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A Project ReportOn
MARKETING RESEARCH OF AMWAY
INDIA
ldquoSubmitted in the Partial Fulfillment for the Requirement of PostGraduate Diploma in Managementrdquo
(PGDM 2010-12)
Submitted To Submitted By
Prof SC SHARMA MUDASSIR MIRZA
(Internal Mentor) Roll No 32
Batch 2010-12
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ACKNOWLEDGEMENT
The beatitude bliss and euphoria that accompany the successful completion of any
task would not be complete without the expression of appreciation of simple virtues
to the people who made it possible
The final project report is submitted to JAGANNATH INTERNATIONAL
MANAGEMENT SCHOOL KALKAJI for partial fulfillment of diploma post graduate
diploma in management (PGDM)
This project is an attempt to study about the growing popularity of ldquoAMWAY in
INDIArdquo I express my thanks to all Staff and other under whose guidance and
direction I gave a good shape to my project report Their constant review and
excellent suggestions throughout the project are highly commendable My heartfelt
thanks go to all the staff members who helped me to gain knowledge about the
actual working and the processes involved in various stock market I would also like
to sincerely thank my faculty guide Prof SC SHARMA whose guidance has helpedme to Understand and complete my project in a timely and proper manner Prof SC
SHARMA helped me a lot in doing my project work
I am very thankful to my Internal Mentor Prof SC SHARMA and all respondents
who gave me their valuable time to complete my project work
MUDASSIR MIRZA
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DECLARATION
I MUDASSIR MIRZA do hereby declare that the project report is submitted as
partial fulfillment of the requirement of PGDM Program of JAGANNATH
INTERNATIONAL MANAGEMENT SCHOOL KALKAJI
The Project has been done under the guidance of faculty guide Prof S C SHARMA
JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL KALKAJI
No part of this report has been published elsewhere
MUDASSIR MIRZA
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LIST OF CONTENTS
Executive summaryhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 5
Introduction to marketing strategies of AMWAYhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 7 Objective of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 9
Methodologyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 9
Introduction to direct selling 12
Current scenario of AMWAY INDIA 15
How does it workshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 17
AMWAY marketing plan helliphelliphellip 19
AMWAY Strategies in the Indian Markethelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 20
A) AMWAYlsquoS market Penetration Strategyhelliphellip helliphelliphellip hellip22
B) AMWAYlsquoS Market Extension Strategyhelliphelliphelliphelliphelliphelliphelliphellip25
Marketing mix of AMWAYhelliphelliphelliphelliphelliphellip hellip 27
Survey 1 ndash Questionnairehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip hellip 31
o Interpretation of survey 1helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 38
SURVEY 2 ndash INTERVIEWhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 40
o Interpretation of survey 2helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 42
Conclusion about surveyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 45
Recommendationshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 47
Conclusion about the projecthelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 48
Biblographyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 49
Appendixhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip
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EXECUTIVE SUMMARY
Amway is a unique company It is defined by the fundamental philosophy of helpingpeople 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 fertileground for the Amway Corporation In short it has made substantial value addition to
Indialsquos social economic life
The focus of this project is based on studying a single organization ie 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
companylsquos 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
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AMWAY VISION
ldquoHelping 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 operaterdquo
AMWAY MISSION
ldquoThrough the partnering of Distributors Employeesand 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 Planrdquo
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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 5th1998 In the brief period since launch it has
emerged as the Countrylsquos largest Direct Selling Company
Facts
Over 200000 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)
Amway India is the founder member of the Indian Direct Selling Association
(IDSA)
Direct Selling requires expertise and special skills Using the benefit of
Amways 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 350000 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 Indias blind
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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 Indialsquos socio economic milieu It as either introduced unprecedented
benefits or upgraded existing facilities to international standards
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OBJECTIVES
Primary Objective The main objective is to carry out an in-depth study of
Amwaylsquos overall marketing strategies in India In order to achieve this primaryobjective 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 ininternational 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
METHODOLOGY
The Methodology adopted was combination of
a 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
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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 ndash 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 Amwaylsquos operations in India
Survey -1
Sample Design Questionnaire method
Sample size 30 respondents
Sample Unit IBOs Customers and others
Segment Respondents
Women 14
Men 9
Others 7
Total 30
Others include elderly people and children
Survey -2
Sample Design ndash Interview method
Sample size ndash 7
Sample Unit ndash IBOs and people working in Amway India Corp
Segment Respondents
IBOs 6
Amway India employee 1
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My project involves the study of Amwaylsquos 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
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INTRODUCTION TO DIRECT SELLING
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 consumers convenience often at hisher
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 countrys 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
countrys 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 willreach 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 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
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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
Amways products to their customers homes Independent Business Owners sell to
people they know or meet The personal contact 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 aproduct moves from a manufacturer to a consumer The increasing use of the
Internet by consumers has created a real potential for developing different types of
business models and for new approaches to reaching users 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
Amwaylsquos 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
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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 sellers
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
marketlsquos needs
This report has been made keeping in mind the benefits which can be derived from
my research
Benefits to customers
This report will be beneficial for consumers who prefer the marketing goods or
services directly to them at their own convenience often in hisher 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 companylsquos 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 andbelieve 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 Amwaylsquos unique
business opportunity
Benefits to companies
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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
AMWAY - THE CURRENT SCENARIO
Amway is the largest multi-level marketing (MLM) organization in the world It is amulti-billion dollar company based on the sale of a variety of products Amwaylsquos
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 support of various
community projects
Corporate Profile
Between then and now Amway corporation has grown into a US Multi-billion
dollar company managed by 12000 employees
It operates across 80 countries and territories in Asia Africa Europe and the
Americas with a turnover of US $57 billion
Amway is the wholly owned subsidiary of Alticor Inc
It has a sales force of over 33 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)
Over 500 R amp D scientists and professionals ensure the exceptional quality of
its products across five product lines
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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 Nationlsquos Environment
Programlsquos Environment Achievement Award This award recognised Amwaylsquos
commitment to environmental education and awareness
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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 arent 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
Independent Business Owners or Distributors are people who have evaluated
the Amway business opportunity and elected to join 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 contact
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 its
right for them This is called sponsoring Amway distributors who sponsor others
generally have higher average sales volumes than those who dont sponsor
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Your Group is the team of distributors youve sponsored Many youve 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 its 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 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 US 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
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Variety of Special Programs
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 theDistributor Hall of Fame in Amways World Headquarters
AMWAYrsquoS 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 Amways retail strategy to provide high quality
readily purchasable items with a good environmental positioning 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 furtherDistributors 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
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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 obtainorders 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
AMWAYrsquoS 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
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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
organisations 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 product
carry the Amway name in the areas of nutrition health beauty and home Amway
also has a range of products that include other well known branded goods The
company also offers a variety of third party services
A Amwayrsquos Market Penetration Strategy
Going for market penetration has involved Amway in making the most of current
products and competences by stretching them 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
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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 ie
Home Care
Personal care
Cosmetics
Nutrition and Wellness
But initially Amway was launched in India with only 6 products most of which werehome 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 Amwaylsquos
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
Amwaylsquos 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 user 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
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market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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2
ACKNOWLEDGEMENT
The beatitude bliss and euphoria that accompany the successful completion of any
task would not be complete without the expression of appreciation of simple virtues
to the people who made it possible
The final project report is submitted to JAGANNATH INTERNATIONAL
MANAGEMENT SCHOOL KALKAJI for partial fulfillment of diploma post graduate
diploma in management (PGDM)
This project is an attempt to study about the growing popularity of ldquoAMWAY in
INDIArdquo I express my thanks to all Staff and other under whose guidance and
direction I gave a good shape to my project report Their constant review and
excellent suggestions throughout the project are highly commendable My heartfelt
thanks go to all the staff members who helped me to gain knowledge about the
actual working and the processes involved in various stock market I would also like
to sincerely thank my faculty guide Prof SC SHARMA whose guidance has helpedme to Understand and complete my project in a timely and proper manner Prof SC
SHARMA helped me a lot in doing my project work
I am very thankful to my Internal Mentor Prof SC SHARMA and all respondents
who gave me their valuable time to complete my project work
MUDASSIR MIRZA
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3
DECLARATION
I MUDASSIR MIRZA do hereby declare that the project report is submitted as
partial fulfillment of the requirement of PGDM Program of JAGANNATH
INTERNATIONAL MANAGEMENT SCHOOL KALKAJI
The Project has been done under the guidance of faculty guide Prof S C SHARMA
JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL KALKAJI
No part of this report has been published elsewhere
MUDASSIR MIRZA
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4
LIST OF CONTENTS
Executive summaryhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 5
Introduction to marketing strategies of AMWAYhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 7 Objective of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 9
Methodologyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 9
Introduction to direct selling 12
Current scenario of AMWAY INDIA 15
How does it workshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 17
AMWAY marketing plan helliphelliphellip 19
AMWAY Strategies in the Indian Markethelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 20
A) AMWAYlsquoS market Penetration Strategyhelliphellip helliphelliphellip hellip22
B) AMWAYlsquoS Market Extension Strategyhelliphelliphelliphelliphelliphelliphelliphellip25
Marketing mix of AMWAYhelliphelliphelliphelliphelliphellip hellip 27
Survey 1 ndash Questionnairehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip hellip 31
o Interpretation of survey 1helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 38
SURVEY 2 ndash INTERVIEWhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 40
o Interpretation of survey 2helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 42
Conclusion about surveyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 45
Recommendationshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 47
Conclusion about the projecthelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 48
Biblographyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 49
Appendixhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip
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5
EXECUTIVE SUMMARY
Amway is a unique company It is defined by the fundamental philosophy of helpingpeople 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 fertileground for the Amway Corporation In short it has made substantial value addition to
Indialsquos social economic life
The focus of this project is based on studying a single organization ie 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
companylsquos 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
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6
AMWAY VISION
ldquoHelping 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 operaterdquo
AMWAY MISSION
ldquoThrough the partnering of Distributors Employeesand 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 Planrdquo
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7
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 5th1998 In the brief period since launch it has
emerged as the Countrylsquos largest Direct Selling Company
Facts
Over 200000 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)
Amway India is the founder member of the Indian Direct Selling Association
(IDSA)
Direct Selling requires expertise and special skills Using the benefit of
Amways 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 350000 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 Indias blind
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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 Indialsquos socio economic milieu It as either introduced unprecedented
benefits or upgraded existing facilities to international standards
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9
OBJECTIVES
Primary Objective The main objective is to carry out an in-depth study of
Amwaylsquos overall marketing strategies in India In order to achieve this primaryobjective 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 ininternational 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
METHODOLOGY
The Methodology adopted was combination of
a 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
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10
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 ndash 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 Amwaylsquos operations in India
Survey -1
Sample Design Questionnaire method
Sample size 30 respondents
Sample Unit IBOs Customers and others
Segment Respondents
Women 14
Men 9
Others 7
Total 30
Others include elderly people and children
Survey -2
Sample Design ndash Interview method
Sample size ndash 7
Sample Unit ndash IBOs and people working in Amway India Corp
Segment Respondents
IBOs 6
Amway India employee 1
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11
My project involves the study of Amwaylsquos 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
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12
INTRODUCTION TO DIRECT SELLING
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 consumers convenience often at hisher
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 countrys 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
countrys 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 willreach 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 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
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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
Amways products to their customers homes Independent Business Owners sell to
people they know or meet The personal contact 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 aproduct moves from a manufacturer to a consumer The increasing use of the
Internet by consumers has created a real potential for developing different types of
business models and for new approaches to reaching users 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
Amwaylsquos 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
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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 sellers
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
marketlsquos needs
This report has been made keeping in mind the benefits which can be derived from
my research
Benefits to customers
This report will be beneficial for consumers who prefer the marketing goods or
services directly to them at their own convenience often in hisher 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 companylsquos 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 andbelieve 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 Amwaylsquos unique
business opportunity
Benefits to companies
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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
AMWAY - THE CURRENT SCENARIO
Amway is the largest multi-level marketing (MLM) organization in the world It is amulti-billion dollar company based on the sale of a variety of products Amwaylsquos
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 support of various
community projects
Corporate Profile
Between then and now Amway corporation has grown into a US Multi-billion
dollar company managed by 12000 employees
It operates across 80 countries and territories in Asia Africa Europe and the
Americas with a turnover of US $57 billion
Amway is the wholly owned subsidiary of Alticor Inc
It has a sales force of over 33 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)
Over 500 R amp D scientists and professionals ensure the exceptional quality of
its products across five product lines
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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 Nationlsquos Environment
Programlsquos Environment Achievement Award This award recognised Amwaylsquos
commitment to environmental education and awareness
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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 arent 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
Independent Business Owners or Distributors are people who have evaluated
the Amway business opportunity and elected to join 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 contact
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 its
right for them This is called sponsoring Amway distributors who sponsor others
generally have higher average sales volumes than those who dont sponsor
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Your Group is the team of distributors youve sponsored Many youve 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 its 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 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 US 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
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Variety of Special Programs
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 theDistributor Hall of Fame in Amways World Headquarters
AMWAYrsquoS 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 Amways retail strategy to provide high quality
readily purchasable items with a good environmental positioning 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 furtherDistributors 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
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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 obtainorders 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
AMWAYrsquoS 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
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21
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
organisations 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 product
carry the Amway name in the areas of nutrition health beauty and home Amway
also has a range of products that include other well known branded goods The
company also offers a variety of third party services
A Amwayrsquos Market Penetration Strategy
Going for market penetration has involved Amway in making the most of current
products and competences by stretching them 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
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22
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 ie
Home Care
Personal care
Cosmetics
Nutrition and Wellness
But initially Amway was launched in India with only 6 products most of which werehome 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 Amwaylsquos
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
Amwaylsquos 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 user 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
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23
market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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3
DECLARATION
I MUDASSIR MIRZA do hereby declare that the project report is submitted as
partial fulfillment of the requirement of PGDM Program of JAGANNATH
INTERNATIONAL MANAGEMENT SCHOOL KALKAJI
The Project has been done under the guidance of faculty guide Prof S C SHARMA
JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL KALKAJI
No part of this report has been published elsewhere
MUDASSIR MIRZA
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LIST OF CONTENTS
Executive summaryhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 5
Introduction to marketing strategies of AMWAYhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 7 Objective of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 9
Methodologyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 9
Introduction to direct selling 12
Current scenario of AMWAY INDIA 15
How does it workshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 17
AMWAY marketing plan helliphelliphellip 19
AMWAY Strategies in the Indian Markethelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 20
A) AMWAYlsquoS market Penetration Strategyhelliphellip helliphelliphellip hellip22
B) AMWAYlsquoS Market Extension Strategyhelliphelliphelliphelliphelliphelliphelliphellip25
Marketing mix of AMWAYhelliphelliphelliphelliphelliphellip hellip 27
Survey 1 ndash Questionnairehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip hellip 31
o Interpretation of survey 1helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 38
SURVEY 2 ndash INTERVIEWhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 40
o Interpretation of survey 2helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 42
Conclusion about surveyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 45
Recommendationshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 47
Conclusion about the projecthelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 48
Biblographyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 49
Appendixhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip
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5
EXECUTIVE SUMMARY
Amway is a unique company It is defined by the fundamental philosophy of helpingpeople 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 fertileground for the Amway Corporation In short it has made substantial value addition to
Indialsquos social economic life
The focus of this project is based on studying a single organization ie 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
companylsquos 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
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6
AMWAY VISION
ldquoHelping 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 operaterdquo
AMWAY MISSION
ldquoThrough the partnering of Distributors Employeesand 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 Planrdquo
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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 5th1998 In the brief period since launch it has
emerged as the Countrylsquos largest Direct Selling Company
Facts
Over 200000 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)
Amway India is the founder member of the Indian Direct Selling Association
(IDSA)
Direct Selling requires expertise and special skills Using the benefit of
Amways 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 350000 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 Indias blind
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8
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 Indialsquos socio economic milieu It as either introduced unprecedented
benefits or upgraded existing facilities to international standards
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9
OBJECTIVES
Primary Objective The main objective is to carry out an in-depth study of
Amwaylsquos overall marketing strategies in India In order to achieve this primaryobjective 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 ininternational 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
METHODOLOGY
The Methodology adopted was combination of
a 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
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10
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 ndash 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 Amwaylsquos operations in India
Survey -1
Sample Design Questionnaire method
Sample size 30 respondents
Sample Unit IBOs Customers and others
Segment Respondents
Women 14
Men 9
Others 7
Total 30
Others include elderly people and children
Survey -2
Sample Design ndash Interview method
Sample size ndash 7
Sample Unit ndash IBOs and people working in Amway India Corp
Segment Respondents
IBOs 6
Amway India employee 1
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11
My project involves the study of Amwaylsquos 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
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12
INTRODUCTION TO DIRECT SELLING
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 consumers convenience often at hisher
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 countrys 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
countrys 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 willreach 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 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
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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
Amways products to their customers homes Independent Business Owners sell to
people they know or meet The personal contact 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 aproduct moves from a manufacturer to a consumer The increasing use of the
Internet by consumers has created a real potential for developing different types of
business models and for new approaches to reaching users 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
Amwaylsquos 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
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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 sellers
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
marketlsquos needs
This report has been made keeping in mind the benefits which can be derived from
my research
Benefits to customers
This report will be beneficial for consumers who prefer the marketing goods or
services directly to them at their own convenience often in hisher 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 companylsquos 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 andbelieve 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 Amwaylsquos unique
business opportunity
Benefits to companies
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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
AMWAY - THE CURRENT SCENARIO
Amway is the largest multi-level marketing (MLM) organization in the world It is amulti-billion dollar company based on the sale of a variety of products Amwaylsquos
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 support of various
community projects
Corporate Profile
Between then and now Amway corporation has grown into a US Multi-billion
dollar company managed by 12000 employees
It operates across 80 countries and territories in Asia Africa Europe and the
Americas with a turnover of US $57 billion
Amway is the wholly owned subsidiary of Alticor Inc
It has a sales force of over 33 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)
Over 500 R amp D scientists and professionals ensure the exceptional quality of
its products across five product lines
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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 Nationlsquos Environment
Programlsquos Environment Achievement Award This award recognised Amwaylsquos
commitment to environmental education and awareness
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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 arent 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
Independent Business Owners or Distributors are people who have evaluated
the Amway business opportunity and elected to join 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 contact
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 its
right for them This is called sponsoring Amway distributors who sponsor others
generally have higher average sales volumes than those who dont sponsor
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Your Group is the team of distributors youve sponsored Many youve 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 its 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 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 US 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
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Variety of Special Programs
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 theDistributor Hall of Fame in Amways World Headquarters
AMWAYrsquoS 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 Amways retail strategy to provide high quality
readily purchasable items with a good environmental positioning 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 furtherDistributors 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
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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 obtainorders 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
AMWAYrsquoS 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
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21
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
organisations 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 product
carry the Amway name in the areas of nutrition health beauty and home Amway
also has a range of products that include other well known branded goods The
company also offers a variety of third party services
A Amwayrsquos Market Penetration Strategy
Going for market penetration has involved Amway in making the most of current
products and competences by stretching them 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
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22
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 ie
Home Care
Personal care
Cosmetics
Nutrition and Wellness
But initially Amway was launched in India with only 6 products most of which werehome 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 Amwaylsquos
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
Amwaylsquos 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 user 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
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23
market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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4
LIST OF CONTENTS
Executive summaryhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 5
Introduction to marketing strategies of AMWAYhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 7 Objective of the studyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 9
Methodologyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 9
Introduction to direct selling 12
Current scenario of AMWAY INDIA 15
How does it workshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 17
AMWAY marketing plan helliphelliphellip 19
AMWAY Strategies in the Indian Markethelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 20
A) AMWAYlsquoS market Penetration Strategyhelliphellip helliphelliphellip hellip22
B) AMWAYlsquoS Market Extension Strategyhelliphelliphelliphelliphelliphelliphelliphellip25
Marketing mix of AMWAYhelliphelliphelliphelliphelliphellip hellip 27
Survey 1 ndash Questionnairehelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip hellip 31
o Interpretation of survey 1helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 38
SURVEY 2 ndash INTERVIEWhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 40
o Interpretation of survey 2helliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 42
Conclusion about surveyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 45
Recommendationshelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 47
Conclusion about the projecthelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 48
Biblographyhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip 49
Appendixhelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphelliphellip
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5
EXECUTIVE SUMMARY
Amway is a unique company It is defined by the fundamental philosophy of helpingpeople 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 fertileground for the Amway Corporation In short it has made substantial value addition to
Indialsquos social economic life
The focus of this project is based on studying a single organization ie 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
companylsquos 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
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AMWAY VISION
ldquoHelping 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 operaterdquo
AMWAY MISSION
ldquoThrough the partnering of Distributors Employeesand 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 Planrdquo
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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 5th1998 In the brief period since launch it has
emerged as the Countrylsquos largest Direct Selling Company
Facts
Over 200000 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)
Amway India is the founder member of the Indian Direct Selling Association
(IDSA)
Direct Selling requires expertise and special skills Using the benefit of
Amways 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 350000 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 Indias blind
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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 Indialsquos socio economic milieu It as either introduced unprecedented
benefits or upgraded existing facilities to international standards
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9
OBJECTIVES
Primary Objective The main objective is to carry out an in-depth study of
Amwaylsquos overall marketing strategies in India In order to achieve this primaryobjective 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 ininternational 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
METHODOLOGY
The Methodology adopted was combination of
a 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
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10
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 ndash 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 Amwaylsquos operations in India
Survey -1
Sample Design Questionnaire method
Sample size 30 respondents
Sample Unit IBOs Customers and others
Segment Respondents
Women 14
Men 9
Others 7
Total 30
Others include elderly people and children
Survey -2
Sample Design ndash Interview method
Sample size ndash 7
Sample Unit ndash IBOs and people working in Amway India Corp
Segment Respondents
IBOs 6
Amway India employee 1
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My project involves the study of Amwaylsquos 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
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INTRODUCTION TO DIRECT SELLING
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 consumers convenience often at hisher
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 countrys 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
countrys 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 willreach 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 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
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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
Amways products to their customers homes Independent Business Owners sell to
people they know or meet The personal contact 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 aproduct moves from a manufacturer to a consumer The increasing use of the
Internet by consumers has created a real potential for developing different types of
business models and for new approaches to reaching users 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
Amwaylsquos 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
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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 sellers
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
marketlsquos needs
This report has been made keeping in mind the benefits which can be derived from
my research
Benefits to customers
This report will be beneficial for consumers who prefer the marketing goods or
services directly to them at their own convenience often in hisher 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 companylsquos 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 andbelieve 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 Amwaylsquos unique
business opportunity
Benefits to companies
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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
AMWAY - THE CURRENT SCENARIO
Amway is the largest multi-level marketing (MLM) organization in the world It is amulti-billion dollar company based on the sale of a variety of products Amwaylsquos
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 support of various
community projects
Corporate Profile
Between then and now Amway corporation has grown into a US Multi-billion
dollar company managed by 12000 employees
It operates across 80 countries and territories in Asia Africa Europe and the
Americas with a turnover of US $57 billion
Amway is the wholly owned subsidiary of Alticor Inc
It has a sales force of over 33 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)
Over 500 R amp D scientists and professionals ensure the exceptional quality of
its products across five product lines
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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 Nationlsquos Environment
Programlsquos Environment Achievement Award This award recognised Amwaylsquos
commitment to environmental education and awareness
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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 arent 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
Independent Business Owners or Distributors are people who have evaluated
the Amway business opportunity and elected to join 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 contact
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 its
right for them This is called sponsoring Amway distributors who sponsor others
generally have higher average sales volumes than those who dont sponsor
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Your Group is the team of distributors youve sponsored Many youve 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 its 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 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 US 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
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Variety of Special Programs
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 theDistributor Hall of Fame in Amways World Headquarters
AMWAYrsquoS 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 Amways retail strategy to provide high quality
readily purchasable items with a good environmental positioning 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 furtherDistributors 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
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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 obtainorders 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
AMWAYrsquoS 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
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21
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
organisations 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 product
carry the Amway name in the areas of nutrition health beauty and home Amway
also has a range of products that include other well known branded goods The
company also offers a variety of third party services
A Amwayrsquos Market Penetration Strategy
Going for market penetration has involved Amway in making the most of current
products and competences by stretching them 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
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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 ie
Home Care
Personal care
Cosmetics
Nutrition and Wellness
But initially Amway was launched in India with only 6 products most of which werehome 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 Amwaylsquos
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
Amwaylsquos 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 user 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
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market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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5
EXECUTIVE SUMMARY
Amway is a unique company It is defined by the fundamental philosophy of helpingpeople 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 fertileground for the Amway Corporation In short it has made substantial value addition to
Indialsquos social economic life
The focus of this project is based on studying a single organization ie 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
companylsquos 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
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AMWAY VISION
ldquoHelping 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 operaterdquo
AMWAY MISSION
ldquoThrough the partnering of Distributors Employeesand 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 Planrdquo
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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 5th1998 In the brief period since launch it has
emerged as the Countrylsquos largest Direct Selling Company
Facts
Over 200000 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)
Amway India is the founder member of the Indian Direct Selling Association
(IDSA)
Direct Selling requires expertise and special skills Using the benefit of
Amways 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 350000 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 Indias blind
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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 Indialsquos socio economic milieu It as either introduced unprecedented
benefits or upgraded existing facilities to international standards
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9
OBJECTIVES
Primary Objective The main objective is to carry out an in-depth study of
Amwaylsquos overall marketing strategies in India In order to achieve this primaryobjective 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 ininternational 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
METHODOLOGY
The Methodology adopted was combination of
a 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
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10
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 ndash 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 Amwaylsquos operations in India
Survey -1
Sample Design Questionnaire method
Sample size 30 respondents
Sample Unit IBOs Customers and others
Segment Respondents
Women 14
Men 9
Others 7
Total 30
Others include elderly people and children
Survey -2
Sample Design ndash Interview method
Sample size ndash 7
Sample Unit ndash IBOs and people working in Amway India Corp
Segment Respondents
IBOs 6
Amway India employee 1
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My project involves the study of Amwaylsquos 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
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INTRODUCTION TO DIRECT SELLING
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 consumers convenience often at hisher
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 countrys 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
countrys 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 willreach 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 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
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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
Amways products to their customers homes Independent Business Owners sell to
people they know or meet The personal contact 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 aproduct moves from a manufacturer to a consumer The increasing use of the
Internet by consumers has created a real potential for developing different types of
business models and for new approaches to reaching users 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
Amwaylsquos 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
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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 sellers
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
marketlsquos needs
This report has been made keeping in mind the benefits which can be derived from
my research
Benefits to customers
This report will be beneficial for consumers who prefer the marketing goods or
services directly to them at their own convenience often in hisher 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 companylsquos 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 andbelieve 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 Amwaylsquos unique
business opportunity
Benefits to companies
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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
AMWAY - THE CURRENT SCENARIO
Amway is the largest multi-level marketing (MLM) organization in the world It is amulti-billion dollar company based on the sale of a variety of products Amwaylsquos
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 support of various
community projects
Corporate Profile
Between then and now Amway corporation has grown into a US Multi-billion
dollar company managed by 12000 employees
It operates across 80 countries and territories in Asia Africa Europe and the
Americas with a turnover of US $57 billion
Amway is the wholly owned subsidiary of Alticor Inc
It has a sales force of over 33 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)
Over 500 R amp D scientists and professionals ensure the exceptional quality of
its products across five product lines
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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 Nationlsquos Environment
Programlsquos Environment Achievement Award This award recognised Amwaylsquos
commitment to environmental education and awareness
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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 arent 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
Independent Business Owners or Distributors are people who have evaluated
the Amway business opportunity and elected to join 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 contact
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 its
right for them This is called sponsoring Amway distributors who sponsor others
generally have higher average sales volumes than those who dont sponsor
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18
Your Group is the team of distributors youve sponsored Many youve 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 its 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 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 US 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
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19
Variety of Special Programs
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 theDistributor Hall of Fame in Amways World Headquarters
AMWAYrsquoS 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 Amways retail strategy to provide high quality
readily purchasable items with a good environmental positioning 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 furtherDistributors 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
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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 obtainorders 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
AMWAYrsquoS 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
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21
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
organisations 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 product
carry the Amway name in the areas of nutrition health beauty and home Amway
also has a range of products that include other well known branded goods The
company also offers a variety of third party services
A Amwayrsquos Market Penetration Strategy
Going for market penetration has involved Amway in making the most of current
products and competences by stretching them 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
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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 ie
Home Care
Personal care
Cosmetics
Nutrition and Wellness
But initially Amway was launched in India with only 6 products most of which werehome 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 Amwaylsquos
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
Amwaylsquos 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 user 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
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market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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41
This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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6
AMWAY VISION
ldquoHelping 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 operaterdquo
AMWAY MISSION
ldquoThrough the partnering of Distributors Employeesand 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 Planrdquo
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7
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 5th1998 In the brief period since launch it has
emerged as the Countrylsquos largest Direct Selling Company
Facts
Over 200000 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)
Amway India is the founder member of the Indian Direct Selling Association
(IDSA)
Direct Selling requires expertise and special skills Using the benefit of
Amways 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 350000 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 Indias blind
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8
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 Indialsquos socio economic milieu It as either introduced unprecedented
benefits or upgraded existing facilities to international standards
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9
OBJECTIVES
Primary Objective The main objective is to carry out an in-depth study of
Amwaylsquos overall marketing strategies in India In order to achieve this primaryobjective 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 ininternational 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
METHODOLOGY
The Methodology adopted was combination of
a 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
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10
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 ndash 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 Amwaylsquos operations in India
Survey -1
Sample Design Questionnaire method
Sample size 30 respondents
Sample Unit IBOs Customers and others
Segment Respondents
Women 14
Men 9
Others 7
Total 30
Others include elderly people and children
Survey -2
Sample Design ndash Interview method
Sample size ndash 7
Sample Unit ndash IBOs and people working in Amway India Corp
Segment Respondents
IBOs 6
Amway India employee 1
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My project involves the study of Amwaylsquos 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
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INTRODUCTION TO DIRECT SELLING
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 consumers convenience often at hisher
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 countrys 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
countrys 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 willreach 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 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
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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
Amways products to their customers homes Independent Business Owners sell to
people they know or meet The personal contact 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 aproduct moves from a manufacturer to a consumer The increasing use of the
Internet by consumers has created a real potential for developing different types of
business models and for new approaches to reaching users 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
Amwaylsquos 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
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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 sellers
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
marketlsquos needs
This report has been made keeping in mind the benefits which can be derived from
my research
Benefits to customers
This report will be beneficial for consumers who prefer the marketing goods or
services directly to them at their own convenience often in hisher 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 companylsquos 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 andbelieve 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 Amwaylsquos unique
business opportunity
Benefits to companies
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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
AMWAY - THE CURRENT SCENARIO
Amway is the largest multi-level marketing (MLM) organization in the world It is amulti-billion dollar company based on the sale of a variety of products Amwaylsquos
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 support of various
community projects
Corporate Profile
Between then and now Amway corporation has grown into a US Multi-billion
dollar company managed by 12000 employees
It operates across 80 countries and territories in Asia Africa Europe and the
Americas with a turnover of US $57 billion
Amway is the wholly owned subsidiary of Alticor Inc
It has a sales force of over 33 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)
Over 500 R amp D scientists and professionals ensure the exceptional quality of
its products across five product lines
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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 Nationlsquos Environment
Programlsquos Environment Achievement Award This award recognised Amwaylsquos
commitment to environmental education and awareness
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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 arent 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
Independent Business Owners or Distributors are people who have evaluated
the Amway business opportunity and elected to join 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 contact
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 its
right for them This is called sponsoring Amway distributors who sponsor others
generally have higher average sales volumes than those who dont sponsor
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Your Group is the team of distributors youve sponsored Many youve 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 its 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 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 US 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
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Variety of Special Programs
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 theDistributor Hall of Fame in Amways World Headquarters
AMWAYrsquoS 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 Amways retail strategy to provide high quality
readily purchasable items with a good environmental positioning 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 furtherDistributors 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
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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 obtainorders 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
AMWAYrsquoS 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
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21
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
organisations 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 product
carry the Amway name in the areas of nutrition health beauty and home Amway
also has a range of products that include other well known branded goods The
company also offers a variety of third party services
A Amwayrsquos Market Penetration Strategy
Going for market penetration has involved Amway in making the most of current
products and competences by stretching them 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
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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 ie
Home Care
Personal care
Cosmetics
Nutrition and Wellness
But initially Amway was launched in India with only 6 products most of which werehome 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 Amwaylsquos
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
Amwaylsquos 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 user 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
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market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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7
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 5th1998 In the brief period since launch it has
emerged as the Countrylsquos largest Direct Selling Company
Facts
Over 200000 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)
Amway India is the founder member of the Indian Direct Selling Association
(IDSA)
Direct Selling requires expertise and special skills Using the benefit of
Amways 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 350000 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 Indias blind
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8
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 Indialsquos socio economic milieu It as either introduced unprecedented
benefits or upgraded existing facilities to international standards
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9
OBJECTIVES
Primary Objective The main objective is to carry out an in-depth study of
Amwaylsquos overall marketing strategies in India In order to achieve this primaryobjective 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 ininternational 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
METHODOLOGY
The Methodology adopted was combination of
a 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
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10
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 ndash 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 Amwaylsquos operations in India
Survey -1
Sample Design Questionnaire method
Sample size 30 respondents
Sample Unit IBOs Customers and others
Segment Respondents
Women 14
Men 9
Others 7
Total 30
Others include elderly people and children
Survey -2
Sample Design ndash Interview method
Sample size ndash 7
Sample Unit ndash IBOs and people working in Amway India Corp
Segment Respondents
IBOs 6
Amway India employee 1
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My project involves the study of Amwaylsquos 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
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INTRODUCTION TO DIRECT SELLING
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 consumers convenience often at hisher
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 countrys 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
countrys 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 willreach 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 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
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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
Amways products to their customers homes Independent Business Owners sell to
people they know or meet The personal contact 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 aproduct moves from a manufacturer to a consumer The increasing use of the
Internet by consumers has created a real potential for developing different types of
business models and for new approaches to reaching users 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
Amwaylsquos 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
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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 sellers
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
marketlsquos needs
This report has been made keeping in mind the benefits which can be derived from
my research
Benefits to customers
This report will be beneficial for consumers who prefer the marketing goods or
services directly to them at their own convenience often in hisher 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 companylsquos 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 andbelieve 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 Amwaylsquos unique
business opportunity
Benefits to companies
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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
AMWAY - THE CURRENT SCENARIO
Amway is the largest multi-level marketing (MLM) organization in the world It is amulti-billion dollar company based on the sale of a variety of products Amwaylsquos
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 support of various
community projects
Corporate Profile
Between then and now Amway corporation has grown into a US Multi-billion
dollar company managed by 12000 employees
It operates across 80 countries and territories in Asia Africa Europe and the
Americas with a turnover of US $57 billion
Amway is the wholly owned subsidiary of Alticor Inc
It has a sales force of over 33 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)
Over 500 R amp D scientists and professionals ensure the exceptional quality of
its products across five product lines
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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 Nationlsquos Environment
Programlsquos Environment Achievement Award This award recognised Amwaylsquos
commitment to environmental education and awareness
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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 arent 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
Independent Business Owners or Distributors are people who have evaluated
the Amway business opportunity and elected to join 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 contact
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 its
right for them This is called sponsoring Amway distributors who sponsor others
generally have higher average sales volumes than those who dont sponsor
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Your Group is the team of distributors youve sponsored Many youve 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 its 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 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 US 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
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Variety of Special Programs
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 theDistributor Hall of Fame in Amways World Headquarters
AMWAYrsquoS 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 Amways retail strategy to provide high quality
readily purchasable items with a good environmental positioning 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 furtherDistributors 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
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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 obtainorders 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
AMWAYrsquoS 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
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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
organisations 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 product
carry the Amway name in the areas of nutrition health beauty and home Amway
also has a range of products that include other well known branded goods The
company also offers a variety of third party services
A Amwayrsquos Market Penetration Strategy
Going for market penetration has involved Amway in making the most of current
products and competences by stretching them 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
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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 ie
Home Care
Personal care
Cosmetics
Nutrition and Wellness
But initially Amway was launched in India with only 6 products most of which werehome 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 Amwaylsquos
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
Amwaylsquos 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 user 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
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market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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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 Indialsquos socio economic milieu It as either introduced unprecedented
benefits or upgraded existing facilities to international standards
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9
OBJECTIVES
Primary Objective The main objective is to carry out an in-depth study of
Amwaylsquos overall marketing strategies in India In order to achieve this primaryobjective 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 ininternational 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
METHODOLOGY
The Methodology adopted was combination of
a 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
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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 ndash 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 Amwaylsquos operations in India
Survey -1
Sample Design Questionnaire method
Sample size 30 respondents
Sample Unit IBOs Customers and others
Segment Respondents
Women 14
Men 9
Others 7
Total 30
Others include elderly people and children
Survey -2
Sample Design ndash Interview method
Sample size ndash 7
Sample Unit ndash IBOs and people working in Amway India Corp
Segment Respondents
IBOs 6
Amway India employee 1
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My project involves the study of Amwaylsquos 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
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INTRODUCTION TO DIRECT SELLING
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 consumers convenience often at hisher
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 countrys 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
countrys 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 willreach 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 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
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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
Amways products to their customers homes Independent Business Owners sell to
people they know or meet The personal contact 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 aproduct moves from a manufacturer to a consumer The increasing use of the
Internet by consumers has created a real potential for developing different types of
business models and for new approaches to reaching users 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
Amwaylsquos 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
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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 sellers
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
marketlsquos needs
This report has been made keeping in mind the benefits which can be derived from
my research
Benefits to customers
This report will be beneficial for consumers who prefer the marketing goods or
services directly to them at their own convenience often in hisher 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 companylsquos 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 andbelieve 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 Amwaylsquos unique
business opportunity
Benefits to companies
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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
AMWAY - THE CURRENT SCENARIO
Amway is the largest multi-level marketing (MLM) organization in the world It is amulti-billion dollar company based on the sale of a variety of products Amwaylsquos
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 support of various
community projects
Corporate Profile
Between then and now Amway corporation has grown into a US Multi-billion
dollar company managed by 12000 employees
It operates across 80 countries and territories in Asia Africa Europe and the
Americas with a turnover of US $57 billion
Amway is the wholly owned subsidiary of Alticor Inc
It has a sales force of over 33 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)
Over 500 R amp D scientists and professionals ensure the exceptional quality of
its products across five product lines
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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 Nationlsquos Environment
Programlsquos Environment Achievement Award This award recognised Amwaylsquos
commitment to environmental education and awareness
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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 arent 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
Independent Business Owners or Distributors are people who have evaluated
the Amway business opportunity and elected to join 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 contact
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 its
right for them This is called sponsoring Amway distributors who sponsor others
generally have higher average sales volumes than those who dont sponsor
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Your Group is the team of distributors youve sponsored Many youve 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 its 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 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 US 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
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Variety of Special Programs
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 theDistributor Hall of Fame in Amways World Headquarters
AMWAYrsquoS 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 Amways retail strategy to provide high quality
readily purchasable items with a good environmental positioning 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 furtherDistributors 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
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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 obtainorders 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
AMWAYrsquoS 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
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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
organisations 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 product
carry the Amway name in the areas of nutrition health beauty and home Amway
also has a range of products that include other well known branded goods The
company also offers a variety of third party services
A Amwayrsquos Market Penetration Strategy
Going for market penetration has involved Amway in making the most of current
products and competences by stretching them 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
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22
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 ie
Home Care
Personal care
Cosmetics
Nutrition and Wellness
But initially Amway was launched in India with only 6 products most of which werehome 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 Amwaylsquos
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
Amwaylsquos 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 user 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
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market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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48
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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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9
OBJECTIVES
Primary Objective The main objective is to carry out an in-depth study of
Amwaylsquos overall marketing strategies in India In order to achieve this primaryobjective 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 ininternational 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
METHODOLOGY
The Methodology adopted was combination of
a 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
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10
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 ndash 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 Amwaylsquos operations in India
Survey -1
Sample Design Questionnaire method
Sample size 30 respondents
Sample Unit IBOs Customers and others
Segment Respondents
Women 14
Men 9
Others 7
Total 30
Others include elderly people and children
Survey -2
Sample Design ndash Interview method
Sample size ndash 7
Sample Unit ndash IBOs and people working in Amway India Corp
Segment Respondents
IBOs 6
Amway India employee 1
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My project involves the study of Amwaylsquos 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
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INTRODUCTION TO DIRECT SELLING
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 consumers convenience often at hisher
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 countrys 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
countrys 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 willreach 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 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
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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
Amways products to their customers homes Independent Business Owners sell to
people they know or meet The personal contact 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 aproduct moves from a manufacturer to a consumer The increasing use of the
Internet by consumers has created a real potential for developing different types of
business models and for new approaches to reaching users 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
Amwaylsquos 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
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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 sellers
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
marketlsquos needs
This report has been made keeping in mind the benefits which can be derived from
my research
Benefits to customers
This report will be beneficial for consumers who prefer the marketing goods or
services directly to them at their own convenience often in hisher 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 companylsquos 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 andbelieve 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 Amwaylsquos unique
business opportunity
Benefits to companies
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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
AMWAY - THE CURRENT SCENARIO
Amway is the largest multi-level marketing (MLM) organization in the world It is amulti-billion dollar company based on the sale of a variety of products Amwaylsquos
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 support of various
community projects
Corporate Profile
Between then and now Amway corporation has grown into a US Multi-billion
dollar company managed by 12000 employees
It operates across 80 countries and territories in Asia Africa Europe and the
Americas with a turnover of US $57 billion
Amway is the wholly owned subsidiary of Alticor Inc
It has a sales force of over 33 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)
Over 500 R amp D scientists and professionals ensure the exceptional quality of
its products across five product lines
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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 Nationlsquos Environment
Programlsquos Environment Achievement Award This award recognised Amwaylsquos
commitment to environmental education and awareness
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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 arent 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
Independent Business Owners or Distributors are people who have evaluated
the Amway business opportunity and elected to join 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 contact
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 its
right for them This is called sponsoring Amway distributors who sponsor others
generally have higher average sales volumes than those who dont sponsor
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Your Group is the team of distributors youve sponsored Many youve 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 its 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 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 US 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
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Variety of Special Programs
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 theDistributor Hall of Fame in Amways World Headquarters
AMWAYrsquoS 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 Amways retail strategy to provide high quality
readily purchasable items with a good environmental positioning 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 furtherDistributors 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
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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 obtainorders 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
AMWAYrsquoS 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
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21
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
organisations 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 product
carry the Amway name in the areas of nutrition health beauty and home Amway
also has a range of products that include other well known branded goods The
company also offers a variety of third party services
A Amwayrsquos Market Penetration Strategy
Going for market penetration has involved Amway in making the most of current
products and competences by stretching them 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
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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 ie
Home Care
Personal care
Cosmetics
Nutrition and Wellness
But initially Amway was launched in India with only 6 products most of which werehome 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 Amwaylsquos
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
Amwaylsquos 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 user 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
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market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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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 ndash 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 Amwaylsquos operations in India
Survey -1
Sample Design Questionnaire method
Sample size 30 respondents
Sample Unit IBOs Customers and others
Segment Respondents
Women 14
Men 9
Others 7
Total 30
Others include elderly people and children
Survey -2
Sample Design ndash Interview method
Sample size ndash 7
Sample Unit ndash IBOs and people working in Amway India Corp
Segment Respondents
IBOs 6
Amway India employee 1
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My project involves the study of Amwaylsquos 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
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INTRODUCTION TO DIRECT SELLING
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 consumers convenience often at hisher
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 countrys 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
countrys 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 willreach 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 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
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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
Amways products to their customers homes Independent Business Owners sell to
people they know or meet The personal contact 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 aproduct moves from a manufacturer to a consumer The increasing use of the
Internet by consumers has created a real potential for developing different types of
business models and for new approaches to reaching users 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
Amwaylsquos 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
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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 sellers
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
marketlsquos needs
This report has been made keeping in mind the benefits which can be derived from
my research
Benefits to customers
This report will be beneficial for consumers who prefer the marketing goods or
services directly to them at their own convenience often in hisher 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 companylsquos 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 andbelieve 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 Amwaylsquos unique
business opportunity
Benefits to companies
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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
AMWAY - THE CURRENT SCENARIO
Amway is the largest multi-level marketing (MLM) organization in the world It is amulti-billion dollar company based on the sale of a variety of products Amwaylsquos
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 support of various
community projects
Corporate Profile
Between then and now Amway corporation has grown into a US Multi-billion
dollar company managed by 12000 employees
It operates across 80 countries and territories in Asia Africa Europe and the
Americas with a turnover of US $57 billion
Amway is the wholly owned subsidiary of Alticor Inc
It has a sales force of over 33 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)
Over 500 R amp D scientists and professionals ensure the exceptional quality of
its products across five product lines
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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 Nationlsquos Environment
Programlsquos Environment Achievement Award This award recognised Amwaylsquos
commitment to environmental education and awareness
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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 arent 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
Independent Business Owners or Distributors are people who have evaluated
the Amway business opportunity and elected to join 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 contact
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 its
right for them This is called sponsoring Amway distributors who sponsor others
generally have higher average sales volumes than those who dont sponsor
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Your Group is the team of distributors youve sponsored Many youve 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 its 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 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 US 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
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Variety of Special Programs
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 theDistributor Hall of Fame in Amways World Headquarters
AMWAYrsquoS 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 Amways retail strategy to provide high quality
readily purchasable items with a good environmental positioning 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 furtherDistributors 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
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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 obtainorders 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
AMWAYrsquoS 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
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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
organisations 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 product
carry the Amway name in the areas of nutrition health beauty and home Amway
also has a range of products that include other well known branded goods The
company also offers a variety of third party services
A Amwayrsquos Market Penetration Strategy
Going for market penetration has involved Amway in making the most of current
products and competences by stretching them 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
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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 ie
Home Care
Personal care
Cosmetics
Nutrition and Wellness
But initially Amway was launched in India with only 6 products most of which werehome 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 Amwaylsquos
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
Amwaylsquos 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 user 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
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market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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My project involves the study of Amwaylsquos 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
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INTRODUCTION TO DIRECT SELLING
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 consumers convenience often at hisher
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 countrys 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
countrys 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 willreach 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 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
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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
Amways products to their customers homes Independent Business Owners sell to
people they know or meet The personal contact 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 aproduct moves from a manufacturer to a consumer The increasing use of the
Internet by consumers has created a real potential for developing different types of
business models and for new approaches to reaching users 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
Amwaylsquos 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
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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 sellers
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
marketlsquos needs
This report has been made keeping in mind the benefits which can be derived from
my research
Benefits to customers
This report will be beneficial for consumers who prefer the marketing goods or
services directly to them at their own convenience often in hisher 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 companylsquos 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 andbelieve 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 Amwaylsquos unique
business opportunity
Benefits to companies
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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
AMWAY - THE CURRENT SCENARIO
Amway is the largest multi-level marketing (MLM) organization in the world It is amulti-billion dollar company based on the sale of a variety of products Amwaylsquos
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 support of various
community projects
Corporate Profile
Between then and now Amway corporation has grown into a US Multi-billion
dollar company managed by 12000 employees
It operates across 80 countries and territories in Asia Africa Europe and the
Americas with a turnover of US $57 billion
Amway is the wholly owned subsidiary of Alticor Inc
It has a sales force of over 33 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)
Over 500 R amp D scientists and professionals ensure the exceptional quality of
its products across five product lines
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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 Nationlsquos Environment
Programlsquos Environment Achievement Award This award recognised Amwaylsquos
commitment to environmental education and awareness
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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 arent 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
Independent Business Owners or Distributors are people who have evaluated
the Amway business opportunity and elected to join 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 contact
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 its
right for them This is called sponsoring Amway distributors who sponsor others
generally have higher average sales volumes than those who dont sponsor
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Your Group is the team of distributors youve sponsored Many youve 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 its 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 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 US 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
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Variety of Special Programs
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 theDistributor Hall of Fame in Amways World Headquarters
AMWAYrsquoS 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 Amways retail strategy to provide high quality
readily purchasable items with a good environmental positioning 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 furtherDistributors 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
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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 obtainorders 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
AMWAYrsquoS 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
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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
organisations 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 product
carry the Amway name in the areas of nutrition health beauty and home Amway
also has a range of products that include other well known branded goods The
company also offers a variety of third party services
A Amwayrsquos Market Penetration Strategy
Going for market penetration has involved Amway in making the most of current
products and competences by stretching them 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
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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 ie
Home Care
Personal care
Cosmetics
Nutrition and Wellness
But initially Amway was launched in India with only 6 products most of which werehome 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 Amwaylsquos
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
Amwaylsquos 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 user 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
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market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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INTRODUCTION TO DIRECT SELLING
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 consumers convenience often at hisher
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 countrys 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
countrys 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 willreach 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 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
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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
Amways products to their customers homes Independent Business Owners sell to
people they know or meet The personal contact 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 aproduct moves from a manufacturer to a consumer The increasing use of the
Internet by consumers has created a real potential for developing different types of
business models and for new approaches to reaching users 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
Amwaylsquos 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
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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 sellers
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
marketlsquos needs
This report has been made keeping in mind the benefits which can be derived from
my research
Benefits to customers
This report will be beneficial for consumers who prefer the marketing goods or
services directly to them at their own convenience often in hisher 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 companylsquos 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 andbelieve 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 Amwaylsquos unique
business opportunity
Benefits to companies
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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
AMWAY - THE CURRENT SCENARIO
Amway is the largest multi-level marketing (MLM) organization in the world It is amulti-billion dollar company based on the sale of a variety of products Amwaylsquos
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 support of various
community projects
Corporate Profile
Between then and now Amway corporation has grown into a US Multi-billion
dollar company managed by 12000 employees
It operates across 80 countries and territories in Asia Africa Europe and the
Americas with a turnover of US $57 billion
Amway is the wholly owned subsidiary of Alticor Inc
It has a sales force of over 33 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)
Over 500 R amp D scientists and professionals ensure the exceptional quality of
its products across five product lines
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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 Nationlsquos Environment
Programlsquos Environment Achievement Award This award recognised Amwaylsquos
commitment to environmental education and awareness
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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 arent 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
Independent Business Owners or Distributors are people who have evaluated
the Amway business opportunity and elected to join 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 contact
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 its
right for them This is called sponsoring Amway distributors who sponsor others
generally have higher average sales volumes than those who dont sponsor
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Your Group is the team of distributors youve sponsored Many youve 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 its 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 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 US 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
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Variety of Special Programs
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 theDistributor Hall of Fame in Amways World Headquarters
AMWAYrsquoS 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 Amways retail strategy to provide high quality
readily purchasable items with a good environmental positioning 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 furtherDistributors 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
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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 obtainorders 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
AMWAYrsquoS 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
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21
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
organisations 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 product
carry the Amway name in the areas of nutrition health beauty and home Amway
also has a range of products that include other well known branded goods The
company also offers a variety of third party services
A Amwayrsquos Market Penetration Strategy
Going for market penetration has involved Amway in making the most of current
products and competences by stretching them 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
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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 ie
Home Care
Personal care
Cosmetics
Nutrition and Wellness
But initially Amway was launched in India with only 6 products most of which werehome 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 Amwaylsquos
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
Amwaylsquos 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 user 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
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market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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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
Amways products to their customers homes Independent Business Owners sell to
people they know or meet The personal contact 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 aproduct moves from a manufacturer to a consumer The increasing use of the
Internet by consumers has created a real potential for developing different types of
business models and for new approaches to reaching users 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
Amwaylsquos 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
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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 sellers
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
marketlsquos needs
This report has been made keeping in mind the benefits which can be derived from
my research
Benefits to customers
This report will be beneficial for consumers who prefer the marketing goods or
services directly to them at their own convenience often in hisher 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 companylsquos 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 andbelieve 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 Amwaylsquos unique
business opportunity
Benefits to companies
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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
AMWAY - THE CURRENT SCENARIO
Amway is the largest multi-level marketing (MLM) organization in the world It is amulti-billion dollar company based on the sale of a variety of products Amwaylsquos
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 support of various
community projects
Corporate Profile
Between then and now Amway corporation has grown into a US Multi-billion
dollar company managed by 12000 employees
It operates across 80 countries and territories in Asia Africa Europe and the
Americas with a turnover of US $57 billion
Amway is the wholly owned subsidiary of Alticor Inc
It has a sales force of over 33 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)
Over 500 R amp D scientists and professionals ensure the exceptional quality of
its products across five product lines
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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 Nationlsquos Environment
Programlsquos Environment Achievement Award This award recognised Amwaylsquos
commitment to environmental education and awareness
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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 arent 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
Independent Business Owners or Distributors are people who have evaluated
the Amway business opportunity and elected to join 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 contact
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 its
right for them This is called sponsoring Amway distributors who sponsor others
generally have higher average sales volumes than those who dont sponsor
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Your Group is the team of distributors youve sponsored Many youve 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 its 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 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 US 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
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Variety of Special Programs
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 theDistributor Hall of Fame in Amways World Headquarters
AMWAYrsquoS 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 Amways retail strategy to provide high quality
readily purchasable items with a good environmental positioning 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 furtherDistributors 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
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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 obtainorders 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
AMWAYrsquoS 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
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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
organisations 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 product
carry the Amway name in the areas of nutrition health beauty and home Amway
also has a range of products that include other well known branded goods The
company also offers a variety of third party services
A Amwayrsquos Market Penetration Strategy
Going for market penetration has involved Amway in making the most of current
products and competences by stretching them 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
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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 ie
Home Care
Personal care
Cosmetics
Nutrition and Wellness
But initially Amway was launched in India with only 6 products most of which werehome 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 Amwaylsquos
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
Amwaylsquos 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 user 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
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market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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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 sellers
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
marketlsquos needs
This report has been made keeping in mind the benefits which can be derived from
my research
Benefits to customers
This report will be beneficial for consumers who prefer the marketing goods or
services directly to them at their own convenience often in hisher 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 companylsquos 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 andbelieve 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 Amwaylsquos unique
business opportunity
Benefits to companies
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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
AMWAY - THE CURRENT SCENARIO
Amway is the largest multi-level marketing (MLM) organization in the world It is amulti-billion dollar company based on the sale of a variety of products Amwaylsquos
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 support of various
community projects
Corporate Profile
Between then and now Amway corporation has grown into a US Multi-billion
dollar company managed by 12000 employees
It operates across 80 countries and territories in Asia Africa Europe and the
Americas with a turnover of US $57 billion
Amway is the wholly owned subsidiary of Alticor Inc
It has a sales force of over 33 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)
Over 500 R amp D scientists and professionals ensure the exceptional quality of
its products across five product lines
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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 Nationlsquos Environment
Programlsquos Environment Achievement Award This award recognised Amwaylsquos
commitment to environmental education and awareness
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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 arent 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
Independent Business Owners or Distributors are people who have evaluated
the Amway business opportunity and elected to join 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 contact
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 its
right for them This is called sponsoring Amway distributors who sponsor others
generally have higher average sales volumes than those who dont sponsor
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Your Group is the team of distributors youve sponsored Many youve 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 its 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 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 US 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
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Variety of Special Programs
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 theDistributor Hall of Fame in Amways World Headquarters
AMWAYrsquoS 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 Amways retail strategy to provide high quality
readily purchasable items with a good environmental positioning 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 furtherDistributors 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
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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 obtainorders 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
AMWAYrsquoS 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
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21
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
organisations 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 product
carry the Amway name in the areas of nutrition health beauty and home Amway
also has a range of products that include other well known branded goods The
company also offers a variety of third party services
A Amwayrsquos Market Penetration Strategy
Going for market penetration has involved Amway in making the most of current
products and competences by stretching them 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
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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 ie
Home Care
Personal care
Cosmetics
Nutrition and Wellness
But initially Amway was launched in India with only 6 products most of which werehome 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 Amwaylsquos
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
Amwaylsquos 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 user 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
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market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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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
AMWAY - THE CURRENT SCENARIO
Amway is the largest multi-level marketing (MLM) organization in the world It is amulti-billion dollar company based on the sale of a variety of products Amwaylsquos
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 support of various
community projects
Corporate Profile
Between then and now Amway corporation has grown into a US Multi-billion
dollar company managed by 12000 employees
It operates across 80 countries and territories in Asia Africa Europe and the
Americas with a turnover of US $57 billion
Amway is the wholly owned subsidiary of Alticor Inc
It has a sales force of over 33 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)
Over 500 R amp D scientists and professionals ensure the exceptional quality of
its products across five product lines
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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 Nationlsquos Environment
Programlsquos Environment Achievement Award This award recognised Amwaylsquos
commitment to environmental education and awareness
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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 arent 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
Independent Business Owners or Distributors are people who have evaluated
the Amway business opportunity and elected to join 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 contact
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 its
right for them This is called sponsoring Amway distributors who sponsor others
generally have higher average sales volumes than those who dont sponsor
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Your Group is the team of distributors youve sponsored Many youve 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 its 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 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 US 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
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Variety of Special Programs
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 theDistributor Hall of Fame in Amways World Headquarters
AMWAYrsquoS 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 Amways retail strategy to provide high quality
readily purchasable items with a good environmental positioning 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 furtherDistributors 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
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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 obtainorders 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
AMWAYrsquoS 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
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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
organisations 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 product
carry the Amway name in the areas of nutrition health beauty and home Amway
also has a range of products that include other well known branded goods The
company also offers a variety of third party services
A Amwayrsquos Market Penetration Strategy
Going for market penetration has involved Amway in making the most of current
products and competences by stretching them 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
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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 ie
Home Care
Personal care
Cosmetics
Nutrition and Wellness
But initially Amway was launched in India with only 6 products most of which werehome 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 Amwaylsquos
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
Amwaylsquos 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 user 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
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market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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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 Nationlsquos Environment
Programlsquos Environment Achievement Award This award recognised Amwaylsquos
commitment to environmental education and awareness
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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 arent 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
Independent Business Owners or Distributors are people who have evaluated
the Amway business opportunity and elected to join 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 contact
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 its
right for them This is called sponsoring Amway distributors who sponsor others
generally have higher average sales volumes than those who dont sponsor
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Your Group is the team of distributors youve sponsored Many youve 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 its 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 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 US 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
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Variety of Special Programs
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 theDistributor Hall of Fame in Amways World Headquarters
AMWAYrsquoS 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 Amways retail strategy to provide high quality
readily purchasable items with a good environmental positioning 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 furtherDistributors 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
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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 obtainorders 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
AMWAYrsquoS 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
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21
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
organisations 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 product
carry the Amway name in the areas of nutrition health beauty and home Amway
also has a range of products that include other well known branded goods The
company also offers a variety of third party services
A Amwayrsquos Market Penetration Strategy
Going for market penetration has involved Amway in making the most of current
products and competences by stretching them 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
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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 ie
Home Care
Personal care
Cosmetics
Nutrition and Wellness
But initially Amway was launched in India with only 6 products most of which werehome 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 Amwaylsquos
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
Amwaylsquos 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 user 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
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market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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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 arent 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
Independent Business Owners or Distributors are people who have evaluated
the Amway business opportunity and elected to join 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 contact
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 its
right for them This is called sponsoring Amway distributors who sponsor others
generally have higher average sales volumes than those who dont sponsor
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Your Group is the team of distributors youve sponsored Many youve 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 its 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 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 US 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
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Variety of Special Programs
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 theDistributor Hall of Fame in Amways World Headquarters
AMWAYrsquoS 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 Amways retail strategy to provide high quality
readily purchasable items with a good environmental positioning 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 furtherDistributors 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
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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 obtainorders 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
AMWAYrsquoS 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
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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
organisations 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 product
carry the Amway name in the areas of nutrition health beauty and home Amway
also has a range of products that include other well known branded goods The
company also offers a variety of third party services
A Amwayrsquos Market Penetration Strategy
Going for market penetration has involved Amway in making the most of current
products and competences by stretching them 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
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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 ie
Home Care
Personal care
Cosmetics
Nutrition and Wellness
But initially Amway was launched in India with only 6 products most of which werehome 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 Amwaylsquos
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
Amwaylsquos 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 user 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
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market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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Your Group is the team of distributors youve sponsored Many youve 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 its 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 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 US 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
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Variety of Special Programs
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 theDistributor Hall of Fame in Amways World Headquarters
AMWAYrsquoS 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 Amways retail strategy to provide high quality
readily purchasable items with a good environmental positioning 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 furtherDistributors 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
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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 obtainorders 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
AMWAYrsquoS 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
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21
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
organisations 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 product
carry the Amway name in the areas of nutrition health beauty and home Amway
also has a range of products that include other well known branded goods The
company also offers a variety of third party services
A Amwayrsquos Market Penetration Strategy
Going for market penetration has involved Amway in making the most of current
products and competences by stretching them 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
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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 ie
Home Care
Personal care
Cosmetics
Nutrition and Wellness
But initially Amway was launched in India with only 6 products most of which werehome 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 Amwaylsquos
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
Amwaylsquos 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 user 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
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market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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Variety of Special Programs
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 theDistributor Hall of Fame in Amways World Headquarters
AMWAYrsquoS 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 Amways retail strategy to provide high quality
readily purchasable items with a good environmental positioning 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 furtherDistributors 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
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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 obtainorders 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
AMWAYrsquoS 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
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21
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
organisations 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 product
carry the Amway name in the areas of nutrition health beauty and home Amway
also has a range of products that include other well known branded goods The
company also offers a variety of third party services
A Amwayrsquos Market Penetration Strategy
Going for market penetration has involved Amway in making the most of current
products and competences by stretching them 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
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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 ie
Home Care
Personal care
Cosmetics
Nutrition and Wellness
But initially Amway was launched in India with only 6 products most of which werehome 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 Amwaylsquos
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
Amwaylsquos 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 user 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
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market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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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 obtainorders 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
AMWAYrsquoS 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
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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
organisations 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 product
carry the Amway name in the areas of nutrition health beauty and home Amway
also has a range of products that include other well known branded goods The
company also offers a variety of third party services
A Amwayrsquos Market Penetration Strategy
Going for market penetration has involved Amway in making the most of current
products and competences by stretching them 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
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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 ie
Home Care
Personal care
Cosmetics
Nutrition and Wellness
But initially Amway was launched in India with only 6 products most of which werehome 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 Amwaylsquos
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
Amwaylsquos 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 user 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
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market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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21
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
organisations 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 product
carry the Amway name in the areas of nutrition health beauty and home Amway
also has a range of products that include other well known branded goods The
company also offers a variety of third party services
A Amwayrsquos Market Penetration Strategy
Going for market penetration has involved Amway in making the most of current
products and competences by stretching them 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
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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 ie
Home Care
Personal care
Cosmetics
Nutrition and Wellness
But initially Amway was launched in India with only 6 products most of which werehome 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 Amwaylsquos
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
Amwaylsquos 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 user 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
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market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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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 ie
Home Care
Personal care
Cosmetics
Nutrition and Wellness
But initially Amway was launched in India with only 6 products most of which werehome 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 Amwaylsquos
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
Amwaylsquos 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 user 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
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market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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market The image created would reflect a great deal about the product and its
consumers One of the most important 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
Amwayrsquos 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 With the exception of the Nutrition amp Wellness and Cosmetics range all
Amway India productsbottles are manufactured through 3 third party contractmanufacturers using world class technology and processes The products match
Amways 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 Indias product portfolio comprises of
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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Ten products in the Personal Care category
Eleven in the Home Care category and
Six in the Nutrition amp Wellness category
Seven in the cosmetics category One product in the Agricultural Category
The other products are two soft toys
Amway Sales aid
Amways product range demonstrates its adaptability to the market based on a
close first-hand understanding of the Indian consumers 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 aremore 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 Amwaylsquos sales success over the years speaks volumes about its
product value and customer satisfaction
Place The Company Amway India launched with 5 offices (New Delhi Mumbai
Bangalore Chennai Kolkatta) 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 productknowledge comprise motivation sessions and seek to optimise the business
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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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
B Amwayrsquos Market Expansion Strategy
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 - Members
C - Clients (customers) of the IBOs
Members 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 Amwaylsquos distributors are now spread all over India even
across the rural areas
across the country
Demographic
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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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 join 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 joining 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
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
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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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
- Amwaylsquos 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
- Amway business opportunity is attracting the middle income group to
earn extra income
- Amwaylsquos 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
- Amwaylsquos products being good in quality are also very much preferredby the upper class segment who can easily afford the pricing but they
donlsquot want to get involved with the business opportunity They are
mostly associated with Amway as their customer
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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Target group
Men ndash Professionals and small business owners
Age - 23 - 50 years
Income Status ndash Working class Middle income upper middle income
Women ndash Professional and housewife
Age ndash 20 ndash 50 years
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 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
Price Amwaylsquos 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 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 anunwritten rule of ―Be present where Amway distributors are
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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Promotion Amway has come up with a vast promotional strategy to reach out to its
customers and other potential buyers
Amways Promotion channels
There are five different promotion channels
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 generatingpersonal 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 tomeet 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 some of the worlds finest beach locations and hotels where they attend a
number of business sessions and exchange thoughts and ideas withcorporate staff
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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Launch into 03 - a major annual launch of new products and services
presented by a road show of events
Training
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
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 administration of their businesses and support new and existing
distributors These lines of sponsorship provide constant face-to-face support from
professional associates
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31
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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
822019 Mudassir Project (1)
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42
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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers drive from it
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43
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 Amwayrsquos 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 ManyAMWAY 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 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
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44
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 support 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
822019 Mudassir Project (1)
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45
CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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46
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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 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 Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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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 affiliates 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 andthe legislation regulating the Direct Selling Industry
Special Literature - Occasionally Amway designs a brochure or leaflet which isused to address a particular change or launch eg new car care product range
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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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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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
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
MeetingsEvents
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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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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37
A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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38
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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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41
This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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42
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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers drive from it
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43
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 Amwayrsquos 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 ManyAMWAY 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 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
822019 Mudassir Project (1)
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44
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 support 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
822019 Mudassir Project (1)
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45
CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4650
46
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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 worth of Amway soaps every month seems
laughable in a country where entire families lead their lives on less money
822019 Mudassir Project (1)
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47
RECOMMENDATIONS
After conducting an in-depth analysis of Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4850
48
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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
822019 Mudassir Project (1)
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49
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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
822019 Mudassir Project (1)
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
822019 Mudassir Project (1)
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32
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 customerlsquos door step
The initial demographic information will help in understanding of Amwaylsquos 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 Rs10 000
Rs 10000- Rs 20000
Rs 20000- Rs 30000
Rs 30000- Rs 40000
Rs 40000- Rs 50000
Rs 50000 and above
This question will help in understanding which income categories of people are
more likely to join the Amway business because of it unique income opportunities
3 a How do you feel are the Amway products priced (Multiple
Choice)
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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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
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34
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
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
MeetingsEvents
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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35
FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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36
C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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37
A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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38
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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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39
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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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40
SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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41
This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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42
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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers drive from it
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43
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 Amwayrsquos 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 ManyAMWAY 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 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
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44
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 support 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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45
CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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46
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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 worth of Amway soaps every month seems
laughable in a country where entire families lead their lives on less money
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4750
47
RECOMMENDATIONS
After conducting an in-depth analysis of Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4850
48
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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
822019 Mudassir Project (1)
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49
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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 5050
BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 3350
33
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 peoplelsquos perception of Amwaylsquos 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 customerlsquos 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
Average
Bad
Poor
This question is necessary for understanding whether the Amway products meet the
customerlsquos 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 3450
34
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
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
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
This will indicate the most popular channel through which Amway is reaching out to
the potential customers
822019 Mudassir Project (1)
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FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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38
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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
822019 Mudassir Project (1)
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39
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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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
822019 Mudassir Project (1)
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40
SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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42
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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers 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 Amwayrsquos 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 ManyAMWAY 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 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
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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 support 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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CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
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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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 worth of Amway soaps every month seems
laughable in a country where entire families lead their lives on less money
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47
RECOMMENDATIONS
After conducting an in-depth analysis of Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
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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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
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34
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
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
MeetingsEvents
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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35
FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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37
A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
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38
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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
822019 Mudassir Project (1)
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39
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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4050
40
SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
822019 Mudassir Project (1)
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41
This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
822019 Mudassir Project (1)
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42
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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers drive from it
822019 Mudassir Project (1)
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43
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 Amwayrsquos 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 ManyAMWAY 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 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4450
44
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 support 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4550
45
CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4650
46
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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 worth of Amway soaps every month seems
laughable in a country where entire families lead their lives on less money
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4750
47
RECOMMENDATIONS
After conducting an in-depth analysis of Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4850
48
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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4950
49
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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 5050
BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
822019 Mudassir Project (1)
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35
FINDINGS FROM THE QUESTIONNAIRE
1 Are you an
Independent Business Owner Customer of Amway products None of the above
Findings
A Independent Business Owners 17
B Customer of Amway products 3
C None of the above 10
2 What is your income level (Rs per month) Below Rs10 000 10000-20000 20000-30000 30000-40000 40000-50000 50000 and above
Findings
A Below 10000 NoneB 10000 ndash 20000 8C 20000 ndash 30000 17D 30000 ndash 40000 4E 40000 ndash 50000 1F Above 50000 None
3 a In your opinion how are the Amway products priced Too expensive Expensive Economical Cheap Poor
Findings
A Too expensive 11B Expensive 15
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36
C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
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37
A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
822019 Mudassir Project (1)
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38
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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
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39
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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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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40
SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
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41
This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
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42
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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers drive from it
822019 Mudassir Project (1)
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43
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 Amwayrsquos 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 ManyAMWAY 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 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4450
44
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 support 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4550
45
CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4650
46
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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 worth of Amway soaps every month seems
laughable in a country where entire families lead their lives on less money
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4750
47
RECOMMENDATIONS
After conducting an in-depth analysis of Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4850
48
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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4950
49
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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 5050
BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 3650
36
C Economical 4D Cheap NoneE Poor None
b Do you think they are fairly priced as compared to other products of the same
category available in the retail stores Yes No
Findings
Yes 9No 21
4 How would you rate the quality of the products
Excellent Good Average Bad Poor
Findings
A Excellent 21
B Good 7C Average 1D Bad 1E Poor None
5 Do you have an easy access to Amway products Yes No
Findings
Yes 28
No 2
6 What is it that attracts you more towards Amway Why
Retailing
Sponsoring
Findings
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 3750
37
A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 3850
38
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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 3950
39
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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4050
40
SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4150
41
This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4250
42
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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers drive from it
822019 Mudassir Project (1)
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43
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 Amwayrsquos 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 ManyAMWAY 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 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
822019 Mudassir Project (1)
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44
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 support 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4550
45
CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
822019 Mudassir Project (1)
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46
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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 worth of Amway soaps every month seems
laughable in a country where entire families lead their lives on less money
822019 Mudassir Project (1)
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47
RECOMMENDATIONS
After conducting an in-depth analysis of Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
822019 Mudassir Project (1)
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48
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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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49
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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
822019 Mudassir Project (1)
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BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
822019 Mudassir Project (1)
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37
A Retailing 6
B Sponsoring 24
Along with an excellent range of products Amway also gives its customers a unique
way of earning extra income which if worked on with full dedication can lead to
residual income to serve generations
7 How did you learn about Amway
Independent Business owner
MeetingsEvents
Newspaper
Peers
Internet
Others Please specify________
Findings
A Independent Business owner 19
B MeetingsEvents 3C Advertisement 1
D Peers 7
E Internet None
F Others Please specify________
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 3850
38
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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
822019 Mudassir Project (1)
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39
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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4050
40
SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4150
41
This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4250
42
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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers drive from it
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4350
43
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 Amwayrsquos 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 ManyAMWAY 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 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4450
44
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 support 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4550
45
CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4650
46
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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 worth of Amway soaps every month seems
laughable in a country where entire families lead their lives on less money
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4750
47
RECOMMENDATIONS
After conducting an in-depth analysis of Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4850
48
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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4950
49
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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 5050
BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 3850
38
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 20000 ndash Rs 30000 per
month This proves that Amwaylsquos 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 29000 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 donlsquot 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
4 90 people in the sample group are satisfied with Amwaylsquos 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 3950
39
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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4050
40
SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4150
41
This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4250
42
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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers drive from it
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4350
43
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 Amwayrsquos 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 ManyAMWAY 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 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
822019 Mudassir Project (1)
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44
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 support 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
822019 Mudassir Project (1)
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45
CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
822019 Mudassir Project (1)
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46
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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 worth of Amway soaps every month seems
laughable in a country where entire families lead their lives on less money
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4750
47
RECOMMENDATIONS
After conducting an in-depth analysis of Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4850
48
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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4950
49
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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 5050
BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 3950
39
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 productlsquos quality was not upto
the desired standards the business opportunity no matter how good it is will
have no meaning So itlsquos the combination of Amwaylsquos excellent quality
products and the income opportunities that has brought more and more
people to join 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 Amwaylsquos 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4050
40
SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4150
41
This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4250
42
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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers drive from it
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4350
43
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 Amwayrsquos 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 ManyAMWAY 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 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4450
44
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 support 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4550
45
CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4650
46
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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 worth of Amway soaps every month seems
laughable in a country where entire families lead their lives on less money
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4750
47
RECOMMENDATIONS
After conducting an in-depth analysis of Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4850
48
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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4950
49
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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 5050
BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4050
40
SURVEY -2 RATIONALE BEHIND QUESTIONS
Guidelines for consulting people associated with the Amway Corporation
1 What is Amwayrsquos Target audience
To get a clear understanding of who are the main users of Amway products and
business opportunity
2 a What is Amwayrsquos expansion strategy
b How is it planning to go about it
This will indicate Amwaylsquos 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 companylsquos 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 Amwaylsquos products in the Indian market
and highlighting the emerging trends of both buyers and sellers
5 Are all these products sourced in India
This will indicate Amwaylsquos 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 IBOrsquosCustomers drive from it
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4150
41
This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4250
42
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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers drive from it
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4350
43
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 Amwayrsquos 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 ManyAMWAY 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 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4450
44
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 support 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4550
45
CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4650
46
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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 worth of Amway soaps every month seems
laughable in a country where entire families lead their lives on less money
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4750
47
RECOMMENDATIONS
After conducting an in-depth analysis of Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4850
48
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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4950
49
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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 5050
BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4150
41
This will indicate Amwaylsquos 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
Amwaylsquos reason for their expensive products
9 What does Amway see as the role of Women in the Amway business
This will explain Amwaylsquos 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
b I have heard rumors that Amway is a cult Is this true
This will help clearing peoplelsquos doubts about Amway as not being associated with
illegal pyramids or cults
RESULTS OBTAINED THROUGH THE INTERVIEW
1 What is Amwayrsquos Target audience
Amwaylsquos products are used by people of all age groups It basically depends on the
distributorlsquos 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 Amwayrsquos expansion strategy
b How is it planning to go about it
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4250
42
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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers drive from it
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4350
43
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 Amwayrsquos 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 ManyAMWAY 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 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4450
44
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 support 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4550
45
CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4650
46
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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 worth of Amway soaps every month seems
laughable in a country where entire families lead their lives on less money
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4750
47
RECOMMENDATIONS
After conducting an in-depth analysis of Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4850
48
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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4950
49
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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 5050
BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4250
42
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 ie the
products are consumed by the distributor as well as sell them to their respectivecustomers
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
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 ie 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 IBOrsquosCustomers drive from it
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4350
43
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 Amwayrsquos 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 ManyAMWAY 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 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4450
44
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 support 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4550
45
CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4650
46
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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 worth of Amway soaps every month seems
laughable in a country where entire families lead their lives on less money
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4750
47
RECOMMENDATIONS
After conducting an in-depth analysis of Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4850
48
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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4950
49
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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 5050
BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4350
43
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 Amwayrsquos 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 ManyAMWAY 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 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4450
44
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 support 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4550
45
CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4650
46
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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 worth of Amway soaps every month seems
laughable in a country where entire families lead their lives on less money
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4750
47
RECOMMENDATIONS
After conducting an in-depth analysis of Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4850
48
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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4950
49
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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 5050
BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4450
44
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 support 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
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4550
45
CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4650
46
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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 worth of Amway soaps every month seems
laughable in a country where entire families lead their lives on less money
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4750
47
RECOMMENDATIONS
After conducting an in-depth analysis of Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4850
48
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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4950
49
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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 5050
BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4550
45
CONCLUSION OF SURVEY
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 ones 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 Donrsquot
An interesting calculation If 1 million people sign up Amway will receive Rs
4400 million (Rs 440 crores or US$ 20680 million) in up-front cash from this
cash richlsquo country
They will have earned all this money without having sold a single one of theirvery expensive products but just by sponsoring people to this business
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4650
46
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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 worth of Amway soaps every month seems
laughable in a country where entire families lead their lives on less money
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4750
47
RECOMMENDATIONS
After conducting an in-depth analysis of Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4850
48
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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4950
49
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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 5050
BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4650
46
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 mdashin the beginning and again every year
as a renewal feemdash it looks like Amway seeks to build a captive consumer
base Once someone has paid Rs 4400 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
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 1500 worth of Amway soaps every month seems
laughable in a country where entire families lead their lives on less money
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4750
47
RECOMMENDATIONS
After conducting an in-depth analysis of Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4850
48
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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4950
49
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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 5050
BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4750
47
RECOMMENDATIONS
After conducting an in-depth analysis of Amwayrsquos 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 PowderThis 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 join 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 join the Amway business they should focus on the needs of these
people ie 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
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 ie Quixtar in India It will help in enhancing the
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4850
48
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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4950
49
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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 5050
BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4850
48
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
CONCLUSION
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
Amwaylsquos 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 supports 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
distributors 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 save time on routine tasks such as shopping for everyday needs Direct
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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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 5050
BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 4950
49
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 support
The Amway business opportunity is supported 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 support
More than 12000 people worldwide are employed in Amway manufacturing
administration and distribution facilities totaling 10 million square feet (929000
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 surpass the most successful distributor and the
business opportunity is continually improved The Amway opportunity has been
imitated often but the level of support Amway provides its distributors is difficult to
duplicate
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 5050
BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011
822019 Mudassir Project (1)
httpslidepdfcomreaderfullmudassir-project-1 5050
BIBLIOGRAPHY
Books and Secondary data
Amway Company Planner
Amway Opportunity brochures
Internet
wwwamwayindiacom wwwamwaycom
wwwonlinemlmcom
wwwamquix50megscom
wwwskepdiccom
wwwgetfactscom
wwwcocscom
wwwgooglecom
wwwmsncom
Newspaper and Magazine
The Hindu Saturday May 10 2011
The Financial Express February 1 2011
The Hindu February 16 2011