Flexible Distribution Strategies in Network Marketing Companies

Abstract

This chapter focuses on rarely explored areas in research, i.e. flexible distribution strategies in Network marketing (NM) companies. The purpose of this chapter is to compare the customer’s perception on flexible distribution strategies across the two companies i.e. Amway India Enterprises (AIE) and Hindustan Unilever Network (HUN) and formulate ‘Distribution Flexibility’ models for flexible distribution strategies. Empirical models are developed to test the predictors of ‘Distribution Flexibility’ in NM companies (HUN and AIE). This objective is attained through gathering information using ‘Snowball’ sampling technique from 300 Hindustan Unilever Network and 300 Amway India customers through structured questionnaire in Greater Hyderabad (Telangana State). The data was analyzed through descriptive and inferential statistics. The findings of this chapter reveal that the majority of HUN respondents are business people, whereas housewives are more prevalent in AIE. ‘Word of Mouth’ (WOM) through ‘Reference group’ plays a leading role. ‘Distribution Flexibility’ is mostly by Network management support and acquaintances . ‘Support’ is low in Amway when compared to HUN. ‘International quality’ is comparatively high in AIE than HUN. Prices are perceived to be higher in Amway India than Hindustan Unilever Network customers. The study highlights the importance of taking appropriate corrective measures to attend major classes like demographics, customer loyalty and satisfaction by increasing the distribution flexibility in network marketing. Even though precautions are taken to include all sections to represent the Telangana state, it is more effective to conduct such studies geographically segment-wise to be more accurate. It is intended that the information from this study will help customers, distributors, and companies’ executives to respond to the ever changing needs of end users in Indian marketing through increasing flexibility via Network marketing. The studies which focus on comparison of ‘Distribution Flexibility’ through network marketing (NM) in Indian context are very few and hence add more value in understanding customer’s buying behaviour in these areas.

Appendix 1

1.1 List of Dependent, Independent Variables and Their Reliabilities

Support (α = 0.826)

• I guide my down line in product-selling activities.

• I orient my down line into our practices and procedures.

• I recruit new members into the sales organization.

• I keep in touch with my down line.

Obedience (α = 0.853)

• I use my NMO products regularly participate in training and meetings organized by my NMO or my up line.

• I keep in touch with the personnel in the my NMO office.

• In my activities, I follow the model given by my sponsor (or up line) with extreme care.

• I follow the distributor contact with extreme care.

Acquaintances (α = 0.871)

• I aim at contributing to issues concerning direct selling and network outside the NW organization.

• I keep in touch with distributors in other direct selling and NM organizations.

• I aim at contributing to the development of direct selling and networking activity, e.g. through associations.

• I make recommendations to NMO concerning issues that affect the distributor network.

Distribution Flexibility (α = 0.71)

• I refer NW products to acquaintances to expand distribution.

• I recommend NW products to other people besides acquaintances.

• I keep in touch with my distributors regularly.

• I recommend NW membership to acquaintances to improve flexibility in distribution.