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 Contents
CHAPTER 1................................................................................................... 4

I. Problems.........................................................................................................4
II. Research questions.........................................................................................5
III. Hypothesis.....................................................................................................8
IV. Conceptual framework/ simulacrum:................................................................9
V. Scope and limitations of the study.................................................................10

Chapter 2 Literature Review........................................................................11

Chapter 3: Research Methodology...............................................................13

I. Research design:............................................................................................13
II. Respondents:................................................................................................13
III. Sampling procedure:....................................................................................13
IV. Data gathering procedure:............................................................................14
V. Statistical analysis of data:............................................................................14

Conclusion:................................................................................................ 15
Reference:................................................................................................. 16

CHAPTER 1
I.

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.
2

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
3

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?

4

1.

Yes (go to question 3)

2.

No (terminate)

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

Seller attitude

10

Quality

10

Brand reputation

10

Price of product

10

Trust of customer

10

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

1

10

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

1

10

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

1

10

10

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

1

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

1

10

10

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

1

RESPONDENTS INFORMATION.
Name:
Date of birth:

Gentle:
Age:

Job:
5

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

Dependent (Success of

Business Characteristics)
Proximity of the seller

Direct Selling Business)

Frequency of purchase

Product characteristics

New customer generation

Seller attitude

Customer retention

Brand reputation
Figure 1:

Purchase volume

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 Methodology

I.

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

p (1 p)
n

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

p (1 p)
n

0.04
0.25
=
1.645
n

=> 0.04 = 1.645

0.5 0.5
n

n = 422.81

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.

Reference:
Aytm (2012) Building brand reputation (online) available from
<https://aytm.com/blog/research-junction/building-brand-reputation-part-2/>

[20th

March 2015]
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<http://blog.e-miles.com/what-is-proximity-marketing/> [21 March 2015]
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<http://smallbusiness.chron.com/keys-successful-direct-selling-46194.html>

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