This week you will select a research method that's appropriate for your study. As you select a method, bear in mind that quantitative research is used to address a social problem by using numerical da

Research Questions

Amenia Payne

University of Phoenix

Research Questions

In recent years there has been a new business model on the horizon called multi level marketing (mlm) also known as network marketing that has become quite popular to individuals seeking flexible and part-time business opportunities. Network Marketing allows individuals to leverage a system that is already in place. Consumers can buy into the system with a low upfront investment. The consumer purchases a product they intend on reselling for a profit through some form of direct selling. Another form of profit through multilevel marketing focuses on recruiting others that also want to sell the product creating a pyramid compensation plan. When a business uses the multilevel marketing concept but focuses majority of their efforts recruiting, they run the risk of running an illegal pyramid scheme. Pyramid schemes use the (mlm) business model to set up legitimate businesses to scam consumers. Falsely advertising, misleading price claims, and other deceptive marketing practices are just a few ways multilevel marketing systems can be manipulated to draw consumers to invest in unethical business practices. In doing so, pyramid schemes cause consumers to misallocate resources and divert interest away from competing products and services (Vander, 2002). The Federal Trade Commission protects the consumer and plays a major role in eliminating businesses that engage in anticompetitive business practices. (encyclopedia) Although the FTC has multiple regulations, multilevel marketing business models are exempt by a revised business opportunity rule. "Since network marketing programs are usually exempt from business opportunity regulation and aren't defined as franchises under state and federal franchise laws, consumers must conduct their own investigation before investing their money"("Network Marketing", 2018). The precedence of these regulatory actions are inadequate in meeting the needs of vulnerable consumers.

The purpose of this exploratory study is to use qualitative research to show the devastating effects on consumers that have engaged in multilevel marketing programs that were pyramid schemes. This research will focus on a case study of Digital Altitude, a multilevel marketing company, which sells a digital marketing business opportunity, was shut down by the FTC for engaging in illegal marketing practices, a pyramid scheme.

The U.S. government has set many business regulations in place to protect employees' rights, protect the environment and hold corporations accountable for the amount of power they have in this business-driven society (Holt, 2018). Multilevel Marketing is a rising business model that lacks government regulation.

Why do the majority of business regulations do not have any bearing on MLM business models?

Why are some MLM business considered legitimate businesses, while others are classified as illegal?

Reference

Holt, M. (2018). Five Areas of Government Regulation of Business. Retrieved from http://smallbusiness.chron.com

Network Marketing(2018). Retrieved from http://https://www.entrepreneur.com/encyclopedia/network-marketing

Vander Nat, P., & Keep, W. (2002). Marketing Fraud: An Approach for Differentiating Multilevel Marketing from Pyramid Schemes. Journal of Public Policy & Marketing, 21(1), 139-151. Retrieved from http://www.jstor.org/stable/30000715