Modelling distributor performance in network marketing organisations

Abstract

This study develops a model that predicts distributor performance in network marketing organisations. Distributor performance is conceptually linked through formal hypotheses to perceptions of marketing mix, organisational commitment, job satisfaction and customer profile. Data was gathered from 500 network marketing distributors to test two nested models, one with job satisfaction as a determinant of performance, and the other with performance as a determinant of job satisfaction. The findings revealed that there was greater model parsimony when the causal direction of the performance/job satisfaction relationship was such that performance causes job satisfaction. The results support several of the a priori hypotheses and suggest that the perceptions of the marketing mix variable are not directly linked to performance, but that the relationship between the variables is mediated by the organisational commitment variable. Implications of the study to network marketing practitioners and avenues for further research are provided.

Antecedents of performance of multi‐level channels in transitional economies

“…Channel performance (economic benefit) refers to the extent to which the relationship between the distributor and the firm/upline manager is productive (good personal sales), profitable (good one's network's sales) and rewarding (resulting in a broader network of distributors) (Skarmeas et al , 2002; Msweli‐Mbanga, 2001, Bucklin and Sengupta, 1993). While many studies examine salespeople's performance (Churchill et al , 1985), there is little previous research that scrutinizes the distributor performance in network marketing firms (Msweli‐Mbanga, 2001). Channel performance in network marketing field has received limited attention from scholars, especially in transitional economies.…”

“…Previous studies in relationship marketing and organizational commitment suggest that commitment is associated with successful relationship (Dwyer et al , 1987), intension to leave the organization (Labatmediene et al , 2007), organizational effectiveness (Stein, 2003) and performance (Saleh and Ali, 2007; Ramaseshan et al , 2006; Lohtia et al , 2005; Skarmeas et al , 2002; Msweli‐Mbanga, 2001). While somewhat redundant in general, this linkage has never been verified in this context, thus:…”

Flexible Work Organizations

“…Hence, there is need to address the true drivers of creating distribution flexibility in the Indian context. Msweli-Mbanga (2001) opined that distributors generate more sales and recruit more distributors in their network, only if they are committed to their organizations and have positive perceptions towards the organization's marketing mix. In terms of regional figures of overall direct selling industry, South India remains a central hub for direct selling companies closely followed by North India.…”

On the Ethicality of Internal Consumption in Multilevel Marketing

“…Much of the research through the 1980s and into the early 1990s centered on the direct-selling process and sales management issues or on the consumer side of direct selling (e.g., Albaum 1992;Peterson, Albaum, and Ridgway 1989;Rosenbloom 1992). Research that has been conducted since then has generally focused on direct selling from a functional perspective (e.g., Coughlan and Grayson 1998;Crittenden and Crittenden 2004;Croft and Woodruffe 1996;Msweli-Mbanga 2001) or has simply utilized a direct-selling context to explore issues of communication and interpersonal relationships (e.g., Bhattacharya and Mehta 2000;Frenzen and Davis 1990;Lan 2002;Pratt 2000;Pratt and Rosa 2003;Young and Albaum 2003). More recently, Brodie et al (2004) examined public perceptions of direct selling as a channel of distribution for goods and services and also as a personal business opportunity in eight countries (the United States, South Africa, Australia, New Zealand, Taiwan, Philippines, Finland, and the United Kingdom).…”