REPUBLIC OF THE PHILIPPINES

Department of Education
Region III
Division of City of San Fernando
PAMPANGA HIGH SCHOOL
SENIOR HIGH SCHOOL DEPARTMENT

Open-minded ka ba: The Experiences of Senior High School Students Involved in Multi-
level Marketing

Prepared by:
Aboga-a Xyrel John
Alcaide, Luc Erich Oliver
Decena, Cristel Joyce
Esguerra, Christia Milen
Intal, Nicole Raven
Tinio, Russel

Submitted for partial fulfillment of the requirements

in Practical Research I

Prepared for:

Ms. Mariella T. Fedeles

Teacher
 CHAPTER 1

PROBLEM AND ITS BACKGROUND

I. Background of the Study:

In the year between 1917 and 1927, Carl Rehnborg introduced to people the aid of
supplements in their diet and the health benefits. In 1930, he went back to America and built a
company named “The California Vitamin Company”. Then in 1939, he changed the name into
“Nutrilite”. Then after six years, the multi-level marketing strategy was born to increase his
company’s sales. When Jay Van Andel and Rich DeVos became distributors of Nutrilite’s
products, they discovered the effectiveness in raising their sales through Multi-level Marketing.
With that knowledge, they put up a company to compete Nutrilite company named “Amway”
and obtained the majority of the stock and became one of the largest company until now.

Most businesses rely on marketing because it is said that it is the key to success.
According to Merriam Webster, “Marketing” is the process or technique of promoting, selling,
and distributing a product or service. In other words, it is a way of advertising product to people
in many creative ways like slogans, packaging designs, celebrity endorsements and media
exposure to capture the attention of potential consumers. No matter how good your products are,
without marketing your business will not gain profit and you may lose your company.

Multi-level Marketing, also known as MLM, is a marketing strategy they use that
involves people in promoting a product and earns a commission through selling it to other
people. It's also known by a variety of names: network marketing, referral marketing and lastly
pyramid marketing. In this Building structure, marketing and the sales representative are not only
receiving a compensation for their own sales but also receiving a percentage of their sales
generated by other salespeople that they recruited. It is commonly known as one's "downline".
Consultants are involved in multi-level marketing and usually selling products directly to
consumers through relationship and word of mouth. Closely 9 out of every 10 consultants are
part-time, and working out of the home as a dealer of a given line of products. Many of multi-
level marketing companies are also employ a "party plan" strategy, where consultants (and
possibly also the consultant's or the "upline") inviting friends and other interested customers in
the sector to a party at the consultant's home (or other available sites). Many products are
revealed and everyone has a good time, and by the end of the party, the consultants have
expectantly made a several sales- and possibly even recruited a new consultant (who in turn to
become a salesperson's). Multi-level marketing (MLM) is a kind of attractive business proposal
to many people. It offers the opportunity to be part of a system for allocating the products to
consumers. Unlike the person it starts a business from a scratch, the MLM member will support
the direct selling company that supplies them a product and sometimes it offers training/orienting
as well. Multi-level marketing has a big difference in pyramid schemes. Pyramid schemes
depend on recruiting people to become a dealer of goods or services. Like MLM, the pyramid
scheme is offering the chance of making money by signing up many recruits and by
accomplishing certain levels of attainment. The big difference between the two is in multi-level
marketing is legal in Canada and mostly in the US while the pyramid schemes aren't.
Cooperating in a pyramid scheme is an violence under the Criminal Code of Canada, you will
illegitimate by up to five years imprisonment. Many companies that establish Multi-level
Marketing assure their distributors to have higher profits from the extra commission they earned
from the other salespeople they recruited. In addition to that, other companies also give false
information or do not provide all the information about their firm. This habit is called
“misleading commercial practice”. This happens when the companies carry wrong information
or limit the data needed by the potential members.

In the Philippines, “open-minded ka ba?’ is the usual line used in Multi-level Marketing.
When Filipinos heard that line, they have that stigma that they are into Multi-level Marketing.
That is why others turned it into a joke because that line has been used too much and it is
sometimes the reason why many people avoid networking. Since being a close-minded person
means someone who easily concludes on things without understanding others. They are more
focused on being understood. A close-minded person is being selfish and egoistic that is not
needed in trading. On the other hand, an open-minded person is unbiased and doesn’t make up
any conclusions. They listen first and are curious about why people have a different perspective.
With that meaning of open-minded, they used it as an invitation to people to join Multi-level
Marketing. For the reason of that they need people who are ready to adapt with changes in their
business to be successful.

We are conducting this research to examine some objectives. First, we want to determine
the factors that encourage students to enter Multi-Level Marketing (MLM). Then, we want to
recognize the benefits and risks in joining the Multi-level Marketing. Lastly, we want to identify
the marketing strategies practiced by SHS students involved in Multi Level Marketing.

II. Literature Review

Multi-level Marketing branded as “network” or “matrix” this kind of marketing uses
distributors to sell products and services. If you have signed up as a distributor you will be
getting commission with the profit or your sales as you sell products and also with the people
you have invited to join and be a distributor. In this marketing they will pay you through two or
more levels named as distributor. At the same time this strategy were being investigated for it
has been prosecuted as an illegal pyramid scheme. After that this strategy has been hearsay. In
determining if the company using MLM is authentic the sales from products and services are
used to pay the distributors and you can’t have commission if you have only recruited you must
also sell, while it si illegal if you are paid from the money of the new recruits. (Rekha, 2011).
The typical Multilevel Marketing program works through recruitment. You are invited to
become a distributor (contractor, consultant or associate), sometimes through another distributor
of the company's products and sometimes through a generally advertised meeting. (Ward, 2018)
Multi Level Marketing is a kind of hybrid of the method of distribution of goods and the method
of building a sales network. It is one of the safest (carries a very low risk) ways of conducting a
business activity. (Gregor and Wadlewski, 2013).

III. Statement of the Problem

The general problem of the study is to examine the Experiences of Senior High School Students
Involve in Multi-level Marketing. Specific questions that the researchers aim to answer the
following:
1. What are the factors that encourage students to enter Multi-level Marketing?
2. What are the benefits and risks in joining Multi-level Marketing?
3. What are the marketing strategies practiced by Senior High School students involved in
Multi-level Marketing?

IV. Scope and Delimitation

This study is limited only to examine the experiences of Senior High School students
particularly the students of Pampanga High School here in San Fernando, Pampanga. This
research will only be conducted in a particular time and date specifically in the second semester
from December to April on the school year 2018-2019.
This study is only focused on the experiences of Senior High School students who are
currently involved and became involved in Multi-level Marketing. This topic will also include
the reasons why they join MLM and the effects of entering it. This research will be conducted
only to five students who are currently studying at the Pampanga High School who are taking
either the academic or TVL track.
In order to collect the data, the primary method that the researchers will use is an
interview. The research findings will only be based on the interview from the selected
participants.

V. Significance of the Study

The researchers identified the following unit that will benefit the study as follows:

For the potential members to guide them to understand more what is behind Multi-level
Marketing. They will gain more knowledge about MLM before entering it. This will help them
to know if they can trust the company they will join or it is just a scam.

For the potential investors to determine what’s behind the networking, the process and
transactions. So that they will be aware and inform before entering and how can they make profit
by it and if it is worth taking the risk.
 For the researchers to examine and recognize the experiences of the Senior High School
students who are involve in Multi-level Marketing. They will gain various ideas, information,
knowledge and it can widen their understanding. Moreover, the researcher will also benefit from
this through getting knowledge and information from this study and it can also help in improving
the mind and applying the research finding in real life.

For the future researchers to serve as a reference who will conduct the same study. This
can help them to gather more information to support their research. It will also be a great help to
them because they will know how to start a research and what are the different steps that they have
to take are. They can also include the results that were made from this study and compare it to the
results they got and the results of this study will help the future researcher to equip their insights
better.
References:

Investopedia Staff. (2018, April 16). Marketing, Retrieved from

https://www.investopedia.com/terms/m/marketing.asp

Network Marketing. (2018, February 3). The History of Network Marketing, Retrieved from
https://www.networkmarketinghq.co.uk/education/history-network-marketing/

Eddine, Bilal Jamal. (2015, March 8). The Importance of Marketing for the Success of a
Business, Retrieved from https://www.linkedin.com/pulse/importance-marketing-success-
business-jamal-eddine

Velasco, Makoy. (2017, September 28). Open Minded Ka Ba? Trade Tayo, Retrieved from
https://makoyvelascoblog.wordpress.com/2017/09/28/open-minded-ka-ba-trade-tayo/

The Difference Between Open-Minded and Close-Minded People. (N.D.). Retrieved from
https://fs.blog/2017/09/open-closed-minded/

Marketing. (2018, November 27) In Merriam-Webster.com. Retrieved from

https://www.merriam-
webster.com/dictionary/marketing?utm_campaign=sd&utm_medium=serp&utm_source=jsonld

Operation-Meditation. (N.D.). 8 Benefits of Having an Open Mind and How to Get One.
Retrieved from http://operationmeditation.com/discover/8-benefits-of-having-an-open-mind-and-
how-to-get-one/