CHAPTER- 1

Introduction

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Marketing of Amway products

Introduction

The objective of modern marketing is to make profits through satisfying consumer` needs

and wants. Hence, the marketers have to understand the real needs, wants, beliefs and

attitudes of the consumers towards their products and services. Today, network

marketing is a multi-billion business. A number of companies have adopted this business

model. It has grown into one of the driving forces of the 21stcentury economy.

Networking marketing is now regarded by many business leaders as the business for the

future. But this marketing method was misunderstood as a get-rich-quick scheme. It is

also too common for the network marketers world wide to answer the legality and

soundness of their business.

Network marketing was actually pioneered in the year 1945 by Carl Rehnborg, the first

person to introduce a compensation plan to market his nutritional products. His company

was originally called California Vitamin company and on latter it was renamed as

Nutrilite products lnc.

Using a multi-tired plan, it allowed any Nutrilite distributor to get a 3% commission from

a downline on the top of the regular commission from its own sales. With this system,

Nutrilite products inc achieved stunning results as compared to the other companies that

were using direct selling method.

Today, Amway India is one of the leading network marketing companies in the world. In

India, it is the founder member of the Indian Direct selling Association. The Indian Direct

selling association is an industry regulatory and promoting body with several reputed

international and national companies in direct sales as member. The Association swears

by its rules called the code of ethics to which every member adheres to. To administer

and execute the code, a code of administer has been appointed.

Amway allows people the opportunity to enhance their life style by owning their

business. It provides the chance to market a line of quality Amway products such as

personal care, home care and like. The business opportunity provided by Amway can be

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pursued on a part time or full time basis, which involves minimum risk and low up front

investment, yet with a good yielding potential. Amway has a heavy accent on training.

Every Amway distributor enjoys free, unlimited access to training session. These training

session impart products knowledge comprising of motivation session and endeavour to

optimize the business potential of participants. Men and women from different walks of

life with vastly varying socio-economic and educational backgrounds have emerged as

successful Amway distributors. Besides economic independence, the Amway experience

has granted them a sense of self actualization.

The direct selling industry is one of the most potent socio economic forces of the late 20 th

century. Direct selling is remarkable business model, which brings the market to

customer and offers a unique business opportunity. Direct selling can be best be

described as the selling can best be described as the selling of products and services

directly to the customers in face-to-face manner through demonstration of usage by an

independent direct sales person, often called an in dependent business owner. Amway,

the leading direct selling industry sell its products through independent business owner

instead of the traditional retail shop marketing approach of hiring sales staff, conducting

advertising campaigns or marketing blitzes.Independent business owners sponsor and

train new independent business owner to expand the sales network. They are paid

commission when they sell products or on the sales of the products by an independent

business owners sponsored by them. These commission however are paid directly by the

company and do not impinge on the earnings of sponsored independent business owner.

The industry has made a unique contribution in transforming individuals from diverse

strata of society successful entrepreneurs. Women who have been traditionally confined

to a life of state domesticity have benefited tremendously. Over 70% of the distributors

engaged in direct selling in India, are women. It is estimated that these distributors earned

rs. 500 crores in the year 2000.

Direct selling benefits the consumers because it sells high quality products at the

consumer`s convenience often at his/her home work place. Customer value the advantage

of convenience, personalized attention, demonstration of usage and a wide choice of

products backed by customers satisfaction guarantee.

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Amway India faces stiff competition from direct selling companies such as

Modicare,Oriflame and the like. The present study is concerned with marketing of

Amway products in Maduri.

For the modern business organisation, developing goods or services is not enough. Goods

must also be available in the right quantity and at the right location in order to reach the

customer. For the organisations themselves, distribution strategies should never be

underrated. developing an effective way of reaching customers may be the cornerstone

upon which their successes are founded. Take Reader's Digest and the unique way in

which it sells products to its customers. What about Vision Express and the revolutionary

reforms it has prompted in the sale of glasses? One reason for their success is that they

reach their customers in a better and more appropriate way than their competitors.

This case study focuses on Amway and the success it has achieved using the oldest form

of distribution - direct selling.

Founded in Ada, Michigan in 1959, Amway has become one of the world's largest 'Direct

Selling' companies. The company's first product L.O.C. was one of the earliest

biodegradable cleaners and is still marketed by Amway.

Today, the company has developed into a global corporation selling more than 400

products and employing in excess of 13,000 people, in over 70 countries and territories

around the world. It manufactures and markets products, which range from household

cleaners, laundry products, toiletries, cosmetics and housewares to vitamins and food

supplements. Amway also markets products on behalf of other manufacturers, such as

Talkland, Bosch, Black & Decker, Kenwood, Pierre Cardin, Aiwa and Philips.

Amway is one of the world’s leading direct selling companies operating in over 80 countries around the world. As business has expanded, we have connected with people by offering them the opportunity to experience the business potential of our quality products. In this regard, our vision of building a brighter future by Helping People Live Better Lives today is reflected. We respect our employees, recognizing their dignity, rights and contribution as individuals. We are committed to providing a workplace that stimulates creativity, quality and dedication. We offer training to

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encourage productivity, achievement and personnel satisfaction. We strongly believe that Amway is where you can create you own destiny.

Be part of a 20 Billion Baht success story!!! We are looking for partners on the road of success. Then come and join a truly global enterprise that has won the Award for Welfare and Labor Relations for 3 years.

Amway (Thailand) Ltd is looking for qualified candidates to become important players in the challenge of building a 20 billion baht business.We’re committed to supporting and developing our people, and provide continuous training, equipment, and techniques to enable you to achieve your full potential. You will also enjoy an attractive salary and remuneration package designed to enhance your lifestyle.• Guaranteed 2 months bonus plus performance bonus, full employee welfare, on-going training reflecting our commitment to your development, an opportunity to shine with an international business leader

Founder's Fundamental

Rich DeVos and Jay Van Andel built the Amway business on the following principles,

which they and their families believe constitute a sound foundation for a meaningful life. 

Freedom

Provides conducive environment in which to live, work, achieve and grow. The Amway

business recognizes, supports and expands freedom, which is both personal and

economic. It gives the freedom to operate as independent business people and conduct a

full-time or part time business.

Family

The family is our primary social structure, providing love, heritage and legacy. The

Amway business respects and supports the family, as evidenced by the Amway Board of

Directors and the prominence of “family” in Amway business. Amway provides the

opportunity to build a family-owned business which can be passed on to generations.

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Hope

Hope gives us the power to transform our lives in positive ways. It is a force that allows

us to envision dreams, establish goals, and achieve great things. By offering hope, we

open windows of possibility for others, irrespective of social status, profession or

educational background.

Reward

Reward involves the shared action of giving and receiving. Reward helps us grow, either

as the giver or the recipient, and there are many ways we are rewarded. Reward is

integral to the Amway business as we help each other grow as people and as

entrepreneurs. Hard work is followed by high rewards.

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CHAPTER – 2

HIST0RY OF THE

ORGANISATION

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History of Amway

Amway Corporation

Amway Corporation was started more than 40 years ago by Jay Van Andel and Rich

DeVos. Its history grew out of an earlier business run by Rich and Jay, who sold

NUTRILITE™ supplements.

Beginning with a highly effective cleaning product that is still part of the Amway

product range, L.O.C.™ Multi-Purpose Cleaner, Amway expanded rapidly, offering

people the chance to become Business Owners selling Amway's growing range of

products. Amway quickly achieved the position it still holds, as a global leader in

multilevel marketing.

From early on, Amway was dedicated to providing quality products as the foundation

of an independent retail business. That dedication led the company to invest in state-of-

the-art product development processes, supported by the finest quality manufacturing

and distribution facilities to be found anywhere in the world.

Today, our business operations reach into more than 80 countries and territories

worldwide and we support more than 3 million Business Owners. We are part of an

international organization with annual sales in excess of US$6.4 billion and we offer

more than 450 different company-branded products and services globally.

We offer a unique business opportunity rooted in a vision of helping people live better

lives. It is an inspiration and an opportunity that is being taken up by millions of people

all over the globe who see it as a way of achieving their own personal and business goals.

Amway India Fact sheet

Amway promotes individual entrepreneurship through its innovative direct selling

approach of world class consumer products. Amway India is the country’s leading direct

selling FMCG-company which manufactures and sells world-class consumer products. Its

business opportunity and all its products are  covered by 100% Money Back Guarantee.

Amway sources all its products from within India, thereby providing stimulus to the local

manufacturing industry. 

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CORPORATE CREDENTIALS

Amway India is a wholly owned subsidiary of US $ 7.2 billion Amway

Corporation, Ada, Michigan, USA. Amway Corporation is one of the largest Direct

Selling companies in the world. It has a presence in 80 countries & territories.

Established in 1995, Amway India commenced its commercial operations in May

1998 and has emerged as the largest Direct Selling FMCG Company. The Company is

headquartered at the National Capital Region of India - New Delhi.

Amway has invested in excess of US $ 35 million (Rs. 151 crore) in India of this;

US $ 6 million (Rs. 26 crore) is in the form of direct foreign investment.

Amway India has 400 full time employees and has generated indirect

employment for 1,650 persons at all the contract manufacturer locations.

The Company has provided income generating opportunity to over 4,50,000

active independent Amway Business Owners.

Amway India provides free and unlimited training to all its distributors to help

them grow their business. Amway India conducted over 29,000 training sessions

during in the past 12-months with an attendance of over 1.5 million Amway Business

Owners and prospects.

Amway India recorded a sales turnover of over Rs. 800 crore during January’07 –

December’07.

Amway India is a member of the Indian Direct Selling Association (IDSA). The

IDSA is an industry regulatory body, with several reputed international and Indian

Direct Selling companies as members.

Amway India is also a member of the Confederation of Indian Industries (CII)

and Federation of Indian Chambers of Commerce (FICCI).

The World Blind Union presented an award and citation to Amway India in 2003,

for its peerless work for the blind children.  

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NATIONAL PRESENCE

 In ten years of commercial operation, Amway India has established a nation-wide

presence in over 125 offices and 55 city warehouses and four regional mother

warehouses. The distribution and home delivery network set up with the support of

independent logistics partners is spread across over 3,000 locations.

MANUFACTURING

Almost all Amway India products are manufactured in the country through 7 third party

contract manufacturers. 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.

PRODUCTS 

At present, Amway India offers over 105 products in four categories. They are

Personal care category, Home Care category, Nutrition & Wellness category and

Cosmetics category.

With the exception of Cosmetics range (Artistry*) and some products in Nutrition

and Wellness category, all Amway India products and bottles are manufactured in

India.

The products match Amway’s global quality standards. They carry a tamper-

proof seal and a ‘100% Money Back Guarantee'. 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.

 

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CORPORATE RESPONSIBILITY 

AMWAY OPPORTUNITY FOUNDATION (AOF)  

Amway Opportunity Foundation (AOF) a registered non-profit organisation

which looks after Amway India’s Corporate Social Responsibility (CSR). Amway

distributors are also volunteers of AOF and they have enthusiastically participated in

all AOF activities. Globally, Amway’s CSR campaign is known as the One By One

Campaign for Children. 

 

PROMOTING FREE ENTERPRISE AND SELF-EMPLOYMENT 

Amway has conducted several seminars on ‘Entrepreneurial Development and

Direct Selling’ in concert with the Confederation of Indian Industries (CII) and the All

India Management Association (AIMA) on the benefits of organised direct selling.  

MEMBER - IDSA (Indian Direct Selling Association)  

Amway India Enterprises Pvt Ltd is a member of the India Direct Selling

Association. The Indian Direct Selling Association is an association of

companies engaged in the business of direct selling in India. Its members are of

high national and international repute having set standards in delivering quality

goods and in following ethical business practices.

Amway mission

Through the partnering of Distributors, Employees, and the Founding Families, and the

support of quality products and service, we offer all people the opportunity to achieve

their goals through the Amway Sales and Marketing Plan.

Business awareness campaign

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Amway is a member of the Direct Selling Association (DSA), the industry body

representing forty direct selling companies. All member companies have to abide by its

Code of Practice which is endorsed by the Office of Fair Trading.

In July 1992 Amway (UK) Ltd launched its Business Awareness Campaign to persuade

the government to tighten up the current pyramid selling legislation.

The campaign had three aims:

To upgrade the legislation and introduce further safeguards to protect both

distributor and consumer.

To ensure that the legislation clearly defines the differences between illegal

pyramid selling and direct selling and to changethe name of the legislation, so that

ethical companies no longer have the pernicious label 'legal pyramids'

To educate the general public, as well as opinion forming bodies such as Trading

Standards Departments and Citizens' Advice Bureaux, about the differences

between reputable direct selling companies

The Amway Sales Plan

The Amway Sales and Marketing Plan is a low risk, low start-up cost business

opportunity that is open to everyone. It allows you to build your business through

retailing products and sponsoring other people who, in turn, can retail products and

offer the business opportunity to others. By passing your sales and marketing

knowledge to your developing team, you not only build your own business network but

also enable others to build one of their own.

The core of the Amway Sales and Marketing Plan's income opportunity is the sale of

quality AMWAY™ products and services to retail customers. As your Amway

business grows, the rewards you earn grow in proportion. The Amway Sales and

Marketing Plan does not compensate anybody for simply recruiting others as

Independent Business Owners.

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Amway sales and marketing plan

The activities of each Amway distributor are determined by the 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.

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

organisation to grow. Direct selling involves sales people showing and demonstrating

products to obtain orders.

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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, offering consumers good value

for money.

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 contact

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.

Direct Selling

The concept of direct selling is based upon person-to-person relationships. The seller

goes to the consumer rather than the consumer to a shop. In today's fast changing society,

where more people work and shopping patterns have altered, this type of shopping not

only provides consumers with accessibility to a wide range of products but is also

convenient.

An organisation involved in direct selling cannot sell without a sales force! At the heart

of Amway's approach to direct selling is the critical relationship between Amway and the

seller or distributor. There are more than 2.5 million renewed independent Amway

distributors world-wide, around 37,000 of whom are in the UK. Each of these distributors

is self-employed. Anyone over 18 can establish their own business as an Amway

distributor, either on a part-time or full-time basis. Amway offers individuals the chance

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to set up their own business with little or no experience or capital investment. Working

hours and flexibility can be adjusted to suit each individual.

Individuals may have many different motives for starting their own businesses. Some

individuals strive for achievement and may have tremendous energy and commitment to

succeed. Others may want independence; to work their own hours and have the ability to

make their own decisions. However, for many others the financial incentive is usually

reward enough to engage in activities, where they may measure their success by income

and standard of living.

The vast majority of new Amway distributors have no previous experience running a

business of their own. Participating in the Amway business has helped them with their

personal and professional development, acquiring skills in dealing with people and

developing a wider business acumen.

Amway products are sold person-to-person, rather than door-to-door or via party plan.

Distributors earn their income through retail profit on the goods they sell. In addition,

they receive a commission from Amway based on the volume of sales they generate

personally, as well as those by their own distributor network.

Amway India: We Are Listening

Corporate Brand : Amway

Agency : Rediffusion Dy&R

Brand Analysis Count : 324

Amway is one of the global leaders in direct marketing. The name Amway is derived

from the words "American Way " . Amway was established in 1959 by Jay Van Andel

and Richard Devos. Amway global now have a presence in over 88 countries and has a

$6.5 Billion turnover.

Amway was established in India in 1995 and commenced operation in 1998. Currently

the company have 80 products in 4 categories. Amway operates in the following

categories :

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Personal Care

Home Care

Nutrition and Wellness

Cosmetics

Amway is often used as an example of a direct marketing company. The company sells

its products using direct distributors called Amway Business Owners ( ABO). The model

works on a business networking model .

The ABOs can build a team by recruiting a team of ABOs under him. The ABO earns

commission on the products sold . Further , the ABO also gets commission for the sales

done by other ABOs recruited by him. The payout is decided by the point system. The

Amway business model also divides the ABOs into different categories based on the

sales performance of the team. The payout varies with different levels.

Amway India in now a 800 crore company with its operation spanning across India. It has

more than 4.5 lakh independent distributors and 117 offices across the country.

Considering the nascent stage of Direct Marketing Industry in India, Amway India has

been reasonably successful. According to Business Line, the direct marketing Industry in

India is estimated to be Rs 3150 crore.

The success of Amway products is predominantly driven by the quality of the products.

Amway India's products are mostly sourced from manufacturing units from India. It has

outsourcing contracts with 5 major units in India. The products are sourced after strict

quality checks.

Amway is a 100 % direct marketing company . That means the consumers will not get

any Amway products from shops. The products can be bought through ABO's. Hence the

sales are driven by the efforts of ABOs. Since the company does not advertise its brands,

the only communication channel is through ABOs who visits households and make

presentations. There are two tasks of a typical ABO : the first task is to sell Amway

products and second task is to appoint new ABOs .

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Typically direct marketing firms faces issues of reach and cost. Since the sales depend

entirely on the independant distributors , the company has to pay huge commission. This

results in the increased cost of the product. Hence the products become expensive

resulting in lower sales.

Amways also faces this issue. The products of Amway are excellent but very expensive.

For example, the Persona brand of soaps cost Rs 30 which is almost double the rate of an

ordinary soap. Persona is one of the best soaps in terms of quality but price is definitely a

dampener. Another example is the range of cosmetics under the brands Attitude and

Artistery . Artistery is targeted at the premium class and Attitude at the middleclass. But

the price of these brands make the consumer think twice before buying it. Hence the

ABOs have a tough time convincing the value proposition.

In a value conscious country like India, the expensive tag of Amway products is the

singular reason for the lack of popularity of its products.

Understanding this issue, Amway launched its first corporate branding initiative in India .

The brand came out with a Television campaign highlighting the customer-centric

approach .

Watch the TVC here : Amway

Amway uses the slogan " We are listening " . The idea revolves round the theme that

Amway understands the Indian consumers and the products are derived from this

understanding . The purpose of the campaign is two fold :

a. The company wants to build equity around the corporate brand which will enable the

ABOs to tide over the initial customer resistance.

b. The enhanced corporate image will also attract people to join Amway as independent

business owners.

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Along with this, the company is also rationalising the pricing strategies. The company is

launching a new range of value products like coconut oil , shaving creams. But here again

the company will face certain issues . For lower priced products, the commission payout

will be less and hence the ABO will have to sell more volume to get higher commission.

Amway had introduced sachets for most of the products, but the low commission payout

for sachets has prompted ABOs to try and sell high value items.

Another significant change that the company made was rationalising the entry cost for

new ABOs. Earlier, a person had to shell out Rs 5000 to join the firm. The cost was to

buy the Amway business kit which consists of various Amway products and brochures.

The ABO can recover the money by selling these products. Now the company has

introduced a starter pack for Rs 995 which does not have Amway products but

brochures . This will be a big relief for the existing ABO since the higher joining costs

turned away most of the potential ABOs.

Among the 80 products, one of the best seller for Amway is the Nutrilite brand. Nutrilite

is a nutraceautical supplement and this brand contributes around 50% of Amway's

turnover. The brand virtually faces no competition so far. The Indian nutraceauticals

market is estimated to be around Rs 1500 crore and is rapidly growing. Many Indian

companies are eying this segment and has serious plans to enter this segment.

Amway has understood that doing business in India will require a new business model.

The company has started to take steps in the right direction. It had tried to rationalise

prices and bring in new value products. But to balance the price , cost, quality and higher

commission is no easy task.

Labels: corporate brand, FMCG

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4 C O M M E N T S :

 IBOFightback - Fighting the Amway Myths said...

Nice analysis. One thing to consider with regards to price/commissions is that the

lower expenses involved in setting up and running an Amway business means that

revenues can be lower yet still maintain a decent income.

3:12 PM  

 subhash patil said...

when 500 people will loose money one person will earn it.

9:29 AM  

 IBOFightback - Fighting the Amway Myths said...

Theoretically possible, yes. There's nothing in the Amway model that requires it

though. In a group of 500 there's no reason all 500 can't make money, if they

want.

More typically you'd find 200 of them joined then decided to nothing. They

probably bought some starting products, but if they didn't think they were worth

it, then they could send them back. Of the 300 left, 100 were just shoppers. Paid

money, got what they ordered, like any other "store". That's not "losing money".

Of those left, 125 dabbled a little - some of these made money, some lost some

money, probably varies month to month. That leaves 75 folk who made decent

money.

Statistically, very few people "lost" money so that 75-200 people could make

money, and there's no reason at all they couldn't all have made money if they'd

decided to pursue it and work hard.

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4:48 PM  

 mohd azrey said...

"Among the 80 products, one of the best seller for Amway is the Nutrilite brand. Nutrilite

is a nutraceautical supplement and this brand contributes around 50% of Amway's

turnover. The brand virtually faces no competition so far."

Allow me correct your statement. Nutrilite is a better supplement when you compare to

low grade products/companies. There are other superior supplement (world's best single

selling supplement.....Lifepak) from pharmanex.

Please take note Amway's Nutrilite is listed too. All the challengers failed to meet the

RDA requirements except Lifepak.

Read below article from Pharmanex:

LifePak Challenge

Pharmanex is so confident that the LifePak Family of Products will meet your unique

supplementation needs that we developed the LifePak Challenge and dared the world to

find a better multi-vitamin/mineral supplement. The

LifePak Challenge is based on the most recent U.S. Government

Recommended Dietary Allowances of essential vitamins and minerals

(known as RDA's) set in 1999.

We Challenge you to find a better multi-vitamin/mineral product. When submitting a

request for a LifePak Challenge please use the following 3 check points:

1. Has the comparison already been done? You can verify this by

telephoning or e-mailing Pharmanex Product Support OR see the list of

completed challengers by clicking on the LifePak Challengers button below.

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2. Is the product suitable for a comparison?

a) The product to be compared must be intended as a nutritionally complete multi-

vitamin/mineral product. If the

product is not intended to be a nutritionally complete multi-vitamin/mineral supplement,

we will not be able to

process your request.

b) Pharmanex LifePak is a premium multi-vitamin/mineral supplement. Therefore, to

ensure a fair comparison we

ask that you limit your comparison requests to a company's most complete multi-

vitamin/mineral product. If the

company-in-question has another more comparable multi-vitamin/mineral supplement we

will not be able to

process your request.

3. Sending in Challenger packaging

To initiate a comparison, Pharmanex Product Support must receive the product's original

packaging including

nutritional information. Product brochures, photocopies, or hand copied ingredient lists

will not suffice. For legal

purposes we must have the product's original packaging. It is not necessary to send in

actual product samples.

Amway is more than an income opportunity or a company or products. It’s about putting

people in control of their lives. It’s about connecting people to others who respect them,

who share their goals and aspirations. It’s about supporting people in their achievements.

Amway is about people connecting people to a better way of life.

Amway Corporation is one of the world's largest direct selling companies. Originally

founded by Jay Van Andel and Rich DeVos, Amway operates in more than 88 countries

and territories in Asia, Africa, Europe and the Americas. Amway products and services

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are marketed through independent business owners worldwide. Amway is a wholly

owned subsidiary of Alticor Inc.

PEOPLE

Amway has more than 6000 employees worldwide. In addition, Amway has more than

3.6 million Independent Business Owners (IBOs) around the world. In China, Amway

products are sold by Amway sales representatives.

PRODUCTS AND SERVICES

Over 450 unique, high-quality products carry the Amway name in the areas of nutrition,

wellness, beauty and home, as well as commercial products and a variety of services. In

addition, Amway independent business owners in selected markets sell additional brand-

name goods through local merchandise catalogues, plus a variety of services and

educational products. All products are backed by a customer satisfaction guarantee.

GOVERNANCE AND MANAGEMANT

Doug DeVos is the President of Amway and Steve Van Andel is the chairman.

FACILITIES

Amway operates out of Alticor's world headquarters located at 7575 Fulton Street East,

Ada, Michigan 49355, USA. 

COMMUNITY SERVICES

Amway, its Independent Business Owners and employees are involved in improving the

communities in which they do business. Specific and current information is available

upon request.

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AFFILIATIONS

Amway is a prominent and active member of the regional and national direct selling

associations worldwide. Doug DeVos is a member of the U.S. Direct Selling Association

Board of Directors. Former Alticor President Dick DeVos is the current Chairman of the

World Federation of Direct Selling Associations (WFDSA). Globally, direct selling is an

industry with approximately $80 billion in sales and more than 30 million salespeople. 

Rules of Conduct

 

Code of Ethics of Amway Distributors.

As owner of my Amway Distributorship, I agree to conduct my Amway business

according to the following ethical guidelines:

As a basic guideline in my activities as an Amway Distributor, I will endeavor to always

treat others, as I would have them treat me.

I will respect and follow this Code of Ethics and the Rules of Conduct observing not only

“the letter” but also ‘the spirit’ thereof.

I will present AMWAY products and the Amway Sales and Marketing Plan to all

prospective Distributors in a truthful and honest manner, and I will make sure to present

only what is approved in official Amway publications.

I will be courteous and prompt in the handling of any and all claims for exchange and

return and follow the procedures prescribed by Amway from time to time in its official

publications.

I will conduct myself in such a manner as to reflect only the highest standards of

integrity, frankness and responsibility because I recognise that my conduct as an Amway

Distributor has far-reaching effects.

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I will accept and carry out the responsibilities of an Amway Distributor (and those of

Sponsor and Direct Distributor when I reach such level), as set forth in official Amway

publications.

In my AMWAY product sales activities, and for the purposes of protecting the Amway

Sales and Marketing Plan, I will use only Amway produced or Amway-authorised

publications.

Amway Rules of Conduct

What does the word Amway mean? Amway is an abbreviation for "American Way" and

was coined in 1959 by company founders, Jay Van Andel and Richard DeVos. Short,

unique and easy to remember, Amway has been registered as a corporate name and

trademark ever since.

In the following decades, Amway Corporation successfully established itself as a leading

multilevel marketing business, built on strong values and founding principles that

continue to sustain our company today. The business is built on the simple integrity of

helping people lead better lives.

Today, Amway is a multibillion-dollar international business representing freedom and

opportunity to millions of people in more than 88 countries and territories around the

world. Amway generates US$6.4 billion (September’04 - August’05) in sales at

estimated retail through this global product distribution network. We offer over 3 million

Business Owners the inspiration to grow those businesses, and we work hard to provide

new and better ways for them to achieve their life goals.

AWARDS

As a corporate leader in promoting environmental awareness and education,

Amway received the prestigious United Nations Environment Programme

Achievement Award in 1989.  

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Corporate Citizenship Award - On November 08, 2005, the United States

Chamber of Commerce awarded Alticor with the Corporate Citizenship Award in the

category of International Community Service for the One by One Campaign for

Children

A SOLID FOUNDATION

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.  

 

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. 

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

retail, and kept going strong. After a lengthy investigation, the FTC verified that Amway

is a genuine business opportunity and not a "pyramid."  

THE BILLION-DOLLAR DECADE

The '80s will be remembered for the first Billion Dollar Year at estimated retail in 1980.

Building expansion at Amway World Headquarters continued at breakneck speed as

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Amway scrambled to keep pace with demand, opening its new cosmetics plant in Ada,

Michigan.  

THE NEXT GENERATION

As carefully planned by Rich and Jay, the second generation Van Andel and DeVos

families took the helm during the ' 90s. The Policy Board was formed and 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.,  

NEW HORIZONS

In 2000, Amway prepared for a new century and a new exciting era.

Almost 50 years after Amway began, the DeVos and Van Andel families created a new

structure to meet the challenges of this new century. A parent company, Alticor, was

established with subsidiaries Amway, Quixtar and Access Business Group—the latter to

consolidate manufacturing and distribution for the enterprise. At the helm of Alticor are

Steve Van Andel (Chairman) and Doug DeVos (President), jointly holding the Office of

the Chief Executive. Today each area of the business, including Amway, has the freedom

to build on its strengths.

Amway continues to be a leading company in the direct selling industry. Its fundamental

principles—freedom, family, hope and reward—hold as true today as they did in the very

beginning

Vision

Inspiring people to live better lives. 

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Mission

To provide the best business opportunity. To deliver exceptional quality products to

urban and semi urban homes in the areas of nutrition and wellness, cosmetics, personal

care, home care, home tech and insurance.

Our Values

Amway has established some simple shared values that unite the entire company, and all

of the Business Owners that are associated with Amway. We believe that these values

guide our actions and help us to achieve everything we are capable of without

compromise or harm.

Integrity

We will uphold the highest personal and professional integrity which demonstrates

honestly, loyalty, respect and high ethical standards in all our responsibilities, obligations

and other activities. We are committed to behave at all times in accordance with the

ethical practices of the organization.

Trust

Building reliability and dependability for self by displaying commitment, honesty,

confidentiality and consistency in all actions.

Transparency

We will promote a culture of openness and mutual trust by interacting objectively and

without underlying personal interests.

Service Orientation

We are committed to serve our customers to fulfill their needs by focusing efforts on

discovering and thereby meeting stated and unstated requirements.

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Partnership

We will collaborate across boundaries and find common ground by sharing ideas and

resources, with a wide range of stakeholders. We will develop networks and build long

term alliances with internal and external customers.

Recognition

We are committed to honor, encourage and support individuals and teams who

contribute, through their behavior and actions, to the success of the organization.

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OBJECTIVES OF THE STUDY

The objectives of the study are:

Problem in the amway marketing.

To study the marketing practices and problem faced by the Amway consumer..

To study the factors influencing the attitude of customers towards Amway

products.

Factor influencing customer`s attitude towards Amway products

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CHAPTER-3

IMPORTANCE OF THE

STUDY

30

IMPORTANCE OF THE STUDY

To know the consumer buying behavior of the Amway consumer.

To know the future of the Amway in India.

To know the Amway joining procedure.

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CHAPTER-4

LITRATURE RIVIEW

32

LITRATURE RIVIEW

Organization develop mission statements to share with manager, employee, and

customers. A clear thoughtful mission statement provides employee with a shared sense

of purpose, direction and opportunity. The statement guide geo-graphically dispersed

employees to Work independently and yet collectively toward realizing the

organization`s goals.

Dominating the industry are a few gaint firms- perhaps a quality leader, a services leader

and a cost leader- that serve the whole market and make their profits mainly leader-that

serve the whole market and make their profits mainly through high volume and lower

costs. Surrounding these dominant firms is a multitude of market nichers, including

market specialists, products specialists and customizing firms. The issue facing a firm in

a mature market is whether to struggle to become one of the “big three” and achieve

profits through high volume and low cost or to pursue a niching strategy and achieve

profits through low volume and a high margin.

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CHAPTER - 5

RESEARCH

METHODOLOGY

34

RESEARCH METHODOLOGY

Research is an art of scientific investigation. Research covers the search for a retrieval of

information for a specific purpose. Research has many categories, from medical research

to literary research. A research paper is a piece of academic writing that requires a more

abstract, critical and thoughtful level of inquiry than you might be used to.

According to Redman and Morry, ‘Research is careful and systematized effort of gaining

new knowledge.’

According to Clifford Woody, ‘Research comprises of defining and redefining

problems, formulating hypothesis or suggested solutions, collecting, organizing and

evaluating data, making deductions and reaching conclusions. And at last carefully

testing the conclusions, to determine, whether they fit the formulating hypothesis or

not.’

The dictionary meaning of research is ‘a careful investigation or inquiry especially

through search for new facts in any branch of knowledge.’

Basically research is a search for truth with the help of some study, observation,

comparison and experiments. It is a search for knowledge with the help of objective and

35

systematic method of finding solution to a problem. Research is a voyage of dictionary of

knowledge lead by inquisitiveness of human nature.

IMPORTANCE Of RESEARCH

Research forms the fundamental base on which the economic and legislative

polices can be built.

Research assists in solving various operational and planning problems of business

and industry.

Research helps to establish social relationships and solves social problems.

Research is used in all fields for applied economics, applied finance and applied

mathematic etc.

Research facilitates scientific and methodological and logical thinking of all.

Research assists in Ph.D. thesis of students.

Assists philosophers and thinkers to establish their viewpoints.

Assists analysts and intellectuals to develop new theories and ideas.

RESEARCH METHODS VERSUS METHODOLOGY

It seems appropriate at this juncture to explain the difference between research methods

and research methodology. Research may be understood as all those methods/techniques

that are used for conduction or research. Research methods or techniques, thus refer to

the method the researcher use performing research operations. In other words, all those

methods, which are used by the researcher during the course of studying his research

problem, are termed as research methods. Science the object of research, particularly the

applied research, is to arrive at a solution for a given problem, the available data and the

unknown aspects of the problem have to be related to each other to make a solution

possible. Keeping this in view, research methods can be put into the following there

groups:

In the first group we include those methods, which are concerned with the collection of

data. These methods will be used where the data already available are not sufficient to

arrive at the required solution.

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The second group consists of those statistical techniques, which are used for establishing

relationships between the data and the unknowns.

The third group consists of those methods, which are used to evaluate the accuracy of the

results obtained.

Research methods falling in the above stated last two groups are generally taken as the

analytical tools of research. Research methodology is a way to systematically solve the

research problem. It may be understood as a science of studying how research is done

scientifically. In this we study the various steps that are generally adopted by a researcher

in studying his/her research problem along with the logic behind them. It is necessary for

the researcher to know not only the research methods/techniques but also the

methodology.

Researcher not only need to know how to develop certain indices or tests, how to

calculate the mean, the mode, the median or the standard deviation or chi-square, how to

apply particular research techniques, are relevant and which are not, and what would they

men and indicate and why. Researchers also need to understand the assumptions

underlying various techniques and they need know the criteria by which they can decide

that certain techniques and procedure will be applicable to certain problems and others

will not. All this means that it is necessary for the researcher to design his/her

methodology for the problem as the same may differ from problem to problem.

For example, an architect, who designs a building, has to consciously evaluate the basis

of his/her decisions, i.e. he/she has to evaluate why and on what basis he/she selects

particular size, number, and location of doors, windows and ventilators, used particular

materials and not others and the like. Similarly, in research the scientist has to expose the

research decisions to evaluation before they are implemented. He has to specify very

clearly and precisely what decisions he/she selects and why he/she selects them so that

others can evaluate them also.

From what has been stated above, we can say that research methodology has many

dimensions and research methods do constitute a part of the research methodology. The

scope of research methodology is wider than that of research methods. Thus, when we

talk to research methodology we not only talk of the research methods but also consider

the logic behind the methods we use in the context of our research study and explain why

37

we are using a particular method or techniques and why we are not using others so that

research results are capable of being evaluated either by the researcher himself/herself or

by others. Why a research study has been undertaken, how the research problem has been

defined, in what way and why the hypothesis has been adopted, why particular technique

of analyzing data has been used and a host of similar other questions are usually

answered when we talk of research methodology concerning a research problem or study.

RESEARCH PROCESS / METHODOLOGY

The research process adopted in this project has the following steps.

FORMULATION OF THE PROJECT TOPIC

This is the starting point of any project. At the very outset it must be singled out i.e. the

decision about the general area of interest has to be taken. This means that the subject

matter of the study has to be defined. Essentially tow steps are involved is formulating

the research topic viz. understanding the problem thoroughly and rephrasing the same

into meaningful terms from an analytical point of view.

DEVELOPMENT OF WORKING HYPOTHESIS

After determining the research problem, the working hypothesis was developed. It is a

tentative assumption made in order to draw out and test its logical or empirical

consequences. The research hypothesis provides the focal point for research. They also

affect the manner in which the tests must be conducted in the analysis of data and

indirectly the quality of data, which is required for the analysis.

DEFINING THE SCOPE AND OBJECETIVE HAVE THE SEARCH

This is the stage at which the research design has to be prepared. This makes the research

as efficient as possible yielding maximum information. In other words, its function is to

provide for the collection of relevant information with minimal expenditure of effort,

time and money.

DETERMINING THE SAMPLE DESIGN

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A sample design is a definite plan determined before any data are actually collected for

obtaining a sample from a given population. The samples can be either probability

samples or non-probability samples. With probability sample each element has a known

probability or being included in the sample but the non-probability sampling do not allow

the researcher to determine this probability. In this project the sample was collected on

basis of simple random sampling where each element of the population has equal

probability of getting selected.

COLLECTING THE DATA

In dealing with any real lie problem it is often found that at hand are in adequate and

hence, it becomes necessary to collect data that are appropriate. There are several ways of

collecting the appropriate data, which differ considerably in the context of money costs,

time and other resources at the hands of the researches. Primary data can be collected

either through experiment or through survey. In case of survey data can be collected by a

number of ways viz. by observation, through personal interviews, through telephone

interviews, by mailing of questionnaires, through schedules. The researcher should select

one of these methods of collecting the data taking into consideration the nature of

investigation, objective and scope of the inquiry, financial resources, available time and

the desired degree of accuracy.

ANALYSIS OF DATA

The analysis of data requires a number of closely related operations such as establishment

of categories, the application of these categories to raw data through coding tabulation

and then drawing statistical inferences. The unwieldy data was condensed into a few

manageable groups and tables for further analysis. The researcher classified the raw data

into some purposeful and usable categories and coding operation was done at this stage

through which the category of data was transferred into symbols that was tabulated and

counted. Editing is the procedure that improves the quality of data for coding. Tabulation

is a part of the technical procedure where in the classified data is put in the form of

tables. The analysis work after tabulation was based on the computation of various

percentages; coefficients etc. by applying various well-defined statistical formulae.

39

GENERALISATIONS AND INTERPRETATIONS

The real value of research lies in its ability to arrive at certain generalization. The

interpretation means to explain the findings on the basis of some theory.

The interpretation of data has been done on the basis of following: -

Coding of Data Collected

Tabulation of Data

Simple Analysis of Data

Cross Analysis of Data

RESEARCH DESIGN

Research design provides the glue that holds the research project together. A research

design is used to structure the research, to show how all of the major parts of the research

project - the samples or groups, measures, treatments or programs, and methods of

assignment – work together to try to address the central research questions.

Understanding the relationships among designs is important in making design choices

and thinking about the strengths and weaknesses of different designs. Once the problem

has been carefully defined, the researcher needs to establish the plan that will outline the

investigation to be carried out. The research design indicates the steps that will be taken

and in what sequence they occur.

PREPARING THE RESEARCH DESING

The research problem having been formulated in clear-cut terms, the researcher will be

required to prepare a research design, i.e. he/she will have to state the conceptual

structure within which research would be conducted. The preparation of such a design

facilitates research to be as efficient as possible yielding maximal information. In other

words, the function of research design is to provide for the collection of relevant evidence

with minimal expenditure of effort, time and money. But how all these can be achieved

depends mainly on the research purpose.

Research purposes may be grouped into four categories, viz. (I) Exploration, (II)

Description, (III) Diagnosis, and (IV) Experimentation. A fixable research design, which

provides opportunity for purpose of the research study, is that of exploration. But when

40

the purpose happens to be an accurate description of a situation or of an association

between variables, the suitable design will be one that minimizes bias and maximizes the

reliability of the data collected and analyzed.

There are several research designs, such as, experimental and non-experimental

hypothesis testing. Experimental designs can be either informal design such as, before-

and-after without control, after only with control, before-and-after with control or formal

designs (such as completely randomized block design, Latin square design, simple and

complex factorial designs), are of which the researcher must select one for his/her

project.

The preparation of the research design, appropriate for a particular research problem,

involves usually the consideration of the following:

The means of obtaining the information.

The availability and skills of the researcher and his/her staff (if any).

Explanation of the way in which selected means of obtaining information will be

organized and the reasoning leading to the selection.

The time available for research.

The cost factor relating to research, i.e. the finance available for the purpose.

SAMPLING DESIGN

There are two important sources of collection of information:

Census

Sample

All the items that fall in the purview of the research are called ‘Universe’ or ‘Population’.

If a study aims at considering all the units of the population it is termed as inquiry.

However, if bias exists in the study then the error, increases manifold if sample size is

41

large. Simultaneously such a type of study is quite expensive such a type of study is quite

expensive and time consuming. Hence such a study is difficult to adopt. Only the

government organizations conduct such studies.

However, normal researches, take a small sample from the universe. The sample is

selected by applying some technique. The sample should adequately represent the

universe or the population. The selection of sample is called sampling technique. The

survey so conducted is called sample survey.

WHY ONLY SAMPLING?

We would not be in apposition to need any statistical theory if we use census to obtain

information from the population. Census is an expensive impractical and uneconomical

way of doing research analysis. The most important reason why one uses sampling rather

than a census is as follows:

Economy: When one uses a sample then he requires fewer amounts of resources as

compared to census, which includes cost, people and time. A wisely selected sample can

provide all answers sought by the researcher very economically.

Time Factors: Sampling decreases the time spent by the researcher in dealing with the

issue. Study of sample and analyzing its results helps the researcher generalize the results

to the whole population within no time as compared to census study.

Large Size of Populations: Representative sampling helps to conduct study for large

populations.

Inaccessibility of Some of the Populations: Sometimes some populations are

inaccessible and in that case the sample units comprising of similar units can be effective

in conducting the research and coming out with results which area applicable to the

whole population including the inaccessible population.

Accuracy: Effective and wisely structured sample provides accurate answers to the study

questions/research needs. Small samples are easy to control and thus reduce normal

errors, which are faced in census studies.

Error and Biasness in Observation and Analysis: Census studies involve more error

and biasness in both observations and analysis as compared to the sampling studies.

42

TYPES OF SMAPLE

Non-random Sampling

The Convenience Sampling

Judgment Sampling

Quota Sampling

Panel Sampling

Random Sampling

Simple Random Sampling

Systematic Random Sampling

Stratified Random Sampling

Cluster Sampling

Multistage Sampling

DATA COLLECTION & METHODS

Data collection and analysis methods for impact evaluation vary along a continuum. At

the one end of this continuum are methods relying on random sampling; structured data

collection instruments that fit diverse experiences into predetermined response

categories; and statistical data analysis. These methods, generally associated with

quantitative research, produce results that are easy to summarize, compare, and

generalize.

METHODS OF DATA COLLECTION

SIMPLE RANDOM SAMPLING

BY OBSERVATION

BY MAILING OR QUESTIONNAIRES

SIMPLE RANDOM SAMPLING

This type of sampling is also known as chance sampling or probability sampling where

each and every item in the population has an equal chance of inclusion in the samples and

43

each one of the possible sample, in case of finite universe, has the same probability of

being selected.

BY OBSERVAION

This method implies the collection of information by way of investigator’s own

observation, without interviewing the respondents, the information obtained relates to

what is currently happening and is not complicated by either the past behavior or future

intensions or attitudes of respondents. This method is also very limited. As such this

method is not suitable in inquiries where large samples are concerned.

BY MAILING OR QUESTIONNAIRES

The researcher and respondents do not come in contact with each other if this method or

survey is adopted. Questionnaires are mailed to the respondents with a request to return

after completing the same. It is the most extensively used method in.

COLLECTION OF DATA THROUGH QUESTIONNAIRES

This method of data collection is quite popular, particularly in case of big enquiries. It is

being adopt by private individual research workers and workers, private and public

organizations and even by government. In this method a questionnaire is sent (usually by

post) to the persons concerned with the request to answer the question and return the

questionnaire. A questionnaire consists of a number of questions printed of typed in a

definite order on a form or set of forms. The questionnaire is melt to response then or

expected to read and understand the questions and write down the reply in the space

meant for the purpose in the questionnaire itself. The respondents have to answer the

questions on their own.

The method of collecting data wise mailing the questionnaires to respondents is most

extensively employed in various economy and business surveys.

The merits claimed on behalf on method are as follows:

There is low cast even when the universe is large and is widely spread geographically.

It is free from the bias of the interviewer; answers are in respondent’s own words.

Respondents have adequate time to give well thought out answers.

44

Respondents, who are not easily approachable, can also be reached conveniently.

Large samples can be made use of and thus the results can be made more dependable and

reliable.

These main demerits of this system can be listed here:

Low rate of return of the duly filled in questionnaires; bias sue to no response is often

indeterminate.

It can be used only when respondents are educated and cooperating.

The control over questionnaire may be lost once it is sent. There is in built inflexibility

because of the difficulty of amending the approach once questionnaires have been

dispatched.

There is also possibility of ambiguous replies or omission of replies altogether to certain

questions; interpretation of omissions is difficult.

It is difficult to know whether willing respondents are truly representative.

This method is likely to be the slowest of all.

Before using this method, it is always advisable to conduct ‘Pilot Study’ (Pilot Survey)

for testing the questionnaires. In a big enquiry the significance of pilot survey is felt very

much. Pilot survey is infecting the replica and rehearsal of main survey. Such a survey,

being conducted by expert, brings to the light the weakness of the questionnaires and also

of survey techniques. From the experience gained in this way, improvement can be

affected.

MAIN ASPECTS OF A QUESTIONNAIRE

Quite often questionnaire is considered as the heart of a survey operation, hence it should

be very carefully, if it is not properly set up, then the survey is bound to fail, this fact

requires us to study the main aspects of a questionnaires viz., the general form, question

sequence and question formulation and wording. Researcher should note the fooling with

regard to these three main aspects of questionnaire.

ESSENTIALS OF A GOOD QUESTIONNAIRE

45

To be successful, questionnaire should be comparatively short and simple i.e. the size of

the questionnaire should be kept to the minimum. Questions should proceed in logical

sequence moving from easy to more difficult questions. Personal and intimate questions

should be left to the end. Technical terms and vague expression capable of different

interpretations should be avoided in a questionnaire.

Question may be dichotomous (yes or no answer), multiple choice (alternative answers

listed) or open ended. The later types of questions are often difficult to analyze and hence

should be avoided in a questionnaire to the extent possible. There should be some control

questions in the questionnaire, which indicate the reliability of the respondent. For

instance, a question designed to determine the consumption of particular material may be

asked first in terms of financial expenditure and later in terms of weight. The control

questions, thus, introduce a crosscheck to see whether the information collected or not.

Questions affecting the sentiments of respondents should be avoided. Adequate space for

answers should be provided in the questionnaire to help editing and tabulation. This

should always be provision for indications of uncertainty, e.g. “do not know”, “no

preference” and so on. Brief directions with regard to filling up the questionnaire should

invariably be given in the questionnaire itself. Finally, the physical appearance of the

questionnaire affects the cooperation the researcher receives from the recipients and as

attractive looking questionnaire, particularly in mail surveys, is a plus point for enlisting

cooperating.

After the collection of data these were systematically presented in tables and statistically

analyzed for deriving information. Suitable bar-diagrams and pie-diagrams are presented

for visible documentations of results.

PROCESSING AND ANALYSIS OF DATA

PROCESSING OF DATA

The collected data in a research is processed and analyzed to come to some conclusion or

to verify the hypothesis made. Processing of data is important as it makes further analysis

of data easier and efficient. Processing of data technically means

Editing of Data

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Coding of Data

Classification of Data

Tabulation of Data

EDINTING

Data editing is a process by which collected data is examined to detect any errors or

omissions and further these are corrected as much as possible before proceeding further.

Editing makes careful scrutiny or investigation of collected data like questionnaire,

surveys etc. editing assures accuracy of data and consistency of facts gathered etc. editing

is two types: (a) Field Editing, (b) Central Editing.

CODING

Classification of responses may be done on basis of one or more common concepts. In

coding a particular numeral or some symbol is assigned to the answers (collected data) in

order to put the responses in some definite categories or classes. The classes of responses

determined by the researcher should be appropriate and suitable to the study. Coding

enables efficient and effective analysis as the responses are categorized into meaningful

classes. Coding decisions are considered while developing or designing the questionnaire

or any other data collection tool. Coding can be done manually or through computer.

CLASSIFICATION

Classification of data implies that the collected raw data is categorized in to common

group having common features. Data having common characteristics are placed in a

common group. Thus the entire data collected is categorized into various groups or

classes, which convey a meaning to the researcher.

TABULATION

The mass of data collected has to be arranged in some kind of concise and logical order.

This procedure is referred to as tabulation. Tabulation summarizes raw data and displays

data n form of some statistical tables. Tabulation is an orderly arrangement of data in

columns and rows.

47

CHAPTER-6

DATA ANALYSIS

48

DATA ANALYSIS One or two person in their individual capacities normally carry out an Amway customer.

Individual who are residents in India and are prerequisites for individuals to apply for an

Amway consumer. Individual who are residents in India and are Indian citizens are free

to do the Amway business without satisfying any prior conditions. Individual who are

foreigen passport holders and are not of Indian origin require approval from the Reserve

Bank of India to apply for distributorship. Individual who are non- residents in India are

required to register with the Reserve Bank of India within 90 days of starting their

Amway business in India.

Q: 1 Age-wise classification of distributers?

Table:1

Age Number of distributer

Less then 25 years 24

25-35 Years 32

35-45years 30

Above 45 years 14

Total 100

Graph:1

49

From the above Table 1, it could be understood that out of 100 respondent consumer, 24

consumer belong to the age group of less than years, 32 consumer belong to the age

group of above 25 years but below 35 years.

Further the Table shows that the 30 distributor belong to the age group of above 35 years

but below 45 years and 14 consumer belong to the age group of above 45 years.

50

Less then 25 years25-35 Years35-45years

Above 45 years

Q: 2 Gender-Wise classification of consumer ?

Consumer are of both gender. The following table shows the gender-wise

classification of consumer.

Table:2

Gender Number of consumer

Men 56

Women 44

Total 100

Graph:2

51

MenWomen

From the above table 2, it is understood that out of 100 respondent consumers, 56

consumer are men and consumer are women.

Q: 3 Literacy level of Amway consumer?

Literacy level of the consumers plays an important role in marketing the Amway

products. The following that shows the qualification of consumers. Table:3

Literacy level Number of consumer

Higher secondary 22

Diploma 34

Degree 30

Post graduate Degree 12

Total 100

Graph:3

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Higher secondary

DiplomaDegreePost graduate Degree

It is evident from table 3, that the educational qualification of 22Amway consumer

Is higher secondary 34 consumer are diploma holders, 30 consumer are degree holder and

14 consumer are postgraduate degree holder.

Q: 4Income –wise classification of Amway Distributers.?

Table:4

Income Number of consumer

Below Rs. 5,000 45

Rs.5,000-Rs10,000 43

Above 12

Total 100

Graph:4

53

Below Rs. 5,000Rs.5,000-Rs10,000Above

Table 4 reveals that 45 consumer earn below Rs.5000 per months; 42 consumer earn

above Rs. 5000 but below Rs. 10,000 and 12 consumer earn above Rs.10,000.

Q: 5 Sources of information about Amway business.

In this survey, an attempt is made to find out the sources of information on which most

of the distributors rely for their business.

Table:5

Sources Number of distributers

Friends 27

Relative 29

Neighbours 20

Other Amway consumer 24

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Total 100

Friends

RelativeNeighboursOther Amway consumer

Graph:5

From the above table 5, it could be inferred that out of 100 respondent, 29 consumer got

the information from relative, 27 from their friends, 24 from other Amway consumer and

only 20 consumer got the idea from neighbors.

Q: 6 Reason for starting Amway business?

The Amway consumer take up the Amway business for both, self-employment and

additional income.

Table:6

Category Number of respondent

Self employment 67

Additional 33

Total 100

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Self employmentAdditional

Graph:6

It is inferred from the above the table that 67 consumer have taken up Amway business

for self-employment and 33 consumer have taken it up for the purpose of additional

income.

Q: 7 Initial investment?

For any business, capital is the most essential thing. Without which, no activity can be

performed. It also one of the four important factors of production. Table 7 shows the

amount of capital invested at the initial stage of starting the business by the respondent

consumer.

Table:7

Investment Number of consumer

Rs. 4000-Rs. 6000 43

56

Rs. 6000-Rs. 8000 19

Rs. 8000-Rs. 10,000 25

Above Rs. 10,000 12

Total 1000

Rs. 4000-Rs. 6000Rs. 6000-Rs. 8000Rs. 8000-Rs. 10,000

Above Rs. 10,000

Graph:7

The above table reveals that 43 consumers had invested above Rs. 4000; 19 consumer

had invested above Rs. 6000 and below Rs.8000; 25 counsumer had invested above Rs.

8000 and below Rs. 10,000 and 12 consumer had invested above Rs.10,000.

Q: 8 Training program?

The training programme conducted by Amway India enterprice assists the consumer in

selling the Amway products. The following Table shows the classification of consumer

based on training programme.

Table:8

Training programme Number of distributer

Attended 88

Not attented 12

57

Total 100

AttendedNot attented

Graph:8

From above table it could be observed that 88 distributor had attended the tranning

program conducted by Amway India enterprise and 12 distributors had not attended the

training programme.

Q: 9 Sponsoring of consumer is the main criterion for the income of Amway

consumer. The more the number of consumer sponsoring consumer earn greater amount

of concession and receive reward and recognition from Amway India enterprise.

Table:9

Consumer Number of distribution

Sponsored 50

Non-sponsored 50

58

Total 100

Graph:9

It is evident from the above Table that 50 consumer have sponsored many Amway

consumer and 50 consumer have not sponsored any Amway consumer.

Q: 10The source ofreaching customer?

The distributor reach the customer through various sources. These sources are classified

into five categories as shown table.

Table:10

Sources Number of distributors

Through friends 28

Through relative 32

59

Sponsored

Non-sponsored

Through colleagues 24

Through neighbors 13

Through other sources 03

Total 100

Graph:10

The above table shows that 28 distributor reached the consumer through their friends, 32

consumer reached the customer through their friends, 32 distributor reached the

customers through their relatives and 24 distributor reached the customer through

colleagues. Through neighbors 13 distributors reached their customer through other

sources .

Q: 11Targeted customer?

Table:11

Targeted customer Number of customer

High class 15

Middle class 78

Low class 04

Other(lower than middle class) 03

60

Through friends

Through relativeThrough colleagues

Through neighborsThrough other sources

Total 100

Graph:11

It is understood from the above table the above table that out of 100 customers, the

targeted customers of 15 customers are high-class people. The targeted customer of 78

are the middle-class people. The targeted customers of 4 customer are low-class people

and the targeted customer of 3 customer are other lower than middle class people.

Q:12Prefrence of products among customer.

It is found that there is preference of Amway products among the consumer from the

point view of the Amway customers. The products are classified into four categories as in

table.

Table:12

Products Number of distributor

Personal care 36

61

Home care 48

Nutrition and wellness 15

Soft toys 01

Total 100

Graph:12

Q: 13 opinion about the price of Amway products?

The price of the Amway products is high when compared to other products. The

following table gives the opinion of the consumer on the price of the Amway products.

Table:13

Price Number of counsumer

Price affect the sales 84

Price does not affect the sales 16

62

Total 100

Graph:13

It is clear from the table that 84 consumer are of the opinion that the price of the Amway

products affects sales while 16 consumer are of the opinion that the price of the Amway

products does not affects their sales.

Q:14Ways of convincing the customer about the price of Amway products?

If the consumer`s way of convincing are effective eventually their sales may start to

increase.

Table:14

Ways Number of customer

Through effective demonstration 22

Through comparison of Amway products 27

63

with other products

Explanation about the superior quality of

the products

27

Explanation about the use of small quantity 24

Total 100

Graph:14

It could be understood that 22 consumer convince through effective demonstration of

Amway products while 27 consumer convinced through comparison of Amway products

with other products. It is noted that 27 consumer explanation about the superior quality of

the products for the purpose of convincing their customer while 24 customer explain the

use of small quantity of Amway products to convince of their consumers.

Q: 14Item Having High Volume of sales?

Table:14

Products Number of consumer

Personal care 45

Home care 19

Nutrition and wellness 36

64

Soft toys 0

Total 100

Graph:14

It is clear from the above table that home care products shows a high volume of sales

according to 19 customer personal care products shows a high volume of sales according

to 45 customer and nutrition and wellness products show a high volume of sales

according to 36 customer.

Q: 15 Factors influencing the customers to buy Amway products?

Table:15

Factors Number of customer

High quality 28

Long term usage 45

No side effects 27

65

Total 100

Graph:15

High qualityLong term usage

No side effects

from the above table it is clear that 28 customer are of the view that high quality

influence their customer to buy Amway products. Long term usage of Amway products

influence the customer to buy as opined by 45 customer and consumer were of the view

that lack of side effect influences the customer to buy Amway products.

CHAPTER-7

66

Conclusion

67

Conclusion

direct selling offers the best business opportunity to any individual like other business

activities. The Amway business may be pursued on part time as well as full time basis.

The success of dirct selling compnies depends on the consumer satisfaction backed with

customer satisfaction. The aim of introducing any new products is to reach all classes of

people irrespective of their income class of living and the like. But this concept does not

hold good in case of direct selling.

Direct selling companies must take steps to promote their products to reach all classes of

people. Customer satisfaction is guaranteed to these companies only when the company

takes into consideration the price of the products as well as sales promotion methods even

if it offers world-class quality products at customer convenience.

68

CHAPTER-8

SUGGESTION

69

SUGGESTION

on the basis of the above analysis, the following suggestions are made:

(1)To create awareness, Amway must take effective sales promotion methods

like advertising so that the products reach every class people.

(2)Even though Amway offers quality goods at customer convenience, its

price are very high. The price is the main factor, which curtails the purchase

of Amway products. So, Amway should take steps to reduce the price of the

products to gain more customers.

70

LIMITATION OF THAT STUDY

In Indian contest that is not easy to convince a people to join the Amway.

The Indian market is not the easy to be taped.

The existing Amway customer is not be easily find out.

In rural areas Amway is not so popular.

Products cost is too high in respect to the products which are using in the rural

areas.

71

APPENDIX

BIBLIOGRAPHY

Philip kotler

C.R. Kothari

W.W.W.Amway.com

W.W.W.AmwayIndia.com

W.W.W.directselling.com

W.W.W.marketing of Amway products.com

72

QuestionnaireQ: 1 In which age group respondent lies?

Less then 25 years ( )

25-35 years ( )

35-45 years ( )

Above 45 years ( )

Q: 2 Gender wise classification of respondent?

Male ( )

Female ( )

Q: 3 Education level of the respondent?

Higher secondary ( )

Diploma ( )

Degree ( )

Post graduate degree ( )

Q: 4 Income wise classification of the respondent?

Below Rs.5000 ( )

73

Rs 5000 – Rs. 10000 ( )

Above 10000 ( )

Q: 5 Sources of information about Amway business?

Friends ( )

Relatives ( )

Neighbors ( )

Other Amway distributors ( )

Q: 6 Reason for starting Amway business?

Self employment ( )

Additional ( )

Q: 7 Preferences for initial investment?

Rs.4000-Rs6000 ( )

Rs 6000-Rs8000 ( )

Rs8000-Rs10000 ( )

Above Rs. 10000 ( )

Q: 8 Training program wise classification of respondent?

Attended ( )

Not attended ( )

Q: 9 Classifications on the basis of sponsorship?

Sponsored ( )

Not sponsored ( )

Q: 10 Who will be the target customer?

High class ( )

Middle class ( )

Low class ( )

Other (lower than middle class) ( )

Q: 11 Preferences of products?

Personal care ( )

Home care ( )

Nutrition and wellness ( )

Soft toys ( )

74

Q: 12 Opinions on the price of Amway products?

Price affects the sales ( )

Price does not affect the sales ( )

Q: 13 Ways of convincing the customers?

Through effective demonstration ( )

Through comparison of Amway products with other products ( )

Explanation about the superior quality of the products ( )

Explanation about the use of small quantity ( )

Q: 14 Item having high volume of sales

Personal care ( )

Home care ( )

Nutrition and wellness ( )

Soft toys ( )

Q: 15 Factors influencing the customers to buy Amway products?

High quality ( )

Long term usage ( )

No side effects ( )

75

76