Nat, 2002).
To define better, Bhattacharjee (2016) explained the chain terminology, where the upline
is the person who sponsors other members, and these members are called downline.
Author Richard Poe (1995), on the other hand, agrees that NM concept definition have
been argued about for several years and it was agreed that it can’t be properly defined.
However, a simple definition can be suggested: NM is a marketing method where the
independent agents employ other agents in the network and collect commissions on their
sales, as cited by Taylor (2012).
“Network marketing is the low-cost, and now high-tech, industry that invites you to build
your own business and earn a potentially high income while working from home on your
own schedule. You earn immediate income and serious long-term residual income by
selling products and services directly to consumers and convincing others to do the same”
(King & Robinson, 2000), as cited in (Taylor, 2012).
Kong (2002) agrees with these statements and describes network marketing as a modern
marketing strategy, by which products move directly from the manufacturer to
consumers’ hands without the rest of the business chain. Mainly, this approach depends
on the word of mouth of the consumers and distributors about the products and the
opportunity to their surroundings, such as friends, families, and connections. Not to
forget that money is earned from either the products’ sales or from embarking new
members.
Of course, definitions vary according to scholars and experts and depending on

experience, studies, knowledge, or expertise. For instance, MLM companies consider that
this business model constitutes an opportunity to make profits. This process starts by
joining the network and buying the company’s products and services on a frequent basis.
Then the member needs to recruit additional people in the chain to do the same and get
commission. Only then they are qualified to earn higher bonuses and step up in the
hierarchy levels to stay in the lead. So mainly NM is a never-ending network of
recruitment and personal consumption, which we can call pyramid scheme (Taylor,
2012).
Also, in some cases, MLM schematic activities are described in a situation when
representatives advise individuals invest in this opportunity, so they acquire the
authorization to recruit other individuals to do the same. Hence, the person generates
commission on the people they recruit, and the product becomes the recruitment card
(Koehn, 2001), as cited in (Hyman, 2007)
There will never be one definition or answer. Indeed, network marketing is practiced in
different companies, different sectors, with different products, and different services; but
the basic Network Marketing system is the same.
2.5. Compensation plans

As network marketing evolved through years, and with increased competition
between these companies as they grow in number, different compensation plans have
been developed in order to keep their members and representatives motivated to work
harder, get more people, increase their sales, and keep the network alive and expanding.
Four compensation plans have been identified and implemented in NM organizations:
Uni-level, Binary, Matrix, and Stairstep (Breakaway). We will only present Uni-level and
Binary, since they are the most used models.
2.5.1 Uni-level:
During the 80s, network marketing adopted the uni-level compensation plan,
which was considered the simplest plan among others. In fact, Amway and Herbalife
adopt the unilevel plan.
Mainly, this plan has limited length, which means that all new members are directly
linked to their recruiter, where they earn commissions on the members’ sales and
purchases; however, the commission goes just up to 8 levels (Unknown, 2016).
In addition, it has unlimited depth, which allows you to recruit as many people as you can
horizontally. Usually, the commissions are 5% of the sales of the recruits, along with the
person’s own sale volume. Example suggested by Temple (2016) can give a clear image
about the plan; it is as follows:
A person recruits 5 people at his frontline, and in return these 5 recruit another 5 each,
continuing to level 6 (for example). The network will be as follows:
Figure 1: Uni-Level Model Structure
Source: Adapted from Uni-level Compensation Plan (Temple, 2016)
This model is a theory for one person at level 1 and, in reality, these numbers are much
higher. Yet, it is not as simple as it shows due to recruitment process, time, people’s
attitudes toward the firm and products, and challenges faced. One main disadvantage of
unilevel plan is that as the frontline of a member grows bigger and bigger, as the person
will lose focus on his/her old recruits and out more focus on their new ones. Also,
regarding payoffs, unilevel plan commissions are limited. Still, there are various
advantages which compensate the other side; they are as what follows:
 Being able to have limitless number of people in the one’s network, which can
add up to the revenues generated (Chandrashekhar, 2013)
 The plan is clear and can be demonstrated to the potentials easy (Willis, 2010)
 Different compensation incentives (Unknown, 2018), which allows extra income:
 Fast Start Bonus: given when a new distributor accomplishes
certain target sales in their initial period
 Pool Bonuses: divided over top individuals who have reached
certain qualifications
 Rank Bonuses: paid to existing members who have attained new
level at the company
 Sponsor Bonuses: rewarded upon getting new members
 Level Commissions: calculated from the percentage of the overall
sales of the representative’s downline
2.5.2 Binary
The binary concept was created by David Crowe during the fall of 1989, where he
started a company American Gold Eagle, and promoted gold coins using the binary plan
for the first time (Clements, Inside Network Marketing, 2006).
According to Springer (2017), binary MLM is considered a new simple version of NM

approaches, which was adapted in different companies over the time. It has been
widespread across organizations globally, and one of the most used systems these days.
In this model, the distributor can have only two members on his/her frontline, but if
he/she wants to sponsor more than two, they would place them under their downlines’
level (called spills). Mainly, on the contrary to unilevel plan, representatives can build as
many levels as they want, which means the model has unlimited depth.
Binary structure gives the opportunity for the members to sponsor only two individuals
under him/her as right-left or strong-weak legs. The right leg is the chain that the
individual joined under and was created by their recruiter, and all members joined by the
above fall under. As for the left leg, it is the individual’s own chain that they must start
creating and recruit people under (Unknown, 2016). The figure below shows how the
model is created.
Figure 2: Binary Model Structure
Source: Adapted from DCR Strategies (2016)
For binary plan, commissions are calculated based on ‘business volume points’ not on
levels of the network. There are three types of compensation plans (Unknown, 2018):
 Introducer or sponsor bonus: given when the member directly recruits new
individuals to the system (sponsors them)
 Pairing bonus: calculated from the total sum of points (sales) from downlines,
after the tree is created by the member, on his/her left and right leg. The bonus
depends on the plan type chosen, and any amount exceeding maximum limit is
not considered
 Matching bonus: paid as a percentage for all new recruits in the network
For this plan, the following have been considered as its downsides:
 In cases where the spillovers are set under an unactive leader, no commissions
will be earned and the individuals will need to put more efforts to strengthen their
left leg to earn more (Unknown, 2018).
 Even though that this structure can provide high return, some members find it
difficult to comprehend how the concept works effectively (Rawlins, 2018). This
indicates the complexity of the binary’s different plans and structures.
Oppositely, major upsides appear with the binary plan; they are as follows:
 Since the member’s strong leg is already being created by their upper
recruiter, the person only needs to focus on building their weak/left leg
(Rawlins, 2018).
 Members should employ only two individuals to foster the expansion of the
chain consequently (Unknown, 2018).
 There are no limitations on how long or how much the person can expand
their chains (Unknown, 2018).
 Members have an advantage of earning certain percentage from the right leg
even though they are not involved in (Unknown, 2018).
2.6. Importance of Network Marketing
Bhattacharjee (2016) describes network marketing as an innovative way of

transacting products and services that is seen to be a new efficient, systematic, and
practical trend of business. This emphasis can be accurate, considering the shifts in
business world, the dynamic advancements of technologies, globalization, and other
factors encouraging this global phenomenon. In fact, the number of NM members
increased from 5.1 million (starting year 1991) to 9.7 million (until year 1989) with
almost 23 billion dollars annual sale (Trajanovska, 2013). Recent data showed that in
2010, there has been approximately 3000 network marketing companies operating
globally, 50 million participants, and sales exceeding 100 million dollars with growth rate
91 % during the ten years (Nichols & Seward, 2010).
Additionally, as a part of the network marketing journey, to know how and why to
choose a specific company. Education is the core element of source when deciding which
NM company to join (Constantin, 2007).
In fact, Gitomer (2000) emphasizes on the importance that the individual should be
devoted, determined, and well trained to succeed as a network marketer. One must
believe in his/her capabilities and skills to become a strong sales representative and be
eager and keen to do everything right and achieve their planned goal.
Of course, this success reflects financial returns, which is basically the goal of any
organization. According to Secure MLM Software site (n.d.), the following are the most
recent top three earners around the world in MLMs:
 Rank 1: Igor Alberts and Andreea Cimbala from Dagacoin company, with
estimated 26,400,000$ yearly earnings
 Rank 2: Jenna Zwagil from MyDailyChoice company, with estimated
12,720,000$ earnings per year
 Rank 3: Trin & Jirawan Vichaidith from Nu Skin company, with estimated
11,280,000$ earnings per year
When we talk millions of dollars earnings for people who have dedicated their time,
efforts, and lives to accomplish a life goal destination, it really triggers everyone’s inner
ego. To clarify, people would say: “I want to do it. I want to earn that money. If someone
did it, it is possible.” These companies have taken the attention of news, press,
companies, and people around the globe, who in return, are striving to investigate and
find the secret which is hidden behind the eight-number figures. Yet, it is not a secret,
rather than a life, time, efforts, and dedication invested in.
Despite all the billions of dollars these companies are making, the impact of MLM aside
financial returns is also on the social, economic, and personal levels.
2.6.1 Economic impact:
For any economy in the world to work, it needs money to be exchanged and
spent. According to Jangbar (n.d.), a businessman and entrepreneur, additional
opportunities to generate income should be created so that cash is exchanged. NM
organizations are opening more opportunities for individuals to generate extra income. To
add, there have been several individuals who turned into millionaires and built their own
businesses.
Jangbar (n.d.) also describes how NMOs are replacing traditional small enterprises,
which can’t be affected negatively by the large dominant corporations. This is associated
with the idea that these companies have minimal costs to operate and can be practiced on
a part-time basis. This way they can produce additional separate income to their regular
ones, and a backup plan if they ever lose their jobs. These factors make the economy
steadier, and money is spent on a regular basis.
2.6.2 Personal impact
What makes network marketing an interesting field to study or be part of is the

wide opportunities people can benefit from on different levels, especially on the personal
level. Malhotra (2018) explains the development process of a new member, where they
turn to be more independent and mature personality. Their skills become stronger in
interacting with different individuals from different backgrounds, talking more
confidently during events, leading their teams, expanding their network, managing their
time more effectively, focusing more on achieving higher results, and creating a more
disciplined approach towards their surroundings.
2.6.3 Social Impact
On a social level, individuals will face new experiences and new people. By
meeting new people, they will expand their connections, make friends, or build
professional relations. This way they enhance their social status, create their public
image, and build their own brand.
Also, being a member in a trusted legal company gives you more credibility when
communicating with people or discussing business with them. The most important things
when doing or trying to do business in any society are ‘honesty’ and ‘transparency’; so
that people can trust working with you or the company.
“The act of selling is transformed into an imaginary featuring making new friends, having
fun, and caring about other people” (Lamoreaux, 2013). In her doctoral thesis, Tiffany
describes how social interactions are created through selling and communicating with
people. In addition to that, NM companies create a support system between their
members as they share experience, directions, and knowledge (Sparks & Schenk, 2001).
In network marketing, the success of the network itself depends on how the members
work together, help each other, collaborate for sake of everyone, and support one another
to become better.
Indeed, network marketing has its positive marks on various aspects as we discussed
previously; yet no business is ever a as pure as it seems. Throughout the years, MLM
companies have been accused of being illegal businesses and dishonest about its
processes and work. This has raised doubts, questions and investigations about the claim,
and experts have tried to well differentiate between Network Marketing and what so
called Ponzi Schemes.
2.7 Ponzi Schemes / Illegal pyramid:
As MLM grew globally throughout the years and became widespread in the 20th
century, it faced opposite opinions and disapprovals from different parties (Bloch, 1996)
(Koehn, 2001) (Krige, 2012). The reason behind this issue is the similarities that
correlates MLMs with illegal pyramid schemes or Ponzi Schemes. Mainly, if the
structure of NM forms the opportunity to generate earnings from unlimited chain of
recruitment, it will then be seen by legal parties as illegal way for businesses to operate.
2.7.1 History
Ponzi schemes were first originated by Charles Ponzi in 1918 and went public
during August 1920, who convinced a group of friends to invest with him, with the
promise of return of 50% in 45 days or double in 90 days, Then, he convinced another
bigger group of friends to invest with him on the same basis. After that, he paid the first
group with the second group money, who in return started adding others into the network
to generate more money to themselves. Ponzi’s scheme made him a wealthy man, from
buying a luxurious house in Lexington, Massachusetts, to earning 25,000 $ a day.
Moreover, the Boston Post got suspicious about his earnings, and started investigations,
which led to shutting his company down. He was arrested, sentenced to 14 years in jail,
accused of 86 mail fraud cases, and had debt for a of seven million dollars. He was
eventually divorced and died in Brazil with no dollar left. However, his story never died,
and Ponzi Scheme was practiced in different forms, copied in various business sectors,
transferred from country to country, and reached international practices (Unknown,
Charles Ponzi, 2014).
2.7.2 Ponzi Scheme Definitions
Galvin (2017) defined, in his publication, PS as illegal organizations incentivizing

people by paying them to employ other individuals in the network. At most incidents,
these types of operations market themselves as legal NMs. Individuals are promised large
returns on their investments, and when they join, their money goes to the individuals who
joined before. This means that the ROI one has generated is the payment of the new
members who have been also scammed (Unknown, 2018).
With pyramid schemes, individuals are requested to pay a certain financial payment as an
investment so they can be authorized to employ other individuals in the network and
receive commissions on their new recruits; hence the product can be deduced as the
recruitment card (Koehn, 2001).
Also, PS are considered unethical in situations when representatives put pressure on their
relatives and friends to participate in the network or take advantage of work relation as
when pressuring products on clients or patients (Koehn, 2001) (Rice, 1997), or convince
others to join in an improper condition as when spreading claims about getting rich fast
and anyone can join and succeed (Bloch, 1996) (Brodsky, 1998) (FitzPatrick, 2005).
Generally, Ponzi Schemes or Pyramid Schemes are illegal and unethical practices of
Network Marketing. They have tried to damage the real concept of network marketing,
which created negative publicity and made it hard for most to differentiate the real from
fake ones. However, awareness and education play a vital role in providing the right
technique to figure and choose the most suitable and beneficial network marketing
company.
2.7.3 Ponzi schemes vs network marketing
There is a thin line that separates ‘Network Marketing’ from ‘Ponzi Schemes’. You don’t
have to be an expert in order to be able to find the difference; you just have to be skeptic
and aware. Many researchers and experts tried to find out the distinguishing points
(Albaum & Peterson, 2011) (Rani & Kumar, 2013) (Ward, 2018), and ended up with the
following:
 Tangibility of the product/service: for businesses to function and survive, it

should be selling real products or services that are consumable, with existing
market as in network marketing but not in PS.
 Investment fees: for any network marketing opportunity, the beginning fees are
reasonable; however, in Ponzi’s they are required to pay high entrance fees.
 Inventory stock: in network marketing, you don’t have to stock products, and the
team will help you sell your stock, or the company will repurchase unsold goods.
It is never the case in PS.
 Emphasis of work: the pressure is on the products or services to increase their
sales and commissions; yet, illegal networks focus and pressure on increasing
recruitment and number of joined individuals
 Commissions: commissions are paid on individual and team sale and not on
recruitment.
So, after studying these important points, any person will be able to judge any company
and choose the most appropriate one.
2.8 The Lebanese context
Lebanon is a country where the most illegal businesses work underground, and
the legal business struggle to survive in this competitive market. Lebanon hosts all kinds
of businesses; from service, to agriculture, to manufacture, to industrial, to
merchandising, and others. These businesses can be local, regional, or international.
In reality, one of the unfortunate facts of the Lebanese regulatory system is that there are
no policies or regulations which concern the kind of the company; only the general
registration form, whether S.A.L, S.A.R.L, or other, according to attorney Keidy (2018),
interviewed via phone.
So, for example, whether it is an agricultural or industrial business, there are no specific
policies on their operations, products, processes, or structures (Keidy, 2018). However, in
most countries, there are sets of structured policies for each kind that would protect these
companies and prevent any unethical or illegal practices under the law.
Thus, it is not a surprise that there is no law, no rules, no restrictions, or procedures, for
network marketing companies in Lebanon.
Upon the interviews, investigations, chamber of commerce visit, and chamber of
economy phone calls, I arrived at a finding that these network companies in Lebanon are
under 3 options:
 Not registered at all

 Registered as a band under a Lebanese company
 Registered through a representative office in Lebanon
The following are our findings for some NM companies operating on Lebanese soil as
trademarks (with no identified representative office in Lebanon):
1) Jeunesse Company: It is founded in the US. It manufactures and sells products

related to skin, nutritional, and personal care.
Figure 3: Registered trademarks for Jeunesse
Source: Adopted from Ministry of economy & trade (https://www.economy.gov.lb/en)
2) Oriflame Company: It is founded in Sweden. It sells cosmetics and skincare

products.
Figure 4: Registered trademarks of Oriflame

3) NU SKIN Company: It is based in the US. It distributes anti-aging, skin care, and
nutritional products globally.
Figure 5: Registered Trademark for NU SKIN
4) FOREVER LIVING Company: It is in the US. It produces health and wellness

products extracted from aloe vera.
Figure 6: Registered Trademarks for FOREVER LIVING
5) AMWAY Company: It is grounded in the US. It concerns with beauty and health
care products.
Figure 7: Registered trademark for AMWAY

Amyway products’ brand:
Figure 8: Registered trademarks for NUTRILITE
Here, the company is registered as a trademark with a representative importing-exporting

office:
6) Herbalife: It is based in Los Angeles. It sells sports, health, and fitness products.
Figure 9: Registered trademarks for Herbalife
The company which imports Herbalife products: Wellness SAL
Figure 10: Registered representative company for Herbalife

Source: Adopted from Commercial Register (http://cr.justice.gov.lb/)
In addition, below are the companies that have been registered by only representative
office.
7) BONOFA: It is based in Germany. They sell subscriptions to website, games,

mobile apps, etc.
Figure 11: Registered representative office for BONOFA

8) GMI: It is founded in Norway. It sells custom made gold jewelry.
Figure 12: Registered representative office for GMI
9) QNET: It is based in Hong Kong. Its sells luxury watches, travel packages,
skin/health care products, etc.
Figure 13: Registered representative office for QNET

The takeaways from these companies and how they are registered are as follows:
 Even though some are registered “legally”, however, this doesn’t guarantee that
this company will do business in an ethical manner.
 The companies that are registered by a representative office fall under a regular
Lebanese laws; for example, if the company generates one million dollars a
month, no commercial control is held on it; as explained by attorney Keidy (2018)
due to ‘freedom of trade’.
 The registered brands under big Lebanese wholesalers fall under regular
international products, where if the company sells one million packages a month,
no questions are asked.
 No control over the companies’ business (how it is working or selling or doing
business with others); so, the question remains under the legality and ethicality of
these actions.
Network marketing when practiced wrongly, is a black market for selling legal products
in an illegal unethical way.
Network marketing is the modern trend in business sector, especially direct selling. It has
upgraded the concept of B2C and opened golden opportunities for many young
individuals globally to benefit financially, socially, and personally. NM business has
generated huge income to the economy, which opened international opportunities around
the world. Yet, NM has faced some conflicts with the rise of PS concept, affecting its
good image, as PS networks are disguising as legitimate NM companies and scamming
individuals (Clements, 2013). Meanwhile, governance is a must to ensure legal practice
of business.
2.9 Determinants of encouragement and discouragement for
youth participation in Network Marketing organizations
It can never be a one-way answer, and it will never be. We live in a world full of
chaos, new trend by the hour, new innovation every minute, new things each second, and
more money to be spent, but on what expense? We devote our lives -if we are lucky to
get a decent job- to minimum 8-10 hours per day just to get the check at the end of the
month and pay for all the things that we might not need but to keep up with the society’s
cravings. Tiktok, Instagram, Facebook, Twitter, and other social platforms that have
shaped our needs and wants and created their own place in our lives, demanding things
that we are addicted to please.
Not to forget, aside all this, whether employed or unemployed, a normal life expenses is
not easy to cover, how about all the extra things? With that being said, we are pressured
to find ways to make more money and keep up with everything going on around us. This
could be a start point for us about why youth might consider Network Marketing
companies a short cut to make more money with less efforts than a usual job.
2.9.1 The Reality of the world we live in
Since the start of industrial and technological revolution back 30 years ago,
people’s lives have been altered on all levels calling it: Development. But what most
people can’t notice, is that what we call development and advancement, is a new way of
making huge amount of money, convincing people to change their eating habits,
lifestyles, attire, talk, think, or live. For some, this is a clear propaganda, but for the rest,
it is called “the trend”.
New fashion line, new Jordan shoes editions, new fancy restaurant opening, iPhone 100
is on market, new hair style, and so on are many other phrases we hear every single day.
For young generations, it is a must to follow what is new, even if they don’t have the
financials for it, and even more if they aren’t 100% convinced; but ‘that’s the trend and
my friends do it’!
When we look at how people are living their lives these days, it feels sad; spending
1500$ over iPhone 11 just to feel the same as others even though he/she has the iPhone 9
which is functioning well, and even more, that they can’t afford it, but they must have it.
What a paradox!
This global phenomenon presents a huge dilemma, but it is not the only piece in the
puzzle. As we know, the economic and social status of most countries haven’t been stable
since years back; graduates are not finding suitable jobs, salaries are not good enough,
unemployment rates are rising, increase in prices, and the domestic market is becoming
saturated with businesses and startups and job opportunities. So what is the plan? Seek
what can be an alternative solution. With the rise of competition between companies to
keep their market shares and revenue streams going, they had to adopt a new channel to
discharge their products and services, stay on track, and expand their operations. Taking
direct selling companies as an example, they created the new concept of ‘Network
Marketing’, which we are investigating in throughout our research.
The concept of buying and selling was interrupted when NM concept appeared years
back, introducing an interesting frame of work for people. Why just buy a product when
you can also sell it and make profit? The traditional buyer-seller chain can be explained
as: Seller as the party who has the product, and the buyer is the party who gets the
product in exchange of money. The chain ends here, while in network marketing you can
be both the buyer and the seller with extra rewards on your performance; as reward
packages differ from company to company according to what we discussed earlier. So,
how attractive can this be for young individuals seeking money making opportunities in
‘what seems to be’ an easy process?
Going forward we will focus on the determinants which encourage and discourage youth
to get involved in this fast career path.
2.9.2 Determinants of encouragement for youth to participate in NM
companies
Money, wealth, and power have been controlling the world since the beginning of
time, starting wars, controlling countries, and enslaving people. This is how the world
works and this is how we started living our lives and based all our decisions and habits
on. It is sad just to think that we are all driven by money and wealth; we strive to make
more money regardless of why we are doing it. The environment and the world we live in
are ruled by people who have money and can manipulate others who don’t. This is why
there is a lot of corruption and money slavery happening everywhere. But at the end, we
need money either to survive or to achieve a certain goal in our lives.
As mentioned earlier, one of the promises network marketing has alleged is ‘getting rich
in short time, increasing your wealth, and becoming financially free’. Also, some
research had different perspectives on the reasons of becoming a network marketer.
Nicole Danuwidjaja, a successful writer and online seller, explains in her article about the
new business trends, where an increase number of young individuals are coming up with
new startups which allows them to have their own business that could generate money
and replace the traditional corporate job. Each year, more youth are turning into
millionaires due to the new better options created by new business organizations, which
motivates them to start their own business ventures to increase their wealth and change
their lives. By investing in the network of connections NM companies offer, these
individuals can generate more profit (2017).
She also talks about how network marketing is helping youth get rich and open
opportunities for them; they are as follows:
1. Connecting them with experts and high ranked individuals: as these

companies have high leveled people on the top of it with vast experience in
the business field, this exposure will allow them to benefit and exchange
knowledge and experience.
2. Developing their leadership skills and inspiring others: the focus of network
marketing is not about pushing for high sales, but rather exchanging
experiences and knowledge, connecting and networking with different people,
and empowering one another.
3. Getting started with little investment: instead of investing a huge amount on a
new business and taking the risk of its success, network marketing companies
give the opportunity for youth to start on their own with much less starting
cost.
4. Choosing the right network marketing company to start with: it is vital to
differentiate a legal firm from a pyramid scheme company to avoid being
trapped in an unethical and illegal practices.
“The power of network marketing is the ability to properly leverage your time. For the
youth, this is the perfect opportunity to earn a side income along with school or work and
can enable you to gain more time to complete what you’d like to do in the future.
Network marketing does take hard work, however, and is not the ultimate ‘get rich quick’
scheme.” (2017) Here, Nicole highlights on the idea that people should be aware that
being involved in this type of business is not a rapid money maker, but rather a
dedication, hard work and consistency.
In addition, some extra attractions can be associated with financial freedom, time
flexibility, and being suitable for anyone interested.
On another note, Idenyi Emmanuel Shaibu, a financial business consultant and human
capital management professional, describes in an interview with Naija Marketing Pro
website why network marketing is a great start for youth. In his perceptive, NM can be
considered as an influential hub, as people are connected in different dimensions. By
investing in this connection, anyone can benefit socially or financially; this is a lesson’s
learned during the NM journey. With this experience, a person can learn how to start a
business and develop, while generating income (Charles, 2017).
Most of the youth struggle to start their career path after graduation since most job
opportunities require a certain level of experience and skills. Getting involved in network
marketing companies before graduation can be an opportunity for them to acquire
experience and skills before head. So then, they can be empowered to grow and find their
career goals.
Barbra Marian mentioned in her newsletter on Smore site (2017), some incentives to
choose network marketing as your career path:
 Flexibility to work from any place in the world: once you establish your network and
get your business running, you can have the freedom to work remotely from your
laptop and get your vacation you have been planning for in Maldives!
 Setting your own work agenda and schedule: the traditional 9-5 working days are off
the chart when you have your network marketing business running. You can work for
one hour or 10 hours as long as you can set your own meetings and plan.
 Low investment cost: most network marketing companies require a small entry fees
to get started. This could save a lot for you if you decided to open your own company
and sink in the investment costs and billables.
 Anyone can be involved regardless of his/her backgrounds, age, gender, race: there is
no discrimination for anyone who wishes to get involved in network marketing
companies, as long as he/she is willing to learn, improve and get results, he/she is
there.
 Lasting income even when you retire since you have an active network: as most of us
work most of our lives to save up for our retirement, with an active network of people
who are working and producing sales and revenues, you are getting a residual from
this network event if you aren’t working.
 Access to all kinds of trainings and development opportunities: most successful
network marketing companies have a training plan for any new or current members to
help them acquire the right skills and develop throughout their journey.
 Improving your social, personal, and professional skills: the journey of network
marketing from the start is a learning process and therefore most successful
companies have successful leaders with high-powered skills. Interacting with experts,
meeting new people, attending events, and traveling to different cultures, are surely
the greatest growth pillars anyone would experience.
 Having the opportunity to support others and getting support: once you are in this
network, you will have all the support needed from the members, superiors, and
experts. Being so, you will be able to do the same with new members.
 Faster profitability compared to traditional businesses: network marketing companies
spare you the huge time, efforts, and investment put in any traditional business to start
making profits in a lesser time frame.
It is interesting how businesses changed and the ways of making money and succeeding
changed accordingly. With the rise of competition between companies to get the best
talents and skilled people in, incentives play the role. Network marketing companies have
boomed in the market, offering various irresistible attractions. For example, in the
Infinite MLM blog, they mentioned that one of the benefits of joining a MLM company
is being around good people, and not just that, but also meeting the high ranked
individuals to get inspired from and feel the support and inclusion for any member (Babu,
2017).
How many times have you met the CEO or top managers at your company?
Furthermore, experiencing the independent work in network marketing will give you the
basic understanding of entrepreneurship and lead you to eventually build your own
business. Will you ever think of starting a business without a nurturing and inspiring
environment? Having a positive energy, surrounding and environment are vital elements
for the success of the employee and the company itself. Most successful network
marketing companies have a positive culture that stirs positive people and positive
attitude between each other’s. Finally, one of the major skills that can be a life changing
is public speaking. We don’t learn it at school or develop it in a regular job, but MLM
gives you the opportunity to empower yourself, become a more self-confident and
outgoing person. How cool is it being on stage with over a minimum of 100 people
watching and you slaying it? Something to think about
Indeed, there are a lot of incentives for joining these companies, as “low startup cost;
leverage factor (distributors can enjoy from the income of others i.e. the downlines
benefit in the distribution network); multiple source of income profits from retails, group
volume, and other bonuses and incentives); personal development via trainings and
business support materials, enhanced entrepreneurial spirit, improved interpersonal skills,
and increased self-confidence; and job creation. It is indeed a win-win business model:
(Effiom & Effiong, 2015).
Nevertheless, Attard (2017) discusses in his blog how people can change their lifestyle
and work journey by joining NM companies with different reasons about the advantages
of this opportunity. Below are some of the attractions for joining MLM company:
 No required experience and qualifications, where any joiner will have the
opportunity to start and develop his/her skills and experience throughout NM
journey
 Flexibility in time and place, where the individual can build flexible working
schedule depending on his/her availability and plan anywhere any time
 Low startup investment compared to opening any business, where there are
minimal expenses to start which reduces the risk and increases the return
 Personal development, since it is a learning process and the person will develop
skills as self-esteem, communication, presentation, management, public speaking,
and more
 Unlimited earning opportunities, whether from the person’s own sales, the team’s
sales, the network sales, or bonuses, incentives, and others; there will always be
money coming back to the pocket
Most youth seek early experience and financial independency to empower them for future
plans, especially ambitious individuals and those young entrepreneurs who needs some
guidance and support. With the exposure MLM companies give its members, it becomes
a great attraction for youth to join.
One important factor which grabs youth attention and interest is that there is no specific
education, skill, or experience required from them; if they are willing to put the time,
effort, and some money in place, they will be able to develop and achieve successful
results.
On another note, there is a different perspective when it comes to why people would join
network marketing companies. For instance, some individuals are customers and like the
products they are using, and others decide to be working from home parents while
generating income. To add, most potential NM members are approached by someone
they know, whether family or friends or connection; this makes the process easier as they
will be more convinced or entrusting the other person (Vance, 2019).
Most people like to get stuff at discounted price, and MLM companies offer this option
for those who uses their products and can benefit from that. What is a better promotion
for any product as by a person who is using it and experiencing the results; be it skin care
or household or cosmetic products? The company would offer a percentage from any
products they can promote and sell, and being so, you are more trustworthy over anyone
not using the products and just marketing them.
What’s more, with the flexibility these companies offer, it can be the perfect opportunity
for stay home parents who wish to stay in the business market. With the advancement of
technologies and communication channels, you can reach anyone anywhere anytime!
And make money too!
One important addition is that a great number of the joiners aren’t 100% convinced or
well educated about the company or the concept of network marketing, but the main
reasons of joining can range from being pressured by a friend or relative, doing it for the
sake of pleasing them, or doing it as a favor for others. This approach is considered
unprofessional and can ruin the company’s image and reputation; however, for those who
aren’t well trained or educated or skilled enough, they consider it the safer option for
them to secure returns. But that’s not the case!
It is important for any person who considers joining a network marketing company to get
all the information needed, research about their ways of working, look for legitimate
background, and check their top listed people. Ask around, get some experts opinions or
even previous members’ views. With the right track to find the right MLM company for
you, you might excel and reach high ends.
In short, the following findings present the common determinants which encourage youth
to be involved in network marketing companies, as below:
1. According to Danuwidjaja (2017), Attard (2017), Effiom & Effiong (2015), and
Marian (2017), low-cost investment can be considered as a factor of
encouragement.
2. According to Danuwidjaja (2017), Attard (2017), Marian (2017), and Vance
(2019), flexibility in time can be considered an encouragement factor.
3. According to Attard (2017), Marian (2017), and Danuwidjaja (2017), requiring no
previous experience can be considered a factor of encouragement.
4. According to Danuwidjaja (2017) and Marian (2017), the opportunity of
expanding one’s professional connections can be considered an encouraging
factor.
5. According to Attard (2017) , Effiom & Effiong (2015), and Marian (2017), we
can say that getting easier and faster access to financial returns can be considered
as an encouraging factor.
2.9.3 Determinants of discouragement for youth to participate in NM

companies
NM companies had a strong exposure and booming since they started, and
without any doubt they would face bad publicity and schematic disreputability; famously
known as ‘Bonzi schemes’ or ‘Illegal pyramids’. In addition, we can’t forget the group of
individuals who don’t believe in these companies and consider them unreal or too good to
be true as a career opportunity, along other determinants which discourage them to
participate or get involved. Whether the company promising image, or people’s
experiences and promotions, or word of mouth passing along, or any bad publicity, they
all can contribute to having a negative influence and unenthusiastic motivation toward
youth.
Martin Zwilling (2011) described the red flags associated with the reasons MLMs might
not be the best involvements to make:
 Fee to start your business: Since most of the MLMs generate their revenues from
their products’ sale, then their business model should reflect that, and up-front
fees shouldn’t be considered. Mainly, the fees paid are for trainings and
workshops they do provide for marketing perspective.
 Promise of generating a hefty amount of money with little work: If this is the
case, then everyone would have been rich by now. Making thousands or millions
of dollars isn’t impossible to do, but neither easy nor fast, but attainable if you
worked hard for it and focused on your goal.
 Considering buying products as investment: a high percentage of companies
request that you buy a package of their products as a way for you to invest and
become active and get officially onboard and leverage your position in the
company. So, the more you get is the more you get ahead in the game. But what if
you couldn’t use or sell them?
 High income estimates: Most companies draw you the image of how much you
will make money by joining them, but what about how are you going to make it?
It is not a side job, nor a part time, if you are dreaming of making millions, it is a
fully pledged ongoing non-stoppable efforts.
 Making money from recruiting people: If what generates money in your pocket is
recruiting people into the network and not focusing on the sales of the product,
then you are in a schematic company, and they are basing their business revenues
on the recruitment and not sales.
Also, Babu (2017) stated the following reasons which criticize network marketing
companies’ concept of work:
 Promoting the get rich quick message: just thinking that this could be true is
frightening! How on earth would selling merchandise at its best could get
someone rich in a short time? What might be an attractive promotional promise,
could be the main reason why people won’t think of joining.
 Misrepresentation and unreal assumptions: Advertising that one of their
supplement products can ‘cure cancer’ or ‘stop aging’ or ‘will make your life
better’, is the main reason of why it is not true, since, if it were, everyone would
have bought it and they won’t be needing anyone to sell and market their product.
They would have solved most of humanity problems; thus, these assumptions
reflect badly on the company’s image.
 Putting focus on how you would be making money through the compensation
plan rather than the products itself: When the company sells you the plan before
the product, it raises some flags on its purpose. This could also harm the company
image.
It all relies on how the company market itself and has its representative promote the
business model. If they are looking for promising individuals to take the lead and be part
of growing its business, then having a solid representation is needed.
In addition, Babu (2017) reveals some truths and facts about how MLMs work:
 Only few people make it: which means it is not a quick process to make money
and not everyone will be able to generate 100$ per hour.
 It requires a lot of work: building your solid network, pitching new sales and
revenue streams, marketing the company and its products, getting trained and
providing training to your teams; it is definitely not a part-time job that you can
have while focusing on your college or full-time job.
 Overselling their products: marketing the company’s products as best in the
market and better than other products aren’t the smartest ways to sell them. Any
product or service needs an appropriate marketing plan.
 Low focus on customers but rather than on sales: for most network marketers, the
focus is on the sales revenue and recruiting new representative who would
generate new sales streams. The customer is a passing number and there isn’t a
retention plan.
 Long time involvement needed: for any person who is committed to reach his/her
financial goals in network marketing companies, the average time needed is a
minimum 10 years of full commitment.
The truth is to be told, if you aren’t willing to take up the challenge as is, it won’t be as
glamourous as they draw and color it to be.
It is really important to do our research and investigation before any decision in life,
whether choosing the college major, buying a new car, picking a vacation location, or
buying a product. And so it goes to taking the decision of whether to join an MLM
company or not. For young individuals, all the advertising propaganda is very attractive
and seducing for them as they are eager for anything that could help them speed up their
professional inclusion in the business world and generate money. However, they might
fall in the trap of starting in the wrong path.
In fact, John Taylor's (2012) research indicates some statistics about the dropout rates of
the MLM joiners:
 A minimum of 50% of MLM representatives leave after one year.

 A minimum of 90% of representatives dropout within five years.
 After 10 years, people on the top only stay, which means approximately 95% of
joiners have left.
This shows that there are gaps to be identified which explains the reason of people
dropping out, reflecting the reasons of discouragement for individuals to join network
marketing companies.
In a case against Nxivm company, Cohn (2021) mentioned in his article on CNBC, that
the FTC warned about signs of an illegal pyramid scheme company:
1. Representatives promote exaggerated promises about how much you will earn.
2. Focusing on recruiting new people as the main rewarding incentive to generate
your money
3. Imposing emotional pressure or high-pressure sales strategies.
4. You have to buy inventory products more than you can sell or use, just to stay
active in the company or meet the requirements for bonuses or other rewards.
In addition, McKay & McKay (2018) explained why individuals should think twice
before joining an MLM company with various reasons like high probability of losing the
money invested as more than 90% of the joiners leave the company without any return,
and it takes years to see return on your investment and time delegated. Secondly, as your
first contact for starting your business journey in a network marketing company would be
your closed circle as family and friends, the selling or recruiting process will be tough
and challenging as you will encounter rejections, resistance, negative behaviors, or a
simple number and by that you might end up harming your relationship with the pressure
of achieving results in your new journey. These could be your biggest fears, risks, and
challenges; and if dealt wrong it happens!
It is really important to be aware of the fact that considering MLM or network marketing
as a part time or side hustle to make high amount of money is a false statement. Don’t fall
in that trap!
Moreover, Albaum & Peterson (2011) have gathered different research on MLM and
mentioned that there are major companies who compensate individuals on recruiting new
people rather than the sales they make, which puts a lot of burden on a young fresh
individual to be able to convince others around him/her to participate in any kind of
company. Also, paying fees, pressuring them to buy inventory, and no refund policy,
makes it even harder to individuals to cope with this kind of allegedly work environment.
In fact, Dr. Abdul Assis Koroth with A.K. Sarada (2012) have conducted a survey with
614 respondents who were/are involved in MLM to identify different aspects on that
subject. They found out that “Only 3% of the respondents have joined in multilevel
marketing under their own will. A majority of the respondents joined in the scheme
simply due to the heavy pressure from others.” That is said, the majority of them “joined
under the influence of others especially from friends and relatives who used personal
relationships to enroll new distributors”, where “62% of respondents had joined as a
distributor as a result of continuous pressure from existing distributors. The remaining
distributors were motivated by other reasons such as intention to use good quality
products and of which only 15% of the respondents was taken up the multilevel
marketing system as a means of employment.” This highlights the use of personal
relationships as a means to encourage individuals to join network marketing companies,
but this only reflects a discouragement factor for them not to be involved.
This lack of professional work frames, low awareness about certain practices and weak
experience and skills on the business conduct, will for sure be considered as
discouragement factors for young potential individuals, as stated by Professor Gregor &
Wadlewski (2013) in their research.
MLMs have had a lot of criticism, whistleblowers, bad publicity and anti-MLM
advocates chasing over the internet. And as a fact, most of these companies have huge
lawsuits against them ranging from pyramid schemes, fraud, misconception, etc.
There are numerous reasons for young individuals to be discouraged about joining
network marketing companies especially individuals with potentials and promising future
as these people are very aware and educated and would be an added value to these
companies. From false promises, to misrepresentation and unprofessional approaches, to
friends and family involvement and pressure, to focus on people recruitment as a business
success, to the high amount of time and efforts to be invested, to inventory stocking as a
means to stay in the loop; these are some common reasons which could discourage
individuals.
Here, we can indicate different factors which discourage individuals to join MLM
companies; and they are the following:
1. According to Zwilling (2011), Albaum and Peterson (2011), and Cohn (2021), we
can say that generating money through recruiting people can be considered a
discouraging factor.
2. According to Cohn (2021), Zwilling (2011) and Babu (2017), the propaganda of
generating huge returns and getting rich quickly can be considered a
discouragement factor.
3. According to McKay & McKay (2018), Koroth & Sarada (2012), and Cohn,
(2021), abusing family and friends relations for business benefits can be a
discouragement factor for youth.
4. According to Zwilling (2011), Cohn (2021), and Albaum & Peterson (2011),
putting pressure on individuals to stock inventories and buy more to access
rewards can be considered a discouragement factor.
5. According to Babu (2017), and McKay & McKay (2018),demanding long time
and huge commitment to achieve the advertised financial status can be considered
as a discouraging factor.
From all the above, we can determine the following modeling:

Figure 14: Towards a first modeling about encouragement and discouragement factors for youth participation in
network marketing
Source: Author (2021), inspired by Danuwidjaja (2017), Attard (2017), Effiom & Effiong (2015), Marian
(2017), Vance (2019), Zwilling (2011), Albaum and Peterson (2011), Cohn (2021), Babu (2017), McKay &
McKay (2018), Koroth & Sarada (2012).
In this chapter, Network Marketing companies and the youth involvement in NM
companies and their intention of participation. We have highlighted on the factors which
could encourage and discourage the youth to be involved. Also, different NM models
were identified with the impact NM has on social, economic, and personal levels.
Moreover, different NM companies were detected via the Chamber of Commerce website
and detailed their registration references. Based on the literature review, the hypotheses
have been proposed and a modulization about these factors and intention of involvement
has been considered to be the initial step to get deep into our study and reach the most
suitable findings.
Chapter Three
Research Methodology
The study adopts many methods to tackle any research problem proposed and
focuses on the methods used to conduct this analysis. It's formulated as follows: research
methodology, research approach, data source, population and sampling, research
instruments (techniques), instrument administration, and data analysis. We need to build
a proper framework or outline which will guide us to certain findings and reach a suitable
solution. This framework can be described as a process composed of testing, evaluating,
analyzing, and concluding different variables and facts associated to reflect on certain
propositions or hypotheses. In this chapter, we will be discussing several aspects of a
research methodology.
3.1 Research Methodology
Research methods are the tools and procedures to collect and evaluate data. Data
can be collected from surveys, observation, focus group discussion, interviews, and
qualitative and quantitative tools. In our research, data were collected from both
qualitative and quantitative methods.
How does our knowledge develop? How do we become more expert and enriched in
certain field or topic? The answer is ‘Research’, specifically scientific research.
Research philosophy sets the paths of how to collect the data, analyze them, and use
them. It tackles the origin, nature, and progress of the data.
“Research is considered to be the more formal, systematic intensive process of

carrying on the scientific method of analysis. It involves a 9 more systematic
structure of investigation, usually resulting in some sort of formal record of
procedures and a report of results or conclusion.” (Best, 1977)
We add more truths to some areas which leads to a better understanding of the way things
are, impacting positively the society we live in. Research is by itself going back to what
we have in hand and what others have previously found and share, then upgrading;
whether by supporting it, tweaking some areas, proving a wrong concept, or discovering
innovative ideas. It can also be considered scientifically by finding solutions to certain
dilemmas.
Knowingly, the best approach is Empirical research. This approach can have different
purposes to be concluded, and mainly:
 Generating more insights on a certain subject

 Assessing certain behaviors to determine causes and effects
 Investigating specific hypotheses or propositions to determine their credibility
According to Prabhat and Pandey (2015) , a research should:
 Be solving an existing problem

 Have scientific finding to support and argument
 Include hypotheses or propositions
 Have specific objectives to be fulfilled
 Require extracting new findings from different resources
 Be unbiased
 Be systematic
 Reflect truthful observations and factual evidence
 Be supported by chosen tools
To be more explicit, the ‘Research Onion’ has been created to show the whole procedure
during any research, starting from data collection and the different methods we can adapt
to approach, analyze, and interpret. The figure below demonstrates the process:
Figure 15 The research onion

Source: (Saunders, Lewis, & Thornhill, 2009)
There are five research philosophies, where the researcher decides on which philosophy
to adopt during their journey: Positivism, Critical Realism, Interpretivism, Post
Modernism, and Pragmatism.
In this study, we adopted a positivist philosophy. “Positivism relates to the philosophical

stance of the natural scientist and entails working with an observable social reality to
produce law-like generalizations” (Saunders, Lewis, & Thornhill, 2009).
This type focuses only on the given facts and scientific proofs. It only takes real
observations with total subjectivity to what is presented without any alternation of any
kind.
“Critical realism focuses on explaining what we see and experience, in terms of the
underlying structures of reality that shape the observable event” (Saunders, Lewis, &
Thornhill, 2009).
This type takes the reality and factual occurrences and reflects them on how we
experience them, which generates several scenarios.
“Interpretivism emphasizes that humans are different from physical phenomena because
they create meanings” (Saunders, Lewis, & Thornhill, 2009).
This type argues that since everyone have different backgrounds, experiences, past
traumas, and culture, we won’t be able to generalize their reactions or interpretations on a
natural or factual experience. This shows the complexity since the result will have several
meanings and realities for different people.
“Postmodernism emphasizes the role of language and of power relations, seeking to

question accepted ways of thinking and give voice to alternative marginalized views”
(Saunders, Lewis, & Thornhill, 2009).
This type highlights on the collective suppressed perspectives which relies on the power
relations to dominate certain realities.
“Pragmatism asserts that concepts are only relevant where they support action” (Kelemen
& Rumens, 2008) (as cited in Saunders, Lewis, & Thornhill, 2009).
This type takes any type of input that has an impact and action driven consequences.
Moreover, depending on the investigated problem and the researcher choice, a certain
type of research philosophy is adapted to further approach it right.
3.2 Research Approach
When designing a research, it is really important to decide on which approach to

adopt; whether deductive, inductive, or abductive. And before deciding on the approach,
we need to decide the type of research we are working on. Deductive approach is
implemented when we start with a theory and test this theory with literature and empirical
strategy. While if we investigated a concept or problem by gathering data, then
interpreting certain theories or hypothesis, we use the inductive approach. As for the
abductive approach, which is a mix of both deductive and inductive, we start by
collecting facts, statistics, and information about a certain concept, detect different leads
and forms, and then we use more tools to reach a new theory or update an existing one.
Deductive approach uses the criteria of analyzing data to check their compatibility with
the propositions or hypotheses set previously at the beginning by the researcher (Thomas,
2006).
With deduction, the researcher starts with certain theories and then at the final stage,
he/she can then substitute/verify them with accurately (Woiceshyn & Daellenbach, 2018).
“Deductive reasoning is a theory testing process which commences with an established

theory or generalization and seeks to see if the theory applies to specific instances (Hyde,
2000)”.
The deductive method has five steps: develop set of hypotheses, formulate theories upon
relation between different variables, test hypotheses using different methods, analyzing
the results to verify the hypotheses, and lastly adjust these theories with the appropriate
findings (Wong, Deductive Research, 2020)
Whereas induction approach uses data collection to explore a certain concept and spot
patterns, in order to result in generating theories based on the findings.
With induction, no initial theories or hypotheses are set to be examined, but rather it
depends on the contribution of the data collection and investigation process to come up
with verified conclusion (Woiceshyn & Daellenbach, 2018).
“Inductive reasoning is a theory building process, starting with observations of specific

instances, and seeking to establish generalizations about the phenomenon under
investigation. (Hyde, 2000)”. This reasoning can be applied in qualitative studies as it
helps the researcher use the collected data by dissecting it and gaining the best insights
about the subject. In fact, this method is commonly used between scholars.
The induction method has three steps: observation and collection of data to find
correlation between variables, examination of the findings to find leads, and design of the
verified theories or hypotheses (Wong, Inductive Research, 2020).
Nonetheless, most of the researcher adapt an approach with a combination of deductive
and indictive approach, known as the abductive approach. “With abduction, data are used
to explore a phenomenon, identify themes and explain patterns, to generate a new or
modify an existing theory which is subsequently tested, often through additional data
collection” (Saunders, Lewis, & Thornhill, 2009). This method uses initial observations
to generate hypothesis/hypotheses that can best reflect these observations with a reasoned
correlation. It is also described as an inference of unverified or unclear assumptions,
reaching somehow accurate findings, and deciding on the best logical proposition, which
can be proved right or wrong after advanced research. Even though with abductive
approach the result is still now 100% sure, but comparing with the deduction and
induction, it’s the most logical method in reaching the best results.
In this exploration, we are implementing the deductive approach for both the qualitative
and quantitative methods. We conducted the interviews to test if the variables identified
in the literature review are consistent with the Lebanese context. Once done, we have
deduced from our literature review number of hypotheses which will be tested
quantitatively to answer our research question related to determinants of youth
involvement in NM companies.
3.3 Type of data
The first thing we do when we start any research is collecting data from different
resources, and these data ca be categorized as Primary, Secondary, and Tertiary as it
depends on the legitimacy and validity of the source.
Primary data reflects unaltered facts which are original work, fresh content, and new
evidence on a certain subject. They might not be published yet and considered more
consistent, unbiased, and dependable (Kabir S. M., 2016)
Mainly primary sources are considered the novel tools which any research builds up on.
They render the direct input about an event, incident, experience, or occurrence. They are
the closest support to the subject. Usually, primary data comes from different sources
mainly experiments, surveys, observations, interviews, questionnaires, etc.
For any researcher who doesn’t have enough data related to the subject or the context
he/she is working on, especially if the secondary sources are not enough, primary data are
crucial for the formation of any research.
However, secondary data are extracted from primary data and might be reworked,
analyzed, and used in different context. These data can be extracted from government
sites, different educational websites over the internet, private agencies, etc. ( (Martins, da
Cunha, & Serra, 2018)
Secondary data are the interpretation of primary data and the use of existing data to
support the research objectives. From articles, books, edited work, to reviews and others,
secondary data is provided.
Church (2002) mentioned in his article that during the secondary data investigation
process, the researcher is not involved in the first stage of collection of the primary data,
but rather takes the findings in published articles, texts, tables, sites and analyze them.
These data can be used effectively as they might add value to the research in hand as they
are collected and used in various concepts.
Tertiary data on the other hand are the combination of both primary and secondary data.
Usually, these data are not referred to a specific author as they digest and compile data
from other sources.
Tertiary data is an assemblance of primary and secondary data that is filtered, analyzed,
and presented in a new format. Its main characteristic is that it groups information from
different authors in one place or site, this helps the researcher gather and digest even
more data and information. It can also lead him/her to different primary and secondary
data. They are quicker and easier to track and access. (Literature Review of the Essentials
of Secondary and Tertiary Data, 2018)
“A tertiary source is an index or textual consolidation of primary and secondary sources”

(Examples of Primary Source, Secondary Source and Tertiary Source, n.d.). It can be
referenced from Wikipedia, dictionary, handbooks, directories, and other.
It might be difficult for some scholars to differentiate between secondary and tertiary
sources, but the tertiary data mainly come from the channel of secondary data and
presented in a more digested and summarized way conveying different sources referred.
Concerning our research, we have used the three types of data. Primary data was
extracted from the eight interviews conducted and the 264 questionnaires answered from
Lebanese youth in different areas, universities, and companies. As for the secondary and
tertiary data, we have managed to expand our research and enrich our literature part with
different sources.
3.4 Choice of land
The study is about network marketing companies in Lebanon and the Lebanese
youth intention of participation with them. The intention of participation and involvement
is highlighted through the study. This subject is selected as it presents a rising issue along
with major challenges for the Lebanese youth. MLM presents opportunities for youth to
develop their professional and working experience along with financial returns. In fact,
there hasn’t been a study, according to our knowledge, about these companies in
Lebanon, how they operate, legality, and the challenges and opportunities they present;
this could be considered as an added value, original concept, and reliable source of
knowledge going forward. Nonetheless, coming from a personal experience in one of
these companies in Lebanon, along with the support of literature review, observations,
and interviews, major issues have been raised in terms of frauds, challenges,
misrepresentation, and low level of awareness about these companies. Moreover, most
Lebanese youth are getting more involved in these companies and other companies
allegedly a legal entity business opportunity without proper awareness and education
about this type of business. For that, a focused study about “Network Marketing
companies in Lebanon and the Lebanese youth involvement” has been implemented.
3.5 Bias
To collect data, related to the companies and the Lebanese youth involvement and
experiences, high ranked individuals and groups could have been approached conducted
from certain networks or companies. This would have been easier but would result in
having biased sample towards these companies and appeal to be very successful, legal,
with no issues, and a lifetime opportunity for youth to be involved. Based on my personal
experience with one of them and a lot of interactions and requests from different
representatives in other companies, biased approach was avoided by contacting random
people in different areas and from different sectors to have diverse sample. Although it
was more time consuming and extra efforts was involved, better results were indicated.
The contributors have been contacted either through face-to-face interviews, video
interview, or online surveys.
3.6 Qualitative research
Qualitative research depends on the understanding of a particular concept at its

unaltered pace to find out how people perceive and interact with it. By that, we might end
up with variations of realities in the eyes of the respondents; however, it gives us great
insights on different levels.
3.6.1 Qualitative tools
This scientific methodology according to Pershkin (1993) satisfies a combination of the

following targets:
 Disclosing essence of specific scenarios, incidents, or relations

 Getting in-depth views on a particular subject to build on added facts or
propositions around the research
 Examining different hypotheses and predictions with factual evidence
 Offering a way to examine the credibility of certain discoveries
Mainly, the qualitative method tools are focus group discussions, one-to-one interviews,
and observation. Each tool has specific use and indication:
 Focus group discussions provide more descriptive and detailed data which
reflects a collective opinion about a certain issue, and might rise different
perceptions depending on the cultural, demographic, and social background of
the participants
 Observations provide wide insights about how people’s behaviors and responses
are observed in a certain setting
 Individual interviews are commonly used as it is more structured with specific
agenda. Questions can be direct, semi-structured, or informal and give direct
understanding about the individual’s perception, feelings, and values towards
certain subject
According to Cropley (2015) “{t}he task of qualitative research is to gain insights into
these constructions of reality, i.e., to tease out the nature of the world as it is experienced,
structured and interpreted by people in the course of their everyday lives.” Even though
the measuring reliability is hard to account for comparing it with the quantitative
approach, the added value it provides the research with is what is important.
In the study, we used individual interviews to test the variables extracted from the
literature review in the Lebanese context, and check which ones are reliable to consider.
3.6.2 Data collection
Depending on the research approach and the needed tools to build up the
complete frame of the study, the data collection process is decided. For our research, we
have implemented both approaches: qualitative and quantitative.
The qualitative method is reflected by personal interviews done in order to verify the
hypotheses which are reflected in the Lebanese context, due to the lack of data and
research in this topic in Lebanon. Eight interviews have been conducted, where seven
were face-to-face and one was via WhatsApp video call. The interviewees were high
ranked individuals in different NM companies in Lebanon, experts in NM, and ex-
members. The questions asked during the interviews were semi-structured to give the
interviewee the right space to express themselves freely about any subject; with this I
have been able to intensively gather as much insights as I can to further support my
research. Since they were done before COVID-19 pandemic, I have had the opportunity
to go deep in my research and get more insights from my interviewees. As mentioned
before, due to the very limited resources in Lebanon concerning network marketing, these
interviews were my biggest source for collecting data, information, and insights about
how MLM concept is viewed, practiced, and adapted in the Lebanese market especially
for Lebanese youth. These materials can be articulated as original data not found any
place and could be used in the future for reference in this topic. With these pilot
interviews, I have been able to extend my research and design the right path to successful
results.
3.6.3 Study sample
A sample can be defined as a portion of a certain population which can signify the
features of that specific population. The procedure of sampling is extraction of data that
can be used to build an examination about the whole population (Kabir S. M., 2016).
The main purpose of choosing a sample to study is obtaining an implication about the
population and the results of the tested hypotheses (Taherdoost, 2016). Since it is very
difficult to test all the people in a population to study them, a good chosen sample can
present sufficient inputs to generalize in the study; however, when choosing a sample, its
important to check all the needed features of it.
According to BMS Team (2013), a good sample is characterized with:
 Being large enough to embody the population

 Being selected in a random approach
 Having simple design to be easier and more practical for the individuals
 Providing the opportunity to extract accurate and factual data
 Having minimal cost and time of operation
 Having a clear design purpose
 Being representative to the population
When it comes to qualitative sampling, it is considered as non-probability sampling and
consists of four types: Convenience, purposive, snowball, and theoretical. Convenience
sampling occurs when participants who are invited to be involved are available and easily
reached. Purposive sampling is choosing specific individuals to be involved who can add
information related to the research question. Snowball sampling is a tool where
participants refer someone who can have significant information related to the research.
Theoretical sampling is knowing exactly what data to be extracted from participants in
reference to previous data and theories analyzed (Lopez & Whitehead, 2013).
In our research, the selected population for the qualitative method is individuals involved
or experts in NM concept and companies. Purposeful and snowballing sampling methods
were used, as the selected individuals had different experiences and backgrounds in NM,
so different perspectives and experiences could generate deeper insights about NM in
Lebanon. Also, some of the individuals referred me to people who have been added value
to the study. With that, these eight individuals represent a fit sample of our population.
The data was extracted from the eight interviews conducted over a period of three
months: between 6 November 2021 and 25 January 2021. The interviewees were selected
based on their expertise, experience, and knowledge about NM in Lebanon. However,
since there wasn’t a clear agenda about the type of people to be interviewed with, and no
guiding indexes about who to approach to have diverse sample, a complex approach was
conducted as follows:
 Extensive online research for anyone who have posted any content about NM in
Lebanon – Zahi Sahli’s article was found, and he was approached and interviewed
with about his experience, opinion and views.
 An online post was added to LinkedIn asking for some expert opinions and any
content in the Lebanese context about network marketing –Rudy Fares responded
with his article about his experience, and he was also interviewed.
 Reaching out to an ex-leader at Jeunesse company (where I was at) – Abdallah
Harfouch was interviewed.
 Getting referred to a representative in Forever Living company –Dalida Jaafar
was interviewed and referred me to Nathelie Hariri, a representative at Herbalife
company.
 Reaching out to my personal network to find more people who were involved or
know about NM –Mike Mefleh was interviewed as an ex-Qnet representative.
 K. A. and R. A. are friends interviewed briefly about their short experience with
Qnet and how they were abused to be part from their friend.
This was a long, exhausting, and time-consuming journey, as each interview took
different approach and was set depending on the availability of the interviewee, whether
in time or place. The main reason behind this long process is getting diverse, original,
primary, accurate, and real input to the research literature especially in the Lebanese
context.
3.6.4 Qualitative data analysis
In this study, even though both methods are used to extract data, however each method
has its own purpose in our research. For that, the qualitative method is used to test the
variables indicated in the literature review and check which ones are consistent with the
Lebanese context, as we have lack of data related to NM in Lebanon. With the data
collected from the interviews, we will be pinpoint on the variables that validated in the
literature review.
3.7 Quantitative research
Quantitative method is a systematic approach where numeric values are extracted

and interpreted to discover and test correlations of different variables with finding
averages, means, and patterns to end with a proper conclusion. Opposite to the qualitative
method, it is measurable and easier to analyze.
3.7.1 Quantitative advantages and disadvantages

In fact, with quantitative method, data are not usually collected in a numeric format, but
rather converted using a selected criterion and then analyzed via certain tools. (Bhandari,
2020)
Bhandari (2020) discusses different advantages and disadvantages of this method:
Advantages:
 Testing the hypothesis directly by analyzing the findings

 Gathering large scale of data from large scale of people sample reached
 Directly comparing the results statistically
 Repeating the study possibility
Disadvantage:
 Focusing on preset variables and disregarding other factors

 Limiting the responses frame results in having limited knowledge about the
respondent’s view
 Leading to biased results if implemented wrongly
It is very common for any method while research to have advantages and disadvantages,
but the right approach is to know the appropriate way to implement it and get the best
results.
In the study, we used survey questionnaires to further test the identified hypotheses and
demonstrate the final model of the research.
3.7.2 Data collection
The quantitative data was collected via questionaries using close ended with multiple
choice questions and Likert Scale to limit the answers and save time to collect as much
data as we can and expand our analysis. The total of 264 surveys have been conducted
via online form using Google Form. This tactic was the fit approach to do since with the
COVID-19 restrictions, live contact was limited and would have taken much more time
to be collected. So, with that, we have saved time and the respondents used their free time
to respond and share with their contacts.
3.7.3 Study sample
For the quantitative method, the selected population is composed of Lebanese youth
individuals who are employed or not employed whether undergraduates or graduates.
Simple random sampling technique was used to give any individuals the equal
opportunity to be selected and involved in the study. Also, we were able to collect data
from different areas in Lebanon, different universities, and different backgrounds; this
provides wider scope for our analysis. With that our sample of 264 participants represent
a fit sample of our population.
The quantitative data were provided via online google survey, it only takes up five
minutes to be completed and submitted. Starting on 17 August 2021, the survey was
distributed mainly through WhatsApp (individual, group, and broadcast chats) and
Instagram chat and stories, and closed on 29 September 2021. So, it took approximately
six weeks for the online survey to be distributed and collected.
3.7.4 List of variables
The dependent variable in this study is the intention of involvement in network

marketing companies of the participants involved in the study. The independent variables
which represent the encouragement and discouragement factors for involvement, which
are classified as follows:
 Encouragement factors: low-cost investment, no experience required, flexibility

of time, expanding one’s network and professional connections, easier and faster
access to financial returns
 Discouragement factors: generating money through recruiting people, propaganda
of getting rich quick, abusing family and friends’ relations for business benefits,
putting pressure to stock inventory, demanding long-term commitment
3.7.5 Measures for the questionnaire
Variable Type Questions Scale used Codes

Age Demographic 1 Nominal 1=18-24
2=25-34
3=35-44
Gender Demographic 2 Nominal 1=M
2=F
Educational Demographic 3 Nominal 1=Bachelor degree
background 2=Master’s degree
3=PHD degree
4= School level
5=Vocational/Profession
degree
Current status Demographic 5 Nominal 1= Business owner
2=Freelancer
3=Full time job
4=Part time job
5=Unemployed
Monthly Demographic 6 Nominal 1=No
expense 2=Not all months
3=Yes
NM General 7&8 Nominal 1=No
background 2=Yes
Entry cost Independent 9 Ordinal – 1=Strongly agree
Likert 2=Agree
Scale 3=Neutral
4=Disagree
5=Strongly disagree
Flexibility Independent 11 Ordinal – 1=Strongly agree
Likert 2=Agree
Scale 3=Neutral
4=Disagree
5=Strongly disagree
Choice General 12 Nominal 1=8-9 hour job
opportunity
2=Set my own schedule
Experience Independent 13 Ordinal – 1=Strongly agree
Likert 2=Agree
Scale 3=Neutral
4=Disagree
5=Strongly disagree
Expand Independent 14 Ordinal – 1=Strongly agree
network Likert 2=Agree
Scale 3=Neutral
4=Disagree
5=Strongly disagree
Financial Independent 15 Ordinal – 1=Strongly agree
return Likert 2=Agree
Scale 3=Neutral
4=Disagree
5=Strongly disagree
Recruitment Independent 16 Ordinal – 1=Strongly agree
Likert 2=Agree
Scale 3=Neutral
4=Disagree
5=Strongly disagree
Rich quick Independent 16 Ordinal – 1=Strongly agree
Likert 2=Agree
Scale 3=Neutral
4=Disagree
5=Strongly disagree
Image General 17 Nominal 1=No
promoted 2=Yes
Relations Independent 18 Ordinal – 1=Strongly agree
Likert 2=Agree
Scale 3=Neutral
4=Disagree
5=Strongly disagree
Inventory Independent 19 Ordinal – 1=Strongly agree
Likert 2=Agree
Scale 3=Neutral
4=Disagree
5=Strongly disagree
Commitment Independent 20 Ordinal – 1=Strongly agree
Likert 2=Agree
Scale 3=Neutral
4=Disagree
5=Strongly disagree
Intention Dependent 20 Ordinal – 1=Strongly agree
Likert 2=Agree
scale 3=Neutral
4=Disagree
5=Strongly disagree
Situation vs General 21 Nominal 1=No
intention 2=Yes
Awareness General 22 Nominal 1=No
2=Yes
3.7.6 Data treatment – SPSS
In our study, we have used the SPSS tool for statistical analysis in order to
discover the impact of our variables on intention joining network marketing, test our
hypotheses, and interpret the results regarding network marketing companies in Lebanon
and the Lebanese youth intention of participation in them reflected with the
encouragement and discouragement factors involved.
3.7.7 Regression Analysis
In order to find if there is a significant relation between the dependent and the
independent variables, and the relative impact of the independent variables on the
dependent variable, regression analysis is conducted. It is a common tool used in most
research and gives the researcher the ability to analyze any relation and provide the
results (Sarstedt & Mooi, 2014).
By applying regression analysis, we are using a setup of different statistical procedures to

find and test the relationship between these variables. We use it as a support application
to our model, whether for validation or rejection. With that, our results can be predicted,
and the final model can be demonstrated.
Sarstedt & Mooi (2014) formed a frame of the regression analysis process:
 Check the requirements for the data to be used

 Indicate and assume the regression model
 Test the assumptions
 Analyze the results
 Validate the results
 Apply the model
By following the process steps, the errors will be minimized, and the results will have
better indications.
“Simple linear regression is used to estimate the relationship between two quantitative
variables” (Bevans, An introduction to simple linear regression, 2020). With that, we can
deduce the concentration of this connection, and predict the amount of the dependent
variable according to the amount of the independent variable. As for multiple regression,
it “is used to estimate the relationship between two or more independent variables and
one dependent variable” (Bevans, 2020). By applying the multiple approach, we can
deduce the strength of the connection between the multiple independent variables with
the dependent and predict the amount of the dependent variable depending on the amount
of the independent variables.
Whether simple or multiple linear regression, the P value or the statistical significance is
what decides if the hypotheses are to be verified or rejected. If the value was less than
0.05, then the hypothesis is validated, and if it is higher than 0.05, then the hypothesis is
rejected and there isn’t a relation between the variables (Adel Amer, 2021).
3.7.8 Reliability and Validity Tests
3.7.9.1 Testing the reliability

Cronbach Alpha test is used in order to test the reliability. The value which is less
than 0.5 is unacceptable, and a value between 0.5 and 0.6 is poor, from 0.6 to 0.7 is
acceptable, from 0.7 till 0.9 is good, and above 0.9 is considered excellent. As per the
following, we can observe a high Cronbach Alpha (0.865), which indicates a good
reliability of the questionnaire. In addition, we found that the majority of items were to be
deleted from each item of the scale by checking the reliability. As a result, this study
approves the overall Cronbach test, which allows all the questions in the analysis to be
maintained.
Table 1: Reliability Statistics
Cronbach's N of
Alpha Items
.865 12
3.7.9.2 Testing the Validity

As previously explained, by reviewing various previous studies listed in the
literature review, the questionnaire used in this study was created. Eventually, the
researchers performed KMO and Bartlett's Test of Sphericity in order to test whether the
variables are related and sufficient for structure detection and to analyze the sampling
adequacy. In addition to verifying whether the correlation matrix is an identity matrix, the
Bartlett test measures the relationship between variables. A significant value of less than
0.05 shows that these data do not generate an identity matrix and are thus roughly normal
multivariate and suitable for further analysis. Additionally, if the KMO value is adequate,
we can ensure the sampling is adequate. A bare minimum of 0.5 and the value between
0.5 and 0.7 is acceptable, the value between 0.7 and 0.8 is good, the value between 0.8
and 0.9 is very good and the value between 0.9 and above is excellent. As per the
following table KMO have the value of (0.836) which is a good indicator, and Bartlett’s
test of Sphericity (2007.713) at a significant (0.000) at 0.05 level.
As a result, because KMO has a high value and BTS is relevant (p=0.000), we can infer
that there is a strong patterned relationship for further study between the variables and
sampling adequacy.
Table 2: KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .836
Bartlett's Test of Sphericity Approx. Chi-Square 2007.713
df 66
Sig. .000
This chapter has incorporated the full detailed description of the

implemented research methodology; where the used research philosophy,
approaches, and methods have been emphasized on. This study is reflected by a
positivism philosophy, deductive approach, qualitative, and quantitative method.
The primary data has been collected from the interviews conducted and the
questionnaire distributed to a diverse sample. Moreover, both the related
population and right sample have been indicated for both methods, with the
distinguished choice of land and the limitations faced and dealt with during the
study and data collection. Finally, the regression analysis has been implemented as
the statistical tool for our quantitative data to study the independent and dependent
variables’ relationship.
Chapter Four
Data Analysis
This chapter is formed of two sections; qualitative and quantitative. Qualitative section
presents the analysis of the interviews, whereas the quantitative section presents the
analysis of the data collected by questionnaires.
4.1 Qualitative data analysis
As mentioned before, our research lacks data and resources related to NM companies in
Lebanon. For that, in order to investigate the proposed hypotheses in the literature review
and reflect them in the Lebanese context, personal interviews were conducted. Even
though the process was time consuming and challenging, they added significant value to
our research and provided deeper insights on our study.
The interviews were with current leaders, ex-members in NM companies, and experts.
Each person had different background, experience, perceptive, facts, and opinions; this
expanded our knowledge about NM in Lebanon.
4.1.1 Demographic characteristics

To have diverse sample, several approaches were applied. First, we searched for any
article or study in Lebanon, and finally found one small article about a persona
experience and some NM implications by Zahi Sahli, who is currently the Director of the
Online Department at Al-Akhbar, as well as media consultant and experienced writer.
After stalking him on LinkedIn, I was able to invite him for an interview and meeting
with him face to face. Second, I shared a post on LinkedIn asking if someone has
insights about NM companies in Lebanon or any related experience to share. Luckily,
Rudy fares, currently investment & portfolio consultant, Financial consultant for
CryptoTicker, and FinTech consultant, contacted me and shared an article about his
experience with NM, so I invited him for an interview and met him face to face.
Moreover, Abdallah Harfouch was one of the leaders at Juenesse, a Network Marketing
company, where I had a short experience with them, and got introduced to him. Harfouch
is currently the founder of AH financial consultancy, CEO and chairman of Forex Space
company, economist, financial market analyst, and an ex-Juenesse leader in Lebanon. A
meeting was done with Harfouch about his experience in several NM companies in
Lebanon, and his implications about their ways of working and culture. He also referred
me to Dalida Jaafar, who was a medical lab technician who worked clinical research in
AUB, had some insurance experience, and became full-time network marketing
representative after her mother introduced her to FM Group. Currently, she is an
associate team lead at H&R Block consultancy agency. During the interview, Jaafar
shared her experience and life changes she did during her NM experience with Forever
Lining company. Moreover, Abdallah also referred me to Hariri, Herbalife company
representative since 2014. With her journey at Herbalife and how she got involved, Hariri
describes how she became a team leader for a large group of people especially women
and taken the advantage of this opportunity to empower them and their financial status
with Herbalife. Last but not least, a friend referred Mike Mefleh, who was an ex-Qnet
member and wanted to share his side of the story during the interview. Finally, K. A. and
R. A. are friends of mine who had a bad experience with Qnet but didn’t want to disclose
their name in our study.
4.1.2 Data analysis

The interviews conducted are documented in a transcript and detailed in Appendix A.
From the transcript content, major themes were extracted and reflected with the variables
indicated in the literature review to check the consistency and difference if available.
Let’s start with the encouragement factors:
For ‘low cost investment’, this variable was confirmed by three interviewees statements
as follows:
 “GMI company was based on internal consumption, where your entrance fee was
buying a minimum product package that was approximately 70$, which was
nothing compared to the opportunity it presents” (Fares, 2018).
 NM “has low investment startup cost” (Fares, 2018).
 “The starter kit was around 14$ of product samples, which was good as an
investment, and I also got 30% discount rate on any purchase I make” (Jaafar,
2018).
 “The starting fee was 68$; by that, you immediately have 25% discount on any
product, and you can reach up to 50% discount as you increase your purchases or
level during the same year. This was a great deal especially that I was using the
products with lower price” (Hariri, 2018).
For ‘flexibility of time’, this variable was recurrent in two statements where:
 “One of the best aspects of NM is that you are not limited by your country or
schedule” (Mefleh, 2019).
 “One of the major reasons behind becoming full-time representative was being
able to have flexible time so I can spend more time with my family and take care
of them at my own time” (Jaafar, 2018).
For ‘No required experience option’, this variable was reflected by statement below:
 Anyone can join; no previous experience required (Harfouch, 2018).

 Also, the company provided trainings to empower the starting members with no
experience, like motivation, sales, business, negotiation, etc. So, I was able to
develop my personality, leadership, people, and entrepreneurial skills and succeed
in my journey” (Jaafar, 2018).
For ‘expanding one’s network and professional connections”, this variable was confirmed
by four interviewees:
 “NM is an opportunity to develop one’s skills, a great start to enter the

marketplace and grow one’s connections and has low investment startup cost”
(Fares, 2018).
 A channel to expand one’s professional network (Harfouch, 2018).
 “After four months, I was able to expand my network,…” (Jaafar, 2018).
 Building connection, relations, and business bonds (Hariri, 2018).
 “Your network can expand globally, and there is no room for showing off or
superior behaviors; from top to bottom everyone is treated the same” (Mefleh,
2019).
For ’getting easier and faster access to financial returns’, this variable was repeated in:
 "In 2010, I was the youngest representative among the whole team, where I
managed to recruit 15 people in the network in the first two weeks and generate
quick revenue easily” (Fares, 2018).
 “… increase my revenues and generate money equivalent to my current job salary
at AUB, so I resigned and became full-time FM network marketer representative”
(Jaafar, 2018).
As for the discouragement factors:
For ‘generating money through recruiting people’, this variable was repeated by four of
our interviewees as follow:
 “Network marketing is a group of individuals (approximately 10 people) who

recruit everyone else as consumers. Every new member is a customer and not part
of the company”, Sahli (2018) defined network marketing as he states that only
top people generate money, and they get the money from by internal consumption
where low level members are the money source.
 “Your revenues aren’t related to the sales, but the recruitment of people under
you” (Fares, 2018).
 “In order to generate money and make profits, the person needs to recruit and
convince his/her friends or family to pay this high fee and join the company. For
every person you get, 500$ are paid for you in cash” (A K. , 2019).
 “After I discovered that I had to convince people to pay this amount on money
and pressure them so I can have 500$ on each person I get, I couldn’t do it” (A
R. , 2019).
For ‘propaganda of getting rich quick’, this variable was mentioned in the following:
 “People shouldn’t believe these ‘get rich’ assumption, things that are too good to
be true are fake ones, so how come only few can do it and not everyone?” (Sahli,
2018)
 “This might seem disturbing for individuals, but network marketing is not an easy
money-making opportunity” (Harfouch, 2018).
For ‘abusing family and friends’ relations for business benefits’, the following
expressions confirmed the variable:
 “Once these individuals are stuck in this dilemma, they try to get other people join
the network and benefit, and drag them with them, and the more level a person
attains, the more inventory they need to buy or the more people they need to
recruit to stay on track” (Sahli, 2018).
 Personal conflicts with friends and relatives (Harfouch, 2018).
 “I only joined after the consistent pressure from him, and he was my friend; I
trusted him” (A K. , 2019).
For ‘putting pressure on individuals to stock inventories to access rewards’, two

interviewees spotted on the variable as below:
 “After a certain point, people start buying products (inventory) to compensate

their losses, since they weren’t able to sell them, and they don’t want to lose their
level &/or stay in the game” (Sahli, 2018).
 Buy products each month to stay active, as there are minimum points the person
needs to have to keep getting points from his/her downline/team (Harfouch,
2018).
For ‘demanding long-term commitment to achieve the advertised financial status’, this
variable is represented in the following expressions:
 This opportunity needs loads of time management and commitment, for that not
everyone can do it, since it needs skillset and right discipline (Fares, 2018).
 "In order for anyone to generate the desired financial returns they expect, they
need to put huge commitment and time, and it takes up minimum two years to
start making that high level of money” (Harfouch, 2018).
 “Success in NM is about consistency, determination and being committed about
your vision” (Hariri, 2018).
Even though there have been some extra factors that could have some impact on the
intention, but the above have been selected and confirmed to be studies and tested further
in our quantitative methodology.
With that we can represent the findings in the below:
Interviewees Confirmed variable

Fares (2018), Jaafar (2018), and Hariri Low-cost investment
(2018)
Mefleh (2019) and Jaafar (2018) Flexibility of time
Harfouh (2018) and Jaafar (2018) No required experience option
Harfouch (2018), Jaafar (2018), Mefleh Expanding one’s network and
(2019), Hariri (2018), and Fares (2018) professional connections
Fares (2018) and Jaafar (2018) Getting easier and faster access to
financial returns
Sahli (2018), Fares (2018), AK (2019) Generating money through recruiting
and AR (2019) people
Sahli (2018) and Harfouch (2018) Propaganda of getting rich quick
Sahli (2018), Harfouch (2018), and AK Abusing family and friends relations for
(2019) business benefits
Sahli (2018) and Harfouch (2018) Putting pressure on individuals to stock
inventories to access rewards
Fares (2018), Harfouch (2018), and Hariri Demanding long-term commitment to
(2018) achieve the advertised financial status
With that, we have confirmed that the variables reflected in the literature review are
consistent in the Lebanese context and that it is possible to proceed with testing and
validating the hypothesis using the quantitative analysis.
4.2 Quantitative data analysis
4.2.1 Demographic Characteristics
The figures and tables below list the characteristics of respondents regarding their
gender, age, education level, current status of job and salary situation. So, we can notice
that the majority of respondents are between 25 and 34 (the youth age) who are 180 of
the total respondents. As well 60 of respondents are between 18 and 24 years old, and the
minority of respondents who are 24 of the total respondents are between 35 and 44 years
old. Hence, the result reflects the main group that we want to focus on which are the
Lebanese youth who might still be at the university or graduates, whether working or not.
Table 3: Age descriptive
Frequency Percent Valid Percent Com.Percent
Valid 18-24 60 22.7 22.7 22.7
25-34 180 68.2 68.2 90.9
35-44 24 9.1 9.1 100.0
Total 264 100.0 100.0

Figure 16 pie chart represents Age Descriptive
Concerning the gender of respondents, table 4 represents the gender descriptive, where
the result was that the majority of respondents are females who are about 167 females
from the total respondents, otherwise males are around 97. This may reflect that females
are more interested or involved in Network Marketing.
Table 4 Gender Descriptive
Cumulative
Frequency Percent Valid Percent Percent
Valid Female 167 63.3 63.3 63.3
Male 97 36.7 36.7 100.0
Total 264 100.0 100.0

Figure 17 Histogram represents Gender Descriptives
Table 5 shows level of education of respondents. Below, we can notice that most of
respondents have a bachelor’s degree who are about 138 of the total respondents, as well
as respondents who have master’s degree are 101, while the minority who achieved their
PHD degree are just 4 respondents, and other educational level who are undergrad are 11
respondents.
Table 5 Education Descriptive
Cumulative
Valid Bachelor’s degree 138 52.3 52.3 52.3

Master’s degree 101 38.3 38.3 90.5
PHD degree 4 1.5 1.5 92.0
School level 11 4.2 4.2 96.2
Vocational/Profession
10 3.8 3.8 100.0
degree
Total 264 100.0 100.0
Figure 18 pie chart represents Status Descriptive
Table 6 shows the current professional level (career) of respondents in our study. Not a
large number who own their business, just 18 respondents are business owners, while
most of respondents are split between those who have full time job that are about 121
respondents of the total responses, and those who are unemployed 104 respondents,
otherwise those who are part time job are only 20 respondents of the total responses.
Table 6 Status Descriptive
Cumulative
Valid Business owner 18 6.8 6.8 6.8
Freelancer 1 .4 .4 7.2
Full time job 121 45.8 45.8 53.0
Part time job 20 7.6 7.6 60.6
Unemployed 104 39.4 39.4 100.0
Total 264 100.0 100.0

Table 7 shows the responses about the salary sufficiency to cover month expenses.
Statistically, the majority of responses agreed that their salary is enough to their monthly
expenses, other wise 89 of responses disagree, while 46 of respondents have no standards
about this regard.
Table 7 Salary Descriptive
Valid No 89 33.7 33.7 33.7
Not all months 46 17.4 17.4 51.1
Yes 129 48.9 48.9 100.0
Total 264 100.0 100.0

4.2.2 Descriptive statistics
4.2.2.1 Attitude toward Network Marketing intention of participation and the formulated
hypotheses.
Concerning low cost and NM participation, about half of the responses who are
48.8% of the total responses disagree joining network marketing if the entry cost is low,
and 31,4% are not sure about, otherwise 19.7% of responses agree joining if entry cost is
low. With regard to NM participation and time flexibility, 44% of the responses disagree
that joining a marketing network is offers then a more flexible time than any regular job,
otherwise about 29.1% agree that there is flexibility in Network Marketing, and 26.9% of
respondents are not sure about. The third variable which consider that joining network
marketing doesn’t require previous experience, so the majority of responses agree with
this regard with about 54.5% of the responses, while approximately 28.4% disagree to be
involved if NM doesn’t require experience and 17% are not sure. When NM
participation is linked with expanding the professional network, most of responses with
57% agreed that it is a motivational factor for joining, on the other hand, 31% of
responses disagree to join NM company even if it would expand their professional
network, and about 11.4% are not sure about. The attitude toward joining network
marketing company if it provides faster and easier financial return to everyone, more than
half of the responses which are about 55% agree with this context, otherwise about 30%
of respondents disagree, and about forth of the respondents are not sure about this regard.
Concerning the need to invite people to join the company and make profit, the responses
split equally between them, so about half of the responses which are about 49.6% agree,
while about 26.6% disagree to join a network marketing if they need to invite people for
recruitment in order to make money, and the rest are not sure. Attitudes toward joining
network marketing which promotes the ‘get rich quick’ image had minority of responses
agree with this regard with about 17% of the respondents’ responses, while
approximately 49% disagree in joining a network marketing company which promotes
the ‘get rich quick’ image and 34.1% are not sure. The attitudes toward joining a
network marketing company even if they are advised to start their network with your
friends and relatives, reflects approximately half of the responses agree with this regard,
while about 27% of the total responses disagree, and the rest of responses are not sure
about. Attitudes about considering joining a Network Marketing company if they are
encouraged to stock non-refundable inventory (products) to access rewards and reach
higher level, 43.2% of responses agree with this context, otherwise 27.3% disagree and
about 29,5% are not sure about. Finally, the last attitude toward considering joining NM
company to achieve high profits even if it takes long time to do so, most of the responses
which are about 60% agree with this regard, while the minority od responses that are
about 21% disagree and the rest are not sure about.
Table 8 Attitudes toward Network Marketing Entry and other variables
# Question Strongly Disagree Not Agree Strongly Mean SD

Disagree sure agree
1 Would you consider joining a

Network Marketing company
18.9 29.9 31.4 14.0 5.7 2.57 0.068
if the entry cost (starting fee)
is low?
network marketing company 2.75
if it is more flexible than 16.7 27.3 22.3 6.8 0.72
26.9
working a regular job?
3 As a young individual, would

you consider joining an 3.36
10.6 20.8 0.79
opportunity that doesn’t 17.8 17 33.7
require previous experience

12.1 20.5 0.81
if it helps you expand your 18.9 11.4 37.1
professional network?
5 Would you consider joining a 11 18.9 15.5 36.4 18.2 0.78
network marketing company
3.32
if it proposes a faster and
easier financial return to
everyone?
if you will need to invite 15.2 14.4 3.22 0,78
11.4 23.9 35.2
people to join the company
and make profit?
31.1 4.5 0,73
that promotes the ‘get rich 17,8 34.1 12,5
quick’ image?
even if you are advised to 11 16.3 3.27 0.76
16.3 24.2 32.2
start your network with your
friends and relatives?
Network Marketing company
if you are encouraged to
stock non-refundable 12.1 14.4 2.25 0.74
31.1 22.7 19.7
inventory (products) to
access rewards and reach
higher level?
10 Would you consider joining
NM company if you are able
to generate high profits even 9.8 19.3 3.49 0.74
11 18,9 40.9
if it takes long time to
achieve that?
4.2.3 Validating Hypotheses
4.2.3.1 Hypothesis H1 “a”

H1 “a”: There is a significant relationship between the low-cost investment as an
encouraging factor for youth involvement in network marketing companies and their
intention of participation.
The model is significant, since p-value in ANOVA test is less than 0.05
R-squared is equal to 0.213, which indicates that this model explains 21.3% of the
variation of youth intention to join network marketing.
As shown in the table of coefficients, the independent variable “low cost investment” is
highly significant at a 95% confidence level (p-value=0.000<0.05).
The coefficient B1 is equal to 0.514, which means that when low cost investment
increases by one unit, intention to join network marketing increases by 0.514 unit.
Table 9: ANOVA and table of coefficients for Regression one
Model Sum of Squares df Mean Square F Sig. R-squared

1 Regression 87.088 1 87.088 70.827 .000 b
Residual 322.151 262 1.230 0.213

Total 409.239 263
Unstandardized Standardized 95.0% Confidence Interval
Coefficients Coefficients for B
Lower Upper
Model B Std. Error Beta t Sig. Bound Bound
1 (Constant) 7.46
1.282 .172 .000 .944 1.620
3
Low cost 8.40
.514 .061 .461 .000 .394 .635
investment 2
4.2.3.2 Hypothesis H1 “b”
Hypothesis H1 “b”: There is a significant relationship between flexibility of time as an
encouraging factor for youth involvement in network marketing companies and their
intention of participation.
R-squared is equal to 0.270, which indicates that this model explains 27% of the variation
of youth intention to join network marketing.
As shown in the table of coefficients, the independent variable “Flexibility of Time” is

highly significant at a 95% confidence level (p-value=0.000<0.05).
The coefficient B1 is equal to 0.555, which means that when flexibility of time increases
by one unit, intention to join network marketing increases by 0.555 unit.
Table 10: ANOVA and table of coefficients for Regression two

1 Regression 110.357 1 110.357 96.739 .000 b
Residual 298.882 262 1.141 0.270

Total 409.239 263
Unstandardized Standardized 95.0% Confidence
Coefficients Coefficients Interval for B
Std. Lower Upper
Model B Error Beta t Sig. Bound Bound
1 (Constant) 1.078 .167 6.443 .000 .749 1.408
flexibility of
.555 .056 .523 9.923 .000 .445 .665
time
4.2.3.3 Hypothesis H1 “c”
Hypothesis “c”: There is a significant relationship between no required experience
option as an encouraging factor for youth involvement in network marketing
As shown in the table of coefficients, the independent variable “no required experience
option” is highly significant at a 95% confidence level (p-value=0.000<0.05).
The coefficient B1 is equal to 0.496, which means that when no required experience
option increases by one unit, intention to join network marketing increases by 0.496 unit.
Table 11: ANOVA and table of coefficients for Regression three
Sum of R-squared
Model Squares df Mean Square F Sig.
1 Regression 105.922 1 105.922 91.494 .000b
0.259
Residual 303.317 262 1.158
Total 409.239 263
Unstandardiz
ed Standardized 95.0% Confidence
Std. Lower Upper
1 (Constant) .93 5.04 .00
.186 .572 1.304
8 6 0
no required experience .49 9.60 .00
.052 .510 .394 .598
option 6 7 0
4.2.3.4 Hypothesis H1 “d”
Hypothesis “d”: There is a significant relationship between expanding one’s network
and professional connections as an encouraging factor for youth involvement in
As shown in the table of coefficients, the independent variable “expanding one’s network
and professional connections” is highly significant at a 95% confidence level (p-
value=0.000<0.05).
The coefficient B1 is equal to 0.366, which means that when expanding one’s network
and professional connections increases by one unit, intention to join network marketing
increases by 0.366 unit.
Table 12: ANOVA and table of coefficients for Regression four

1 Regression 60.326 1 60.326 45.299 .000 b
Residual 348.912 262 1.332 0.147

Total 409.239 263
Unstandardize Standardized 95.0% Confidence
d Coefficients Coefficients Interval for B
Std. Lower Upper
1 (Constant) 1.38 7.14 .00
.193 1.001 1.762
1 6 0
expanding one’s network
6.81 .00
and professional .366 .054 .388 .260 .472
2 0
connections
4.2.3.5 Hypothesis H1 “e”
Hypothesis H1 “e”: There is a significant relationship between getting easier and
faster access to financial returns as an encouraging factor for youth involvement in
As shown in the table of coefficients, the independent variable “getting easier and faster
access to financial returns” is highly significant at a 95% confidence level (p-
value=0.000<0.05).
The coefficient B1 is equal to .405, which means that when getting easier and faster
access to financial returns increases by one unit, intention to join network marketing
increases by .405 unit.
Table 13: ANOVA and table of coefficients for Regression five
Sum of Mean R-squared

Model Squares df Square F Sig.
1 Regression 68.704 1 68.704 52.860 .000b
Residual 340.534 262 1.300 0.410
Total 409.239 263
Std. Lower Upper
1 (Constant) 1.26 6.45 .00
.196 .877 1.647
2 3 0
getting easier and faster 7.36 .00
.405 .055 .414 .297 .513
access to financial returns 3 0
4.2.3.6 Hypothesis H2 “a”
Hypothesis H2 “a”: There is a significant relationship between generating money
through recruiting people as discouraging factor for youth involvement in network
As shown in the table of coefficients, the independent variable “between generating

money through recruiting people” is highly significant at a 95% confidence level (p-
value=0.000<0.05).
The coefficient B1 is equal to -.241, which means that when money through recruiting
people increases by one unit, intention to join network marketing decreases by .241 unit.
Table 14: ANOVA and table of coefficients for Regression six

1 Regression 24.664 1 24.664 16.803 .000b
Residual 384.574 262 1.468 0.06
Total 409.239 263
Std. Lower Upper
1 (Constant) 3.384 .204 16.568 .000 2.982 3.786
Recruitment -.241 .059 -.245 -4.090 .000 -.357 -.125
4.2.3.7 Hypothesis H2 “b”
Hypothesis H2 “b” There is a significant relationship between propaganda of getting
rich quick as discouraging factor for youth involvement in network marketing
The model is not significant, since p-value in ANOVA test is more than 0.05
R-squared is equal to 0.02, which indicates that this model doesn’t explain the variation
As shown in the table of coefficients, the independent variable “Propaganda of getting

rich quick” is not significant at a 95% confidence level (p-value=0.419>0.05).
The coefficient B1 is equal to .053, which means that when getting rich quick increases
by one unit, joining to network marketing increases by .053 unit.
Table 15: ANOVA and table of coefficients for Regression seven

1 Regression 1.001 1 1.001 .642 .424 b
Residual 408.238 262 1.558

Total 409.239 263
Std. Lower Upper
1 (Constant) 2.47 14.13 .00
.175 2.133 2.824
8 7 0
Rich .41
.053 .065 .050 .810 -.076 .181
propaganda 9
4.2.3.8 Hypothesis H2 “c”
Hypothesis H2 “c”: There is a significant relationship between abusing family and
friend’s relations for business benefits as discouraging factor for youth involvement in
As shown in the table of coefficients, the independent variable “abusing family and
friends’ relations for business benefits” is highly significant at a 95% confidence level
(p-value=0.000<0.05).
The coefficient B1 is equal to -.426, which means that when abusing family and friends
relations for business benefits increases by one unit, intention to join network marketing
decreases by .426 unit.
Table 16: ANOVA and table of coefficients for Regression eight
Sum of R-squared
Model Squares df Mean Square F Sig.
1 Regression 72.245 1 72.245 56.168 .000b
Residual 336.994 262 1.286 0.177
Total 409.239 263
Std. Lower Upper
1 (Constant) 3.99 20.15 .00
.198 3.607 4.389
8 3 0
Abusing family and friends
.00
relations for business -.426 .057 -.420 -7.495 -.538 -.314
0
benefits
4.2.3.9 Hypothesis H2 “d”
Hypothesis H2 “d”: There is a significant relationship between putting pressure on
individuals to stock inventories to access rewards as discouraging factor for youth
As shown in the table of coefficients, the independent variable “between putting pressure
on individuals to stock inventories to access rewards” is highly significant at a 95%
confidence level (p-value=0.000<0.05).
The coefficient B1 is equal to -.513, which means that when between putting pressure on
individuals to stock inventories to access rewards increases by one unit, intention to join
network marketing decreases by .513 unit.
Table 17: ANOVA and table of coefficients for Regression nine
Sum of Mean R-
Model Squares df Square F Sig. squared
1 Regression 96.988 1 96.988 81.380 .000b
Residual 312.251 262 1.192 0.237
Total 409.239 263
Std. Lower Upper
1 (Constant) 4.27 .00
.194 22.047 3.890 4.653
1 0
putting pressure on
individuals to stock .00
-.513 .056 -.492 -9.159 -.623 -.403
inventories to access 0
rewards
4.2.3.10 Hypothesis H2 “e”
Hypothesis H2 “e”: There is a significant relationship between demanding long-term
commitment to achieve the advertised financial status as discouraging factor for youth
As shown in the table of coefficients, the independent variable “between putting pressure
on individuals to stock inventories to access rewards” is highly significant at a 95%
confidence level (p-value=0.000<0.05).
The coefficient B1 is equal to -.438 which means that when between putting pressure on
individuals to stock inventories to access rewards increases by one unit intention to join
network marketing decreases by .438 unit.
Table 18: ANOVA and table of coefficients for Regression ten
Sum of Mean R-squared

Model Squares df Square F Sig.
1 Regression 96.988 1 96.988 81.380 .000b
Residual 312.251 262 1.192 0.179
Total 409.239 263
Std. Lower Upper
1 (Constant) 4.13 19.33 .00
.214 3.712 4.554
3 3 0
demanding long-term
-.43 - .00
commitment to achieve the .058 -.423 -.552 -.324
8 7.555 0
advertised financial status
4.2.3.11 Multiple Regression Analysis
The multiple regression analysis examines the association between the
independent variables represented by the indicators (h1a … h2e) and the dependent
variable (Intension of joining network marketing). It shows a summarized result of the
regression analysis.
The results of the ANOVA analysis, as shown in the table below, indicate that the model
was a significant predictor of dependent variable “intention joining network marketing”
at level (0.005).
Table 19: ANOVA test for multiple regression
Model Sum of Squares df Mean Square F Sig.

1 Regression 201.872 9 22.430 27.474 .000b
Residual 207.367 254 .816
Total 409.239 263
As per the table 18, R squared= 0.5 which indicates that approximately 50% of the
proportion of variance in the intention joining network marketing is explained by the
independent variables.
Table 20: Model summary for multiple regression
Adjusted R Std. Error of the

Model R R Square Square Estimate
1 .702a .493 .475 .90355
Moreover, the SPSS output also demonstrates the estimated model coefficients. It
includes the column of unstandardized coefficients that form the equation to predict the
intention of peoples’ intention to join network marketing. The predicted equation:
Intention Joining a Network Marketing= 2.685 (constant) + (0.040 x H1a) + (0.342 x
H1b) + (0.345 x H1c) + (0.226 x H1d) – (0.008 x H1e) – (0.148 x H2a) – (0.163 x H2c)
– (0.280 x H2d) – (0.153 x H2e)
As we can notice in the following table, as much as H1a increases by one unit, the
dependent variable (Intention Joining a Network Marketing) will increase 0.04, and also
when the predictor variable H1b will increases by one unit, then the dependent variable
(Intention Joining a Network Marketing) will increase by 0.342, Additionally, for every
unit increase in the predictor variable H1c then the dependent variable will increase by
(0.345). So they are positively related with the dependent variable, and have impact on it.
While we can notice that the beta coefficient is positive in the predictor (H1d), so for
every 1-unit increase in this predictor variable, the outcome variable (Intention Joining a
Network Marketing) will increase by (0.223), the adverse result done with the predictor
variable (H2e), which is negatively related by (-0,08). The next factors, which are the
discourage factors to join network marketing, for every 1-unit increase in predictor
variable H2a, then there will be decrease by (0.148) in intention to join network
marketing. Same analysis in predictor H2b, as every increasing unit, there will be a
decrease in the dependent variable and so on.
Furthermore, the independent variable (H1e) is not significant at level (0.05), so it has no
direct impact on the dependent variable (Intention Joining a Network Marketing), while
rest of independent variables are significant at level (0.05), so they have direct impact on
the dependent variable.
The table of coefficients on the regression is presented below:

Table 21 Multiple Regression
Overall Significance
95.0%
Confidence
Unstandardized Standardized Interval for
Coefficients Coefficients B
Std. Lower Upper

1 (Constant) 2.685 .305 8.797.0002.084 3.286
Would you consider joining a Network

Marketing company if the entry cost .040 .096 .036 2.549.008-.149 .230
(starting fee) is low?
Would you consider joining a network

marketing company if it is more flexible .342 .099 .322 3.446.001.146 .537
than working a regular job?
As a young individual, would you consider

joining an opportunity that doesn’t require .345 .081 .355 4.271.000.186 .504
previous experience

marketing company if it helps you expand .226 .107 .240 2.100.037.437 .014
your professional network?
Would you consider joining a network -.008 .119 -.009 -.071 .943-.244 .227
marketing company if it proposes a faster
and easier financial return to everyone?
marketing company if you will need to -
-.148 .057 -.150 .010-.036 -.260
invite people to join the company and make 2.610
profit?

marketing company even if you are advised -
-.163 .062 -.160 .009-.285 -.042
to start your network with your friends and 2.649
relatives?
Would you consider joining a Network

Marketing company if you are encouraged -
-.280 .066 -.271 .000-.410 -.151
to stock non-refundable inventory (products) 4.256
to access rewards and reach higher level?
Would you consider joining NM company if

-
you are able to generate high profits even if -.153 .059 -.148 .010-.269 -.038
2.613
it takes long time to achieve that?
a. Dependent Variable: dependent
In order to determine the final model of the research, 10 simple linear regressions
were conducted, to test the impact of each independent variable on the dependent
variable. Only ‘Propaganda od getting rich quick’ variable was not significant and
rejected from the model as it doesn’t have any impact on the dependent variable
‘intention’. To test the impact of the rest collectively on the intention, multiple
regression was then conducted and 8 variables has a significant impact on the
dependent variable, whereas ‘Faster and easier financial returns’ variable was not
significant and has no impact on the intention, so it is rejected from the model.
With that, only eight variables are left which indicated a significant relation with
the intention of participation whether negative or positive, as shown below in the
final modelization:
Figure 19: Towards a new modelling about encouragement and discouragement factors for Lebanese youth
participation in network marketing
Source: Author (2021)
Chapter five
Discussions and interpretations
5.1 Summary of results
The empirical study has indicated the existence of a significant relationship

between most of the independent variables with the dependent variable. After analyzing
and interpreting the data collected from the respondents (Lebanese youth) and the
investigations applied to validate the hypotheses of this research based on quantitative
methods, the results are listed shortly as below:
There are several encouragement factors which has have a significant impact on the
intention of the Lebanese youth to participate in NM companies:
 NM companies that offer low starting fees have a favorable significant impact on
Lebanese youth intention of participating in NM companies.
 Not requiring previous experience in NM companies has a favorable significant
impact on Lebanese youth intention of participating in NM companies.
 Offering flexibility for setting own schedule and time in NM companies has a
favorable significant impact on Lebanese youth intention of participating in NM
companies.
 Expanding own network and professional connections in NM experience has a
favorable significant impact on Lebanese youth intention of participating in NM
companies.
 Offering easier and faster access to financial returns with NM companies has no
significant impact on Lebanese youth intention of participating in NM companies.
There are several discouragement factors which have a significant impact on the intention
of the Lebanese youth to participate in NM companies:
 Generating money through recruitment of other people in the network has an
adverse significant impact on Lebanese youth intention of participating in NM
companies.
 Promoting the propaganda of getting rich quick in NM companies has no
significant impact on the Lebanese youth intention for participating in NM
companies.
 Abusing family and friends relations for recruitment or business benefits has an
adverse significant impact on Lebanese youth intention of participating in NM
companies.
 Getting pressured to stock inventory to keep active access rewards and bonuses in
the company an adverse significant impact on Lebanese youth intention of
participating in NM companies.
 Demanding long term commitment to reach high profits in NM has an adverse
significant impact on Lebanese youth intention of participating in NM companies.
These findings satisfy the main objective of the research which is to find the relation
between different encouragement and discouragement factors with the intention of young
individuals to be involved in NM companies.
5.2 Discussion related to the literature review
In this part, we will be comparing the findings with the previous studies indicated in the
literature review and check similarities and difference is found. Each hypothesis will be
demonstrated alone.
 H1a ‘low-cost investment’ was validated with a positive relation to the intention
of participation, and this finding is compatible with several studies presented in
chapter two that showed according to Danuwidjaja (2017), NM is opening
business opportunities for youth to invest in where they can gett started with little
investment, instead of investing a huge amount on a new business and taking the
risk of its success. Also, Attard (2017), Effiom & Effiong (2015) and Marian
(2017) stated that low startup costs in NM companies is considered as a positive
incentive for youth to participate.
 H1b ‘flexibility in time’ was validated with a positive relation to the intention of
participation. Marian (2017) agrees in this part of the result as they discussed that
NM attracts youth with the flexibility in time and place factor, where the
individual can build flexible working schedule depending on his/her availability
and plan anywhere any time. To add, Danuwidjaja (2017), Vance (2019), and
Attard (2017) mentioned that having flexible schedule at work attracts youth to
joining NM companies as more and more generations are demanding more
flexible jobs.
 H1c ‘no required experience’ was validated with a positive relation to the
intention of participation, and it is consistent with Attard (2017) statement that
NM opportunity doesn’t require experience and qualifications, where young
undergraduates have the opportunity to start and develop his/her skills and
experience throughout NM journey- which makes it an attractive package.
Correspondingly, Marian (2017) and Danuwidjaja (2017) agree that requiring no
experience for joining NM companies positively impacts the youth intention of
involvement.
 H1d ‘expanding one’s network and professional connections’ was validated with
a positive relation to the intention of participation and reflected with the literature
part where Danuwidjaja (2017) describes how these companies have high leveled
people on the top with vast experience in the business field, and this exposure will
allow them to benefit and exchange knowledge and experience. To add, NM
members get the opportunity to meet and connect with individuals from different
backgrounds, countries, and fields, while exchanging knowledge, experience, and
maybe creating new business opportunity together. Hence, young individuals
grasp this idea and consider joining to benefit from this opportunity that could be
and added value to their career future.
 H1e ‘getting easier and faster access to financial returns’ wasn’t validated and
rejected from being considered to relate to the intention of participation of youth
in NM companies. Moreover, even though Attard (2017), Vance (2019), and
Marian (2017) mentioned that some NM companies can provide an easier and
faster financial return to individuals, but this aspect has been proved by the
respondents not to be impactful to their intention of participating.
 H2a ‘generating money through recruiting people’ was validated with a negative
relation to the intention of participation. For clarification, Zwilling (2011) agrees
that companies that are based on recruiting people for profits can be considered to
implicate a fraud and might make individuals reluctant to get involved. Albaum
and Peterson (2011), and Cohn (2021) also stand by this statement. Thus, this way
of generating money reflects negatively on the intention of these youth to
participate and decrease their motivation to be involved.
 H2b ‘propaganda of generating huge returns and getting rich quickly’ was not
validated and rejected from being considered to relate to the intention of youth
participation in NM. Even though Cohn (2021), Zwilling (2011) and Babu (2017)
believe that NM companies exaggerating their images and promises might
negatively influence, the results have proved that there is no impact on the
participation intention.
 H2c 'abusing family and friends relations for business benefits’ was validated
with a negative relation to the intention of participation, which seemed to be
consistent with different previous implications. To explain, McKay & McKay
(2018) insisted on the idea the process of recruiting or selling other people can be
challenging and might harm relationships with the pressure of achieving results.
Adding to that, Koroth & Sarada (2012) and Cohn (2021) also agree that abusing
relations negatively impact on individuals intention to be involved and decrease
their interest in joining.
 H2d ‘putting pressure on individuals to stock inventories to access rewards’ was
validated with a negative relation to the intention of participation, and it was
compatible with some studies, where (Albaum & Peterson, 2011) found in their
research that 62% of respondents joined as distributors as a result of continuous
pressure from existing distributors whether relatives or friends. Zwilling (2011)
and Cohn (2021) also indicate that individuals are prone into considering
pressuring their surroundings as a demotivation factor to join NM company and
negatively impact their intention of participation.
 H2e ‘demanding long-term commitment to achieve the advertised financial
status’ was validated with a negative relation to the intention of participation. To
illustrate, this was associated with Babu (2017) statement where he mentioned
that NM requires a lot of work to build solid network, and pitch high sales and
revenue streams, and some individuals wouldn’t be able to accommodate that.
Similarly, McKay & McKay (2018) implicates that youth might consider this
concept as a discouraging factor for the participation and are reluctant to join an
opportunity that requires long term commitment to reach certain level of revenue.
5.3 Managerial Implications
This research sheds the lights on NM companies in Lebanon. The aim is to study and
determine the aspects which motivate and demotivate Lebanese youth to join a NM
company. During the study, we have indicated several managerial suggestions that would
have huge influence on the commercial and business sector in general.
First, there is no law regarding network marketing which can legalize their operations and
work in Lebanon, even though in different countries around the world, these types of
companies have either laws or policies or governmental issues. The absence of such law
can negatively affect not only these companies, but also other types of companies
operating on the Lebanese soil, the individuals and the citizens that are involved or might
be involved, and the general welfare of the community.
Second, with the untracked number of people involved in these companies and the lack of
internal governance, these companies are exposed for bad imaging and influence on their
work and brand.
Moreover, as digital marketing has taken over how people think, feel, and act about
anything around them, internet has played an important role is affecting people’s
behaviors and perceptions on different NM companies positively and negatively. Honesty
and transparency are the best tools for any managers in a company to build a strong
position in the market and increase people’s trust in them. Some young individuals might
fall in the trap of disguised campaigns, but at the end for any company to survive, it
needs consistency it their operations and workflow.
Lastly, it is very important to highlight that this study is original and a new source in the
Lebanon and in the commercial sector specifically. In fact, there hasn’t been any public
research or proper investigations conducted. With that, it can be very beneficial for any
individual or party to use this as a starting point for any related subject that could further
tackle another angle and topic about NM companies in Lebanon.
5.4 Conclusion
NM companies are increasing and with the development of the markets,

technologies, and knowledge, businesses are adapting with the change. As more and
more of the upcoming generations are demanding faster shifts in the business workplace,
more opportunities are being created to fill the gap. More flexibility, opened culture,
better work-life balance, and attractive incentives, all come together with what
individuals are seeking as suitable business opportunities for them. And with the rise of
competition between organizations and markets, changes must be applied to survive and
retain best talents.
Despite all the circumstances Lebanon is facing, young individuals keep seeking for
better alternatives and options for their career paths. Whether freelancing,
entrepreneurship, remote work, or others, youth are searching for opportunities which
provide freedom and independency.
Many companies whether NM or alleged have appeared in the Lebanese market:

Juenesse, Herbalife, Forever Living, Qnet, Bonofa, GMI, Binance, and many others still
operating underground. In reality, there have been a lot of success stories of young
individuals who have joined network marketing companies and became rich and leaders
in the field. Even though there has been reported fraud cases in Lebanon, where many
individuals lost money and were scammed, but on the other hand, many individuals have
been involved in an ethical legal company which provided opportunities to develop their
skills (like management, communication, interpersonal, leadership, presentation, etc),
earn extra money, expand their connections, become leaders of several teams, get
exposure locally and internationally, and opened their own businesses.
With the a lack of information about Network Marketing companies in Lebanon;

especially regarding the factors which motivate or demotivate youth to be part in them,
an investigation was conducted to know more about NM companies in Lebanon, how
they are operating, their legal practice, how individuals are being compensated and
whether they are making money or losing, the monitoring system in Lebanon in regards
to these companies, the awareness level and education in NM concept, and determine the
factors of encouragement and discouragement. Using qualitative approach with eight
interviews conducted and quantitative approach with 264 respondents to online survey,
indicated hypotheses were tested and analyzed reaching proper results. The findings
demonstrated a positive significant relation between different encouragement factors, and
negative significant relation between discouragement factors, associated with the
intention of Lebanese youth participation in NM companies. With low cost starting
package, flexibility of time, not requiring prior experience, and expanding connections,
young individuals would see NM opportunity with an added value and get motivated to
join and participate in them. However, with generating money by recruiting people in the
company, abusing family and friends relations for business benefits, stocking inventory
to stay active and access reward, and demanding long term commitment, individuals are
more reluctant to join NM company and might consider it as shady opportunity. Our
research has created an original and unique topic where no previous studies have been
done in Lebanon. With the findings of our study, we would be able to encourage future
studies and investigations to dive deeper in this rising topic that is evolving and leading
to different impacts in the society. With its originality and need to be explored, we have
worked on determining the factors of encouragement and discouragement on the
Lebanese youth intention of joining these companies. With that, it adds a significant
added value to the commercial and business sector in Lebanon.
In Lebanon, the main challenge with these operating companies that there isn’t a policy
to differentiate them from regular business to set proper agenda of their operation. Also,
no law is adapted to protect legally operating organizations from schematic companies
that are negatively impacting its reputation and harming their business.
With the high unemployment rate in Lebanon, and the challenges of opening new
businesses, especially with high risk on investment involved, legal NM companies might
open opportunities for Lebanese youth to fill the existing gap.
With the right frame of work, awareness, education, and intervention, more young
individuals can have a space where they can develop, grow, become active in the society,
and make a positive change in building a better community, economy, and country.
5.5 Recommendations
Based on the findings of our study, below are the main recommendations:
 Legal NM companies should make sure to have protective policy or law in their
operating country
 NM companies should build a stronger monitoring system to their network to
detect any illegal or unethical practice from their members and joiners
 NM companies must focus their marketing campaigns in a more transparent,
reliable, and genuine approach that would relate to the youth in the right way
 Any individual interested in joining a NM company should do an extensive
research about the company, ask around, and gather needed information before
making the suitable decision
 Youth must educate themselves about NM, the concept, how they work,
international scope and increase their knowledge with this business concept
 Government must intervene to secure legal and ethical practice of these operating
companies in Lebanon and protect individuals and legal companies from fraud
and schemes
 Government should impose a policy and law that puts NM companies in a
separate category from regular businesses, to build a clear frame of work for their
operations
 Government or official departments like the Chamber of Commerce is encourages
to create an awareness campaigns and educational official publications for public
so they become more knowledgeable about these companies and which are
operating in a legal way
 More experts and leaders in the legal NM companies are advised to share their
experiences, document their stories, publish articles, and increase resources for
Lebanese youth to consider for their reference and increase their knowledge about
it.
5.6 Limitations
It is common that in any research conducted, some limitations arise during the
process, depending on different factors around the study.
Theofanidis & Fountouki (2019) discuss in their journal that limitations point out some
weak areas in the study, but they are not controlled by the individual researcher. They can
be related to the research design, funding restraints, modeling issues, and others. Mainly
a limitation is a restriction the researcher faces during the process of the study and might
have certain impact over the research results, therefore, the implications of the study.
This is why it is important to highlight on them when submitting the research.
 The main limitation faced and been addressed is the absence of information and
research about network marketing companies in Lebanon. Ever though some
representative offices have been contacted for further insights, they were very
clear that they can’t disclose any information about the company and won’t give
any name of any manager or person that would support.
 Also, the Chamber of Commerce was contacted and mentioned that they don’t
have specific data about these companies as they are either under the umbrella of
an established company or as a representative office or illegal. Not to forget that
there is no law about NM companies in Lebanon and they are treated like any
operating company. This has raised more challenges as it makes the reach for
these companies harder.
 Moreover, if the members of these networks have been contacted for sampling,
the result would have been biased as they would answer positively. For that we
have expanded our sample to reach more people that might be ex-members, from
different companies, and from diverse background and age to have a valid result
which can me later adapted.
 To add, most individuals who have had a bad or fraudulent experience with any of
these companies, they were reluctant to be interviewed, as they were embarrassed
about their story or due to their post in the public sector which is against the law
to be involved in this kind of acts.
5.7 Future research perspectives
In our research we have investigated the encouragement and discouragement

factors on the intention of Lebanese youth for participating in NM companies. Future
research should target the government and how it is involved or must be involved in
building a more secured and legal practice for these companies in Lebanon. Also, more
investigations should be done on the companies operating in Lebanon taking each one as
a case and performing a detailed approach to build up a suitable reference for public.
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Appendix A: Pilot interviews with different experts and
experienced individuals
As mentioned earlier, there isn’t enough data (according to our knowledge) related to
network marketing in Lebanon; how they operate, registered, research done, etc. For that,
we have conducted pilot interviews with financial experts, ex-network marketing
representatives, and leaders in some companies to extract enough information, support
our thesis and reflect on our hypotheses.
In the very beginning of my research journey and while trying to find research, articles,
data, or information about network marketing in Lebanon, knowing that according to our
knowledge there are minimal findings, I came across an article on a website called Bold
in Lebanon, however the website was deactivated later. The article was written by Zahi
Sahli, who is currently the Director of the Online Department at Al-Akhbar, as well as
media consultant and experienced writer.
So, I tracked him down, added him on LinkedIn and invited him over a meeting to know
more about his experience. Interestingly fact, I found out that Zahi has never joined any
network marketing company, but he was approached several times from different people
ranging from close friends or online connections, to convince him in joining a network
marketing company. For that, he did his research, asked around, got ex-reps experiences,
and had to share his findings in an article online. “All network marketing companies are
the same; it is a setup”, Zahi stated as he explained the different factors that puts these
companies in the red zone for him. “Network marketing is a group of individuals
(approximately 10 people) who recruit everyone else as consumers. Every new member
is a customer and not part of the company”, Zahi defined network marketing as he states
that only top people generate money, and they get the money from by internal
consumption where low level members are the money source. To clarify more, internal
consumption means that people are paying the organization, instead of them giving the
products and selling them (getting commissions), the individual must purchase the
products at first and sell them on their own, taking the risk to get to the field and sell the
products, and if it wasn’t sold the individual loses his money. And “after a certain point,
people start buying products (inventory) to compensate their losses, since they weren’t
able to sell them, and they don’t want to lose their level &/or stay in the game. Moreover,
once these individuals are stuck in this dilemma, they try to get other people join the
network and benefit, and drag them with them, and the more level a person attains, the
more inventory they need to buy or the more people they need to recruit to stay on track”.
“When people resist the idea of joining an NM company, they tell them that they are
being negative, they don’t dream big enough, they can become millionaires, and ‘if you
believe you become’, is their motto”. For Sahli, “people shouldn’t believe these ‘get rich’
assumption, things that are too good to be true are fake ones, so how come only few can
do it and not everyone?”
During our interview, Zahi mentioned different factors which discourages people to join
network marketing companies, as: “Stocking inventories to keep active and access more
levels, recruiting people in the network, getting pressured from their friends, promoting
the ‘get rich quick’ image which is not true”.
As a final statement, Zahi said that “researching the company is not enough, you can’t
weigh the positives and negatives and decide if it is good or no. If there is 10% indication
it is bad, then it is.”
On my journey to reach out to people who have been in network marketing, I came
across Rudy Fares, currently investment & portfolio consultant, Financial consultant for
CryptoTicker, and FinTech consultant, who approached me after I posted an inquiry on
LinkedIn about wanting support from anyone who has input on the subject, he messaged
me an article posted on Business For Home site about his journey with network
marketing; so I called for a meeting with him and meet him in person for an interview.
Rudy started his network marketing journey when he was high school senior after one of
his friends talked to him about GMI (Gold Mine International), a company which sells
gold pated pens, pendants, and jewelry stuff. He was curious enough to attend a session
and know more about the company; quoting him “I asked many questions to get better
understanding; they talked about network marketing concept and I found it logical and
interesting. I got in and started with them. In 2010, I was the youngest representative
among the whole team, where I managed to recruit 15 people in the network in the first
two weeks and generate quick revenue easily.” However, back then there weren’t enough
resources to search about the company, network marketing, and how they operate. In
2012-2013, the teams needed support but couldn’t reach out to the headquarters, and after
several attempts, he found out that the company was a fraud and left the company,
searching for another operating NM company in Lebanon with better image and
representation. Fares stated that “GMI company was based on internal consumption,
where your entrance fee was buying a minimum product package that was approximately
70$, which was nothing compared to the opportunity it presents, and your revenues isn’t
related to the sales, but the recruitment of people under you.” After GMI, he reached out
to representatives in Talk Fusion company, which sells video communications products,
including live broadcasting products, video conferencing, and desktop sharing tools, and
wanted to introduce it to Lebanese market. However, due to the Syrian crisis back then,
and the disruption of the economy and political status in Lebanon, there were challenges
with the payment issues and others effected by the situation, so he couldn’t operate a
network in Lebanon. To add, not only there isn’t any law or control over NM companies
operating in Lebanon, but also, there isn’t awareness and education about this concept.
Nonetheless, Fares’s early experience with network marketing has helped him develop
his knowledge, skills, expertise, and his own personal brand. So according to Fares: “NM
is an opportunity to develop one’s skills, a great start to enter the marketplace and grow
one’s connections and has low investment startup cost. On the other side, there are some
red flags to consider as this opportunity needs loads of time management and
commitment, for that not everyone can do it, since it needs skillset and right discipline;
also, revenue is based on recruitment not sales, and the invitation approach can be
unprofessional or not presented in the right way.”
According to Fares, network marketing can be considered a good starting point for
individuals who want to build their experience on a young age, but they need to make
sure they choose the right company to work with.
Previously, I had the chance to join Jeunesse, a global US company which markets skin
care, nutritional, and energy products, for a short period of time, and I managed to meet
some experts in the field; one of them is Abdallah Harfouch. He is currently the founder
of AH financial consultancy, CEO and chairman of Forex Space s.a.l, economist,
financial market analyst, and an ex-Juenesse leader in Lebanon. Throughout our
interview I found out that he was one of the early investors in Bonofa, which was a
German company that claimed to have the biggest network services in the world but
turned out to be a fraudulent association. However, his experience didn’t keep him from
investing in other network marketing companies like Juenesse, where he and five
colleagues introduced it in Lebanon, and he reached ‘Sapphire’ rank (considered to be an
advanced level); “the level of the member is based on their sales volume and their team’s
sales volume, and the balance depending on the type of plan”, stated Harfouch. For him,
“Juenesse offers products that are adhered by adults, so there are products to use, sell,
promote, build up the teams and activate the business cycle”. Also, “incase the new
members wants to be a distributor and build a team, they need to enter a rewarding
system, and buy a minimum package of the products at first, since they need to use the
products in order to market and convince people of trying it”, Harfouch mentioned. This
means that the individual’s investment starts with buying an initial inventory package as
an entry fee.
Moreover, Harfouch explained why network marketing is not entrepreneurship, but

instead it teaches you the spirit of entrepreneurship; where first you need to have seven
main skills (how to get new clients, invite people to check your opportunity, close deals,
lead a team, present, promote events, and get people started), and second you should have
your own brand to create and build, which is not the case in network marketing since
there is already a brand that you market and you are an independent distributor.
He describes that “the process in network marketing takes time, and in order for anyone
to generate the desired financial returns they expect, they need to put huge commitment
and time, and it takes up minimum two years to start making that high level of money.
This might seem disturbing for individuals, but network marketing is not an easy money-
making opportunity”. As well, “problems faced in network marketing doesn’t come from
the system of network marketing, but it comes from two factors: companies that try to
mimic NM concept, but they are Ponzi schemes, or some members who are unethical and
try to sell in any way possible.” For that education is a vital element for any person who
wants to join any MLM company.
Harfouch stated some encouraging factors for youth to join MLMs, some are below:
 Anyone can join; no previous experience required

 You can start by your network of friends and family
 Starting opportunity for unemployed individuals or side money
 A channel to expand one’s professional network
 Develop one’s skills via trainings
Also, he mentioned some points that could be considered discouraging, as below:
 Buy products each month to stay active, as there are minimum points the person
needs to have to keep getting points from his/her downline (team)
 Managing time as it requires lots of commitment
 Personal conflicts with friends and relatives
 Fear of failure
 Being a scam
Considering Lebanon case, Harfouch specified that most NM companies when they go
global, they are registered as brands under a company (import or export) in order to be
able to get access to Lebanese market. Therefore, we don’t have enough information
about what and how many MLM companies are registered in Lebanon, and no law can
organize its activities or protect the joiners from fraud. Nonetheless, NM concept in
Lebanon is very weak, and there isn’t enough awareness about this marketing concept, so
most people have no clear understanding about these companies and how they operate,
and the opportunities they have. For that, he concluded the interview by advising young
individuals to educate themselves about network marketing before starting, search about
it and know everything, understand a lot and ask about it, and then they can decide to join
a good nm company.
After my interview with Abdallah, he referred me to Dalida Jaafar, who was a medical
lab technician who worked clinical research in AUB, had some insurance experience, and
became full-time network marketing representative after her mother introduced her to FM
Group. Currently, she is an associate team lead at H&R Block consultancy agency.
Going back then, her mother was a representative who focused on selling FM Group
products which were household, health & beauty care, and cosmetics products. After
joining, she wanted to know about network marketing and worked more on building her
network rather than selling the products. She mentioned that “the starter kit was around
14$ of product samples, which was good as an investment, and I also got 30% discount
rate on any purchase I make. Mainly the revenues a representative make are based on the
person network’s (team) sales, and what makes the company successful is that its
products are consumable, covers most of the household items, and are of good quality.”
She enjoyed her experience and didn’t have many challenges except with some
individuals who were resistant and thought it was a fraud company, due to the lack of
awareness in Lebanon. Jaafar stated that “after four months, I was able to expand my
network, increase my revenues, and generate money equivalent to my current job salary
at AUB, so I resigned and became full-time FM network marketer representative. One of
the major reasons behind becoming full-time representative was being able to have
flexible time so I can spend more time with my family and take care of them at my own
time. Also, the company provided trainings to empower the starting members with no
experience, like motivation, sales, business, negotiation, etc. So, I was able to develop my
personality, leadership, people, and entrepreneurial skills and succeed in my journey.”
Therefore, Jaafar stated some encouraging factors to join NM companies, as:
 Low investment
 Consumable products
 Flexibility in own time
 Development of skills
 Expanding one’s connections and network
 Good side money as a part time
 Faster and easier money compared to traditional jobs
She also suggested that lack of awareness and education and fraudulent companies might
affect people’s intentions of joining an MLM company negatively.
“It is all about choosing the right company; research about it, its products, prices, system,
and then decide; it is an experience that everyone should try.” Jaafar stated as a final
advice to youth and anyone interested in joining.
Nathelie Hariri, a Herbalife representative, was the second person on Abdallah Harfouch
list of reference. I had the meeting with her over WhatsApp video call since she is from
Saida. Nathalie has been a Herbalife representative since 2014, after her brother
introduced her to the company and wanted her support. At first, she wasn’t familiar with
the network marketing concept, so it took her one year before getting ahead by herself
and building her own network. Coming from a graphic design academic background, she
was involved in her family’s agricultural business, but she found herself in network
marketing.
“The starting fee was 68$; by that, you immediately have 25% discount on any product,
and you can reach up to 50% discount as you increase your purchases or level during the
same year. This was a great deal especially that I was using the products with lower
price,” Hariri stated. Her journey started by a team of two, where they used to rent a stand
during job fairs and events, take people’s numbers and tell them that they are getting gifts
(facial cremes or body test). After that, they start contacting them and giving them
appointments, where some of them become customers and others show interest in joining
the network. “ I was able to build my own team and generate 4000$ per month after hard
work and commitment to this opportunity.” She is now providing trainings and sessions
to her team, potential members, and her community in Saida. Hariri mentioned that her
strength point was being a customer herself as she “started using the products and
benefiting from them”; this has empowered her to share her experience and be more
confident about her approach with people. “Success in NM is about consistency,
determination and being committed about your vision”, she said as she explained the
importance of putting the right time and efforts in network marketing to succeed,
meaning it is not a quick easy destination. Moreover, she highlighted on the significance
of good representation for any company, because due to some unethical acts from some
members, the company’s image is affected and would negatively influence how people
would perceive it. For Herbalife, one of their focus is abiding the rules and policies and
making sure no one pulls anything that would harm the company’s image, or they will
either pay a penalty or leave the company.
Hariri talked about different encouraging factors to join a network marketing company;
some are:
 Building connection, relations, and business bonds

 Getting experience and access workplace at young age
 Developing skills like negotiation, communication, facilitation, etc
 Starting with low investment fee
 Getting products at discount
 Having the opportunity to start young with no required experience
She also mentioned that misrepresentation and unethical practices influence the
company’s image, and that this work requires lots of commitment to see expected results.
These could be discouraging factors for youth who want something quick and easy.
“I advise people to start network marketing and work regular job at the same time, choose
the company that best fits them, see development and benefit from it not just financially”,
Hariri ended the meeting with some advice to the youth.
One on the most companies which had a high publicity in the recent years was Qnet, an
allegedly network marketing company with products to sell. However, there has been a
lot of cases where individuals have reported losing their money after the promise of
getting high returns in a short period of time. The investment could range from 1000$ to
3000$ paid in cash to the contacted person, in return to a wristwatch, water filters, and
travel discounts provided, and others. I came across several friends who have been either
approached to join or have joined already and got their stories to know more about their
experiences. K.A. was at that time serving in the army as gendarme, had a limited income
with a limited financial status. He was approached by his friend who is public security
officer and convinced him to join the company by paying 3000$ with a promise that he
can double and triple them in a short time. Interestingly, the Qnet network was growing
largely among public sectors (army, security, etc), as it was something, they can generate
money without reporting on it. At that time, K.A. didn’t have the full amount of money,
but his friend insisted to getting a loan from anyone so he can join. “He gave me 48 hours
to get the money and kept urging me to join. I had to take a debt from a relative to cover
the whole amount as it was my only savings. I only joined after the consistent pressure
from him, and he was my friend; I trusted him.” After joining, K.A. found out that “in
order to generate money and make profits, the person needs to recruit and convince
his/her friends or family to pay this high fee and join the company. For every person you
get, 500$ are paid for you in cash.” It was a challenging thing for him to do it and he
dropped after a while without any return. The same thing happened with a girl R.A., who
had the same officer friend approach her to join, forced her to take a loan from her family
and pay 2000$. “After I discovered that I had to convince people to pay this amount on
money and pressure them so I can have 500$ on each person I get, I couldn’t do it. I
talked to my father and I petitioned a lawsuit against my friend to return my money, as it
wasn’t a legitimate opportunity, but rather a fraudulent case.”
Qnet was on media, newspapers posts, and legal investigations especially in the public
sector, where several soldiers and officers were fired after being exposed. For that, we
reached out to Mike Mefleh, who was an ex-Qnet agent at that time. “It was after I
finished my interior design degree when a friend invited me to attend a seminar and be
introduced to Qnet”, Mefleh stated. He after joined the company and started learning
more about it and the ways of working. “The basis of the company is its products and the
need to sell them, and by selling you have to get members join; and the work in upon
you. Our process started by inviting 200+ people to attend a seminar, but it was costly
and needs money, time, and appropriate orientation process – which we lacked. So, we
created the principle of COI – Circle of Influence: the circle of influence are people who
trusts you and you can influence their thoughts and behaviors, but importantly she
shouldn’t know each other.” One of the major incidents that most of the heard cases was
the 48 hours deadline for any member to join. After meeting the prospect, they give
him/her 48 hours to get the money, or they won’t be able to join. This has created a lot of
pressure on them especially for some who don’t have the full amount, so they rush into
getting debts from their relatives and friends without even realizing the consequence of it.
Mike explained this theory as to “keep the enthusiasm of the idea and opportunity”, even
though in some cases it wasn’t as easy as it sounds. As for the products, he mentioned
that “products are refundable, and the membership fees are refundable in certain cases.
We give the new member 10 days to secure their involvement, if they couldn’t fit with
the work, we refund, and they exit.” Reflecting on what Mike stated, this happens when
the company or in specific certain members follow the policies, but large number of
testimonials have indicated unethical behaviors. For him, the experience of any
individual depends on how they view this opportunity; “every person who aims for
monetary result won’t succeed in the long term. Materialistic goals will only fail any
member who see it like that.” After three years of experience as a full timer with Qnet,
Mike said that “if I want to return to Qnet, I wouldn’t return in Lebanon. Most of the
people don’t have the right principle for the basic of work, and they are misusing its
principles for personal benefits. My decision to leave the company at that time was due to
personal reasons. From my experience, I have learned to have a personal vision and goal,
work on it, and be more open to the possibilities around me. Also, one of the best aspects
of NM is that you are not limited by your country or schedule, your network can expand
globally, and there is no room for showing off or superior behaviors; from top to bottom
everyone is treated the same.” At the end, Mike raised a flag on the importance of
working on increasing the awareness about Network Marketing as “people’s perception
about the companies and their work is negative due to lack of proper education and
knowledge.”
Appendix B: Questionnaire
Network Marketing or Multi-Level Marketing
This survey is a part of a Master's Thesis project designed to find out the determinants of
encouragement and discouragement for Lebanese youth to be involved in Network
Marketing companies. For that, the survey is divided into three sections: background,
knowledge, and thesis hypotheses related questions. Samar Sahily - Lebanese University
‫اني‬NN‫باب اللبن‬NN‫هذا االستطالع هو جزء من مشروع أطروحة الماجستير المصمم لمعرفة محددات التشجيع واإلحباط للش‬
‫يات‬NN‫ة وفرض‬NN‫ة والمعرف‬NN‫ الخلفي‬:‫ام‬N‫ة أقس‬NN‫تطالع إلى ثالث‬NN‫يم االس‬NN‫ تم تقس‬، ‫ذلك‬NN‫ل‬.‫بكي‬NN‫ويق الش‬NN‫لالنخراط في شركات التس‬
‫لة‬NNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN‫ئلة ذات الص‬NNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNNN‫األس‬.
‫ الجامعة اللبنانية‬- ‫سمر الساحلي‬
Section 1 : Personal Information ‫معلومات شخصية‬
This section will provide us better understanding of our targeted audience background for
further analysis.‫سيوفر لنا هذا القسم فه ًما أفضل لخلفية الجمهور المستهدف لمزيد من التحليل‬
1. How old are you? ‫كم عمرك‬

 18-24
 25-34
 35-44
2. What is your gender? ‫جنسك‬
 Female ‫ى‬N‫نث‬N‫أ‬
 Male N‫ر‬N‫ذك‬
3. What is your educational background? ‫ما هي خلفيتك التعليمية؟‬ *
 Bachelor degree N‫وس‬N‫ري‬N‫ال‬N‫بك‬N‫ ال‬N‫جة‬N‫در‬
 Master's degree N‫ير‬N‫ست‬N‫اجي‬N‫م‬
 PHD degree ‫ه‬N‫را‬N‫تو‬N‫دك‬N‫ ال‬N‫جة‬N‫در‬
 Vocational/Profession degree N‫ني‬N‫مه‬
 School level N‫سة‬N‫در‬N‫م‬
 Other:
4. Choose your university/education background ‫ التعليمية‬/ ‫اختر خلفيتك الجامعية‬ *

 Lebanese University (LU)
 Antonine university (UA)
 Balamand
 USJ
 USEK
 AUST
 LIU
 BAU
 AUB
 LAU
 Other
5. What is your current status? ‫ما هو وضعك الحالي؟‬
 Part time job N‫م جزئي‬N‫وا‬N‫ د‬N‫مل‬N‫ع‬
 Full time job N‫مل‬N‫ كا‬N‫ام‬N‫ل دو‬N‫عم‬
 Business owner N‫مل‬N‫صاحب الع‬
 Unemployed ‫ل‬N‫ عم‬N‫ال‬N‫ب‬
6. Does your salary/allowance enough for your monthly expenses? ‫ مخصصاتك‬/ ‫هل راتبك‬
‫كافية لتغطية نفقاتك الشهرية؟‬
 No
 Yes
 Not all months N‫هر‬N‫ألش‬N‫ ا‬N‫س كل‬N‫لي‬
Section 2: General Knowledge ‫معرفة عامة‬

This section will help us in understanding the knowledge/experience that Lebanese youth
have about Network Marketing or Multi-Level Marketing ./ ‫سيساعدنا هذا القسم في فهم المعرفة‬
‫ المستويات‬N‫الخبرة التي يمتلكها الشباب اللبناني حول التسويق الشبكي أو التسويق متعدد‬
7. Do you know what is "Network Marketing" or "Multi-Level Marketing? ‫هل تعرف ما هو‬
‫"التسويق الشبكي" أو "التسويق متعدد المستويات"؟‬
 Yes
 No
8. Have you been a member or distributor in one of Network Marketing companies
(currently in one)? ‫هل كنت عض ًوا أو موزعًا في إحدى شركات التسويق الشبكي (حاليًا في واحدة)؟‬
 Yes
 No
Section 3: Encouragement & Discouragement factors to join ‫عوامل التشجيع‬

‫واإلحباط لالنضمام‬
The following questions will reflect on different determinants for Lebanese youth to
participate in Network Marketing companies. ‫ستعكس األسئلة التالية محددات مختلفة للشباب اللبناني‬
‫للمشاركة في شركات التسويق الشبكي‬.
9. Would you consider joining a Network Marketing company if the entry cost (starting
fee) is low ? )‫ة‬NN‫وم البداي‬NN‫دخول (رس‬NN‫ة ال‬NN‫انت تكلف‬NN‫بكي إذا ك‬NN‫ويق ش‬NN‫ركة تس‬NN‫مام إلى ش‬NN‫ر في االنض‬NN‫ل تفك‬NN‫ه‬
‫منخفضة؟‬
 Strongly agree ‫ة‬N‫شد‬N‫ ب‬N‫فق‬N‫وا‬N‫م‬
 Agree N‫فق‬N‫وا‬N‫م‬
 Neutral N‫دي‬N‫حيا‬
 Disagree N‫عارض‬N‫أ‬
 Strongly disagree N‫دة‬N‫ض بش‬N‫أعار‬
10. What is the maximum amount you are willing to pay to join a Network Marketing
company? ‫ما هو الحد األقصى للمبلغ الذي ترغب في دفعه لالنضمام إلى شركة تسويق شبكي؟‬
11. Would you consider joining a network marketing company if it is more flexible than
working a regular job? ‫هل تفكر في االنضمام إلى شركة تسويق شبكي إذا كانت أكثر مرونة من العمل في‬
‫وظيفة عادية؟‬
12. Between a job of 8-9 hours a day and an opportunity that allows you to set your own
schedule; which one would you choose? ‫ ساعات في اليوم وفرصة تسمح لك‬9 ‫ إلى‬8 ‫بين وظيفة من‬
‫بتحديد جدولك الزمني الخاص ؛ أي واحد سوف تختار؟‬
 8-9 hour job 8-9 N‫مل‬N‫ ع‬N‫ساعات‬
 Set my own schedule opportunity N‫خاص بي‬N‫ ال‬N‫ني‬N‫زم‬N‫ ال‬N‫ول‬N‫لجد‬N‫ ا‬N‫ فرصة‬N‫ين‬N‫عي‬N‫ت‬
13. As a young individual, would you consider joining an opportunity that doesn’t require
previous experience? ‫ هل تفكر في االنضمام إلى فرصة ال تتطلب خبرة سابقة؟‬، ‫كفرد شاب‬
14. Would you consider joining a network marketing company if it helps you expand
your professional network? ‫اعدك على‬N‫انت تس‬N‫بكي إذا ك‬NN‫ويق ش‬N‫ركة تس‬N‫مام إلى ش‬NN‫هل تفكر في االنض‬
‫توسيع شبكتك المهنية؟‬
15. Would you consider joining a network marketing company if it proposes a faster and
easier financial return to everyone? ‫هل تفكر في االنضمام إلى شركة تسويق شبكي إذا كانت تقترح‬
‫عائدًا ماليًا أسرع وأسهل للجميع؟‬
16. Would you consider joining a network marketing company if you will need to invite
people to join the company and make profit? ‫هل تفكر في االنضمام إلى شركة تسويق شبكي إذا‬
‫كنت ستحتاج إلى دعوة أشخاص لالنضمام إلى الشركة وتحقيق ربح؟‬
17. Would you consider joining a network marketing company that promotes the ‘get rich
quick’ image? ‫هل تفكر في االنضمام إلى شركة تسويق شبكي تروج لصورة "الثراء السريع"؟‬ *
18. Would you trust a company which promotes that you can get rich quickly? ‫هل تثق في‬
‫شركة تروج للثراء بسرعة؟‬
 Yes
 No
19. Would you consider joining a network marketing company even if you are advised to
start your network with your friends and relatives? ‫هل تفكر في االنضمام إلى شركة تسويق‬
‫شبكي حتى لو نصحك ببدء شبكتك مع أصدقائك وأقاربك؟‬
20. Would you consider joining a Network Marketing company if you are encouraged to
stock non-refundable inventory (products) to access rewards and reach higher level?
‫ترداد‬NN‫ل لالس‬NN‫ير قاب‬NN‫زون غ‬NN‫زين مخ‬NN‫جيعك على تخ‬NN‫بكي إذا تم تش‬NN‫ويق ش‬NN‫ركة تس‬NN‫مام إلى ش‬NN‫ر في االنض‬NN‫ل تفك‬NN‫ه‬
‫(منتجات) للوصول إلى المكافآت والوصول إلى مستوى أعلى؟‬
21. Would you consider joining NM company as a part timer because you heard that you
could generate higher profits from it than any regular part time job? ‫هل تفكر في االنضمام‬
‫ة‬NN‫ا أعلى من أي وظيف‬NN‫اح منه‬NN‫ق أرب‬NN‫ك تحقي‬NN‫ه يمكن‬NN‫إلى شركة التسويق الشبكي كعامل بدوام جزئي ألنك سمعت أن‬
‫بدوام جزئي عادية؟‬
22. Would you consider joining a network marketing company if it offers good
opportunity for you? ‫هل تفكر في االنضمام إلى شركة تسويق شبكي إذا كانت توفر لك فرصة جيدة؟‬
 Yes
 No
23. Before and after the devaluation of the currency (during the crisis), did your intention
of joining a Network Marketing company changed? )‫قبل وبعد تخفيض قيمة العملة (أثناء األزمة‬
‫ هل تغيرت نيتك في االنضمام إلى شركة تسويق شبكي؟‬،
 Yes
 No
24. Do you think we lack awareness in Lebanon about Network Marketing concept? ‫هل‬
‫تعتقد أننا نفتقر إلى الوعي في لبنان حول مفهوم التسويق الشبكي؟‬
 Yes
 No
25. Any thing you want to share with us that could support us in our thesis? ‫أي شيء تريد‬
‫مشاركته معنا يمكن أن يدعمنا في أطروحتنا؟‬
Appendix C: Interview questions
Note: Depending on the type/background/experience of the interviewee, selected

questions will be addressed from the following:
1. What’s your name?

2. What is your professional occupation? (industry / sector)
3. Which NM company are you involved (or previously were involved)?
4. What other companies do you know operating in Lebanon?
5. Do you know how these firms are registered in Lebanon?
6. What was the approach taken to introduce you to the company?
7. Who are your targets? on what basis you choose your recruits? random? Criteria?
8. How did/do you approach others?
9. Describe your experience in a professional way ( how and what did you do to
reach your level )
10. Do you take trainings? what kind? What do they mainly teach and focus on?
11. How long have you stayed in the organization? (why did u leave? Or still in?)
12. How does the compensation plan work? Is it the same structure in all NM firms?
13. How much where/are you generating income? Approx..
14. Can a person take NM are a full-time job for long term? No aside or main job?
(future changes,)
15. What problems did you face? (professional, relationships, family, friends, etc)
16. What are the factors which encourage individuals to be involved?
17. What are the factors which discourage individuals to be involved?
18. what age category is the most concerned in NM companies?
19. The more you recruit the more u generate money? so the business is about
recruiting people?
20. Why is there bad image and buzz about the NM, MLM , pyramid schemes ?
21. Why do you think, as reference to studies made, large number of people lose their
money and small percentage get high returns? ( very high turnover of members)
22. Studies shows that NM strategy in recruitment and sales exploits relationships and
tries to misuse them for work and financial purposes, are you with or against?
23. In your opinion, when does these firms start practicing fraud? Illegal schemes?
24. What should these types of companies do to avoid schematic image to public?
25. Do you advice young individuals to participate in these firms? And on what basis
26. Is there enough awareness and education about this topic in Lebanon?
27. IMPORTANT Q: These type of businesses have been operating for more than 2
decades in Lebanon, why in your professional opinion there hasn’t been studies
and reports, public data or info about them, when it has been ‘employing’
thousands of individuals, there is a huge cash flow, and business cycle ?

Intention To Join Network Marketing

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Intention To Join Network Marketing

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Lebanese University

Faculty of Economic Sciences

And Business Administration

Network Marketing in Lebanon: What Encourage or

A Thesis Prepared in the Fulfillment of the Requirement for the Master’s

Supervisor: Dr. Inaya Wahidi

Reader: Dr. Groerges Jreij

Reviewer: Dr. Jana Badran

Academic Year 2020-2021

Keywords: Network Marketing, Multi-Level Marketing, Ponzi Scheme, Pyramid Scheme,

NM: Network Marketing

MLM: Multi-Level Marketing

PS: Pyramid Scheme or Ponzi Scheme

WFDSA: World Federation of Direct Selling Associations

DSA: Direct Selling Association

FTC: Federal Trade Commission

WOM: Word of Mouth

ROI: Return on Investment

B2C: Business to Consumer

S.A.L: Société Anonyme Libanaise (Joint Stock Company)

S.A.R.L: Société Anonyme à Responsabilité Limitée (Limited Liability Company)

Chapter One: Introductory Chapter...............................................................................................13

1.2. Problem statement...........................................................................................................15

1.3. Research Objectives........................................................................................................16

1.4. Research Question...........................................................................................................17

1.5. Research Hypotheses......................................................................................................18

1.7. Study Contents................................................................................................................21

Chapter Two: Literature Review...................................................................................................22

2.1. Importance of NM Concept in Lebanon.............................................................................22

2.2. Historical Overview of Network Marketing.......................................................................23

2.3. Traditional marketing versus network marketing...............................................................24

2.4. Network marketing definitions...........................................................................................25

2.5. Compensation plans............................................................................................................26

2.6. Importance of Network Marketing.....................................................................................31

2.6.1 Economic impact:.........................................................................................................33

2.6.2 Personal impact.............................................................................................................33

2.6.3 Social Impact................................................................................................................33

2.7 Ponzi Schemes / Illegal pyramid:........................................................................................34

2.7.2 Ponzi Scheme Definitions.............................................................................................35

2.7.3 Ponzi schemes vs network marketing...........................................................................36

2.8 The Lebanese context..........................................................................................................37

2.9 Determinants of encouragement and discouragement for youth participation in Network

2.9.1 The Reality of the world we live in..............................................................................44

2.9.2 Determinants of encouragement for youth to participate in NM companies................46

2.9.3 Determinants of discouragement for youth to participate in NM companies...............52

Chapter Three: Research Methodology.........................................................................................61

3.1 Research Methodology........................................................................................................61

3.2 Research Approach..............................................................................................................64

3.3 Type of data.........................................................................................................................66

3.4 Choice of land......................................................................................................................68

3.6 Qualitative research.............................................................................................................69

3.6.1 Qualitative tools............................................................................................................69

3.6.2 Data collection..............................................................................................................70

3.6.3 Study sample.................................................................................................................71

3.7 Quantitative research...........................................................................................................73

3.7.1 Quantitative advantages and disadvantages..................................................................73

3.7.2 Data collection..............................................................................................................74

3.7.3 Study sample.................................................................................................................74

3.7.4 List of variables............................................................................................................75

3.7.5 Measures for the questionnaire.....................................................................................75

3.7.6 Data treatment – SPSS..................................................................................................78

3.7.7 Regression Analysis......................................................................................................78

3.7.8 Reliability and Validity Tests.......................................................................................80