Danang University of Economics

BTEC HND NATIONAL DIPLOMA IN BUSINESS MANAGEMENT

A research proposal

on

The Factors Affecting the Success of

Direct Selling Businesses in

Da Nang

By:

Cao Thanh Lan (Mia)

Mai HVBu (Tom)

Tho My (Rosy)

NgPhanTrcNhi (Annie)

Table of ContentsCHAPTER 14I.Problems4II.Research questions5III.Hypothesis8IV.Conceptual framework/ simulacrum:9V.Scope and limitations of the study10Chapter 2 Literature Review11Chapter 3: Research Methodology13I.Research design:13II.Respondents:13III.Sampling procedure:13IV.Data gathering procedure:14V.Statistical analysis of data:14Conclusion:15Reference:16

CHAPTER 1I. Problems

Direct selling is an assertive, face-to-face approach to selling where the salesperson commonly presents product or service to a prospect at home or office of customer.

This study proposes to determine the major factors that affect to the success of direct selling company. The diverse antecedents of factors affect to success of direct selling will be elaborated such as proximity, seller attitude, product knowledge and trust. In direct selling, proximity of seller will help them easy to each customers house to marketing and sell product. It helps them save time and transportation cost. Skills of direct seller are significant factors affecting the success of direct selling. It includes good communication skills, listening skills and introduce products enthusiastically. Product knowledge is critical in direct selling. Since seller often sell one specific product or a line of related products, seller need to come across as the expert in product category. This establishes credibility as the salesperson and helps maintain the credible reputation of the brand seller sells. The importance of building and maintaining trust between buyers and sellers is a key facilitator of successful direct selling. Reliability of the product and of the corporation will give the trust to consumers and facilitate a purchase. Therefore, direct selling companies seek to build trust, reliability and create better awareness about their company's brand and image.

Over the past years, direct selling is becoming popular at Danang. Direct selling has played an important role in direct selling market, especially domestics, skin care or house products. Our research studies about the factors that affect to the success of Direct selling in Danang. There are some major effective factors that relate to the success of direct selling in Danang city, such as product quality, professional of employees, training program and sale commission.

Direct selling is becoming popular at Danang. Direct selling has played an important role in direct selling market.

Nowadays, most people want to earn money from direct selling and enjoying some direct selling companies in danang. In addition to this, direct selling also affect to the awareness and shopping habits of customers.

There are some major effective factors that relate to the success of direct selling in Danang city, such as product quality, professional of employees, training program and sale commission. They built a success department to collect customer onions

Direct selling is becoming popular in Vietnam, especially in Danang. Also, They achieve some big successes in Danang market. We do this research to study about the factors that affect to the successful of the direct selling businesses in Danang and how they can develop and competive in Danang market.

II. Research questions

1. Which of these factors affect the success of direct selling companies?

a. Seller attitude

b. Quality

c. Brand reputation

d. Price of product

e. Trust of customer

2. How much do these individual factors affect the success of direct selling businesses in Da Nang?

3. Is there a significant difference on the effect of these factors to the success of direct selling businesses in Da Nang?

Questionnaire

INTRODUCTION.

Good morning/ afternoon/ evening, we are students from the Center for International Education at Danang University of Economics. We are conducting a survey about the factors affecting the success of Direct selling businesses in Da Nang

SCREENING QUESTION.

1. Do you or member of your family using products of direct selling company?

1. Yes (go to question 2)

2. No (terminate)

2. Have you bought any product of direct selling company?

1. Yes (go to question 3)

2. No (terminate)

3. What are the most important factors affect to your purchase?

Seller attitude 1 23456789 10

Quality 1 23456789 10

Brand reputation 1 23456789 10

Price of product 1 23456789 10

Trust of customer 1 23456789 10

4. How much does seller attitude factor affect to customer retention?

1 23456789 10

5. How much does product characteristic factor affect to purchase volume?

123456789 10

6. How much does brand reputation factor affect to customer retention?

123456789 10

7. How much does income factor affect to your purchase?

123456789 10

8. How much does price of product factor affect to your purchase?

123456789 10

9. How much do you trust the brands of direct selling?

1 23456789 10

RESPONDENTS INFORMATION.

Name: Gentle:

Date of birth:Age:

Job:

15

III. Hypothesis

Ha1. There is a significant difference on the effect of proximity of the seller between frequency of purchase and purchase volume.

Ho1. There is no significant difference on the effect of proximity of the seller between frequency of purchase and purchase volume.

Ha2. There is a significant difference on the effect of product characteristics between frequency of purchase and purchase volume.

Ho2. There is no significant difference on the effect of product characteristics between frequency of purchase and purchase volume.

Ha3. There is a significant difference on the effect of seller attitude between new customer generation and customer retention.

Ho3. There is no significant difference on the effect of seller attitude between new customer generation and customer retention.

Ha4. There is a significant difference on the effect of brand reputation between new customer generation and customer retention.

Ho4. There is no significant difference on the effect of brand reputation between new customer generation and customer retention.

IV. Conceptual framework/ simulacrum:

Independent (Direct Selling Business Characteristics)

Dependent (Success of Direct Selling Business)

Proximity of the seller

Product characteristics

Seller attitude

Brand reputation

Frequency of purchase

New customer generation

Customer retention

Purchase volume

Figure 1:

Direct selling business characteristics are proximity of the seller, product characteristics, seller attitude and brand reputation. In direct selling, proximity of seller will help them easy to each customers house to marketing sell product. It help them increase frequency of purchase. Products characteristics help attract more new customers. It determines the marketing mix and potential target market. Seller attitude include communication skill, listening skill, and introduce product enthusiastically. It helps seller retain customers. A favorable brand reputation means consumers trust products and feel good about purchasing goods and services.

V. Scope and limitations of the study

The main variables that we will study are Proximity of the seller, Product Characteristics, seller attitude, brand reputation. The sub variables are Income, price of product, trust of customer.

The area of this study covers all areas have many people in Da Nang city. However, the study is specifically focused on the people are customer of direct selling. we will choose 100 respondents.

For the survey, in order to find out the most suitable people to survey, we have to collect both secondary and primary data.

Secondary data: We collected the information about people in Da Nang from the direct selling companies. After that we do the sampling frame and we applied random sampling. we choose some people from the list of population from the companies. Besides, base on information from internet we do question for survey about direct selling in Da Nang for customer.

Primary data: We use questionnaire to survey customers by interview them to collect real information.

We research has several limitations. This study primarily limited by its small sample size. An earlier star in data collection would have increased thi time needed to survey more participants. More contact between the researcher and the target sample may have increased participant. Ideally, the number of participant would have been more evenly distributed across gender/age/etc. the participants represented a narrow range of ethnicity/ages/etc. a larger sample with more diversity would have benefited our results. including multiple colleges/groups on campus could have diversified the ethnicities/ages/etc. represented in the sample.

Chapter 2 Literature Review

The success of direct selling depends largely upon proximity of the seller, product characteristics, seller attitude and brand reputation. For direct selling can create a dominant market presence, customer loyalty and satisfaction, the direct selling companies and seller must do these factors well. We will focus briefly on factors affecting the success of direct selling business in Da Nang which would lay the groundwork for the further discussion.

The proximity in direct selling is really important because it directly affect to the purchase of customers. Proximity can help the seller understand what the customers look forward to the products or the sellers. Proximity includes communication with customers by face to face, leaving the messages on special occasions or on social tools. This helps the seller becoming close to the customers. For example, e-Miles Digital Media web (2014) views, any business or organization that operates in a fixed location can execute a proximity marketing campaign to assist with an extensive marketing strategy. This type of marketing provides general information about a product, business, or service to nearby consumers.

About product characteristics, according to Paula Gorry (2014) view, there are a range of products available within the industry including cosmetics, cleaning products, nutritional products, home wares and paper craft supplies to name a few. With this breadth of choice, it's important to carefully select the type of product to sell. Being enthusiastic about product will ease the selling process - making it much more fun to continue expanding the business. The independence that is synonymous with direct selling means sellers have to be self-motivated and this should follow naturally if sellers are selling a product they believe in.

Seller attitude includes good communication skills, listening skills and introduce products enthusiastically of seller. for example, Neil Kokemuller said that direct selling simply will not work if seller do not have adequate interpersonal communication skills. Seller needs to make customer trust and connect with them as a salesperson. Direct sellers need to have a friendly demeanor and build trust quickly to get invited into a home or business.

Finally, the brand reputation is one of factors affecting the success of direct selling. Consumer value brand reputation very highly when theyre making purchase decisions, so its importance should not be underestimated. For example, according to a 2012 study by J.D. Power and Associates, nearly one out of two product buyers will not purchase a particular product due to quality concerns based entirely on common knowledge. In other words, their perceptions of the brand reputation are so meaningful to them that theyll discard brands based solely on those perceptions.

Chapter 3: Research MethodologyI. Research design:

This study follows the survey design. A Survey about the factors affecting the success of direct selling businesses in Da Nang will be rated through customer by questionnaires with closed responses questions using ten point.

II. Respondents:

We will ask 100 respondents about survey, who are direct selling customers in Danang and have age about 21-50 years old. This show that we are directed toward the trend of the direct selling business is young people.

III. Sampling procedure:

The population of this study can be use to describe customer of direct selling companies who as a workforce represent about 870.000 people.

In this research, we use random sampling method to get respondent. For the survey, there are two stages. The first stage is that we will chose areas have many people in Da Nang city. After that, we also apply random sampling method to help us can choose the customer easier that we choose some people from the list of customers from direct selling company to make 100 surveys.

Therefore, the calculation for the sample size was done by ME = z

The sampling size has three elements: margin of error (ME), confident level (z) and prior judgment (p).

P= 50% = 0.5

ME= 4% = 0.04

z= 90% = 1.645

ME = z => 0.04 = 1.645

n =

For the sampling size, we must do survey with 422 people but time is limited and we hard to have a list of customer information from direct selling companies so we not easy to find out 422 people to make survey. Thus, we reduced the surveys to 100 people that can save more money and time to do the surveys.

IV. Data gathering procedure:

The data for this research were collected using a survey questionnaire. The survey was created using suitable questions modified from related research and individual questions formed by us. We group collect the information from areas has many people. For that, each member will try to collect information of 25 people in 2 days which can fit to the requirement of 100 respondents information.

V. Statistical analysis of data:

Descriptive: measures of center tendency (min, median, and mode) and Measures of dispersion ( standard deviation, variable)

Inferential: Correlation between the age according to the respondent grouped and the result of the investigation collected by them.

Conclusion:

Recently, direct selling business has had a great impact, both positive and negative on the economy of the world. Thus, the study of attitudes toward corporate image is essential to allow the operations of the direct selling business to grow steadily and to show its effects on consumers awareness. The purpose of this study was to identify the key factors influencing the success of direct selling.

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