A Study of Consumer Perceptions of the Products Sold Through Multilevel Marketing
Prabandhan & Taqniki, Management Research Journal, Vol. 5, No. 4, pp. 97-103, 2011
13 Pages Posted: 24 Dec 2011
Date Written: December, 21 2011
Abstract
Often we are approached by a neighbour, colleague or a family member who promises to unveil an incredible ground level business opportunity where one can work at his/her own terms and conditions and carve out a bright future. Multilevel Marketing (MLM) is a specific form of direct selling which experienced significant international growth during the 1990s. Multilevel marketing plans also known as “network” or “matrix” marketing are a way of selling goods or services through distributors. These plans typically promise that if you sign up as a distributor, you will receive commissions- for both your sales for the plan’s goods or services and those of other people you recruit to join the distributors. Multilevel marketing plans usually promise to pay commissions through two or more levels of recruits known as distributor’s “downlines”. During the same period there was a corresponding increase in the investigation and prosecution of illegal pyramid schemes. Since then Multilevel Marketing Programs are a constant source of debate. In a legitimate MLM company, commissions are earned only on the sales of the company’s products or services. No money may be earned from recruiting alone (“sign–up-fees”). If participants are paid primarily from money received from new recruits then the company is an illegal pyramid scheme. This paper attempts to study the ethical issues involved in multilevel marketing and the awareness of the same amongst the public. The genuineness of the products offered in relation to value for money and product quality is another area of study of this paper. With multilevel marketing often a perception of the people is that it is a get rich in no time opportunity. Through this research paper the truth of this belief is also studied.
Keywords: Multilevel Marketing, Network Marketing, Consumer Perceptions, Herbalife, Amway
Suggested Citation: Suggested Citation