Benefits and Challenges of Multilevel Marketing in Kenya:a Case of Golden Neolife Diamite International Distributors in Nairobi, Kenya

Abstract

World over Multilevel marketing (MLM), also called Network marketing has become a successful concept that empowers ordinary people to turn into successful entrepreneurs. This concept is about distributing products directly from the manufacturers to the end consumers, thereby doing away with the traditional channel of distributors, wholesalers and retailers, so that the consumers get the entire benefit of direct selling. The multilevel marketing industry as a whole has grown over the years and the reasons for this among many others is that there are more people looking either to supplement or replace their incomes. There are also more opportunity seekers in any recessionary period due to the uncertainty of their present financial situation. This study aimed to find out the benefits and challenges of Multilevel marketing as practiced by Golden Neo-life Diamite International (GNLD) distributors in Nairobi, Kenya. A descriptive survey research design was used in this study. The population of interest was all the practicing distributors of GNLD products based in Nairobi, Kenya. A convenient sample size of 200 distributors was used in the study. Primary data was collected using a semi structured questionnaire which was administered through personal interviews by research assistants. A total of 189 questionnaires out of 201 were filled and returned, representing a response rate of 94.5%. The data was analyzed using measures of central tendency, mainly frequencies, mean scores and standard deviations and the results presented in tables and graphs. GNLD is a classic example of how the MLM concept works in Kenya. Besides being a source of income for those involved, the study revealed that other benefits of MLM amongst GNLD distributors included the low barriers to entry into the business and its flexibility, the fact that MLM has no age or education restrictions as compared to traditional jobs. Ranking high was also the fact that MLM acts as a social support network for those involved. It helps people to grow and develop not only their business skills but also personal life skills. Under challenges, the study revealed that MLM appealing to people's greed and promise of making quick money was a major obstacle in conducting the business. Only a small minority of people take their time to fully understand the business concept to be able to work it out well, many others drop out before long thereby propagating the negative perceptions about MLM. This challenge is closely linked to the concern that some MLMs may use deception and overzealous product claims to recruit individuals, further aggravating the negative publicity that surrounds the subject of MLM.