INTRODUCTION:

Network Marketing is a specific form of direct selling and is also known as ‘multilevel marketing’ or ‘multilevel direct selling’ (Muncy, 2004). It involves retailing based on face to face communication between a selling agent and a potential buyer (Msweli and Sargeant, 2001; Brodieet al., 2002). These distributors or agents get commissions, discounts or other considerations for their direct sales as well as for indirect sales made by their down lines (Koehn, 2001; Higgs and Smith, 2007). Distributors or sales persons gets an opportunity to build own business or network through recruiting, training and motivating others to sell the same products or services (Vander and Keep, 2002). Network marketing is not only for those who need the products for, but also who need an additional income (Bloch, 1996).

In practice, a typical network marketing organization sales force is composed of individuals performing the role of salesperson-recruiter-manager who build and oversee geographically dispersed sales units of different sizes. These individual distributors perform many of the same duties as traditional sales people, particularly those who service final consumers and small businesses (Pratt, 2000). The distributors are independent because there is no formal relationship of employer and employee among them. They are given an opportunity to set up their own business by recruiting other distributors as their downline (Koroth, 2011).

It gets crucial for network marketing distributors to perceive the things in their original form in order to make precise and effective decisions. Distributors may sometimes express that they are aware about the actual situation before they interact with the reality (Drafke and Kossen, 2002). Perception of an individual controls the behavior of an individual. Perception is the method of selection, organization and interpretation of sensations in a meaningful manner (Stávková et al., 2008).

To remain competitive, it is essential for network marketing organizations to focus on distributors' perception for considering network marketing as an income opportunity. Therefore, the present study analyzes the relationship of demographic factors and distributors' perception for considering network marketing as an income opportunity.

REVIEW OF LITERATURE:

Network marketing is a business that assures financial independence with personal and social freedom. These factors play an important role to attract the distributors to adopt network marketing (Brodieet al., 2002; Kiyosaki, 2004; Krige, 2012). It is seen as an opportunity that provides residual income, which is not attainable by those who enjoy only linear income (Peterson and Wotruba, 1996; Hedges, 2001; Kiyosaki, 2004). Koroth (2011) examined the influence of demographics on the perception level of multilevel marketing distributors. He analyzed that more than half of the distributors belong to low perception level regarding multilevel marketing system. It had been found that the female distributors perceive multilevel marketing more positively than male distributors. It had been found that educational qualification and marital status did not significantly affect the distributors' perception for multilevel marketing. It had also been analyzed that distributors having high monthly income were more positive for multilevel marketing. The study also revealed that already economically active distributors at the time of joining multilevel marketing had greater high perception level compared to unemployed group. Berry (1997) focused on the important factors leading to the joining of network marketing. It had been found that earning extra income is the leading factor to join network marketing. Alturas et al., (2005) analyzed the determinants resulting in consumers’ satisfaction and acceptance of direct selling. The factors leading to consumers’ acceptance of direct selling are experience with direct selling, convenience, marital status, specificity of the product, experience with the sales person, purchase in group, trust and gender. The factors resulting in consumers’ satisfaction with direct selling are experience with the sales person, gender, experience with DSO, experience with direct selling, monthly household income and availability of products. Chouyrod (2009) examined the effective factors of student decisions to join network marketing business. It has been found that ‘making money’, ‘trend of opportunity in business’ and ‘business experience’ are the important reasons leading to the acceptance of network marketing. ‘Implementation factors’ and ‘marketing mix factors’ are the two main factors contributing the acceptance of network marketing business. Out of these two factors, respondents gave the importance to marketing mix factors in comparison to implementation factors for the decision to run the network marketing business. Kiaw and Run (2007) studied the reasons for joining and staying on in a multilevel marketing company. It was found that the main reasons for joining and continuing in MLMs are ‘financial independence’, ‘personal freedom’, ‘types of products and benefits’, ‘product credibility’ and ‘incentives’.

Thus, most of the studies regarding factors leading to the joining of network marketing have been conducted in foreign countries. However, not much work could be traced specifically focusing on relationship of demographic characteristics and distributors' perception regarding network marketing as an income opportunity in Indian context. Therefore, the present study is an attempt to bridge this research gap.

OBJECTIVE OF THE STUDY:

The study has been conducted to analyze the relationship of demographic characteristics and distributors’ perception regarding network marketing as an income opportunity.

RESEARCH METHODOLOGY:

The study is descriptive in nature. The population comprised of registered distributors who are also the consumers of different network marketing organizations like Amway, Modicare, Tupperware, Oriflame, Avon, Modicare, Vestige, DXN, Forever Living Products (FLP), Monavie and Herbalife from National Capital Region (NCR). The respondents have been contacted in weekly meetings of the distributors. Both, primary and secondary data have been used in the present study. The primary data have been collected in the period of October-December 2013 by applying snowball sampling technique. Primary data have been collected with the help of a structured questionnaire based on five point Likert scale from strongly agree to strongly disagree. First section of the questionnaire contains demographic profile of the respondents and second section contains a list of nine statements indicating perception of distributors regarding network marketing as an income opportunity. Secondary data have been collected through the survey of Indian direct selling industry conducted by Indian Direct Selling Association (IDSA). In all, 450 respondents had been contacted; out of which 381 gave the answers of all the questions. Finally, a sample of 381 respondents has been finalized for further analysis.

Data Analysis Techniques:

Firstly data (nine statements) have been grouped by using Principal Component Analysis (PCA) method of Exploratory Factor Analysis (EFA) with Varimax rotation. Factor loadings above 0.40 have been considered significant in this study. Significance of the factor loading depends on the sample size. For a sample size of 300 factor loading should be greater than 0.298 (Stevens, 2002; Hair et al., 2010). Eigen values related with a construct indicate the substantive importance of that factor. Constructs having Eigen values one or more than one have been retained as it represents the substantial amount of variation explained by a factor (Kaiser, 1960). The Kaiser-Meyer-Olkin measure of sample adequacy (KMO) has been used to measure the sample adequacy. It varies between 0 and 1 (Kaiser, 1970). The Bartlett’s test of sphericity is used to test for the adequacy of the correlation matrix i.e., the correlation matrix has significant correlations among at least some of the variables (Ho, 2006). Reliability means that a measure should consistently reflect the construct that it is measuring. The reliability of the construct of the present study has been measured through Cronbach’s alpha as it is an estimate of the average of all the correlation coefficients of the variables within a test (Ho, 2006). The touchstone for Cronbach’s alpha of above 0.60 has been followed for the present study. Secondly, t-test and analysis of variance have been applied to analyze the relationship of demographic characteristics and distributors' perception regarding network marketing as an income opportunity.

Hypotheses of the Study:

Eight null hypotheses have been developed for the present research work to investigate the relationship of demographic characteristics and distributors' perception regarding network marketing as an income opportunity:

H₀1: There is no significant difference in distributors’ perception regarding network marketing as an income opportunity on gender basis

H₀2: There is no significant difference in distributors’ perception regarding network marketing as an income opportunity on age basis

H₀3: There is no significant difference in distributors’ perception regarding network marketing as an income opportunity on educational qualification basis

H₀4: There is no significant difference in distributors’ perception regarding network marketing as an income opportunity on marital status basis

H₀5: There is no significant difference in distributors’ perception regarding network marketing as an income opportunity on monthly income basis

H₀6: There is no significant difference in distributors’ perception regarding network marketing as an income opportunity on concerned organization basis

H₀7: There is no significant difference in distributors’ perception regarding network marketing as an income opportunity on job status basis

H₀8: There is no significant difference in distributors’ perception regarding network marketing as an income opportunity on network marketing experience basis

ANALYSIS AND INTERPRETATION OF DATA:

Descriptive Statistics:

The sample incorporates 50.1 per cent females and 49.9 per cent males representing almost equal distribution of females and males. Majority of the respondents (26.5 per cent) belong to 32-38 age group, 19.4 per cent belongs to 25-31 age group, 18.1 per cent belongs to 39-45 age group, and 13.9 per cent belongs to 46-52 age group. 62.4 per cent respondents are married and 37.6 respondents are unmarried. Majority of the respondents (44.9 per cent) respondents belong to Rs. 25000-50000 monthly income group, and 25.7 per cent belong to Rs. 50000-75000 monthly income group. As far as experience is concerned, majority of the respondents (30.7 per cent) have 1-3 years and 30.2 per cent respondents have more than three years experience in network marketing industry which indicates the long term association of the respondents with their network marketing. The percentage of the respondents having experience 10-12 months is 21.5 per cent, while 17.6 per cent respondents have experience 6-9 months. Distributors having experience less than six months have not been taken into consideration.

Factor Analysis Approach

Single factor i.e. income opportunity has been extracted through nine statements related to distributors' perception regarding network marketing as an income opportunity. The following Table 1 represents calculated value of KMO and Bartlett's test for the application of Exploratory Factor Analysis (EFA).

Table 1: KMO and Bartlett's Test

Kaiser-Meyer-Olkin (KMO) Measure of Sample Adequacy

0.87

Bartlett's Test of Sphericity

Significance level

894.60

0.000*

Source: Primary Data

*Significant at five per cent level

Table 1 depicts that the tests of the assumptions for EFA are satisfied with the KMO measure of sample adequacy of 0.87 and Bartlett’s test of sphericityreturning a value of 894.60, significant at five per cent level of significance.

Table 2: Factor Loadings of Respective Statements

Factor	Factor Loading	Eigen Value	Percentage of Variance	Cronbach's Alpha	Mean (Standard Deviation)
Income Opportunity
Supplementary income	0.761	3.732	41.469	0.82	3.64 (0.69)
Residual income	0.693
Infinite income potential	0.679
Setting up own business	0.636
No-money down deal	0.634
Low investment	0.613
Life time security of job	0.611
Financial independence	0.585
Money back guarantee	0.562

Source: Primary Data

Table 2 represents that the single factor with an Eigen value 3.732 has been extracted related to distributors' perception regarding network marketing as an income opportunity. This factor explains 41.469 per cent of variance with mean 3.64 and standard deviation 0.69. The Cronbach's alpha for the factor 'income opportunity' is 0.82, which is greater than 0.60. Therefore, it has satisfied the assessment of reliability for exploratory research. This factor is dominated by the items such as 'supplementary income, (factor loading=0.761)', 'residual income, (factor loading=0.693)', 'infinite income potential, (factor loading=0.679)', 'setting up own business, (factor loading=0.636)', 'no-money down deal, (factor loading=0.634)', 'low investment, (factor loading=0.613)', 'life time security of job, (factor loading=0.611)', 'financial independence, (factor loading=0.585)' and 'money back guarantee, (factor loading=0.562)'.

Further relationship of demographic characteristics and distributors' perception regarding network marketing as an income opportunity has been analyzed through t-test and analysis of variance (ANOVA).

Distributors' Perception regarding Network Marketing as an Income Opportunity on the basis of Gender

Table 3: Distributors' Perception regarding Network Marketing as an Income Opportunity on Gender basis

Factor

Female

Male

p-value (Sig.)

Mean

S.D

Mean

S.D

Income opportunity

3.73**

0.69

3.56

0.68

2.480

0.014*

Source: Primary Data

*Significant at five per cent level (H₀1 is not supported)

**Underlined figure represents highest mean score

H₀1: There is no significant difference in distributors’ perception regarding network marketing as an income opportunity on gender basis

Table 3 exhibits distributors' perception regarding network marketing as an income opportunity on the basis of gender. The results from the analysis indicate that there is significant difference in distributors' perception for network marketing as an income opportunity (t=2.480, p<0.05). Female distributors perceive more positively network marketing as an income opportunity compare to male distributors as mean score of female distributors is higher than mean score of male distributors.

Table 4: Distributors' Perception regarding Network Marketing as an Income Opportunity on Age (in years) basis

Factor	18-31		32-45		46-59		60 and above		F (Sig.)
Factor	Mean	S. D	Mean	S. D	Mean	S. D	Mean	S. D	F (Sig.)
Income opportunity	3.90**	0.50	3.66	0.68	3.44	0.77	3.71	0.76	8.063 (0.000)*

Source: Primary Data

*Significant at five per cent level (H₀2 is not supported)

**Bold figures represent location of significant difference and underlined figure represents highest mean score

Table 5: Distributors' Perception regarding Network Marketing as an Income Opportunity on Educational Qualification basis

Factor	Graduate		Post Graduate		Professional Degree		Any Other		F (Sig.)
Factor	Mean	S.D	Mean	S. D	Mean	S. D	Mean	S. D	F (Sig.)
Income opportunity	3.67	0.72	3.74	0.69	3.78**	0.56	3.38	0.72	1.875 (0.133)

Source: Primary Data

**Underlined figure represents highest mean score

H₀2: There is no significant difference in distributors’ perception regarding network marketing as an income opportunity on age basis

Table 4 depicts that there is significant difference in distributors' perception regarding network marketing as an income opportunity on the basis of age, F (3,377) =8.063, p<0.05'. Post hoc comparisons using the Tukey HSD test have been done to identify the location of significant difference. For the factor 'income opportunity', the mean score of the respondents from 18-31 age group is significantly different from mean scores of the respondents from 32-45 and 46-59 age groups. It indicates that respondents from 18-31 age group perceive more positively network marketing as an income opportunity compare to respondents from other age groups.

H₀3: There is no significant difference in distributors’ perception regarding network marketing as an income opportunity on educational qualification basis

Table 5 represents that there is no significant difference in distributors' perception regarding network marketing as an income opportunity as the F-value results in p-value greater than five per cent level of significance. It indicates that educational qualification has no effect on distributors' perception for considering network marketing as an income opportunity. Therefore, H₀3 is supported.

Table 6: Distributors' Perception regarding Network Marketing as an Income Opportunity on Marital Status basis

Factor	Married		Unmarried		t	p-value (Sig.)
	Mean	S.D	Mean	S. D
Income opportunity	3.69**	0.72	3.60	0.60	0.018	0.986

Source: Primary Data

**Underlined figure represents highest mean score

H₀4: There is no significant difference in distributors’ perception regarding network marketing as an income opportunity on marital status basis

Table 6 represents that there is no significant difference in distributors' perception regarding network marketing as an income opportunity on the basis of marital status as the F-value results in p-value greater than five per cent level of significance. It indicates that marital status has no effect on distributors' perception for considering network marketing as an income opportunity. Therefore, H₀4 is supported.

H₀5: There is no significant difference in distributors’ perception regarding network marketing as an income opportunity on monthly income basis

Table 7 represents that there is significant difference in distributors' perception regarding network marketing as an income opportunity on monthly income basis, F(3,377)= 3.88, p<0.05. Post hoc comparisons using the Tukey HSD test have been done to identify the location of significant difference. For the factor 'income opportunity', the mean scores of the respondents from Rs.50,000-Rs.75,000 monthly income group is significantly different from mean scores of the respondents from less than Rs.25,000 and Rs.25,000-Rs.50,000 monthly income groups. It indicates that higher level of income tends to more positive perception regarding network marketing as an income opportunity.

Table 8: Distributors' Perception regarding Network Marketing as an Income Opportunity on Concerned Organization basis

Network Marketing Organization	Income Opportunity
Network Marketing Organization	Mean	S.D	F (Sig.)
Amway	4.11**	0.83	5.747 (0.000)*
Tupperware	3.76	0.55
Oriflame	3.66	0.77
Avon	3.80	0.34
Modicare	3.38	0.58
Vestige	3.81	0.69
DXN	3.58	0.70
FLP	3.39	0.56
Monavie	3.34	0.73
Herbalife	3.68	0.75

Source: Primary Data

*Significant at five per cent level (H₀6 is not supported)

**Bold figures represent location of significant difference and underlined figure represents highest mean score

H₀6: There is no significant difference in distributors’ perception regarding network marketing as an income opportunity on concerned organization basis

Table 8 represents that there is significant difference in distributors' perception regarding network marketing as an income opportunity on concerned network marketing organization basis, F(9,371)=5.747, p<0.05. Post hoc comparisons using the Tukey HSD test have been done to identify the location of significant difference. For the factor 'income opportunity', the mean score of the respondents from Amway is significantly different from mean scores of Modicare, FLP and Monavie. Overall, Amway distributors perceive more positively network marketing as an income opportunity.

Table 9: Distributors' Perception regarding Network Marketing as an Income Opportunity on Job Status basis

Job Status	Income Opportunity
Job Status	Mean	S.D	F (Sig.)
Full time Employed	3.74	0.63	1.872 (0.084)
Part time Employed	3.66	0.78
Self employed	3.69	0.61
Unemployed	3.43	0.25
Housewife	3.40	0.90
Student	3.64	0.65
Retired	3.62	0.51

Source: Primary Data

**Underlined figure represents highest mean score

H₀7: There is no significant difference in distributors’ perception regarding network marketing as an income opportunity on Job status basis

Table 9 exhibits that there is no statistically significant difference in distributors' perception regarding network marketing as an income opportunity on the basis of job status at the time of joining network marketing, as the F value results in p-value greater than five per cent level of significance. Therefore, H₀7 is supported. Overall, economically active distributors (full time, part time and self employed) perceive more positively network marketing as an income opportunity.

H₀8: There is no significant difference in distributors’ perception regarding network marketing as an income Opportunity on network marketing experience basis

Table 10 depicts that distributors' perception regarding network marketing as an income opportunity significantly vary on the basis of network marketing experience, F(3,377)=4.707, p<0.05. Post hoc comparisons using the Tukey HSD test have been done to identify the location of significant difference. For the factor 'income opportunity', the mean score of the respondents from more than three years experience group is significantly different from mean score of 6-9 months experience group. It indicates that respondents having experience of more than three years perceive more positively network marketing as an income opportunity.

MAJOR FINDINGS:

The present study has been carried out to analyze the relationship of demographic characteristics and distributors' perception regarding network marketing as an income opportunity. To achieve this objective, firstly single factor 'income opportunity' has been extracted through principal component method of exploratory factor analysis. Network marketing provides the opportunity to supplement the present income, residual income and financial independence. It requires low investment with money back guarantee. It provides infinite income potential, life time security of job with no chances of loss. It allows the individuals to set up own business. This finding is in agreement with the finding of Kiaw and Run (2007). Females perceive more positively network marketing as an income opportunity. Females including house wife as well as already employed get involve in network marketing. Respondents from 18-45 age group perceive more positively network marketing as an income opportunity. Educational qualification and marital status do not statistically and significantly influence the distributors' perception regarding network marketing as an income opportunity. It indicates that network marketing does not require any specific educational qualification. Respondents from Rs.50,000-Rs.75,000 monthly income group consider more positively network marketing as an income opportunity. Amway distributors' perception has been observed more positive regarding network marketing as an income opportunity followed by Vestige, Avon and Tupperware. Job status at the time of joining network marketing does not have a significant influence on distributors' perception for considering network marketing as an income opportunity. It indicates that network marketing is not only for those who seek for employment opportunity, but also for those who want to supplement their present income. Experience plays an important role in shaping the perception of an individual regarding a phenomenon. Findings of the study indicate that distributors having network marketing experience of more than three years perceive more positively network marketing as an income opportunity.

IMPLICATIONS:

Due to rise in cost of living and increased consumption basket of families, network marketing is being considered as an income opportunity. Individuals from all walks of life can join network marketing regardless of their education level and marital status. Female participant especially housewife get an income opportunity through network marketing in order to contribute in family income. It is an income opportunity not only for unemployed persons, but individuals already in employment can pursue it part time to supplement their present income.

AREAS FOR FUTURE RESEARCH:

Similar type of study can be undertaken by collecting data from the respondents operating in other areas of the country. The future research can be conducted by taking non-distributors (only consumers) as respondents. The impact of other motivational factors on the willingness to join network marketing can also be examined.

CONCLUSION:

The study investigated the relationship of demographic characteristics and distributors' perception regarding network marketing as an income opportunity. Results indicate that overall perception of the network marketing distributors has been found positive considering network marketing as an income opportunity. Demographic characteristics like gender, age, monthly income, concerned network marketing experience, employment status and network marketing experience have statistically significant influence on distributors' perception regarding network marketing as an income opportunity.

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Received on 07.01.2019 Modified on 16.02.2019

Res. J. Humanities and Social Sciences. 2019; 10(2):697-703.

DOI: 10.5958/2321-5828.2019.00115.3