Chapter I

INTRODUCTION
According to the FTC (Federal Trade Commission) : “Direct selling is a blanket term that

encompasses a variety of business forms premised on person-to-person selling in locations other

than a retail establishment, such as social media platforms or the home of the salesperson or

prospective customer.

Direct selling consists of two main business models: single-level marketing, in which a

direct seller makes money by buying products from a parent organization and selling them directly

to customers, and multi-level marketing (also known as network marketing or person-to-person

marketing), in which the direct seller may earn money from both direct sales to customers and by

sponsoring new direct sellers and potentially earning a commission from their efforts.

Here in Surallah, direct sellers scattered everywhere to distribute their products in order to

gain income. They have the guts to talk/communicate with people and wander around the market

particularly here in Surallah. They sacrificed to ramble in a dusty road and the pain with the hit of

the sun and wet from the rain. Direct selling has a big impact to the distributors and customers.

First, the distributors earned directly if they do this kind of business and they are directly self-

employed but earning are not as simple as we think if you are good at convincing and if your

product is salable they guarantee and trust the product’s effect. So, if you are a distributor you

should think first before purchasing the goods that you want to sell. Choose a product that has a

good name, quality and lot of people already knew how effective it is. It also has benefits for the

customers, they directly get the product that they want just staying in their post. They don’t need

to go in the mall and supermarket just to purchase it. They don’t need to spend their money for the

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transportation fee that’s why it is very convenient to every customer. Products from direct selling

can also guarantee your satisfaction with all you need and want.

STATEMENT OF THE PROBLEM

This research aims to know the “Effectiveness of direct selling to the distributors and

customers in Surallah”. And what are their effects to the market in surallah, how it works and runs

accordingly in the market. It also involves the conditions of direct selling distributors in selling the

products to the market. This will be guided by the following sub-problem questions:

1. What are the characteristics of direct selling?

2. What are the conditions in buying/ purchasing directly or face-to-face selling/ marketing?

3. What is the impact to the customers about the over-all appearance of the products?

4. Who are the prospective buyers in direct selling?

SIGNIFICANCE OF THE STUDY

The Researcher hopes

To the customers: That this study will help them to know how direct selling affects their life

specifically in purchasing products. It helps them to know about the benefits that they may get in

direct selling/buying aside from going to the mall/ supermarket and online buying that satisfy

themselves about the certain products.

To the distributors: That this study will help them to improve the conditions in dealing with

customers on how to operate their business by doing direct selling. It also helps them to know

about the benefits that they can get from products and the customers. They can also earn some

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commission and incentives coming from the supplier or the manufacturer of the products that they

bought and sell through direct selling.

To direct selling organization/company: That this study will help them to improve their products

and conditions in selling so that their distributors and customers will benefit equally. It will also

help them to know the things that they do to make their distributors satisfied and happy to serve

and sell their products because of the benefits and bonuses that they may get to their manufacturer

or supplier.

DEFINITION OF TERMS

Definition: Direct selling means marketing of consumer products/ services directly to the

consumers, generally in their homes or homes of others, at their workplaces and other places away

from the permanent retail locations, usually through explanation or demonstration of the products

by a direct seller or by mail order sales.

Direct selling typically includes in home selling situations such as door to door solicitations,

appointments, referrals, and product parties as well as the catalogues and the Internet to

disseminate information (Frenzen & Davis 1990). Peterson defines direct selling as “face to face

selling away from a fixed retail location”. (Peterson, Albaum & Ridgway 1989)

Direct seller: Direct seller means a person who is a member of a distribution system of the direct

selling entity engaged in direct selling.

Mail order sales: Mail order sales means sale of goods or services which a person conducts either

by himself or through any person authorized by him, by receiving an offer for sale contract by

mail.

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Distributor: An entity that buys noncompeting products or product lines, warehouses them, and

resells them to retailers or direct to the end users or customers.

Customer: A party that receives or consumes products (goods or services) and has the ability to

choose between different products and suppliers.

Cash on delivery (COD): Payment method in which ordered goods are carried to the buyers place

but are handed over only upon full payment.

SCOPE AND DELIMITATION

This study focuses on the distributors and customers who are connected performing an

activity which is direct selling here in Surallah. The research sample is composed of 30 respondents

with the use or in the process of interviewing. The researcher will also prepare questionnaires that

will help to gather important data.

The research used efficient and reliable sources to show the exact and real effect of direct

selling to the distributors and customers in Surallah. The gathered data was analyzed by the

researcher to provide or get the point of the respondent’s idea and will explain moreover for a

better understanding. The research data is based on the information given by the interviewee and

their interaction to each other to explore more about this kind of business. It focuses on the

condition in direct selling and how it works on the market. The researcher will also include the

characteristics of customers and distributors in dealing with each other.

The researcher will also gather some data from the distributors in Surallah and asks some

questions about how their business works and why they continue this kind of business and the

benefits they get as well as the customer’s benefits.

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 The location of this research will be located at the Surallah’s public market and the

neighboring barangays particularly in Barangay Libertad and barangay Centrala. The researcher

will cover the quarter of 2018 in completing here research specifically in gathering the data coming

from respondents.

CONCEPTUAL FRAMEWORK

DIRECT SELLING’S
PERFORMANCE
IN TERMS OF
SELLING IN

Conditions in

direct selling

Customer’s
Distributors
satisfaction
Benefits
And benefits

Characteristics of Characteristics of
Buying Selling

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Chapter II

REVIEW OF RELATED LITERATURE

Master of management Peter F. Drucker once said: “What an enterprise is, is decided by

the customers”. For a successful Direct Seller, in addition to treating himself/herself as part of the

business body to accurately reflect enterprise image and concept, it is more important to clarify

and satisfy real customer’s need through sincere and objective mind. This is also the most

important spirit of Direct Selling and is the reason why an excellent Direct Selling company stays

strongly in the market. In the past, when the vendor sells the product using traditional selling way,

profit will be stripped off by vendors in the first stage and second stage sales channels, and the

cost of the vendor will get increased greatly and accordingly. No doubt, these costs will be

transferred to the customer, which in turn leads to a burden to the consumer. Therefore, some

suppliers, in order to reduce profit stripping in several stages by the intermediate vendors, they

start to find their own personnel for the product sale, or try to use mobile technology to assist

product sale, the new generation of selling ways such as ”Direct Selling”, “Marketing” and internet

shopping are thus generated. In 1982, with the introduction of Amway, Direct Selling started to

enter Taiwan and other Direct Selling companies started to follow. On November 1997, some

companies which have the sales mainly based on interpersonal network, for example, Direct

Selling for example, Amway, SHUANG HOR (HK) COMPANY LTD., Nuskin Taiwan, Forever,

etc., started to launch company’s web sites for sales and business promotion so as to enhance the

business operation efficiency of Direct Selling; these companies are seen with great potential. At

that time, Direct Selling Association also reduces its entrance barrier for the membership

application, that is, a company will have the qualification to become a member once it is founded

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for more than one year; and a commission for promoting commercial virtues has been founded to

implement the restrictions of commercial virtues on the companies in this industry. Direct Selling

can be divided into single level Direct Selling and multi-level Marketing; however, in recent years,

to cope with the change of industry environment, some of the Direct Selling companies such as

Avon started to shift its strategy toward the development of multiple channels for Direct Selling.

We hope, through this study, to understand the business operation system and planning in Direct

Selling and compare the advantages, disadvantages, opportunities and threats of different business

systems; we hope that the results of this study can be used as reference by companies or people in

the Direct Selling industry.

World federation of direct selling associations (WFDSA) has defined Direct Selling as:

“On non-fixed retailing places and through the use of face-to-face way, the product and service

are sold directly to the consumers. “ Robert A. Peterson & Thomas R. Wotruba (1996) briefly

described the ”Direct Selling” as a face-to-face selling without fixed retailing sites. However, the

Direct selling education foundation of USA in 1992 had a definition on Direct Selling: “Direct

Selling is a distribution method for consumptive product or service through personnel contact

(Sales personnel to the purchaser) and at different commercial locations, mainly at home“. Here

the natures of “consumptive” and “distribution way” are emphasized from Direct Selling. Direct

Selling can be categorized in two ways in broad sense and in narrow sense. In broad sense, Direct

Selling is a selling way that the manufacturer or the product importer sells the product directly to

the final consumer. For example, the fisherman sells the fishes to the customers directly and the

farmers sell the rice directly to the consumers, etc. However, for further definition, the Direct

Selling in broad sense should include the narrow Direct Selling: “Product manufacturer or

importer, through Direct Seller and consumer and through a way of face-to-face selling, introduces

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or sells the product or service to consumers. Generally speaking, Direct Seller is not employee of

the company and the selling is usually done in non-fixed selling site” (Professor Te-Fa Chen,

2006). Today, both direct Marketing and direct Selling are sometimes all called Direct Selling.

However, a direct effectiveness selling is that the product manufacturer or importer, through the

mail of DM, catalogue, broadcasting, TV channel, internet, etc., transfer the product and service

information to the consumer, and the consumer then reply through mail or answer through

telephone (Professor Te-Fa Chen, 2006). Therefore, we can see two keys in Direct Selling: “Face-

to-face selling” and “Sell at non-fixed places”. Direct selling is a process of face-to-face

communication between two persons, and the direct effectiveness marketing is way of selling

product or service such as mailing of catalogue, telephone/TV marketing, direct reply to the

advertisement or the recent emergence of network marketing. The lack of face-to-face contact is

the major difference between Direct Selling and direct effectiveness marketing. Direct selling

further includes single level marketing and multi-level marketing. In single level Direct Selling,

Direct Seller is also the consumer and Direct Seller sells the product or service of the company to

the customer, then the Direct Seller receives bonus from the company according to his/her sale

performance. In single level Direct Selling, the income of Direct Seller comes directly from the

retailing profit he/she sells the product to the final consumer (Professor Te-Fa Chen, 2006). Multi-

level Direct Selling is also called network marketing, in addition to getting profit through the sale

of product or service, Direct Seller can also become an upstream to absorb or instruct customer to

become downstream Direct Seller, then the Direct Seller is awarded with rank and bonus according

to the number of persons in his/her downstream and the sale performance. Bonus system is the

major difference between single level Direct Selling and multi-level Direct Selling; especially,

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multi-level Direct Selling is also called ”Marketing” or ”multi-level Marketing”, which is a

business operation model selected by most of the Direct Selling companies.

Chapter III

RESEARCH METHODOLOGY

In this chapter, I will discuss the research design, area of the study, population, sample of

the population, sampling technique, and instrument for data collection, validation of the

questionnaire, administration of the instrument and method of data analysis.

Research Design

The researcher chose a survey research design that’s best served to answer the question

and the purpose of the study. The survey research is one in which a group of people or items is

studied by collecting and analyzing the data from only a few people or items considered to be

representative of the entire group. Which means, only a part of the population is studied, and

findings from this are expected to be generalized to the entire population (distributors and

customers of direct selling in Surallah) defines the survey assessing public opinion or individual

characteristics by the use of questionnaire and sampling methods.

Population of the study

The target population for this research is the customers and distributors of direct selling in

Surallah.

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Sample of the Population

The sample of the population in this research study is composing of 5 distributors and 5

customers in each distributor in the field of direct selling business here in Surallah and with the

total of 25 respondents or the customers and 5 respondents of distributors with over-all total of 30

respondents.

Sampling Techniques
A stratified random sampling procedure was used for selecting the participants in this

study. This technique was employed to ensure a fairly equal representation of the variables for this

study.

Method of Data collection

The questionnaires were administered directly to the chosen sample for this study. 25

copies of the questionnaire given out to the customers were successfully completed and returned

to the researcher coming from the customers of direct selling in Surallah. The researcher

interviewed 5 distributors of direct selling that allows her to know the benefits or the impact of

direct selling in their lives. They provided the data that the researcher wanted to attain that enables

her to determine and analyze the data given by the respondents.

Method of Data Analysis

The Data collected from the field were analyzed. The answers and responses of the

respondents will be shown in the table below:

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Chapter IV

Data Analysis

Presentation of data

Data collected from distributor

Distributor’s Distributor’s Distributor’s Distributor’s Distributor’s

product choice why they benefits after conditions in benefits from
chose direct selling their selling their supplier
selling products
Shampoo, Can earn money Monthly Cash to cash Monthly
ganozhi easily and have incentives basis, registered Incentives
toothpaste, big incentives by FDA and
juices, tea, BFAO
ganozhi soap,
coffee and
supplements

Data collected from 5 customers

Customers Products they bought often Customer satisfaction rate (1-

10)
1 Coffee 9
2 Soap 7
3 Coffee 10
4 Ganozhi soap 6
5 Shampoo 8

As you can see the distributor successfully sell her products to her customers. Her sellable

product is coffee most customers are satisfied with the products that they bought from their

distributor. That’s why her customer satisfaction rate is 16% over 20%.

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Data collected from distributor

Distributor’s Distributor’s Distributor’s Distributor’s Distributor’s

product choice why they benefits after conditions in benefits from
chose direct selling their selling their supplier
selling products
Avon products Easy to sell and Incentives, 1 month to pay, If they can sell
can earn income Bonuses and if customer has maximum
through sideline free products available, much amount of
better products they
earned bonus.
Data collected from 5 customers

Customers Products they bought often Customer satisfaction rate (1-

10)
1 Shoes 8
2 Cosmetics 10
3 Cosmetics 10
4 Cosmetics 10
5 Clothes 7

As you can see avon products are very sellable especially their cosmetics products and the

customers gave a perfect 10 for it. They gain a total of 18% over 20%.

Data collected from distributor

Distributor’s Distributor’s Distributor’s Distributor’s Distributor’s

product choice why they benefits after conditions in benefits from
chose direct selling their selling their supplier
selling products
Natasha Easy to sell Incentives, 1 month to pay, Incentives,
products bonuses and free cash to cash bonuses and free
products basis much products
better

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Data collected from 5 consumers

Customers Products they bought often Customer satisfaction rate

(1-10)
1 Shoes 9
2 Shoes 10
3 Clothes 8
4 Clothes 9
5 Inner wear 8

As you can see, Natasha products are known for its shoes and clothes because of its quality

that’s why Natasha products gained a total percent of 17.6% over 20%.

Data collected from distributor

Distributor’s Distributor’s Distributor’s Distributor’s Distributor’s

product choice why they benefits after conditions in benefits from
chose direct selling their selling their supplier
selling products
Personal Easy to sell Incentives and 1 month to pay Incentives,
collection bonuses bonuses and free
products products

Data collected from 5 consumers

Customers Products they bought often Customer satisfaction rate (1-

10)
1 Household products 7
2 perfume 10
3 Household products 8
4 lotion 6
5 Household products 10

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 As you can see, personal collection products are known for their household product that’s

why common household purchased in personal collection in relation with that they earned 16.4%

over 20%.

Data collected from distributor

Distributor’s Distributor’s Distributor’s Distributor’s Distributor’s

product choice why they benefits after conditions in benefits from
chose direct selling their selling their supplier
selling products
Lifestyles Has a good Incentives and Cash to cash Incentives,
products profit after bonuses bonuses and free
selling products

Data collected from 5 consumers

Customers Products they bought often Customer satisfaction rate (1-

10)
1 Intra food supplement 9
2 Intra food supplement 10
3 Nutria Dietary Supplement 8
4 Fibrelife 9
5 Intra food supplement 10

As you can see, lifestyles products are widely known for adults they said that the products

in lifestyles are really effective because already tried and proven it really works diligently. That’s

why they earned 18.4% over 20%.

Distributors products Total percentage

Shampoo, ganozhi toothpaste, juices, tea, 16% / 20%

ganozhi soap, coffee and supplements
Avon products 18% / 20%

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 Natasha products 17.6% / 20%
Personal collection products 16.4% / 20%
Lifestyles products 18.4% / 20%

customer satisfaction rate (percentage score

over 20%)
19%
19%
18%
18%
17%
17% customer satisfaction rate
(percentage score over 20%)
16%
16%
15%
15%
ganozhi avon natasha personal lifestyles
products collection products

That is the data presenting the percentage of customer satisfaction rate coming from the

data gathered filled by the customers according to what they observed on the products that they

purchased through direct selling from their distributor. Lifestyles products gained a highest

percentage rate because their products was tested and prove that it is really effective even though

it is expensive. The ganozhi products gained the lowest percentage rate because it is not highly

known for now.

Chapter V

SUMMARY
Direct selling here in Surallah has a big impact to all the business man and woman.

These are the direct selling business that still exists to provide and help each people to produce

and give a good product that will satisfy their needs and wants in their daily lives. I collected data

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from my respondents which are highly connected to my topic which is direct selling. The

customers are buying their necessary products to Avon, Natasha, Personal collection, lifestyles

products and ganozhi products. These direct selling businesses are still existing here in the

Philippines and even Worldwide and promoting their products to all their valued customers.

According to some distributors they sell their products because they can earn directly by just

roaming around and talking straightly to prospective buyers. They give conditions to all their

customers about payments and freebies of they purchase the target amount. They give bonuses to

give happiness to all their customers so that they will continue to buy the products to them. They

always put a smile on their faces to guarantee that they are trust worthy person and ready to make

business.

CONCLUSION

Direct selling has a big impact to distributors and customers. First, the distributors make

themselves to be self-employed and they earned good amount of income that can really help their

daily expenditures and can sustain needs in their daily lives. The distributors chose direct selling

as their source of income because it is easy to sell and they earned incentives, bonuses and free

products coming from their supplier. They establish conditions in selling their products they give

their customers a days or month to pay for the goods that they purchased. Sometimes, they also

offers free products if you purchased large amount in the particular products. The customers in

this type of business were also encouraged to be part of this business they can be a dealer as well

as retailer. They benefited a lot from their customers because they don’t need to go on

supermarkets, malls and boutique just to purchase a product that they need and want. But in direct

selling the distributor itself will deliver the product instantly to your place. They can also receive

discounts and freebies that the distributor offers for a limited time only and in paying, they had

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given a lot of time to prepare the money that they must pay for their purchases. That’s why direct

selling itself is an important activity to the business and to the people involved it gives them

employment and they benefit lot things from each other.

RECOMMENDATION

Direct selling should be stable and active in the field of business it plays a big a role in the

market that exchanging of goods is successfully done. It is a good way for the distributors to

improve their products, the way they communicate to the customers, their conditions in selling and

their strategy in selling their products that customers will be attracted to it so that they can continue

the life of direct selling in the market. This type is widely known now a days whether you are just

staying in your or work you can also purchase products simpler because the distributor will roam

around and will present a product that you might buy. To the customers direct selling is really

advantageous to all of you. It is designed to all the people who have limited time to purchase at

different supermarkets and malls because of their hectic schedule to their studies and works. All

people can be part of direct selling it is a theory of “give and take” it means it is a “win-win”

situation or both parties are benefiting to each other. To the company that created this kind of

business continue to create more opportunities to all the people who wanted to be a successful

business man/woman that gives each of them the opportunity to change their way of living into a

most comfortable one.

REFERENCES

 IRJET-V218223.pdf – A STUDY ON DIRECT SELLING BUSINESS (AMWAY INDIA

LTD) INKERALA: A CASE STUDY OF CALICUT DISTRICT OF KERALA

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  26ChenMeiLiang.pdf – A STUDY OF DIRECT SELLING MANAGEMENT

STRATEGIES: AN EXAMPLE OF THE AVON CESMETICS COMPANY IN TAIWAN

 CEO09B5F19151.pdf – TRUST AND RELATIONSHIP COMMITMENT BETWEEEN

DIRECT SELLING DISTRIBUTORS AND CUSTOMERS

 MERRIAM-WEBSTER DICTIONARY

 BUSINESS DICTIONARY

CURRICULUM VITAE
Libertad National High School

Accountancy Business and Management

Glory Jean Dagum

Sitio Franco, Centrala, Surallah, Sou. Cot.

mtokura25@yahoo.com

November 5, 1999

Educational Background:

Elementary Awards:

Centrala Central Elementary School Most Responsible- grade 4

Centrala, Surallah, So. Cot. Most Neat and clean- grade 5

June 2006- March 2012 Most Neat and Clean- grade 6

Junior High School Awards:

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Libertad National High School Advance Proficiency Award- grade 9

Brgy. Libertad, Surallah, So. Cot. Advance Proficiency Award-grade10

June 2012- March 2016

Senior High School Awards:

Libertad National High School

Grade 11 – first semester with honors

Second semester with high honors

Grade 12 - first semester with high honors

Second semester

Brgy. Libertad Surallah, So. Cot.

June 2016 – Present

Fathers name: Dominador C. Dagum

Mothers name: Lallaine M. Dagum

Sibling: Donna M. Dagum

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