Marketing Strategy Of Amway India Ltd 3f2s3c

CONTENTS Executive Summary

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Introduction

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Amway Profile • How it works? • Product Profile • Current Scenario

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Amway’s marketing strategies • Sales & Marketing Plan • Strategies in the market  Penetration  Segmentation

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Research Methodology

45

Findings & Analysis

54

Conclusion

72

Recommendation

75

Bibliography

77

Sample Questionnaire

79

EXECUTIVE SUMMARY Amway is a unique company. It is defined by the fundamental philosophy of helping people help themselves. Amway has helped millions of people run their own independent business around the world. Today, Amway continues to grow by offering new products and business opportunities to people from all cultures and walks of life. Whether they are employees, distributors, or citizens in the community, Amway touches their lives for better. India with its rich reservoir of will, talent and enterprise is perhaps the most fertile ground for the Amway Corporation. In short it has made substantial value addition to India’s social economic life. The focus of this project is based on studying a single organization i.e The Amway Corporation. This research has been conducted to study the marketing strategy adopted by Amway in the Indian market. An attempt has been made to study the company’s perspective in the new market and analyse on how the company plans its expansion in India. I have substantiated my research by conducting interviews to gain more insight about the corporation. The data has been analysed on the basis of 2 surveys which were conducted by me. Survey 1 was conducted through direct, phone and online interviews. Survey 2 is conducted by gathering information through structured questionnaire and the interpretation for the same has been provided. I have finally concluded my research by providing a summarized conclusion and also suggested recommendations on the basis of the marketing mix.

AMWAY VISION “Helping people live better lives. In all aspects of our products, businesses and social responsibility, we strive to make a meaningful difference in the communities in which we operate.”

AMWAY MISSION “Through the partnering of Distributors, Employees, and the Founding Families, and the of quality products and service, we offer all people the opportunity to achieve their goals through the Amway Sales and Marketing Plan.”

INTRODUCTION Direct Selling is a remarkable business model, which brings the market to the customer and offers a unique business opportunity to anyone eager to adopt the spirit of enterprise. Direct Selling can best be described as the selling of products and services directly to consumers in a face-to-face manner, through demonstration of usage, by an independent direct salesperson. Direct Selling benefits consumer because it sells high quality products at the consumer's convenience, often at his/her home or workplace. Customers value the advantages of convenience, personalised attention, demonstration of usage, and a wide choice of products backed by Customer Satisfaction Guarantee. One of the most tangible impacts of Direct Selling in its new advent has been the fact that it has touched the average man and women in a manner never experienced before. Amway India Corporation is the country's leading Direct Selling Company. It is perhaps the best example of the contribution Direct Selling is making to India. In a little over two years of commercial launch Amway India has emerged as the country's largest Direct Selling Company. It closed its financial year with a turnover close to Rs. 250 crores (the Amway Financial year runs from Sept. to Aug.). It will reach its target of Rs. 1000 crore turnover much before its declared target of the year 2004.. The direct selling industry has grown rapidly over recent years. Changing lifestyles, demographics and economic recession have all been factors influencing this growth. Amway provides people with business opportunities across the globe. Direct selling is not about 'getting rich quick' it is about creating rewards for effort and initiative. With

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low risk and low capital investment, Amway provides people with the opportunity to achieve and to improve their lives. As a leading player in the world of direct selling, Amway is helping to 'clean up' the industry and provide a valuable and acceptable form of product distribution. In an impersonal fast-moving world driven by technology, Amway provides the personal touch. Because it focuses upon direct selling, Amway is different from more traditional distribution channels. Its Independent Business Owners own their own business, with the flexibility to deal directly with their own clients and to build up personal relationships. These Independent Business Owners also have the ability to deliver Amway's products to their customers' homes. Independent Business Owners sell to people they know or meet. The personal and care they provide is an important element in direct selling. They are also self-employed and can introduce others to the business to form their own sales group of Independent Business Owners.

The channel of distribution describes the stages of ownership that take place as a product moves from a manufacturer to a consumer. The increasing use of the Internet by

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consumers has created a real potential for developing different types of business models and for new approaches to reaching s directly and quickly in their homes. This report examines in detail the marketing strategy of the leading global direct marketing major, Amway in India. In the initial stages of the report I have focused on Amway’s current position in the Indian market. As the research progresses I have tried to analyse the companies marketing objective for India and how they set out to achieve them. This report also provides a brief introduction to the concept of multilevel marketing and tries to make the reader understand the difference between multilevel marketing and the traditional distribution setup in the FMCG sector, so as to give an idea as to how the system is being utilized by companies like Amway.

MLM -a definition Multilevel marketing allows sellers to build a business through their own sales efforts and by inviting others to become sellers. Remuneration is based on a seller's personal sales AND on the combined sales of those people they have sponsored, trained and motivated. The story of Amway is intended to drive home the point of a company being alert enough to modify its globally accepted practices to suit the local market’s needs. This report has been made keeping in mind the benefits which can be derived from my research.

Benefits to customers 6

This report will be beneficial for consumers who prefer the marketing goods or services directly to them: at their own convenience often in his/her home either on a one-to-one basis, or in the context of a sales party. Through this the customers will get a better idea about the company’s product offerings and value the advantages of: convenience, personalised attention, and a good selection of quality products available at their door steps.

Benefits to sellers Many people have chosen direct selling because they want to build their own business, but do not have: considerable funds required to buy a franchise or start a new company. Among the top five reasons people sell direct because they like and believe in the product, like being their own boss, and working their own hours, like the supplemental family income or making extra money for themselves. It can be beneficial from the sellers point of view as it may give them the idea of exactly how they can go about creating their own business and benefit from the Amway’s unique business opportunity.

Benefits to companies In this report I have deeply analysed the marketing strategy for Amway through personal interviews by many IBOs and Amway customers who have helped in adding valuable data to this project which can be useful for the company. The suggested recommendations can be considered by the corporation for further expansion and increasing market share.

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COMPANY HISTORY

Amway began in 1959 with two young entrepreneurs in the United States -- Rich DeVos and Jay Van Andel. Their concept for an innovative business opportunity, centered around person-to-person marketing, established itself as a leader among one of today's fastest-growing industries. Today, more than 3.6 million independent business owners distribute Amway products in more than 80 countries and territories. Amway is part of the Alticor family of companies whose global sales totaled $4.5 billion in its most recent fiscal year. 1950s - A Friendship Forms Rich DeVos and Jay Van Andel's friendship actually began with a business proposition, when Rich struck a deal with Jay for a ride to school for 25 cents a week. After high school they entered the military, but they planned to start a business together after separate tours of duty. A friendship formed and became a business relationship that has lasted to this day. 1960s - The Early Years Amway quickly outgrew its original facilities in the basements of Rich DeVos's and Jay Van Andel's homes. In its first full year of business, Amway's sales were more than half a million dollars. 1970s - The Decade of Growth As vowed by Jay Van Andel the night of the 1969 disaster, Amway rebuilt the aerosol plant and went on. The ' 70s began with sales of more than $100 million at estimated

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retail, and kept going strong. After a lengthy investigation, the FTC verified that Amway is a genuine business opportunity and not a "pyramid." 1980s - The Billion-Dollar Decade The ' 80s will be ed for the first Billion Dollar Year at estimated retail in 1980. Building expansion at Amway World Headquarters continued at breakneck speed as Amway scrambled to keep pace with demand, opening its new cosmetics plant in Ada. 1990s - The Second Generation As carefully planned by Rich and Jay, the second generation Van Andel and DeVos families took the helm during the ' 90s. Steve Van Andel and Dick DeVos succeeded their fathers as Chairman and President. Distributors witnessed a similar trend, with the second generation of many distributor families taking on important leadership roles.

2000s - The New Millennium In 2000, Amway Corporation became a wholly-owned subsidiary of Alticor, Inc. Chairman Steve Van Andel and President Doug DeVos share the Office of the Chief Executive.

Many Ways to Receive Income You have read about the first two ways: Retail Profit. Averages 20% + of Business Volume (BV) on products you sell. Performance Incentive, ranges from 3% to 21% and is paid monthly.

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There are many more ways for Direct Distributors to earn income when they meet qualifications. These are: (a) Leadership Commission. (Paid monthly) (b) Monthly Depth Commission. (Paid monthly) (c) Ruby Commission. (Paid monthly) (d) Emerald Commission. (Paid yearly) (e) Diamond Commission. (Paid yearly) (f) Diamond Plus Commission. (Paid yearly) (g) Double Diamond Payment. (Rs. 500,000. One time cash award) (h) Triple Diamond Payment. (Rs. 10,00,000. One time cash award) (i) Crown Payment. (Rs. 20,00,000. One time cash award) (j) Crown Ambassador Payment. (Rs. 30,00,000. One time cash award) Special Leadership Programmes As you attain various levels of achievement, you may also be eligible for various AMWAY leadership programmes: Direct Distributor Seminar: A special two-day meeting for new Direct Distributors. With all expenses paid by AMWAY, new Direct Distributors meet the AMWAY India management team, and receive an abundance of information to assist them as they build their growing businesses.

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Annual Leadership Conferences in countries around the world. Invitations are extended to AMWAY's top leaders to meet in a business-building atmosphere. A variety of special programmes, such as your own special day at AMWAY, your own success story in the Distributor magazine, the Amagram, or your name and picture added to the Distributor Hall of Achievements in India and World Headquarters.

Business Considerations AMWAY CORPORATION has succeeded for almost four decades because it is a proper, ethical, and honorable addition to the retail marketplace. AMWAY is a world leader in Direct Selling. A key element to this success is the recognition by governments that AMWAY is a model marketing system. As with any venture, you should review all aspects, weigh the ad vantages /disadvantages, and decide whether it meets your needs. Here are some essential points to consider about the AMWAY business opportunity:

Start-Up Costs Compare the start-up costs of this opportunity with that of a conventional business, and you will notice quite a difference. The only cost for an AMWAY Business is that of a Business Kit, which costs Rs. 4,400.

Merchandising The first way you can make money with your AMWAY business is to sell products to retail customers. Successful merchandising is made easier by AMWAY's line of high

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quality products; a sound combination of upscale and consumable items that can mean profitable and repeat sales.

Sponsoring You may increase your merchandising efforts through sponsoring. Although it is not mandatory to sponsor people, sponsoring may increase your income when the Distributors you sponsor begin to build their own AMWAY business.

Business Materials As your business begins to grow, you may want to acquire training aids. You also may want to attend motivational and business-building meetings. These are optional.

Deductions Your AMWAY business is not a tax shelter, but you are entitled to deduct your ordinary and necessary business expenses as defined by the Income Tax Act, 1961.

Time and Effort The bigger your financial goal, the more time and effort you will need to put into your AMWAY business. With an AMWAY business, you work as much or as little as you like, depending on your own goals. It's all up to you.

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Contents of the Business Kit LITERATURE EXTERIOR CARTON

PRODUCTS G&H LOTION 250 ml NATURE SHOWER CREME HAND

BUSINESS PLANNER ALL PRODUCT LEAFLET PRODUCT DEMO BOOKLET

SOAP SEE SPRAY CONC 500 ml. CAR WASH 500 ml.

FLIP CHART

G&H BODY SHAMPOO 250 ml

CAR STICKER

PURSUE DISINFECTANT 500 ml

AMAGRAM ISSUE

DISH DROP 500 ml. LOC HIGH SUDS 500 ml. SA8 W/NATURAL SOFTENER 500 ml PERSONAL CARE PUMP DISPENSER SAT2IN1 SHAMPOO & COND 250 ml SA 88 APPLICATION SQUEEZE BOTTLE W/TURRET TOP PISTOL GRIP SPRAYER SQUEEZE BOTTLE

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Steps to success in the Amway Business

Amway distributors seem to hang on every word their sponsors say. They do exactly what their uplines do. They talk like them, act like them, and follow them around everywhere as if they were kings and queens. Naturally, with this sort of following, Amway distributors expect guidance in everything they do. This is the reason behind all of the tapes, books, and step-by-step instructions for building an Amway business. Below are the 8 recommended steps for building a large network and the four steps to sponsoring new distributors. These steps, taken from handouts given to me by my diamond directs, sure don't make one think that the tapes, books, and other materials are optional! Take a gander!

Eight Steps to Building a Large Network

1. 100% Personal Use 2. Establish 10 - 15 customers o

Priority Service Program

3. Books o

Read a book each month

o

Read 10-15 pages each day

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4. Tapes o

Listen to one tape a day (minimum)

o

Be on "Recommended Tape"

5. Functions o

Attend all functions (see page 11)

6. Business counseling with active upline o

Set goals with upline on Goal Setting Card (F-7)

7. Group Association o

Build quality relationships within the network

8. Show The Plan (STP) o

Make a list of names by using Amagrams, Christmas lists, telephone indexes, wedding invitations, etc. to jog your memory (don't pre-judge).

o

Add new names through daily s.

o

out 1 tape a day

o

Show the Plan (STP) three time a week

o

Utilize the Issues and Answers video properly

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Four Steps of Sponsoring 1. out prospecting tapes or approach directly and follow up within 24 hours. 2. Set appointments 3. STP 4. Follow up -- second look meeting

And Who Is Bill Britt? From the experiences of friends I spoke with in the USA, what is more likely to appear on the Amway list of promises is promotional cassettes and books rather than more products. The promotional material is designed to help an Amway distributor "sell, sell, sell." The basis for this activity is propounded by American, Bill Britt. He and another American, Dexter Yager, run two of the most successful 'systems' under the Amway banner. It is said that about 90% of Amway's products move through these two systems. In India, what is being discussed is the Bill Britt system. The Advocate newspaper in the USA reported that to follow Britt's system is to spend hundreds of dollars a year on

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motivational tapes. Amway distributors are told that "spending money to buy these tapes is the key to building a large, successful Amway business." Therefore, it is likely that new products peddled by Amway distributors will not be more soap but more hope in the form of these motivational materials. One USA based distributor, an Indian (who has since left the business), told me that these tapes were meaningless and were sold to people by convincing them that weren't doing well enough. He said that the tapes would become an item for sale and Amway distributors will be selling them to each other in a self feeding frenzy.

Amway India – Product Catalogue

•Car Wash •Dish Drop •L.O.C. •Pursue •SA8 Delicate •SA8 Liquid •See Spray •ZOOM •Leather & Vinyl Cleaner

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•Buff Up •PreWash Liquid

•G & H Body Lotion •G&H Body Shampoo •Glister 5-in-1 Toothpaste •Satinique Dandruff Control Conditioner •Satinique Dandruff Control Shampoo •Satinique Shampoo and Conditioner •Nature Shower Creme Hand Soap •Persona Family Tooth Brush •Persona Talc •Persona Soap

•Nutrilite Protein Powder •Triple Guard Echinacea •Siberian Ginseng

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•Glocosamine HCL •Nutrilite Daily •Nutrilite Kids

•Advanced Daily Eye Cream •Alpha Hydroxy Serum Plus •Time Defiance Nighttime Renewal Crème & Lotion •Whitening Essence •Time Defiance Daytime Protection Creme •Moisture Rich System •Clarifying System

•

APSA -80

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Amway - The Current Scenario

Amway is the largest multi-level marketing (MLM) organization in the world. It is a multi-billion dollar company based on the sale of a variety of products. Amway’s philosophy is defined by commitments, trusts, enduring relationships, and the ideal of perfection above profit. From a humble beginning in 1959, using an old gas station, Amway the brainchild of Co founders Rich DeVos and Jay Van Andel, is now one of the largest and most successful direct sales companies. Amway has also worked to provide better opportunities for people through active of various community projects.

Corporate Profile:

 Between then and now, Amway corporation has grown into a US Multi-billion dollar company managed by 12,000 employees.  It operates across 80 countries and territories in Asia, Africa, Europe and the Americas with a turnover of US $5.7 billion.  Amway is the wholly owned subsidiary of Alticor Inc.  It has a sales force of over 3.3 million distributors.  The company Manufactures 450 products of which 350 are patented.  The company is also a long standing, active member of the World Federation of Direct Selling Association (WFDSA).

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 Over 500 R & D scientists and professionals ensure the exceptional quality of its products across five product lines: 

Home Care



Personal care



Home Tech



Cosmetics



Nutrition and Wellness

Amway is committed to expanding the environment awareness of all people of the world. In June 1989, Amway was presented with the United Nation’s Environment Program’s Environment Achievement Award. This award recognised Amway’s commitment to environmental education and awareness.

Quixtar Quixtar is a Multi-Level-Marketing (MLM) opportunity. It is promoted by Alticor. In 2001 Quixtar replaced the North American Amway business opportunity and is currently known as the web version of Amway. It will be able to bank on Amway agents to aggressively market their products from the get go. All Amway agents now known as IBOs ie Independent Business Owners were invited to open up their e-mall, selling not only Amway products but products of other manufacturers as well. The emphasis, as with Amway, will be on Multi-level-Marketing i.e recruiting new Quixtar agents who are encouraged to recruit further agents such that the agents will get the cut of sales made by those they recruit.

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AMWAY INDIA

Amway India is a wholly owned subsidiary of Amway Corporation, Ada, Michigan, USA. Amway Corporation is a 42 year old company, and is among the largest Direct Selling companies in the world. IT was established in 1995. It commenced commercial operations in May 5th,1998. In the brief period since launch, it has emerged as the Country’s largest Direct Selling Company.

Facts:  Over 200,000 entrepreneurs have adopted the Amway business opportunity; and are actively involved in building their independent Amway business.  Amway has invested US $ 35 million in India. Of this, US $6 Million is in the form of Direct Foreign Investment. (IDSA)  US $4 million has been spent in transferring state-of-the-art technology.  The company Amway India was launched with 5 offices (New Delhi, Bangalore, Mumbai, Chennai, Kolkatta) which serviced 150 locations.  At present, in addition to 32 offices in all metros and major cities, Amway India services over 379 cities and towns in the country.  Turnover of Rs 100 cr. and Rs. 250 cr. in the first and second years of operation respectively. Plans to reach Rs. 1000 turnover by the year 2004.  In India Amway Corporation comprises of 72% women, 24% Couples, and 4% men. (Source IDSA)

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 Amway India is the founder member of the Indian Direct Selling Association (IDSA)  Direct Selling requires expertise and special skills. Using the benefit of Amway's leadership status in the global Direct Selling industry, Amway India has in the past 12 months, conducted over 8000 training sessions with an attendance of approximately 350,000 Distributors.  Amway India was honoured by the AICB Millennium Outstanding Service Award, 2000 by the All India Confederation of the Blind in recognition of its sterling contribution to the cause of India's blind.  The Karnataka Welfare Association awarded Amway India with the `Rising Business Star of the Millennium' during a ceremony held at Bangalore during October, 2000. In the short period since its advent in the country, Amway has made several contributions to India’s socio economic milieu. It as either introduced unprecedented benefits, or upgraded existing facilities to international standards.

Corporate Responsibility Through its presence in India, Amway continues to enhance human resource development using its experience in entrepreneurial opportunity and self employment. Amway Distributors follow a Code of Ethics and Rules of Conduct consistent with the World Federation of Direct Selling Associations (WFDSA) which defines the goals, principles and responsibilities in building and operating an Amway business. Amway has conducted several seminars on "Entrepreneurial Development and Direct Selling" in

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concert with the Confederation of Indian Industries (CII) and the All India Management Association (AIMA) to educate popular opinion on the benefits of organized direct selling.

HOW IT WORKS Amway is different from the more traditional distribution channels in that the business has developed through direct selling. In Amway, one is recruited as an "independent" distributor of Amway products by buying a couple of hundred dollars worth of the products from the one who recruits you, known as your "upline." Every distributor in turn tries to recruit more distributors. Income is generated by sales of products by the distributor plus "bonuses" from sales of his or her recruits and their recruit-descendents. How do you begin? First, you are sponsored by another Amway distributor and you obtain the Amway Business Kit. The Business Kit contains basic AMWAY products and literature for your use and for sharing with others. You begin by developing both customers and distributors. Customers or clients are the people who buy the AMWAY products from you but who aren't Amway distributors. 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 re-order various AMWAY items. However, I have found that people everywhere need high-quality, Satisfaction Guaranteed products which they believe Amway is able to provide.

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Independent Business Owners or Distributors are people who have evaluated the Amway business opportunity and elected to the business. IBOs deal directly with Clients, build up personal relationships and deliver direct to Clients' homes. They are highly motivated, selling to people they know or meet. The personal and care that they provide is an important element in direct selling. IBOs are self-employed and can introduce others to the business, and so form their own sales network. The most successful Amway businesses enjoy a balance of merchandising AMWAY products and sponsoring distributors. Growth in your business comes from sharing the Amway business opportunity with others and helping them decide if it's right for them. This is called sponsoring. Amway distributors who sponsor others generally have higher average sales volumes than those who don't sponsor. Your "Group" is the team of distributors you've sponsored. Many you've sponsored personally, but others were sponsored by those you personally sponsored. You train and motivate your group and, as a result, you earn extra income when they earn income. As you continue to grow your business and they continue to grow theirs, you both can benefit. Like any other business, your Amway distributorship needs frequent input and activity to grow. However, whatever your goals are, you control how quickly or how slowly you build your business. After all, it's your independent Amway business. Over time, a distributorship can grow considerably. The more distributors in your group who become successful in the Amway business, the stronger your business will become, and the higher the pin levels you can qualify for. We call them "pin levels" because you

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earn incentive pins at the various achievement levels of the business. Each pin level features a set of incentives and rewards for being successful.

Income Incentive and more The Amway Opportunity offers distributors many benefits. Some are financial, others are intangibles, such as peer recognition, pride in achievement, the joy of helping others, working with family, and the esteem of owning your own business

Income potential As an Amway distributor, you can earn income many different ways. For instance, in the U.S. and Canada, you can earn income in at least 10 different ways. They include retail profit (the difference between Distributor Cost and the Retail Price) and nine different bonuses rewarding various levels of accomplishment.

Special leadership programme As you qualify at various levels of achievement, you may be eligible to attend various Amway leadership programs: Annual Business Meetings In countries around the world, company - paid invitations are extended to Amway leaders to meet in a business-building atmosphere. Variety of Special Programs

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When your business qualifies at a specific distributor level, a special invitation occurs. Imagine your special day at an Amway facility, your own success story featured in our distributor magazine, and your name and picture added to the Distributor Hall of Fame in Amway's World Headquarters.

AMWAY’S MARKETING OBJECTIVE The objective involves matching consumer needs with the product. The better the match, the more lasting the potential for the relationship between the seller and the buyer. The selling process is aided by Amway's retail strategy to provide high quality, readily purchasable items with a good environmental positioning, and offering consumers’ good value for money.

AMWAY SALES AND MARKETING PLAN Amway practices direct selling which is A method of selling goods directly to the consumer by an independent Distributor. A Distributor can then introduce further Distributors and generate income from retail profits supplemented by bonus payments based upon the total sales of the group built by a Distributor'. Income is generated by a distributor through: •

the retailing of goods to consumers. Retail margins (mark-ups) on the basic wholesale price represent income to the selling distributor.

•

Additional performance and leadership bonuses, paid on the volume of personal business of the distributor and the business volume of the distributors he has introduced to the business. 28

•

Various levels of leadership bonuses, dependent upon the overall size and shape of the business, paid on achieving different levels of business performance.

This plan, therefore, rests upon the twin foundations of retailing and sponsoring. •

Retailing - the selling of goods to consumers on which retail margins are earned and performance bonuses gained.

•

Sponsoring - the introduction of other individuals to establish and develop their own independent Amway distributorships.

Retailing enables distributors to provide immediate financial incentive rewards. Sponsoring enables distributors to replicate the base with other people, thus allowing the organization to grow.

Direct selling involves sales people showing and demonstrating products to obtain orders. As with all direct selling activities, the process involves two-way communication and this can be time-consuming. Business success and the resulting financial results are a direct consequence of effort, commitment and personal group motivation. Personal between distributors at one-to-one or group meetings provides the opportunity for individuals to discuss strategies, difficulties, levels of involvement and plans for the future. The income objectives and individual targets may be determined by each distributor based upon what he or she wants to earn. Distributors who develop direct selling businesses may come from widely different backgrounds, with vastly different levels of experience and knowledge - the common factor to their success is the desire to achieve.

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AMWAY’S STRATEGIES IN THE INDIAN MARKET

INTRODUCTION The launch of any new product requires a considerable amount of time, effort and careful planning. Research and development uses advances in science and technology to enhance products, while market research is carried out to examine changing consumer tastes and fashions. The key to successful marketing is to clearly identify at which market segment the product should be aimed, find out precisely what consumers in this target group want and then plan the marketing strategy accordingly. The focus of brand image and positioning of the product within the marketplace are of paramount importance.

All organisations face an external business environment that constantly changes. Changes in the business environment create both opportunities and threats to an organisation's strategic development, and the organisation cannot risk remaining static. It must monitor its environment continually in order to: •

build the business

•

develop strategic capabilities that move the organisation forward

•

Improve the ways in which it creates products and develops new and existing markets with a view to offering its customers better service.

Amway is an interesting example of a company that reviews its strategic capabilities and uses this review to develop its products and markets. More than 450 products carry the Amway name in the areas of nutrition, health, beauty and home. Amway also has a range 30

of products that include other well known branded goods. The company also offers a variety of third party services.

A. Amway’s Market Penetration Strategy Going for market penetration has involved Amway in making the most of current products and competences by 'stretching' those new markets. One great benefit of direct selling is that it is an immediate channel to the marketplace that offers customers a good service, while at the same time providing business opportunities for individuals. Special incentives enable IBOs and end consumers to take advantage of particular offers at certain times of the year and these incentives have also helped to increase market penetration. There are also special events such as Leadership Training Seminars. These enable IBOs to spend time with others involved in the business and to learn about 'best practice' from each other, whilst also sharing ideas.

Target Markets and Market Segmentation Segmentation: The Amway business opportunity is open to everyone, regardless of sex, race, age, religion, or political or other personal beliefs. The Amway business appeals to women, men, couples, and families from all backgrounds. Amway also offers a range of Fast Moving Consumer Goods through its five main product categories i.e. 

Home Care



Personal care



Cosmetics



Nutrition and Wellness

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But initially Amway was launched in India with only 6 products most of which were home and personal care products. Target Audience: Although it was recognised by Amway that groups such as children, men and teenagers are likely to become targets in the future, the Amway’s range of products was aimed mainly at adult females between 23 and 44 years of age. These products are daily use items catering mainly to the household sector. Through Amway’s extensive market research it was proved that that women are often looking for new products and technologies that will provide a more satisfying product experience. Thus Amway has segmented its market on the basis of typical consumer from this target group: •

is probably a professional woman

•

is very product conscious

•

wants professional, quality products

•

Regular of home care and beauty products

•

relies on recommendations from friends when making any purchase decisions

•

Makes buying decisions based on clinical evidence.

Positioning: The focus of brand image and positioning of the product in a new market place are of paramount importance. Thus, it was important for Amway to create a strong brand image for the total product range for entering the Indian market. The image created would reflect a great deal about the product and its consumers. One of the most important 32

challenges for Amway was to develop an appropriate packaging for all its products to appeal to the Indian consumer. Packaging can be crucial to the success of a new product and Amway went to great lengths to ensure that the packaging and design appealed to the target audience. The colours are light, elegant, soft and culturally appealing. Soft, metallic white gives a sense of clarity, while the blue caps represent water and blue sky. The silver metallic touches add luxury and spice. All the colours are designed to suggest cleanliness. This design was used to create a brand image. The following objectives for the brand were set: •

to increase distributor profitability and productivity by providing a new and exciting business opportunity

•

to optimise consumer convenience and value through enhanced product differentiation by providing them with an exclusive and revolutionary range of products.

Amway’s products are positioned as : “At Amway, quality means innovation in formulas and technology. A commitment to excellence backed by the resources to do the job right and confident that every product will meet your satisfaction -- guaranteed.” Having decided on the target audience, we turn our attention to the Marketing Mix:

Product: Considering the overwhelming success its receiving in the Indian market, Amway has introduced more products in each category. It is also planning to expand the

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product category by introducing Home tech and food items in India. Amway has also adapted itself to the local market by introducing the sachets and small bottle packs which can be used by people in small quantities and are very economical. With the exception of the Nutrition & Wellness and Cosmetics range, all Amway India products/bottles are manufactured through 3 third party contract manufacturers using world class technology and processes. The products match Amway's global quality standards. They carry a tamper-proof seal and a 'Customer Refund Policy'. If not completely satisfied with the product, the consumer can return it for a refund. Amway products are environment friendly, and are not tested on animals. Amway encourages the return of its used product bottles for re-cycling and to prevent their misuse. At present, Amway India's product portfolio comprises of:: •

Ten products in the Personal Care category,

•

Eleven in the Home Care category and

•

Six in the Nutrition & Wellness category.

•

Seven in the cosmetics category

•

One product in the Agricultural Category.

•

The other products are two soft toys.

•

Amway Sales aid.

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Amway's product range demonstrates its adaptability to the market based on a close, firsthand understanding of the Indian consumer's nuances. An aggressive product launch plan introduces new products every few months. In the coming months, Amway will further expand its product portfolio through the launch of several new core line products. Amway had initially started with 6 products for the Indian market in 1998. At present it has about 45-50 products in its various product categories which is about 11% of its total product category.

Pricing: Amway products are price competitive and overall a good value for money. While some of its products are more expensive than their counterparts, others are less expensive and most are competitively priced. Products that are more expensive usually have greater features and benefits over competitive goods. Many AMWAY products are highly concentrated, meaning a single purchase lasts longer. On a cost-per-use basis, these products are priced very competitively from their local brands. The consumer is the ultimate judge of price and value, and Amway’s sales success over the years speaks volumes about its product value and customer satisfaction.Amway’s pricing strategy remains the same but with the introduction of sachets and small bottles, people can now enjoy its products at an economical rate.

Place: Amway India enterprise is redefining its structure by overhauling its supply chain. The network marketing company is looking at reducing the lead time by moving closer to the point of consumption, improving its information system and reaching out to homes through a better delivery system. It is expanding its presence across the country and adding new products to its portfolio. The company has done away with its central warehouse at Nagpur and opened four regional ware houses in Bangalore, Kolkatta, Delhi

35

and Mumbai that are serviced directly from the manufacturing units. The company today has 36 offices serving over 385 locations across the country. It plans to add 14 more offices to its network this year taking the total number of offices to 50 which will serve over 450 locations. These new offices will be opened at strategic locations spread across the country and governed by an unwritten rule of “Be present where Amway distributors are.” The Company Amway India launched with 5 offices (New Delhi, Mumbai, Bangalore, Chennai, Calcutta) and a Central Warehouse (Nagpur), which serviced 150 locations. At present Amway India has 32 offices, and a reach to 352 locations. Promotion: Amway promotes its products through its Independent Business Owners. It has a heavy accent on training. Every Amway distributor enjoys free, unlimited access to training sessions. These training sessions impart product knowledge, comprise motivation sessions, and seek to optimise the business potential of participants. Recently Amway has also started advertising about its products in various Newspapers and Magazines to promote its products and reach out to their target markets. Amway has come up with a vast promotional strategy to reach out to its customers and other potential buyers. Amway's Promotion channels There are five different promotion channels:

36

Corporate Events Corporate events include specially arranged functions, such as product fairs, conferences and seminars, which distributors at different levels are invited to attend. Face-to-face communication at a range of events helps Amway and its distributors to get to know each other. They also provide an opportunity for distributors to get to know each other and are useful for relaying messages, giving advice and generating personal discussion. Events include: •

Pace Setter - a reward incentive to help new and existing distributors reach the 6bonus level within three consecutive calendar months.

•

It also encourages a balanced business, with equal amounts of retailing and sponsoring - essential for long-term success and profitability.

•

Direct Distributor Seminar - allows newly qualified Direct Distributors to meet the Amway Management Team, tour the UK Headquarters, attend key informative, motivational business sessions and go to the New Direct Distributor Gala Dinner.

•

Leadership Seminar - where distributor leaders who have achieved a target criteria set by Amway, travel for a seven day trip with compliments of Amway to

37

some of the world's finest beach locations and hotels where they attend a number of business sessions and exchange thoughts and ideas with corporate staff. •

Launch into '03 - a major annual launch of new products and services presented by a road show of eventTraining

Training builds the skills and knowledge of distributors and therefore improves competence levels. For Amway, the starting point of the training process is to identify the skills and knowledge necessary for distributors to carry out their role. Acquiring product knowledge is an important aspect of training and preparation. As Amway relies upon the personal service of its distributors and the quality of its products, it is essential that distributors are not just shown how to use products but also how to merchandise them to their best advantage. Training may involve either Corporate or Group (Line of Sponsorship) Training on specific product brands. Distributor input into these sessions provides informative help for the management of independent businesses. Once a distributor has achieved an advanced knowledge of a specific brand, they can then receive the training and tools required via a 'Train a Trainer' session whereby they will be taught how to train their own group, therefore maximising their expertise.

Lines of sponsorship

Amway is essentially a people-based business - without people, the business cannot expand. The business of each distributor grows via new customers and through the sponsorship of new distributors. 38

Established distributors are involved in helping newly sponsored associates to merchandise Amway products. Distributor groups meet to discuss company procedures and their goals. The groups also discuss new product launches and promotions, the istration of their businesses and new and existing distributors. These lines of sponsorship provide constant, face-to-face from professional associates.

Publications Written communication is useful as a permanent source of reference. Amway uses a range of written communications to promote its ideas and products across its target audience. These include: •

Amagram - This magazine is mailed directly to all Amway distributors in the India. Amagram is used to communicate information about new products, promotions, community news, distributor events and recognitions as well as news of other s throughout the Amway world. Amagram shows how distributors can make more out of their business. It is also used to help distributors understand the philosophy by which the business operates and the legislation regulating the Direct Selling Industry.

•

Special Literature - Occasionally, Amway designs a brochure or leaflet which is used to address a particular change or launch, e.g. new car care product range.

B. Amway’s Market Expansion Strategy

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One method used by Amway involves expanding the ways in which individuals can be involved with the Amway business. Amway has developed a structure known as the IMC model. This increases the number of ways through which people can become involved in the Amway business. Each of the letters IMC stands for a different type of involvement. •

I - Independent Business Owners (IBOs)

•

M -

•

C - Clients (customers) of the IBOs.

are allowed to purchase Amway products at a price equivalent to that paid by IBOs, but do not participate in the Amway Sales and Marketing Plan. They are a new type of 'customer' who deals directly with Amway.

Target Markets and Market Segmentation Segmentation:

Geographic: Amway is now trying to reach people by setting offices even in the remote areas of the country. Amway’s distributors are now spread all over India even across the rural areas.

Demographic: 40

Age: Amway products are meant for people of all age groups. It includes a wide variety from soft toys meant for children to health and nutrition products for the entire family. But to the Amway as an Independent Business Owner a person should be above 18 years of age.

Income: Amway business opportunity is more popular among the middle income group since it gives them a chance to increase their income level by using its products and also making others use them as well.

Gender: Majority of Amway products cater to the needs of Women Eg: cosmetics, home care and personal care. But Amway is introducing many new products in the Indian market the choices are increasing for both men and women.

Family Life cycle: Majority of people ing Amway are young women and newly married couples.

Occupation: Most of the people who are engaged in the Amway business are either professionals or small businessmen.

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Psychographic

Personality: It appeals to people who are ambitious and want to earn high incomes with in a short span of time. Amway through it unique business opportunity gives them a chance to earn enough income and show them the path to realise their dreams.

Social Class: Majority of Amway people comprise of working class, middle class, Upper-Middle class. Behavioral Benefits: The consumers enjoy the benefit of using a high quality product which is available to them at their door steps. Loyalty status: People working with Amway have a very high loyalty status. They slowly start replacing Amway products with other local products and can continue to use these products for life. Attitude towards product: Amway people are usually very enthusiastic and optimistic in everything they do. Target Audience: -

Amway’s products appeal to a large number of buyers all over India.

-

It is targeting people who believe in using high quality products which are conveniently available to them.

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-

Amway business opportunity is attracting the middle income group to earn extra income.

-

Amway’s target audience include a lot of professionals and young couples who are very ambitious to earn high level of income in a short span of time.

-

Amway’s products being good in quality are also very much preferred by the upper class segment who can easily afford the pricing but they don’t want to get involved with the business opportunity. They are mostly associated with Amway as their customer.

Target group Men – Professionals and small business owners Age

- 23 - 50 years

Income Status – Working class, Middle income, upper middle income

Women – Professional and housewife Age – 20 – 50 years

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RESEARCH METHODOLOGY

OBJECTIVES

Primary Objective: The main objective is to carry out an in-depth study of Amway’s overall marketing strategies in India. In order to achieve this primary objective, I have focused my research in three main segments:

A. Where the Company stands at present. B. Where do they plan to go with their objectives for the Indian Market? C. How do they plan to achieve the set targets?

This report is appropriate for understanding the various concepts used in international marketing. It is a complete information guide with relevant information taken from reliable sources, questionnaire and interviews with people who have achieved success through this organisation

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METHODOLOGY The Methodology adopted was combination of: Primary Data Collection:  Direct Interview with people who are associated with the Amway corporation in India  Questionnaire filled by a selected group of people.

b. Secondary Data Collection: The data has also been collected from:  Books  Magazines  Editorials  Internet  Nottingham e-Library  Amway Business Planner  Amway Opportunity Brochure etc.

Sampling Plan: I have tried to gather data on the basis of both the interview and the questionnaire. Survey - 1 had been conducted by asking the people to fill in the questionnaire and express their views about the company. Survey – 2 had been conducted in order to get some valuable data which has been collected through direct, telephone and online interviews with people associated with Amway to get a better insight of Amway’s operations in India. 45

Survey -1 Sample Design: Questionnaire method Sample size: 100 respondents Sample Unit: IBOs, Customers and others

Segment

Respondents

Women

55

Men

36

*Others

9

Total

100

*Others include elderly people and children.

Survey -2 Sample Design – Interview method Sample size – 7 Sample Unit – IBOs and people working in Amway India Corp.

Segment IBOs

Respondents 6

Amway India employee

1

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My project involves the study of Amway’s marketing strategies in India. I had planned my work on the project along the following lines:

1. Data Collection 2. Data Analysis 3. Data Compilation 4. The preparation and presentation of the report.

My first step in data collection involved meeting my guide for having a general understanding of what my product should be like and then some specific understanding of the company.

After deciding upon the broad frame work of my project, I proceeded on a search for secondary sources of data. After analysing the data I prepared, I proceeded towards the primary sources in which direct, phone and online interview were conducted so as to substantiate my research with more facts.

Survey 1 - Rationale Behind The Questions The main reason to formulate this questionnaire was to find out as to why more and more people in India are getting attracted towards Amway. Is it because of its unique business opportunity or the convenience of a wide variety of fine quality products available the customer’s door step.

47

The initial demographic information will help in understanding of Amway’s popularity among a certain group of customer and how they perceive of it.

1. Are you an: 

Independent Business Owner



Customer of Amway products



None of the above.

This question is necessary as it will be able to provide us with a variety of views as to how Amway is being perceived differently by people based on their association with it.

2. What is your income level: (per Month) 

Below Rs.10, 000



Rs 10,000- Rs 20,000



Rs 20,000- Rs 30,000



Rs 30,000- Rs 40,000



Rs 40,000- Rs 50,000



Rs 50,000 and above

This question will help in understanding which income categories of people are more likely to the Amway business because of it unique income opportunities.

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3. a. How do you feel are the Amway products priced: (Multiple Choice) 

Too expensive



Expensive



Economical



Cheap



Poor

b. Do you think they are fairly priced as compared to other similar products available in the retail stores? Yes / No

This will indicate people’s perception of Amway’s product prices and whether they feel that the prices are in compliance with the product quality or not. It would also be able to give idea about customer’s preferences for Amway products in comparison to other products easily available at the retail outlets.

4. How would you describe the quality of the products:



Excellent



Good 49



Average



Bad



Poor

This question is necessary for understanding whether the Amway products meet the customer’s expectations for being the high quality products as being positioned by the company.

5. Are these products easily accessible? 

Yes



No

Amway being a direct selling company totally relies on the door to door delivery of products. Thus it is important to know if the customers ever faced any dissonance by Amway in its product and service delivery.

6. What is it that attracts you more towards Amway? why?



Retailing



Sponsoring

This is an important question through which we can understand the main reason why people would like to associate themselves with Amway. Is it mostly because they like

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consuming a good quality product or is it the unique business opportunity that Amway provides which is a source of an extra income.

7. How did you learn about Amway? 

Independent Business owner



Meetings/Events



Newspaper



Peers



Internet



Others, Please specify________

This will indicate the most popular channel through which Amway is reaching out to the potential customers.

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LIMITATIONS OF THE PROJECT

• The company or the IBO’s were hesitant to give time and good information to students, so information required for the primary research which is a basic need of this project was not easily available in required quality and quantity.

• I have conducted this type of an elaborate and analytical project for the first time so information might not be utilized adequately.

• Time constraint.

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FINDING & ANALYSIS

SURVEY -2 RATIONALE BEHIND QUESTIONS Guidelines for consulting people associated with the Amway Corporation. 1. What is Amway’s Target audience? To get a clear understanding of who are the main s of Amway products and business opportunity. 2. a. What is Amway’s expansion strategy? b. How is it planning to go about it? This will indicate Amway’s plans to increase its market share in India and the strategy it uses to achieve it. 3. How is the company planning to expand its home delivery coverage? This will indicate the company’s idea of expansion by making its products available at every corner of the country 4. a. How many products has Amway launched in the Indian market? b. How many more are they planning to launch and in what product category? This will indicate the increasing demand for Amway’s products in the Indian market and highlighting the emerging trends of both buyers and sellers.

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5. Are all these products sourced in India? This will indicate Amway’s commitment to the quality of its products and how they try to maintain the same product standards in India. 6. a. With what companies does Amway have strategic alliances in

India?

b. What benefits the IBO’s/Customers drive from it? This will indicate Amway’s value added services to its distributors by forming strategic alliances with companies which have products and services that are relevant and of use to them. 7. Has there been any changes made in the Amway product offerings according to the Indian Market? This will indicate the extent to which Amway has adapted its product keeping in mind the needs of the Indian customers. 8. We have heard Amway products are expensive. Why is this? Since Amway products are considered highly priced, this question will justify Amway’s reason for their expensive products. 9. What does Amway see as the role of Women in the Amway business? This will explain Amway’s strategy as to why there are majority of the women doing the Amway business. 10. a. What is the difference between Amway and illegal pyramids?

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b. I have heard rumors that Amway is a cult? Is this true? This will help clearing people’s doubts about Amway as not being associated with illegal pyramids or cults.

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RESULTS OBTAINED THROUGH THE INTERVIEW 1. What is Amway’s Target audience? Amway’s products are used by people of all age groups. It basically depends on the distributor’s way of targeting people. So for every distributor there may be a separate target audience. There has also been an overwhelming response from people in rural areas and far away states like Nagaland, Jammu and Kashmir, Arunachal Pradesh etc how use Amway products and make use of the Amway business opportunity. 2. a. What is Amway’s expansion strategy?

b. How is it planning to go about it? a. Amway plans to add more and more people as its distributors to facilitate more sales of the Amway products. b. They plan to achieve this by increasing the consumption of their products i.e the products are consumed by the distributor as well as sell

them to their respective

customers. 3. How is the company planning to expand its home delivery coverage. Home delivery coverage will be expanded through e-commerce, setting up order booking centre at the courier office so that the products can be ordered through telephone or in person and this request can be forwarded to the Amway office whereby from there they are delivered to the respective customers.

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4. a. How many products has Amway launched in the Indian

market?

b. How many more are they planning to launch and in what product category? a. So far Amway has launched about 45-50 products in the Indian market which is about 10-11% of its total product range. They will introduce more as the market gets matured and people are ready to accept new products. b. Amway is planning launching its new product categories in India i.e Home tech and food items. In the existing categories they are planning to bring more indigenous products eg: persona powder etc.

5. Are all these products sourced in India? Almost all Amway India products are manufactured in the country through 3 third party, contract manufacturers (Sarvotham Care, Hyderabad ; Jejuplast, Pune ; Naisa Industries, Daman). To bring the identified contract manufacturers' production facilities and skills to international standard, Amway has invested in excess of US$ 4 million (approx. Rs 17 crore*). The transfer of this state-of-the-art, world class technology, has been free of cost.

6. a. With what companies does Amway have strategic alliances in India b. What benefits the IBO’s/Customers drive from it.

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In India Amway has tie ups with Bharat Petroleum Corporation Ltd. for its customer loyalty programme and has come up with co-branded Amway-BPCL Petro card for its distributors. The company also has strategic alliance with standard chartered Bank for a co-branded Amway - SCB credit card for the distributors. b. The benefits the IBOs gets is in the form of additional Point Value which adds up to their total earnings from Amway. On collecting a certain point value they can also redeem it for a free gift.

7. Has there been any changes made in the Amway’s product offerings according to the Indian Market. To meet the local market requirements Amway has now introduced sachets instead of big bottles which are more economical and can also be given to customers on trial basis.

8. We have heard Amway products are expensive. Why is this? Amway products are competitively priced and offer a good value for money. Many AMWAY products are highly concentrated, meaning a single purchase lasts longer. On a cost-per-use basis, these products are priced very competitively from their local brands.

9. What does Amway see as the role of Women in the Amway business? Amway has helped to empower millions of women around the world by offering them a low-cost, low-risk opportunity to achieve their goals by owning their own business. This

58

fact is especially gratifying to us. There are countless examples of single women who have achieved success in the Amway business, just as there are of women who have succeeded in partnership with their spouses.

10. a. What is the difference between Amway and illegal pyramids? b. I have heard rumors that Amway is a cult? Is this true? Unlike illegal pyramids, Amway and other legitimate direct selling business. A pyramid scheme is something in which a person gets benefited the most by other people working for him. Eg: An owner of a big company gets paid more while the employees work the maximum number of hours, but in case of Amway, people gets paid according their capability to work. The harder they work, the more they earn. The best answer to this question is that pyramid schemes typically operate for a few months before they ultimately collapse and disappear. Amway, however, has been in business for more than 40 years. b. No, Amway Corporation is a business and, similar to other large and established companies, has a distinct environment defined by shared business goals. Shared business philosophies should not be misinterpreted as a cult. While unique as individuals, Amway distributors share a desire to succeed in a business of their own and recognize Amway as an excellent opportunity to achieve their goals. New distributors receive training, motivation and in building independent businesses, and are rewarded for their achievements. A close look at Amway will reveal that any reference to Amway as a cult is incorrect.

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QUESTIONNAIRE ANALYSIS

Q1.

60%

55%

50% 40% 30%

25%

20%

20% 10% 0% Independent Business Owner

Customer of Amway products

None of the above.

Q2. 35%

30%

30%

25%

25% 18%

20% 15% 10% 5%

10%

12%

5%

0% Below Rs.10, 000

10,00020,000

20,00030,000

30,00040,000

40,00050,000

50,000 and above

60

Q.3

a) 40%

35%

35%

30%

30% 25%

20%

20% 15% 10%

7% 3%

5% 0% Too Expensive

Expensive

Economical

Cheap

Poor

b)

49% 51%

Yes No

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Q.4

45% 40% 35%

40% 35%

30% 25% 20%

15%

15% 10% 5% 0% Excellent

Good

Average

0%

0%

Bad

Poor

Q.5

40% Yes No 60%

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Q.6

50%

50%

Retailing

Sponsoring

63

0% 5%

Others

10%

Internet

30% 20%

Peers

5%

Newspaper

10%

Meetings/Events

60%

Independent Business owner

Q.7

55%

50%

40%

10% 0%

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Q.8 60%

50%

50% 40% 30% 20%

15%

13%

12%

10%

10% 0% Very strong

Strong

Moderate

Weak

Low

Q.9 60%

50%

50% 40% 30%

25%

25%

20% 10% 0% Very much

Moderate

Not so much

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Q. 10

70% 60%

60%

50% 35%

40% 30% 15%

20% 10% 0% Yes

No

May be

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INTERPRETATIONS

1. Most of the people who filled up the questionnaire were Independent Business Owners followed by regular customers of Amway products which were

2. 57% of the people fall in the Income group of Rs 20,000 – Rs

30,000 per

month. This proves that Amway’s major consumer group lies in this income segment that get a chance to use quality products at the same time earn money out of it.

3. According to this survey majority of the people feel that Amway products are expensive but at the same time they provide various explanations for them. Eg: If asked why a person would spend Rs. 290.00 for 4liter of see spray (household cleaner) instead of buying same quantity of Colin which is worth only Rs. 252. The obvious answer one can expect is that Amway products are in concentrated form and last for a longer period of time. In this case one should consider per unit cost of the product which would make Amway cheaper than other products. Some people from the middle income group also find these products very expensive at initial stages but once they start

earning through Amway they don’t mind

spending on these products any more. At the same time while answering the question related to price, on the contrary to the above statements some people also feel that they are not fairly priced as compared other product in similar categories.

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4. 90% people in the sample group are satisfied with Amway’s product quality and find them excellent.

5. Almost everybody agrees that they have easy access to Amway products whether directly from the company or through the Amway distributors.

6.

87% of the people as per the sample group feel that they are more attracted to Amway because of its unique business opportunity. They get to use the products of an excellent brand and at the same time benefit from the income opportunities provided at Amway. Some people also feel that product has an important role to play in all this because if the product’s quality was not upto the desired standards, the business opportunity no matter how good it is, will have no meaning. So it’s the combination of Amway’s excellent quality products and the income opportunities that has brought more and more people to the Amway family. It is because of this winning combination that Amway has been so successful over the last 4 decades and still running strong.

7. Amway’s IBOs are a strong medium through which Amway reaches out to the masses. It conducts special training programs for its IBOs to use their products and at the same time motivates them to refer these products to their family, friends, relatives etc. Amway markets its products through the IBOs and in turn rewards them depending on the number of sales they make.

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On the basis of the above report we can derive the following conclusions: Low start up cost With an Amway Business Kit being the only start-up cost, Rs4400 virtually anyone can own an Amway business. Compared to other business opportunities, initial costs for starting an Amway business is intentionally low, priced affordably for nearly anyone with a desire to invest in their future. Low risk Amway’s product-buy-back policy and no inventory requirement ensure a very low risk when starting an Amway business. Its “Satisfaction Guarantee” has always been a measure of confidence in the quality and value of AMWAY products, one more way Amway s the business opportunity for distributors. Performance based Amway is a performance-based business that rewards people in direct proportion to their effort. The bigger the financial goal, the more time and effort a distributor will need to put into his or her business. With an Amway business, a distributor can work as much or little as he or she likes. The rewards are based directly on the distributor's accomplishments. Direct selling is trend Thirty-four million people worldwide are engaged in direct selling, which is a $82 billion industry (Source: DSA 2002). As people become busier, they are looking for ways to

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save time on routine tasks, such as shopping for everyday needs. Direct selling fills this need nicely, because Amway distributors deliver products to their doors. In addition, Amway is one of the oldest and largest direct selling companies in the world. Flexibility Goals and rewards are different for each distributor. You have the flexibility of working part time while keeping a full-time job or building an Amway business into a full-time career. You choose the time you invest in building your Amway business. Product The Amway business opportunity is ed by a diverse line of hundreds of quality AMWAY products and, in many markets, thousands of other brand-name products and services. Amway has established a reputation for innovation in developing top quality products and packaging. Corporate More than 12,000 people worldwide are employed in Amway manufacturing, istration, and distribution facilities totaling 10 million square feet (929,000 square meters). Amway manufactures products in the United States, China and Korea and maintains product warehousing facilities around the globe. Equality of opportunity Anyone starting an Amway business gets in at the same level. Each new distributor has the same opportunity to sur the most successful distributor, and the business opportunity is continually improved. The Amway opportunity has been imitated often, but the level of Amway provides its distributors is difficult to duplicate. 70

CONCLUSION Positive side to Amway  The only positive side to Amway is the chance to make money. It is the chance to get oneself involved in a trade as a side business, especially if one is trying to recover from a failed (or failing business) or one has lost one's job. To the extent that a few people will surely make money, the system works.  Amway has also helped solve the problem of unemployment in the country and given a hope to earn high incomes through their independent business to millions of people all over India.  It is involved in a lot of community services. Amway feels that it is their responsibility to serve the community in which they live. Through Amway Motivational Organisations (AMOs) it has try reach out to a lot of handicap people and provided them with free services at any time. It is also involved in helping the blind by providing them with proper education. Amway is also actively involved various environmental projects such as planting more trees etc.  Amway offers a wide range of good quality products which are easily available to people at their door steps.

Underside side of Amway  Why Amway Will Make Money Even If You Don’t An interesting calculation: If 1 million people sign up, Amway will receive Rs. 4400 million (Rs. 440 crores or US$ 206.80 million) in up-front cash from this ‘cash rich’

71

country. They will have earned all this money without having sold a single one of their very expensive products but just by sponsoring people to this business. 

How This Is Done At The Expense Of The Middle Class

While doing this research, I have found that the only way to succeed in the business is to be able to sign up vast numbers of people and make them use the products for themselves. The other way is to run around peddling soap from door to door after having bought it from Amway at a discount. This is exactly where the Amway business strategy comes into play. It makes people hand over their savings to Amway to buy them a dream. If all Amway did was to manufacture and sell their products through door-to-door salespeople there would be no problem. The choice of purchase is left up to the individual. By asking for deposits from buyers —in the beginning and again every year as a renewal fee— it looks like Amway seeks to build a captive consumer base. Once someone has paid Rs. 4,400 to Amway, he is naturally disinclined to buy Nivea hand cream instead of Amway Gly-Honey hand lotion. The element of personal choice is thus prejudiced. By involving their "distributors" in a complicated system of down-the-line commissions they are given the impression that there is a limitless market for Amway products. The truth is that the market share for Amway is as limited as the market share for any other product. Traditional retail trade is not about to collapse and because of the expensive price structure; the growth of that market is restricted to the very wealthy.

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Calling this "an opportunity to use world class products" is a bit like calling the purchase of a Mercedes Benz for Rs. 25 lakhs an "opportunity", when an efficient Maruti 800 for one-tenth of that price will do nicely. With all these constraints, telling people of profit mechanisms tied into several thousand people buying Rs. 1,500 worth of Amway soaps every month seems laughable in a country where entire families lead their lives on less money.

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RECOMMENDATIONS After conducting an in-depth analysis of Amway’s various marketing strategies in India, I would like to suggest a few recommendations

Product: To prolong the life-cycle of a brand or product range, an organization must inject new life into the growth period through readjusting the ingredients of the marketing mix. To ensure the Amway range of products would stay in line with evolving market trends and tastes, Amway should set about upgrading its brand with the additional objective of increasing its global competitiveness. They should introduce more products which are made in India. Eg: Persona Powder. This product will also give the IBOs and customers the cost advantage. Price: As a result of my research I have discovered that all the Amway products are expensively priced. If they are trying to target the middle income group they must reconsider their price structure once again and make it a bit economical for the Indian audience. This way may be they can enjoy a larger market share, as it could be one of the reasons why some people may be hesitant to the Amway business.

Place: There is still a long way to go for Amway to have its presence all over India. But keeping in mind the overwhelming response it is getting from the rural segment of the country to the Amway business they should focus on the needs of these people i.e to make the products available to them at their conveniences. They should also try to Manufacture their products in India, which will then reduce the cost pressure on its customers.

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They should also try to set up their offices in states like Kerela, because Kerala is a very good market for the Direct Selling industry for various reasons; the two most important factors seen favouring the industry are the high literacy rate and the willingness to try something different.

Promotion: Sine India is advancing on the technological front, I feel its time to Introduce the e-commerce Amway i.e Quixtar in India. It will help in enhancing the Multi-level marketing to a great extent. It will also create a new business experience for the Indian IBOs and will also help in promoting their sales.

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BIBLIOGRAPHY

This project work is based on the information that has been collected from various sources. To mention a few, information from some websites, newspapers and magazines facilitated the preparation of this project.

 Books and Secondary data •

Amway Company Planner

•

Amway Opportunity brochures

 Websites •

www.amwayindia.com

•

www.amway.com

•

www.onlinemlm.com

•

www.amquix.50megs.com

•

www.skepdic.com

•

www.getfacts.com

•

www.cocs.com

•

www.msn.com

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 Newspaper and Magazine •

The Hindu, Saturday May 10, 2003

•

The Financial Express, February 1, 2002

•

The Hindu, February 16, 2001

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QUESTIONNAIRE

Name: ___________________________

Age: _____________________

Address: _________________________

Status: ___________________

Occupation: ______________________

Sex: _____________________

1Are you an: 

Independent Business Owner



Customer of Amway products



None of the above.

2What is your income level: (per Month) 

Below Rs.10, 000



Rs 10,000- Rs 20,000



Rs 20,000- Rs 30,000



Rs 30,000- Rs 40,000



Rs 40,000- Rs 50,000



Rs 50,000 and above

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3a. How do you feel are the Amway products priced: 

Too expensive



Expensive



Economical



Cheap



Poor

b. Do you think they are fairly priced as compared to other similar products available in the retail stores. Yes / No

4How would you describe the quality of the products: 

Excellent



Good



Average



Bad



Poor

5.Are these products easily accessible? Yes/No

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6. What is it that attracts you more towards Amway? Give reasons to your answer



Retailing



Sponsoring

7. How did you learn about Amway?



Independent Business owner



Meetings/Events



Newspaper



Peers



Internet



Others, Please specify________

8. How do you rate the presence of Amway in the market?



Very strong



Strong



Moderate



Weak

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9. Rate the appeal of Amway’s ment? 

Very much



Moderate



Poor

10.Do you thing the products of Amway are environment-friendly? 

Yes



No



Maybe

Priyachodhary bba gen 3rd sem section A

Priya Choudhary Sec A General , 3rd Semster B.B.A

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