THE MECHANISM OF PROMOTING DISTRIBUTOR’S

ACTIVITY IN MULTI－LEVEL MARKETING

HIROSHI FUJII Regular Lecturer Meisei University

&

Noriko Taji Associate Professor Meisei University

Department of Management & Information Science,

Meisei University Maeharacho 3-41-33, Koganei-city,

Tokyo, Japan, 184-0013, Phone&Fax:+81-42-304-0929 E-mail ：tajinoriko@nifty.com

Abstract

There is a large market of multi-level marketing in Japan. This sort of business has a

unique system that members who are customers introduce their products to

acquaintances and recruit them. Using this system, members can organize down-line

groups and expand their networks. The organization has a social community character

and a structure geared towards outward openness. This research focuses on the lowest

layer composed of distributors who have high consumer consciousness. We aim to define

the process model of the distributors having motivation and action. In the process, we

confirm that economic and social factors are intermingled. The former corresponds to

the expectation of monetary reward, and the latter corresponds to up-line’s mentor and

network marketing company’s management.

THE MECHANISM OF PROMOTING DISTRIBUTOR’S

ACTIVITY IN MULTI－LEVEL MARKETING

Abstract

There is a large market of multi-level marketing in Japan. This sort of

business has a unique system that members who are customers introduce

their products to acquaintances and recruit them. Using this system,

members can organize down-line groups and expand their networks. The

organization has a social community character and a structure geared towards

outward openness. This research focuses on the lowest layer composed of

distributors who have high consumer consciousness. We aim to define the

process model of the distributors having motivation and action. In the process,

we confirm that economic and social factors are intermingled. The former

corresponds to the expectation of monetary reward, and the latter

corresponds to up-line’s mentor and network marketing company’s

management.

RESARCH OBJECTIVES

The character of Network Marketing Organizations

Network marketing, also known as multilevel marketing, was established in the United

States and has been put to successful use in Japan by organizations such as Amway, Nu

Skin and Morinda. Characterized by a lack of stores outlets or promotional activities,

network marketing instead involves a sales method that relies on consumers who have

become members to introduce a company’s products to other consumers. The network

marketing company takes sales and marketing fees usually paid to distributors, as well as

the middleman’s profit margin, and offers monetary payment to members as an incentive.

As a rule, members pay a membership fee and become independent, personal proprietors.

Let me explain a typical network marketing organization (NMO). Network marketing

is driven by the consumer members themselves. The role of the network marketing

company is limited to product planning and development, operation of the membership

organization, and other backup responsibilities. The company itself does not engage in

the selling of its products. Consumers usually become members and start business

activities through the invitation of existing members. Groups above a member in the

network hierarchy are referred to as “up-line,” and groups borne from you’re the

member’s group as “down-line.” It is standard practice that a member who becomes a

member of one group cannot also be a member of another. In this way, network

interrelationships are maintained in an orderly manner. New members, in addition to

selling products, engage in recruiting activities in order to expand their down-line

network. In the initial stages of membership, new members receive support from up-line

members, and acquire business know-how. Providing all goes well, these new members

will then support and cultivate newer, down-line members. The difficulty lies in

cultivating down-line networks that are positioned further down the line from the directly

supervised group. Without the cultivation of second-generation and third-generation lines,

business expansion would cease. “Up-line” members therefore engage in what are called

“maintenance activities,” including the direct support of the activities of “down-line”

members and meetings on business tactics. The membership organizations of network

business are thus communities characterized by strong internal unity, and have a structure

geared towards outward openness.

The Significance of Conducting Research on Network Marketing Organizations

Figures released by the WFDSA (World Federation of Direct Selling Associations) in

2001 indicate that the Japanese market for total door-to-door sales including multilevel

marketing transactions has surpassed that of the United States to become the largest in the

world, amounting to 2.94 trillion yen in sales and some 2 million members. Furthermore,

the number of members is less than a third of US levels, which indicates that the

productivity of each member is high.

Network marketing boasts a large market and high productivity despite its very specific

form of trade, but there has been very little research on this form of distribution. The one

exception is the work “Network Business Research” (Nonaka et.al., 1999), based on a

case study of Nu Skin. A clarification of the mechanisms leading to the success of

network businesses—which can be described as consumer-driven or

participatory—would lead to useful suggestions for other marketing setups. Such an

investigation would highlight the process behind the motivations of consumer members

and their activities.

It is useful to divide motivational factors with regards to members into monetary and

non-monetary factors. Monetary factors comprise mainly of expectations towards the

monetary incentive offered to organization members. Representative non-monetary

factors include social factors such as the creation of social relationships between

members. The cash incentive that comprises the monetary factor can be divided up into

two kinds: the mark up between the purchase price from the network marketing company

and the price of a product sold to a non-member; and the commission paid according to

sales figures for members in one’s own network (Coughlan and Grayson, 1998). On the

other hand, advanced research into social factors has pointed out the following issues.

Pratt, in his study (2000b) based on participant observation among members of

Amway, the world’s largest network marketing network, shows that many members did

not have an accurate picture of how much they were earning, and that such members had

established a positive self-identity that was not premised on economic success. Pratt

explains the importance of social factors apparent in the actions of these members, who

opted not to leave the business but to remain within the membership organization even in

cases where economic success was not achieved.

In addition, Grayson (1996) suggests one reason for the parallel existence of social and

monetary factors to be that the market for network marketing involves both social and

monetary exchange. The concept of a market that involves both of these forms of

exchange was established by Granovetter (1985), and is referred to as an “embedded

market.” Because network marketing involves sales and distribution via the social

networks of sales agents, monetary and social exchange intermingled. In other words,

where business and social activities usually take part in different spheres, network

marketing brings sales activities into the home and other spaces usually separate from

business activities (Frezen & Davis, 1990). Biggart (1989) calls this form of social

relationship “an extremely personal form of interaction, which involves members

becoming heavily involved in each others’ personal lives, with some even referring to

members as their family.”

The importance of social factors has also been pointed out in research conducted on

members of the Nu Skin network in Japan by Nonaka (1999). They suggest that social

factors are more powerful amongst successful members or members in the upper

echelons of the network. These higher layer members stand to gain in the network

business from stimulating business in their line communities, and it is possible to find

evidence that this feeds into social factors. Then what about members in the lower levels

of the network? Such members consist of new entrants, as well as old-timers who have

been involved in the network for a long time but remain in the lower ranks of the

organization. How are these members motivated by monetary and social factors, and how

do they attempt to continue with their activities? Rather than engaging in inter-level

analysis, this paper focuses on these low layer members. Because membership numbers

have a pyramid-style distribution—the further down the line, the more members per

level—it is thought that a survey focusing on the lowest layer members will reflect the

characteristics of the largest groups within the network organization. This paper,

emphasizing social factors, looks at the motivations and activities of the sort of members

left out by Nonaka (1999), and provides an analysis of related processes.

THEORY AND HYPOTHESES

Issues for Research

The issues researched by this paper consist of the following.

It considers the mechanisms behind the expansion of network marketing organizations

by elucidating the processes related to the motivation of low layer members by social and

monetary factors, and the resulting activities of such members.In an “embedded market”

conceptualized by Grayson (1996), where economic and social exchange intermingle,

how are members motivated, and how do they engage in various activities? Furthermore,

members must attract new recruits in order to expand the network. In other words,

recruiting activities carried out by members, which leads to increased linkages, is the

main driving force behind the expansion of the network marketing organization.With

regards to recruiting activities carried out by members, some situations involve members

mainly approaching persons they are already close acquainted with, while others involve

members mainly approaching almost strangers.This paper will also consider what sort of

acquaintances low layer members approach in their recruiting activities in order to win

new members.

The research objectives are as follows.

Objective 1: Clarify an activity model for members positioned in the lowest layer of

network marketing organizations, with an emphasis on confirming the

effects of the management of the network marketing company, as well

as up-line mentors, which both constitute social factors.

Objective 2: Create categories within the model based on whether recruiting activities

target close acquaintances or almost strangers

Regarding Objective 1, it is first necessary to review the characteristics of member

activities. The first characteristic is the lack of enforcement on the part of the network

marketing company. Unlike employees of a regular corporation, members are not forced

to work. If members find it burdensome to engage in recruiting activities or in the selling

of products, they are able to merely consume the products of the company, and are of

course able to leave the network with minimum hassle. The other characteristic is that

relationships between up-line and down-line members exist in an entirely laissez-faire

fashion. Some up-line members may conduct careful mentoring, while others leave their

down-line counterparts well alone. In response, down-line members may either accept or

reject the approaches made by up-line mentors. The actions of such members, who

engage in business activities from very unrestricted positions, may demonstrate a

different nature to the motivation and activities seen amongst employees of a regular

corporation.

As indicated in Objective 2, the sort of acquaintances that should be approached is an

issue often debated among members of a group. Members may find it awkward to target

recruitment activities at those they know, or may try to avoid rejection. As mentioned

earlier, networking marketing has a embedded market ; however, to maintain a balance

between business and personal activities is not always easy. Sometimes, members may

experience a situation where their targets try to avoid the introduction of business into the

private sphere. This constitutes the problem of rejection from the outside

(Eisenhardt,1989; Greil and Rudy, 1984; Pettigrew,1990; Pratt, 2000a). The fear of

rejection, by friends or relatives, of either their activities or the organization gives rise to

the option of targeting distant acquaintances or almost strangers.

In addition, there is a limit to the number of close acquaintances known to one

individual, and it is very easy for a member’s social circle to become saturated in a short

period of time. Therefore, in order to vigorously expand activities over a long period of

time, it can be predicted that expanding targets to include almost strangers is a more

effective method.

What disparities can be seen in activity models as a result of choosing to target

acquaintances as opposed to almost strangers? The activity process model premised

under Objective 1 will be used to confirm whether or not the two approaches to

recruitment activities differ in terms of the model.

The Activity Process Model Framework

This paper assumes the activity process model of network marketing organization

members. The members become psychologically empowered through either social or

monetary factors, or both, and are able to further business activities, reach high

performance levels, and reach a feeling of satisfaction.

As a hypothetical outline of the tasks involved in Objective 1, “the activity model of

members will be divided into five stages—motivators, the empowered state, activity,

performance and satisfaction—and the validity of this model will be tested”.

First of all, members become motivated to act either through monetary or social factors.

Monetary factors include attraction to the monetary reward system, which is a system

whereby “the more activities undertaken and the more down-line groups cultivated, the

higher the monetary reward”—a characteristic of this form of business. Social factors are

assumed to involve aspects such as support received from up-line mentors, and the

management issue of the network marketing company.

The state brought about by the two types of motivational factor, in which an individual

is eager to become positively involved in activities, is referred to as the empowered state.

People do not engage in an activity by merely becoming motivated, however. Whether the

motivational factors have an effect and cause an individual to engage in activities depends

on the nature of the empowered state of the individual. The importance of the empowered

state in linking motivator with activity has already been pointed out by Taji, Kono, Ohe

and Karasawa (2002). In this way, members reach a state of being empowered which then

promotes activity.

Activities can be divided into the selling products to non-members, recruiting activity

involving the invitation of new members into the network, and maintenance activity to

aid in the continuation of down-line network groups. If these go well, results follow such

as a rise in the number of recruited members and an increase in income. As a result, the

member is able to feel a certain level of satisfaction.

METHODS

Research Design

In order to measure each of the factors comprising the hypothetical model above, this

paper investigates indicators, and poses various questions.

Of the motivational factors, those relating to social factors were created on the basis

that they involve mentors positioned up-line (above the member in the organizational

network), as well as managerial issues of the network marketing company. Surveyed

items pertaining to mentors include examples such as “they support my activities” and

“They give me a role to play within a group.” Items pertaining to managerial issues

include “I owe establishing reliance and self-confidence to the training system” and “I

sympathize with the founder’s principles and management policies.”As for

items related to the monetary reward system, the survey asked only to the extent of

whether members felt that “the monetary reward system was better than that of other

network marketing organizations.” However, because this paper is mainly concerned

with social factors, it does not assign multiple variables to monetary factors, but instead

includes it as a factor that contrasts directly to social factors.

As for factors leading to the empowered state, the three suggested by Taji

et.al.(2002)—the achievement of building social relationships, pride of having

accumulated product information, and Pride of influence over others—are assumed.

Pride of influence over others is one of the motivations of

word-of-mouth(Dichter,1966).Surveyed items pertaining to the empowered state include

“I want to increase my company members,” “I have self-confidence in understanding the

products well” and “I feel good when I can give my influence and persuasion on other

people.”

Variables for activities include “sales activities,” “recruitment activities,” and

“maintenance activities.” Performance was measured through “average income” and

“number of members recruited.” Performance indicators used were monthly income from

commissions and markups, and the number of members recruited over the last 6 months.

The effectiveness of this model has been demonstrated through previous research (Taji et.

al., 2002).

Finally, surveyed items pertaining to satisfaction were established. They can be divided

into “satisfaction with income level” and “emotional satisfaction” at having participated

in the network. The architecture of activity process model explained above is seen in fig.1

Insert Figure 1

For every question, targets were asked to rank their agreement on a five-level Likert

Scale, from 5, “I think so,” to 1, “I don’t think so.”

Research Targets and Methods

The research targets of this study were members of a major network marketing

organization, and the sample was taken from members at the lowest level of the network.

Samples were randomly selected from the targeted level, and cooperation in the study

was requested over the telephone. Questionnaires were then sent out. Of the 700

questionnaires sent out, 425 samples were returned (response rate of 60.7%), of which

361 samples were valid responses (84.9%).

Average Profile of Sample

The average attributes of the sample were as shown in Table 1. Over 90% were women,

60% of whom had other jobs (including part-time work). What is interesting is the

presence of some members who have been members for nine years, and have never

participated in another network marketing organization. It is possible to induce from this

that these members have engaged in minimal participation over a long period of time.

Over a quarter of the samples involved a husband and wife engaging in activities together.

Because brother or parent-child collaborations were rare, it is assumed that the rest

operate on their own.

Insert Table１

RESULTS

Extracting Motivational and Empowered State Factor

Four motivational factors which constitute social factors, and three factors leading to

the empowered state, were extracted. The surveyed items that form the extracted

motivational factors and the empowered state factor are outlined below.

First, consider the motivational factors indicated in Table 2.

Previous research into the functions of up-line mentors has been carried out by De Vos

(1993), who confirmed that mentors helped down-line members form a positive

self-identity, and Pratt (2000b), who demonstrated that mentors disseminate skills and

information. This paper assumed that up-line mentors function as motivators for

down-line members, and carried out due sampling and measurement. Since the work of

Kram (1985), two ways in which mentors function as motivators have been identified:

career support, which involves business-related guidance, and psycho-social support,

which is related to the function of the mentor as a role model. This paper was also able to

extract two factors for the functions of up-line mentors: business guidance mentors and

psychosocial support mentors.

Extracted factors relating to the management of the network marketing company were

“trust in the network marketing company,” such as trust in its management concept and in

the quality of its products, and “training and support provided by the network marketing

company.”

The problem of multicolinearity is evident from the moderate correlation as seen in

Table3: “business guidance mentor” and “training and support provided by the network

marketing company” (0.61); “training and support provided by the network marketing

company” and “monetary reward system” (0.68); and “business guidance mentor” and

“monetary reward system”(0.50). However, these factors are related to enthusiasm to

participate in business. Therefore, a moderate correlation is judged to be permissible.

Insert Table2

Insert Table3

Next, three factors were extracted relating to the empowered state. “Achievement of

building social relationships” in Table 4 indicates the perceived rewards gained from

expanding the network itself, while “pride of having accumulated product information”

suggests an active attitude towards working to acquire necessary knowledge, and “Pride

of influence over others” suggests a desire to achieve self-recognition. Surveyed items

included items with a strong monetary nature, such as the joy of receiving bonuses and

prizes, a determination to be promoted, and the desire to stabilize income. However, a

factor combining such items, “sense of achievement gained through monetary rewards”

was not extracted.

The following are put forward as reasons why factors with a monetary nature could not

be extracted. Receipt of the monetary reward is integral with factors with a strong social

nature, such as success in recruitment activity leading to more friends, or satisfaction at

having gained someone’s understanding. Various factors involve surveyed items with a

strong monetary nature, such as “I want to have a stable income by enlarging my group,”

“I understand the rewards system completely,” and “I feel happy if I can confirm my

achievements with remuneration..” The fact that factors combining both items with

a monetary nature and items with a social nature can be interpreted as an indication of an

embedded market, where economic and social exchange coexist.

In addition, the correlation coefficient for each factor is significantly small, indicating

the reliability of the findings (Table 5).

Insert Table4

Insert Table5

Validity of the Model

Is the activity process model itself valid? Of the 5-stage model shown in Figure 1,

involving motivator, the empowered state, activities, performance, and satisfaction, is it

not possible that some members would jump directly from motivator to activities? This

paper therefore carried out multiple linear regression analysis using empowered state

factors and activities, as well as motivational factors and activities, and compared the

results. The results showed a significantly higher multiple correlation coefficient (R)

when the process flowed through the empowered state, therefore validating the relevancy

of the 5-stage model involving the empowered state.

Sales activities × empowered state factors (0.27) as opposed to sales activities ×

motivational factors (0.17).

Recruiting activities × empowered state factors (0.51) as opposed to recruiting

activities × motivational factors (0.35).

Network activities × empowered state factors (0.66) as opposed to network activities ×

motivational factors (0.52).

Conclusion

Objective 1 “Validation of an activity model for members positioned in the lower

levels of network marketing organizations” and related findings

This paper was able to extract the motivational factors validated in Table 2 and 3.

For each, a relationship was confirmed with one of the three factors of the empowered

state (Table 4). The correlation between factors relating to the motivational stage and the

empowered state becomes higher as sample numbers go up, so a correlation diagram

involving all samples has not been included here. In addition, as was stated in the section

above, the validity of the process model involving motivator, the empowered state, and

activities has already been confirmed, and the “activity model for members positioned in

the lowest layer of network marketing organizations” as referred to in Objective 1 has

been clarified. In addition, it was also confirmed that social factors such as the network

marketing company’s management and up-line mentor acted as motivators.

Another fact also discovered was that the various factors of the empowered state stage

combined both items with a strong monetary nature and those with a strong social nature.

It was confirmed that this was an indication that these activities were taking place in a

market involving the coexistence of economic and social exchange, or an embedded

market.

Objective 2 “Creating categories within the activity model based on differences in

the targets of recruitment activities targets” and related findings

This section first sets out the method used to categorize samples on whether

recruitment activities targeted close acquaintances or almost strangers. As for

differentiation of which was regarded as more important by each sample, judgment was

based on which target was emphasized.

More specifically, the following two questions were prepared.

I target close acquaintances: “I enthusiastically target relatives or direct

acquaintances”

I target almost strangers: “I take every opportunity to enthusiastically approach

strangers, even without an introduction through relatives or friends.

The two questions were answered on a 5-point scale, so the difference between the two

were calculated, and if the value of the latter score minus the former score was positive,

this was taken to mean that strangers were emphasized as targets, whereas if the value of

the latter score minus the former score was negative, this was taken to mean that close

acquaintances were emphasized as targets. Samples where the value of the latter score

minus the former score equaled 0 were removed from the comparison.

The two activity process models are as illustrated in Figures 2 and 3.

The group targeting close acquaintances seems to be influenced by mentors, whereas

mentors have no such influence over the group targeting almost strangers. The group

targeting distant acquaintances or strangers rarely reaches the empowered state due to

motivator from up-line mentors, but tends to carry out activities independent of up-line

groups. It is apparent that for this group, motivator is gained through trust in the

management concept or product value of the network marketing company. Many such

members most likely were unable to establish strong relationships with up-line groups. Of

course, embarrassment arising from carrying out recruitment activities among

acquaintances or the fear of being rejected may also be prerequisite.

As for the relationship between activities and performance, what is interesting is that in

situations where recruitment activities target close acquaintances, aggressive sales

activities tends to reduce the number of recruits. This may indicate the fact that engaging

in sales activities that target a limited number of people raises income slightly but reduces

recruiting opportunities.

On the other hand, members that target almost strangers may see income from their

sales activities go down, indicating that sales activities often end in failure.

We now focus on the maintenance activities carried out by members who target close

acquaintances. The fact that even maintenance activities targeting members already

within the network brings about a rise in recruitment indicates a rise in second-generation

members, possibly an indirect effect borne of close acquaintances. In cases where

members targeted almost strangers, maintenance activities and numbers of recruit are not

correlated, and no increase is seen in second-generation members. This suggests that the

aforementioned indirect effects are not at work in this case.

Insert Figure 2

Insert Figure 3

How large is the indirect effect brought about by activities targeting close

acquaintances, involving an increase in the number of second-generation members, as

opposed to the direct effects brought about by activities targeting almost strangers,

involving an increase in membership? In addition, what differences can be seen in terms

of income? Results are indicated in Table 6.

Insert Table 6

The difference between the average number of recruits was discarded very close to the

10% significance level. Although not statistically significant, the number of recruits

tended to be higher when activities were carried out widely among “almost strangers.” On

the other hand, it was found that the direct effects of activities carried out widely

among ”almost strangers” do not necessarily outperform the indirect effects of carrying

out activities among ”close acquaintances.” This indicates that the indirect effects of

“targeting close acquaintances” are very high.

No differences were seen in terms of income. Considering that individual members

tend to regard income, rather than numbers of recruit, as an indicator of their performance,

it becomes appropriate to evaluate performance through income. From this point of view,

there was no difference in performance between carrying out recruiting activities

targeting “almost strangers” or “close acquaintances.”

SUMMARY AND DISCUSSUIONS

This section sums up the significance of this research. Firstly, it focused on members

belonging to the lowest layer of network marketing organizations, hitherto unexplored by

previous research. It examined the validity of the activity model whereby members

become motivated, reach the empowered state, and engage in activities. As a result, two

types of differences were compared in terms of activity patterns. In terms of motivational

factors, members who were influenced by their up-line mentors tended to target their

recruiting activities at close acquaintances, whereas members who were influenced by the

network marketing company’s management methods tended to direct their recruitment

activities at almost strangers.

It was also discovered that no differences in performance were seen between members

who emphasized ”close acquaintances” and those who emphasized ”almost strangers.”

Although it could be said that recruiting activities carried out among ”almost strangers”

tended to be directly linked to an increase in the number of recruits, the indirect effect of

relying on “close acquaintances” was also found to be very large. This suggests that

inviting ”close acquaintances” to become new down-line members, and supporting the

activities of these members, leads to the acquirement of future, second-generation

members. In other words, it can be concluded that analysis should not only deal with

connections between up-line and down-line groups, but also concentrate on further

linkages between ties, which are a fundamental characteristic of network marketing

systems.

This constitutes the mechanism behind the enlargement of the network marketing

organization. As members in the lowest layer of the network approach close

acquaintances, their repeated actions create a huge low layer within the network.

Incidentally, in this case, new relationships that constitute strong linkages between ties

are very influential. This goes against the conclusion reached in a study of the

information provided in job referrals by Granovetter (1973), which held that ”weak ties

have more influence than strong ties.” Therefore, we now consider this point in more

depth.

Let us focus on the targets analyzed in this study. The membership period for the

sample was nine years, and 90% were women. This is seen to have had a large effect on

the results. Members who engaged in minimal participation over a long period of time

without participating in other network marketing organizations can be accounted for as

having remained within the network due to their loyalty to the products, or an emphasis

on social factors rather than a work-conscious attitude. Moreover, it can be understood

that the indirect effects of activities that depend on strong ties are as successful as direct

effects of activities that depend on weak ties to actively approach potential members.

Issues for Future Research

How does the activity model differ when the targets analyzed belong to the high layer

groups in the network? In addition, because targeting close acquaintances is somewhat

limited, enthusiastically carrying out recruitment activities that target almost strangers in

the typical salesman style may lead to higher performance levels.

In addition, because this survey analyzed the model from the standpoint of down-line

groups, it did not consider the activities of up-line members, or what interactions took

place between up-line and down-line members. For example, in the case that recruitment

activities were carried out among almost strangers, it was unclear whether up-line

mentors did not have an influence as a motivational factor inducing the empowered state

because up-line members made an effort to function as a mentor but down-line members

were unable to put their guidance to good use, or because the down-line members

downright rejected their mentors’ advice and undertook their own course of action.

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Figure 1 Architecture of Activity Process Model in Network Marketing

Motivators Empowered state Activity Performance Satisfaction

・

・

Achievement of building social relation

Pride of having

accumulated product information

Pride of

influence overothers

Sales activities

Recruitment

activities

Maintenance activities

Monetary satisfaction

Emotional satisfaction

Numbers of recruit

Average

income

Fe

91

報酬制度

Business guidance mentor

Psycho-social support mentor

Training & support provided by the network marketing company

Trust in network marketing company

Monetary reward system

Table 1

Average Profile of Sample （Ｎ＝361）

male No other job Full time house wife

Membership period

No experience in other NMOs

Activity with spouse

.9% 39.9％ 35.3% 9 years 91.4% 23.2%

Table 2 Motivational Factors

Items Factor1 Factor2

They introduce a veteran senior member as a role model. 0.76 0.38 They show the activity of members who make an effort. 0.81 0.39 They support my activities. 0.79 0.45

Business They suggest a monthly goal and instruct me. 0.76 0.41 guidance They explain the incentive system. 0.77 0.42 mentor They nourish my talent. 0.71 0.53

They show useful knowledge and skill. 0.65 0.53 They give me a role to play within a group. 0.69 0.51 They teach me how to build interpersonal relationships. 0.65 0.61 They provide information on the transaction systems and organization. 0.67 0.54 They consult me showing sympathy. 0.41 0.81 They deal with me in a friendly, considerate manner. 0.37 0.80 Psycho-social They encourage me when I get depressed 0.42 0.79

support They are my role model 0.44 0.74 mentor They are reliable and just like my guarantor. 0.44 0.70

They have splendid capability for gathering information. 0.49 0.60 They have coolness to evaluate product justly. 0.35 0.53 They explain the merits and demerits of products. 0.35 0.51 contribution rate 0.37 0.34 Cronbach Alpha reliability 0.97 0.94

Training & I owe establishing reliance and self-confidence to the training system. 0.82 0.30

support I owe my presentation skill to the training system. 0.79 0.30

provided by I strengthen my independent attitude by training system. 0.79 0.27 the network I want to participate in seminars and meetings held by the company 0.70 0.37 marketing company

I want to participate in international conventions organized by the company. 0.69 0.36

The company show responsible attitude in operating. 0.63 0.35

They have a good product-line. 0.32 0.75

They consider the products’ effects on the human body and the environment. 0.19 0.75

Trust in I sympathize with the founder’s principles and management. 0.40 0.69 the network I like a lot of their favorite products. 0.33 0.68 marketing I can trust this NMO compared with other NMO’s. 0.42 0.63

company I like their PR activities. 0.41 0.63 I am satisfied with their packaging and designs. 0.23 0.58 contribution rate 0.31 0.29 Cronbach Alpha reliability 0.91 0.90

Table 3 Means, Standard Deviations, and Correlations among Motivational Factors

Mean Std. Dev. 1. 2. 3. 4. 5. 1.Business Guidance Mentor 0.00 0.99 1.0 -0.05 0.61 0.06 0.502.Psycho-social support mentor 0.00 0.87 -0.05 1.0 -0.01 0.14 -0.023.Training and support of NM company 0.00 0.97 0.61 -0.01 1.0 -0.02 0.684.Trust in NM Company 0.00 0.86 0.06 0.14 -0.02 1.0 -0.025.Monetary reward system 3.18 1.30 0.50 -0.02 0.68 -0.02 1.0

Table 4 Empowered State Factors

Items Factor1 Factor2 Factor3

I want to go higher up in the business ranking by enlarging my group . 0.82 0.30 0.31

I want to have a stable income by enlarging my group. 0.78 0.29 0.35 Achievement of I explain my activity and business earnestly. 0.76 0.38 0.18 building social I introduce this business to acquaintances who are looking for a job. 0.70 0.33 0.21 relationships I want to increase my company members. 0.66 0.29 0.50 I can build strong ties with my family 0.63 0.36 0.17

I consider the company members who have the same position as me as a good rival. 0.60 0.31 0.42

My spouse and family understand and help me. 0.55 0.34 0.23 I have self-confidence in understanding the products well. 0.31 0.80 0.29

I can adequately provide information that the other person needs, as I am familiar with a wide rang of cases and examples. 0.34 0.79 0.22

Pride of having I can cope with complaints and questions. 0.27 0.72 0.27

accumulated I can explain the difference between our products and other companies’ products. 0.34 0.71 0.30

product I have done some professional and expert studies about health and beauty. 0.29 0.70 0.24

information I understand the rewards system completely 0.38 0.67 0.28 I promote expensive products after buying and trying them. 0.44 0.52 0.24 I am convinced of the quality of the products by using them. 0.28 0.50 0.38 I feel a sense of achievement if a person I know becomes a member. 0.48 0.21 0.73

Pride of I feel good when I can give my influence and persuasion on other people. 0.17 0.28 0.70

influence over I am glad to confirm my justifiable assertion if other people like it. 0.16 0.40 0.69 others I feel happy if I can confirm my achievements with remuneration. 0.48 0.28 0.64 I want to strengthen my ties with my acquaintances. 0.47 0.31 0.55

contribution rate 0.26 0.24 0.17 Cronbach Alpha reliability 0.94 0.93 0.9

Table 5 Means, Standard Deviations, and Correlations among of Empowered State Factors Mean Std. Dev. 1. 2. 3. 1.Achievement of building social relations 0.00 0.94 1.00 -0.06 -0.08 2.Pride of having accumulated product information 0.00 0.94 -0.06 1.00 0.01 3.Pride of influence over others 0.00 0.90 -0.08 0.01 1.00

Table 6 Comparison between Performances by Targeting Close Acquaintance

and ones by Targeting Almost Strangers

Numbers of Recruit N Mean Variance Degree of

freedom t

The group targeting close acquaintances

82 1.28 4.48

The group targeting almost strangers

95 2.29 33.03

122 -1.60

（P< .10, T=1.65） Average Income N Mean Variance Degree of

freedom t

The group targeting close acquaintances

82 1.61 1.13

The group targeting almost strangers

91 1.68 1.46

171 0.41

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Monetary

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ining & support ed by the networkketing company

Trust in the ork marketing company

Monetary reward system

Achievement ofbuilding social relationships Pride of having accumulated product information Pride of Influence over others

Monetary

satisfaction

Emotional satisfaction

Sales activities

ecruitment activities

aintenance activities