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MCA Business (017) Practice Tests & Test Prep by Exam Edge - Free Test


Our free MCA Business (017) Practice Test was created by experienced educators who designed them to align with the official Missouri Content Assessments content guidelines. They were built to accurately mirror the real exam's structure, coverage of topics, difficulty, and types of questions.

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MCA Business - Free Test Sample Questions

What is the marketing strategy that compensates promoters of direct selling companies not only for product sales they personally generate, but also for the sales of others they introduced to the company called?

Correct Answer:
multi-level marketing


the correct answer to the question is multi-level marketing (mlm). mlm is a distinct marketing strategy often used by direct selling companies. this strategy not only rewards the promoters for the sales they personally create but also offers compensation for the sales made by individuals whom they have recruited into the company. this dual incentive structure is a hallmark of the mlm model.

in mlm, each promoter or distributor can recruit new distributors, forming a distributor network. the original recruiter gains benefits from their own sales as well as a percentage of the sales made by the recruited distributors. this structure creates multiple levels of compensation, hence the name "multi-level marketing." the levels can often extend down several tiers, which means that earnings can potentially come from a significant network of recruits.

mlm is sometimes confused with pyramid schemes, which are illegal. however, the key difference is that mlms are based on actual product sales to consumers, whereas pyramid schemes primarily generate revenue from the recruitment of new members into the scheme without a legitimate product to sell. it's crucial for anyone considering joining an mlm to understand this distinction and to ensure that a substantial part of the company's revenue comes from selling products or services.

common characteristics of mlm include direct selling techniques and reliance on personal networking. promoters typically utilize their personal networks to sell products and recruit new distributors. this method of selling is often supported by company-led training that includes sales strategies and marketing skills.

overall, multi-level marketing can offer a pathway to personal business growth and revenue generation but requires commitment to both sales and recruitment. it's important for individuals involved to focus on ethical selling practices and clear communication about how the system works to avoid misconceptions about mlm being similar to fraudulent pyramid schemes.