Summary Brief
Shades of Embeddedness: Tie Strength and Obligations in
Direct Selling Parties
Scott D. Johnson, University of Louisville Patrick Migliore, University of Louisville
Abstract
Direct selling is the term that describes non-store transactions based on personal encounters
between sellers and buyers. A popular group-based direct selling approach is the "party plan"
where distributors/consultants facilitate retail transactions in the home. One direct selling
company suggests that "one of your best sources for building a customer base is a group of
people you already know. These acquaintances try Amway products and become your customers
as they use and reorder various Amway items" (Amway, 2001).
Literature Review
Direct Selling
Tne party plan has been identified as a good setting to study market embeddedness since such
parties are generally conceived in the context of bringing together family, friends, neighbors, and
co-workers (Davis, 1973). Such a party plan may also be construed as a network, defined as "a
composite of a larger number of actors and the pattern of relationship that ties them together"
(Iacobucci and Hopkins, 1992). Davis (1973) further describes party plans as "concentrated,
condensed nodes of sociability."
Taylor (1978) notes that such direct selling approaches depend on the ability to take advantage of
the pre-existing relations that may exist between a host/hostess and guests. That is, there exists
an "everyday sociability and reciprocity of friends, neighbors, and kin."
Embedded Markets
Markets with such social ties have also been called embedded markets" (Granovetter 1985;
Frenzen and Davis 1990). These markets operate by assumed or embedded rules that differ from
the common market assumptions where buyers and sellers are thought of as anonymous and
where social relationships are inconsequential.
Tie Strength
According to Granovetter (1973), tie strength is "a (probably linear) combination of the amount
of time, the emotional intensity (mutual confiding), and the reciprocal services which
characterize the tie." Various studies have developed scales to measure tie strength using some
combination of the characteristics in Granovetter's definition (Brown and Reingen, 1987;
Frenzen and Davis, 1990).
