Determinants of distributors’ motivational factors in multi-level marketing in KwaZulu-Natal

Abstract

It has become obvious that multi-level marketing (MLM) is gaining momentum in industries as many companies are adopting MLM strategy to save and cut costs on advertising and middlemen. A few studies have been conducted in other countries on multi-level marketing, but there is a gap in knowledge with respect to the South African market. For this reason, there is a need to research factors influencing distributors in engaging in multi-level marketing, to understand the opportunities and the benefits that the business entails. The rationale of this study was to provide new insights for the distributors into the factors that motivate multi-level marketing. Therefore, the aim of this study was to determine the motivational factors that influence distributors in engaging with MLM companies in KwaZulu-Natal. The study adopted a quantitative research approach, where the data obtained was descriptive in nature. The research population was made up of 368 distributors engaging in MLM within KwaZulu-Natal. Convenience sampling was used. The sample size was selected by administering a questionnaire to those distributors available to the researcher. The results were then analysed using the Statistical Package for Social Sciences (SPSS) Version 26.0 software. Validity was addressed by conducting a pretest of the questionnaire, and the study’s reliability was measured using Cronbach’s Coefficient Alpha test. The findings showed that compensation package, discount on the product, quality product, methods of distinguishing between MLM and Ponzi/pyramid schemes, and up-line and management support influence distributors motivational factors. The results also showed that discount on the product did not influence distributors. Recommendations are made to industry and companies to increase their knowledge of these important factors in order to attract and retain more distributors in their businesses and improve their marketing strategy for growth and expansion.