||Comparative Study of Direct Selling Systems in Taiwan and Indonesia
||Graduate Institute of Management Science
||Direct Selling companies have come to occupy an essential place in the market economy. The multi-level marketing (MLM) industry which is a special form of direct selling system, is characterized as a network-building service industry. Following international competition and the transformation of the social structure in both in Taiwan and Indonesia, more and more people have been attracted to the multi- level marketing industry. The designing core of a multi-level marketing organization network focuses on giving consideration to market development opportunities between consumer-oriented (self-use consumers) and business-oriented (career- minded sales distributors) direct salespeople. Because the multi- level marketing industry has a loose and open organization structure, control of loyalty and turnover undoubtedly would affect its operation. In this paper, we propose hypotheses and implement statistical test in Taiwan and Indonesia’s multi-level marketing (MLM) companies to analyze whether there is a difference in direct selling systems between Taiwan and Indonesia and also to .analyze the determinant factors that affect the direct selling systems effectiveness in both two countries. By testing six hypotheses, we find that the difference in respective cultures in the societies of Taiwan and Indonesia impact upon the direct selling systems in those two countries. Direct selling systems in both countries also differ along the lines of sales persons' performance in relationship marketing, which are different in various areas. The selling techniques put to use by sales persons in Taiwan and Indonesia’s direct selling show several variances which in turn cause direct selling systems to be different in both countries. Finally, this research also describes the best method for direct selling in each country to get success.
||TABLE OF CONTENTS
Table of Contents……………………………………………………………….……...I
List of Tables…………………………………………………………………………III
List of Figures………………………………………………………………………..IV
CHAPTER I:INTRODUCTION 1
1.1 Research Background 1
1.2 Research Motives 3
1.3 Research Objectives 4
1.4 Research Organization 4
1.5 Research Flow 5
1.6 Research Limitation 6
CHAPTER III:LITERATURE REVIEW 7
2.1 Theoretical Background 7
2.1.1 Direct Selling System 7
2.1.2 Relationship Marketing 9
2.1.3 Network Marketing 15
2.1.4 Cultural Differences 19
2.2 Related work 21
CHAPTER III:BACKGROUND OF DIRECT SELLING SYSTEM IN TAIWAN AND INDONESIA 24
3.1 Direct Selling in Taiwan 24
3.2 Direct selling in Indonesia 35
CHAPTER IV:RESEARCH METHODOLOGY 43
4.1 Research Framework 44
4.2 Research Subject 44
4.3 Sampling 44
4.4 Data Collection 47
4.5 Definition of Variable 48
4.6 Questionnaire design 50
4.7 Method of Analysis 52
CHAPTER V:DATA ANALYSIS 53
5.1 General Analysis Response 53
5.2 Validity and Reliability Instrument 60
5.3 Chi- Square Test 63
5.4 ANOVA analysis (One Way Classification) 73
5.5 Test Result 75
CHAPTER VI:CONCLUSION AND SUGGESTIONS 76
6.1 Conclusion/Discussion 76
6.2 Suggestions for Future Research 79
English References: 80
Internet Resources 86
LIST OF TABLES
Table 2.1 Summary of Existing Studies on Guanxi 12
Table 2.2 A Commission Percentage 18
Table 2.3 Nationality Status 19
Table 2.4 Summary of Literature of Direct Selling 22
Table 3.1 Economic Demography Factor 27
Table 3.2 Data of Taiwan’s Direct Selling System Companies (1998) 28
Table 3.3 Taiwan’s Multilevel Marketing Industry Outlook (as the end of 2002) 33
Table 3.4 Data of direct Sales in Indonesia 36
Table 4.1 Questionnaire distribution in MLM Taiwan 46
Table 4.2 Questionnaire distribution in MLM Indonesia 47
Table 4.3 Questionnaire design 50
Table 5.1 A summary of Questionnaires and Response Rates 53
Table 5.2 The Profile of the Respondent 54
Table 5.3 Descriptive Statistics Analysis 56
Table 5.4 Validity and Reliability Test Result 61
Table 5.5 Result of Chi -Square Test 64
Table 5.6 Independent t-test result (Culture)……………………………….73
Table 5.7 Independent t-test result (relationship)………………………….73
Table 5.8 Independent t-test result (Selling Technique)…………………...74
Table 5.9 The Test Results 75
LIST OF FIGURES
Figure1.1 Research flow chart 5
Figure 3.1 Sales Amount 33
Figure 3.2 Active Participants (Thousands) 34
Figure 3.3 Registered Enterprises 34
Figure 3.4 Companies in-operation 35
Figure 4.1 Research framework 44
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