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CONTENTS

Executive Summary Introduction Amway Profile How it wor !" Product Profile Current Scenario Amway#! mar etin$ !trate$ie! Sale! & 'ar etin$ Plan Strate$ie! in t(e mar et Penetration Se$mentation )e!earc( 'et(odolo$y +indin$! & Analy!i! Conclu!ion )ecommendation .i/lio$ra0(y Sam0le 1ue!tionnaire 3 5 9

3%

*5 5* ,,5 ,, ,9

E2EC3TI4E S3''A)5
Amway is a unique company. It is defined by the fundamental philosophy of helping people help themselves. Amway has helped millions of people run their own independent business around the world. Today, Amway continues to grow by offering new products and business opportunities to people from all cultures and walks of life. Whether they are employees, distributors, or citizens in the community, Amway touches their lives for better. India with its rich reservoir of will, talent and enterprise is perhaps the most fertile ground for the Amway orporation. In short it has made substantial value addition to India!s social economic life. The focus of this pro"ect is based on studying a single organization i.e The Amway orporation. This research has been conducted to study the marketing strategy adopted by Amway in the Indian market. An attempt has been made to study the company!s perspective in the new market and analyse on how the company plans its e#pansion 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 $ surveys which were conducted by me. %urvey & was conducted through direct, phone and online interviews. %urvey $ 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 mi#.

A'6A5 4ISION
'Hel0in$ 0eo0le live /etter live!7 In all a!0ect! of our 0roduct!8 /u!ine!!e! and !ocial re!0on!i/ility8 we !trive to ma e a meanin$ful difference in t(e communitie! in w(ic( we o0erate79

A'6A5 'ISSION Through the partnering of Distributors, Employees, and the Founding
Families, and the support of quality products and service, we offer all people the opportunity to achieve their goals through the Amway Sales and
ar!eting "lan#$

INT)O:3CTION
(irect %elling 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. (irect %elling 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. (irect %elling benefits consumer because it sells high quality products at the consumer*s convenience, often at his+her home or workplace. ustomers value the advantages of convenience, personalised attention, demonstration of usage, and a wide choice of products backed by ustomer %atisfaction ,uarantee. -ne of the most tangible impacts of (irect %elling in its new advent has been the fact that it has touched the average man and women in a manner never e#perienced before. Amway India orporation is the country*s leading (irect %elling ompany. It is perhaps the best e#ample of the contribution (irect %elling is making to India. In a little over two years of commercial launch Amway India has emerged as the country*s largest (irect %elling ompany. It closed its financial year with a turnover close to .s. $/0 crores 1the Amway 2inancial year runs from %ept. to Aug.3. It will reach its target of .s. &000 crore turnover much before its declared target of the year $004.. The direct selling industry has grown rapidly over recent years. hanging lifestyles,

demographics and economic recession have all been factors influencing this growth. Amway provides people with business opportunities across the globe. (irect 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. 5ecause it focuses upon direct selling, Amway is different from more traditional distribution channels. Its Independent 5usiness -wners own their own business, with the fle#ibility to deal directly with their own clients and to build up personal relationships. These Independent 5usiness -wners also have the ability to deliver Amway*s products to their customers* homes. Independent 5usiness -wners 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 5usiness -wners.

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

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 e#amines in detail the marketing strategy of the leading global direct marketing ma"or, Amway in India. In the initial stages of the report I have focused on Amway!s current position in the Indian market. As the research progresses I have tried to analyse the companies marketing ob"ective 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 26 , sector, so as to give an idea as to how the system is being utilized by companies like Amway.

';' <a definition


6ultilevel marketing allows sellers to build a business through their own sales efforts and by inviting others to become sellers. .emuneration is based on a seller*s personal sales A7( on the combined sales of those people they have sponsored, trained and motivated. The story of Amway is intended to drive home the point of a company being alert enough to modify its globally accepted practices to suit the local market!s needs. This report has been made keeping in mind the benefits which can be derived from my research.

.enefit! to cu!tomer!
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This report will be beneficial for consumers who prefer the marketing goods or services directly to them9 at their own convenience often in his+her home either on a one)to)one basis, or in the conte#t of a sales party. Through this the customers will get a better idea about the company!s product offerings and value the advantages of9 convenience, personalised attention, and a good selection of quality products available at their door steps.

.enefit! to !eller!
6any people have chosen direct selling because they want to build their own business, but do not have9 considerable funds required to buy a franchise or start a new company. Among the top five reasons people sell direct because they like and believe in the product, like being their own boss, and working their own hours, like the supplemental family income or making e#tra money for themselves. It can be beneficial from the sellers point of view as it may give them the idea of e#actly how they can go about creating their own business and benefit from the Amway!s unique business opportunity.

.enefit! to com0anie!
In this report I have deeply analysed the marketing strategy for Amway through personal interviews by many I5-s and Amway customers who have helped in adding valuable data to this pro"ect which can be useful for the company. The suggested recommendations can be considered by the corporation for further e#pansion and increasing market share.

CO'PAN5 HISTO)5

Amway began in &;/; with two young entrepreneurs in the <nited %tates )) .ich (e=os and >ay =an Andel. Their concept for an innovative business opportunity, centered around person)to)person marketing, established itself as a leader among one of today*s fastest)growing industries. Today, more than ?.8 million independent business owners distribute Amway products in more than @0 countries and territories. Amway is part of the Alticor family of companies whose global sales totaled A4./ billion in its most recent fiscal year. %95=! < A +riend!(i0 +orm! .ich (e=os and >ay =an Andel*s friendship actually began with a business proposition, when .ich struck a deal with >ay for a ride to school for $/ cents a week. After high school they entered the military, but they planned to start a business together after separate tours of duty. A friendship formed and became a business relationship that has lasted to this day. %9>=! < T(e Early 5ear! Amway quickly outgrew its original facilities in the basements of .ich (e=os*s and >ay =an Andel*s homes. In its first full year of business, Amway*s sales were more than half a million dollars. %9,=! < T(e :ecade of ?rowt( As vowed by >ay =an Andel the night of the &;8; disaster, Amway rebuilt the aerosol plant and went on. The * :0s began with sales of more than A&00 million at estimated

retail, and kept going strong. After a lengthy investigation, the 2T verified that Amway is a genuine business opportunity and not a Bpyramid.B %9@=! < T(e .illion<:ollar :ecade The * @0s will be remembered for the first 5illion (ollar Cear at estimated retail in &;@0. 5uilding e#pansion at Amway World Deadquarters continued at breakneck speed as Amway scrambled to keep pace with demand, opening its new cosmetics plant in Ada. %99=! < T(e Second ?eneration As carefully planned by .ich and >ay, the second generation =an Andel and (e=os families took the helm during the * ;0s. %teve =an Andel and (ick (e=os succeeded their fathers as hairman and Eresident. (istributors witnessed a similar trend, with the second generation of many distributor families taking on important leadership roles.

-===! < T(e New 'illennium In $000, Amway orporation became a wholly)owned subsidiary of Alticor, Inc. hief

hairman %teve =an Andel and Eresident (oug (e=os share the -ffice of the F#ecutive.

'any 6ay! to )eceive Income


Cou have read about the first two ways9 .etail Erofit. Averages $0G H of 5usiness =olume 15=3 on products you sell. Eerformance Incentive, ranges from ?G to $&G and is paid monthly.

There are many more ways for (irect (istributors to earn income when they meet qualifications. These are9 1a3 Ieadership ommission. 1Eaid monthly3 1b3 6onthly (epth ommission. 1Eaid monthly3 1c3 .uby ommission. 1Eaid monthly3 1d3 Fmerald ommission. 1Eaid yearly3 %e& Diamond 'ommission# %"aid yearly& 1f3 (iamond Elus ommission. 1Eaid yearly3 1g3 (ouble (iamond Eayment. 1.s. /00,000. -ne time cash award3 1h3 Triple (iamond Eayment. 1.s. &0,00,000. -ne time cash award3 1i3 rown Eayment. 1.s. $0,00,000. -ne time cash award3 1"3 rown Ambassador Eayment. 1.s. ?0,00,000. -ne time cash award3 S0ecial ;eader!(i0 Pro$ramme! As you attain various levels of achievement, you may also be eligible for various A6WAC leadership programmes9 :irect :i!tri/utor SeminarA A special two)day meeting for new (irect (istributors. With all e#penses paid by A6WAC, new (irect (istributors meet the A6WAC India management team, and receive an abundance of information to assist them as they build their growing businesses.

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Annual ;eader!(i0 Conference! in countries around the world. Invitations are e#tended to A6WAC*s top leaders to meet in a business)building atmosphere. A variety of !0ecial 0ro$ramme!, such as your own special day at A6WAC, your own success story in the (istributor magazine, the Amagram, or your name and picture added to the (istributor Dall of Achievements in India and World Deadquarters.

(usiness 'onsiderations
A6WAC -.E-.ATI-7 has succeeded for almost four decades because it is a proper, ethical, and honorable addition to the retail marketplace. A6WAC is a world leader in (irect %elling. A key element to this success is the recognition by governments that A6WAC is a model marketing system. As with any venture, you should review all aspects, weigh the ad vantages +disadvantages, and decide whether it meets your needs. Dere are some essential points to consider about the A6WAC business opportunity9

Start<30 Co!t!
ompare the start)up costs of this opportunity with that of a conventional business, and you will notice quite a difference. The only cost for an A6WAC 5usiness is that of a 5usiness Jit, which costs .s. 4,400.

'erc(andi!in$
The first way you can make money with your A6WAC business is to sell products to retail customers. %uccessful merchandising is made easier by A6WAC*s line of high

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

S0on!orin$
Cou may increase your merchandising efforts through sponsoring. Although it is not mandatory to sponsor people, sponsoring may increase your income when the (istributors you sponsor begin to build their own A6WAC business.

.u!ine!! Su00ort 'aterial!


As your business begins to grow, you may want to acquire training aids. Cou also may want to attend motivational and business)building meetings. These are optional.

:eduction!
Cour A6WAC business is not a ta# shelter, but you are entitled to deduct your ordinary and necessary business e#penses as defined by the Income Ta# Act, &;8&.

Time and Effort


The bigger your financial goal, the more time and effort you will need to put into your A6WAC business. With an A6WAC business, you work as much or as little as you like, depending on your own goals. It*s all up to you.

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Content! of t(e .u!ine!! Bit


;ITE)AT3)E FLTF.I-. A.T-7 5<%I7F%% EIA77F. AII E.-(< T IFA2IFT E.-(< T (F6- 5--JIFT 2IIE DA.T A. %TI JF. A6A,.A6 I%%<F %-AE %FF %E.AC -7 /00 ml. A. WA%D /00 ml. ,MD 5-(C %DA6E-- $/0 ml E<.%<F (I%I72F TA7T /00 ml (I%D (.-E /00 ml. I- DI,D %<(% /00 ml. %A@ W+7AT<.AI %-2TF7F. /00 ml EF.%-7AI A.F E<6E (I%EF7%F. %AT$I7& %DA6E-- M -7( $/0 ml %A @@ AEEII ATI-7 %N<FFOF 5-TTIF W+T<..FT T-E EI%T-I ,.IE %E.ACF. %N<FFOF 5-TTIF P)O:3CTS ,MD I-TI-7 $/0 ml 7AT<.F %D-WF. .F6F DA7(

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Ste0! to !ucce!! in t(e Amway .u!ine!!

Amway distributors seem to hang on every word their sponsors say. They do e#actly what their uplines do. They talk like them, act like them, and follow them around everywhere as if they were kings and queens. 7aturally, with this sort of following, Amway distributors e#pect guidance in everything they do. This is the reason behind all of the tapes, books, and step)by)step instructions for building an Amway business. 5elow are the @ recommended steps for building a large network and the four steps to sponsoring new distributors. These steps, taken from handouts given to me by my diamond directs, sure don*t make one think that the tapes, books, and other materials are optionalP Take a ganderP

Fight %teps to 5uilding a Iarge 7etwork

&. %==C Per!onal 3!e $. E!ta/li!( %= < %5 cu!tomer!


o

Eriority %ervice Erogram

?. .oo !
o

.ead a book each month .ead &0)&/ pages each day

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4. Ta0e!
o

Iisten to one tape a day 1minimum3 5e on B.ecommended TapeB

/. +unction!
o

Attend all functions 1see page &&3

8. .u!ine!! coun!elin$ wit( active u0line


o

%et goals with upline on ,oal %etting ard 12):3

:. ?rou0 A!!ociation
o

5uild quality relationships within the network

@. S(ow T(e Plan DSTPE


o

6ake a list of names by using Amagrams,

hristmas lists, telephone

inde#es, wedding invitations, etc. to "og your memory 1don*t pre)"udge3.


o

Add new names through daily contacts. Eass out & tape a day %how the Elan 1%TE3 three time a week <tilize the Issues and Answers video properly

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+our Ste0! of S0on!orin$


&. Pa!! out 0ro!0ectin$ ta0e! or a00roac( directly and follow u0 wit(in -* (our!7 $. Set a00ointment! ?. STP 4. +ollow u0 << !econd loo meetin$

And 6(o I! .ill .ritt" 2rom the e#periences of friends I spoke with in the <%A, what is more likely to appear on the Amway list of promises is promotional cassettes and books rather than more products. The promotional material is designed to help an Amway distributor Bsell, sell, sell.B The basis for this activity is propounded by American, 5ill 5ritt. De and another American, (e#ter Cager, run two of the most successful *systems* under the Amway banner. It is said that about ;0G of Amway*s products move through these two systems. In India, what is being discussed is the 5ill 5ritt system. The Advocate newspaper in the <%A reported that to follow 5ritt*s system is to spend hundreds of dollars a year on

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motivational tapes. Amway distributors are told that Bspending money to buy these tapes is the key to building a large, successful Amway business.B Therefore, it is likely that new products peddled by Amway distributors will not be more soap but more hope in the form of these motivational materials. -ne <%A based distributor, an Indian 1who has since left the business3, told me that these tapes were meaningless and were sold to people by convincing them that weren*t doing well enough. De said that the tapes would become an item for sale and Amway distributors will be selling them to each other in a self feeding frenzy.

Amway India F Product Catalo$ue

Q ar Wash Q(ish (rop QI.-. . QEursue Q%A@ (elicate Q%A@ Iiquid Q%ee %pray QO--6 QIeather M =inyl leaner

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Q5uff <p QEreWash Iiquid

Q, M D 5ody Iotion Q,MD 5ody %hampoo Q,lister /)in)& Toothpaste Q%atinique (andruff ontrol onditioner Q%atinique (andruff ontrol %hampoo Q%atinique %hampoo and onditioner Q7ature %hower reme Dand %oap QEersona 2amily Tooth 5rush QEersona Talc QEersona %oap

Q7utrilite Erotein Eowder QTriple ,uard Fchinacea Q%iberian ,inseng

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Q,locosamine D I Q7utrilite (aily Q7utrilite Jids

QAdvanced (aily Fye ream QAlpha Dydro#y %erum Elus QTime (efiance 7ighttime .enewal rRme M Iotion QWhitening Fssence QTime (efiance (aytime Erotection reme Q6oisture .ich %ystem Q larifying %ystem

AE%A )@0

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Amway < T(e Current Scenario

Amway is the largest multi)level marketing 16I63 organization in the world. It is a multi)billion dollar company based on the sale of a variety of products. Amway!s philosophy is defined by commitments, trusts, enduring relationships, and the ideal of perfection above profit. 2rom a humble beginning in &;/;, using an old gas station, Amway the brainchild of o founders .ich (e=os and >ay =an 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 pro"ects.

Cor0orate ProfileA

5etween then and now, Amway corporation has grown into a <% 6ulti)billion dollar company managed by &$,000 employees. It operates across @0 countries and territories in Asia, Africa, Furope and the Americas with a turnover of <% A/.: billion. Amway is the wholly owned subsidiary of Alticor Inc. It has a sales force of over ?.? million distributors. The company 6anufactures 4/0 products of which ?/0 are patented. The company is also a long standing, active member of the World 2ederation of (irect %elling Association 1W2(%A3.

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-ver /00 . M ( scientists and professionals ensure the e#ceptional quality of its products across five product lines9 Dome are Eersonal care Dome Tech osmetics 7utrition and Wellness

Amway is committed to e#panding the environment awareness of all people of the world. In >une &;@;, Amway was presented with the <nited 7ation!s Fnvironment Erogram!s Fnvironment Achievement Award. This award recognised Amway!s commitment to environmental education and awareness.

1uixtar
Nui#tar is a 6ulti)Ievel)6arketing 16I63 opportunity. It is promoted by Alticor. In $00& Nui#tar replaced the 7orth American Amway business opportunity and is currently known as the web version of Amway. It will be able to bank on Amway agents to aggressively market their products from the get go. All Amway agents now known as I5-s ie Independent 5usiness -wners were invited to open up their e)mall, selling not only Amway products but products of other manufacturers as well. The emphasis, as with Amway, will be on 6ulti)level)6arketing i.e recruiting new Nui#tar agents who are encouraged to recruit further agents such that the agents will get the cut of sales made by those they recruit.

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A'6A5 IN:IA

Amway India is a wholly owned subsidiary of Amway <%A. Amway

orporation, Ada, 6ichigan,

orporation is a 4$ year old company, and is among the largest (irect

%elling companies in the world. IT was established in &;;/. It commenced commercial operations in 6ay /th,&;;@. In the brief period since launch, it has emerged as the ountry!s largest (irect %elling ompany.

+act!A -ver $00,000 entrepreneurs have adopted the Amway business opportunityK and are actively involved in building their independent Amway business. Amway has invested <% A ?/ million in India. -f this, <% A8 6illion is in the form of (irect 2oreign Investment. 1I(%A3 <% A4 million has been spent in transferring state)of)the)art technology. The company Amway India was launched with / offices 17ew (elhi, 5angalore, 6umbai, hennai, Jolkatta3 which serviced &/0 locations. At present, in addition to ?$ offices in all metros and ma"or cities, Amway India services over ?:; cities and towns in the country. Turnover of .s &00 cr. and .s. $/0 cr. in the first and second years of operation respectively. Elans to reach .s. &000 turnover by the year $004. In India Amway orporation comprises of :$G women, $4G ouples, and 4G

men. 1%ource I(%A3

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Amway India is the founder member of the Indian (irect %elling Association 1I(%A3 (irect %elling requires e#pertise and special skills. <sing the benefit of Amway*s leadership status in the global (irect %elling industry, Amway India has in the past &$ months, conducted over @000 training sessions with an attendance of appro#imately ?/0,000 (istributors. Amway India was honoured by the AI 5 6illennium -utstanding %ervice Award, $000 by the All India onfederation of the 5lind in recognition of its

sterling contribution to the cause of India*s blind. The Jarnataka Welfare Association awarded Amway India with the S.ising 5usiness %tar of the 6illennium* during a ceremony held at 5angalore during -ctober, $000. In the short period since its advent in the country, Amway has made several contributions to India!s socio economic milieu. It as either introduced unprecedented benefits, or upgraded e#isting facilities to international standards.

Cor0orate )e!0on!i/ility Through its presence in India, Amway continues to enhance human resource development using its e#perience in entrepreneurial opportunity and self employment. Amway (istributors follow a ode of Fthics and .ules of onduct consistent with the

World 2ederation of (irect %elling Associations 1W2(%A3 which defines the goals, principles and responsibilities in building and operating an Amway business. Amway has conducted several seminars on BFntrepreneurial (evelopment and (irect %ellingB in

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concert with the onfederation of Indian Industries 1 II3 and the All India 6anagement Association 1AI6A3 to educate popular opinion on the benefits of organized direct selling.

HO6 IT 6O)BS
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 BindependentB distributor of Amway products by buying a couple of hundred dollars worth of the products from the one who recruits you, known as your Bupline.B Fvery distributor in turn tries to recruit more distributors. Income is generated by sales of products by the distributor plus BbonusesB from sales of his or her recruits and their recruit)descendents. Dow do you beginT 2irst, you are sponsored by another Amway distributor and you obtain the Amway .u!ine!! Bit. The 5usiness Jit contains basic A6WAC products and literature for your use and for sharing with others. Cou begin by developing both customers and distributors. Cu!tomer! or client! are the people who buy the A6WAC products from you but who aren*t Amway distributors. -ne of your best sources for building a customer base is a group of people you already know. These acquaintances try A6WAC products and become your customers as they use and re)order various A6WAC items. Dowever, I have found that people everywhere need high)quality, %atisfaction ,uaranteed products which they believe Amway is able to provide.

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Inde0endent .u!ine!! Owner! or :i!tri/utor! are people who have evaluated the Amway business opportunity and elected to "oin the business. I5-s deal directly with lients, build up personal relationships and deliver direct to lients* 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. I5-s are self)employed and can introduce others to the business, and so form their own sales network. The most successful Amway businesses en"oy a balance of merchandising A6WAC products and sponsoring distributors. ,rowth in your business comes from sharing the Amway business opportunity with others and helping them decide if it*s right for them. This is called !0on!orin$. Amway distributors who sponsor others generally have higher average sales volumes than those who don*t sponsor. Cour B?rou0B is the team of distributors you*ve sponsored. 6any you*ve sponsored personally, but others were sponsored by those you personally sponsored. Cou train and motivate your group and, as a result, you earn e#tra income when they earn income. As you continue to grow your business and they continue to grow theirs, you both can benefit. Iike any other business, your Amway distributorship needs frequent input and activity to grow. Dowever, whatever your goals are, you control how quickly or how slowly you build your business. After all, it*s your independent Amway business. -ver 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 B 0in level!B because you

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

Income Incentive and more


The Amway -pportunity offers distributors many benefits. %ome are financial, others are intangibles, such as peer recognition, pride in achievement, the "oy of helping others, working with family, and the esteem of owning your own business

Income 0otential
As an Amway distributor, you can earn income many different ways. 2or instance, in the <.%. and anada, you can earn income in at least &0 different ways. They include retail profit 1the difference between (istributor ost and the .etail Erice3 and nine different

bonuses rewarding various levels of accomplishment.

S0ecial leader!(i0 0ro$ramme


As you qualify at various levels of achievement, you may be eligible to attend various Amway leadership programs9 Annual 5usiness 6eetings In countries around the world, company ) paid invitations are e#tended to Amway leaders to meet in a business)building atmosphere. =ariety of %pecial Erograms

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When your business qualifies at a specific distributor level, a special invitation occurs. Imagine your special day at an Amway facility, your own success story featured in our distributor magazine, and your name and picture added to the (istributor Dall of 2ame in Amway*s World Deadquarters.

A'6A5#S 'A)BETIN? O.GECTI4E


The ob"ective involves matching consumer needs with the product. The better the match, the more lasting the potential for the relationship between the seller and the buyer. The selling process is aided by Amway*s retail strategy to provide high quality, readily purchasable items with a good environmental positioning, and offering consumers! good value for money.

A'6A5 SA;ES AN: 'A)BETIN? P;AN


Amway practices direct !ellin$ which is A method of selling goods directly to the consumer by an independent (istributor. A (istributor can then introduce further (istributors and generate income from retail profits supplemented by bonus payments based upon the total sales of the group built by a (istributor*. Income is generated by a distributor through9

the retailing of goods to consumers. .etail margins 1mark)ups3 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. $@

=arious 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.

)etailin$ ) the selling of goods to consumers on which retail margins are earned and performance bonuses gained.

S0on!orin$ ) the introduction of other individuals to establish and develop their own independent Amway distributorships.

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

(irect selling involves sales people showing and demonstrating products to obtain orders. As with all direct selling activities, the process involves two)way communication and this can be time)consuming. 5usiness success and the resulting financial results are a direct consequence of effort, commitment and personal group motivation. Eersonal 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 ob"ectives and individual targets may be determined by each distributor based upon what he or she wants to earn. (istributors who develop direct selling businesses may come from widely different backgrounds, with vastly different levels of e#perience and knowledge ) the common factor to their success is the desire to achieve.

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A'6A5#S ST)ATE?IES IN THE IN:IAN 'A)BET

INT)O:3CTION
The launch of any new product requires a considerable amount of time, effort and careful planning. .esearch and development uses advances in science and technology to enhance products, while market research is carried out to e#amine changing consumer tastes and fashions. The key to successful marketing is to clearly identify at which market segment the product should be aimed, find out precisely what consumers in this target group want and then plan the marketing strategy accordingly. The focus of brand image and positioning of the product within the marketplace are of paramount importance.

All organisations face an e#ternal business environment that constantly changes. hanges in the business environment create both opportunities and threats to an organisation*s strategic development, and the organisation cannot risk remaining static. It must monitor its environment continually in order to9

build the business develop strategic capabilities that move the organisation forward Improve the ways in which it creates products and develops new and e#isting markets with a view to offering its customers better service.

Amway is an interesting e#ample of a company that reviews its strategic capabilities and uses this review to develop its products and markets. 6ore than 4/0 products carry the Amway name in the areas of nutrition, health, beauty and home. Amway also has a range ?0

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

A7 Amway#! 'ar et Penetration Strate$y


,oing for market penetration has involved Amway in making the most of current products and competences by *stretching* those new markets. -ne 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. %pecial incentives enable I5-s 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 Ieadership Training %eminars. These enable I5-s to spend time with others involved in the business and to learn about *best practice* from each other, whilst also sharing ideas.

Tar$et 'ar et! and 'ar et Se$mentation


Se$mentationA The Amway business opportunity is open to everyone, regardless of se#, 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 2ast 6oving product categories i.e. Dome are Eersonal care osmetics 7utrition and Wellness onsumer ,oods through its five main

?&

5ut initially Amway was launched in India with only 8 products most of which were home and personal care products. Tar$et Audience9 Although it was recognised by Amway that groups such as children, men and teenagers are likely to become targets in the future, the Amway!s range of products was aimed mainly at adult female! /etween -3 and ** year! of a$e7 These products are daily use items catering mainly to the household sector. Through Amway!s e#tensive market research it was proved that that women are often looking for new products and technologies that will provide a more satisfying product e#perience. Thus Amway has segmented its market on the basis of typical consumer from this target group9 is probably a professional woman is very product conscious wants professional, quality products .egular user of home care and beauty products relies on recommendations from friends when making any purchase decisions 6akes buying decisions based on clinical evidence.

Po!itionin$A The focus of brand image and positioning of the product in a new market
place are of paramount importance. Thus, it was important for Amway to create a strong brand image for the total product range for entering the Indian market. The image created would reflect a great deal about the product and its consumers. -ne of the most important ?$

challenges for Amway was to develop an appropriate packaging for all its products to appeal to the Indian consumer. Eackaging 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. %oft, metallic white gives a sense of clarity, while the blue caps represent water and blue sky. The silver metallic touches add lu#ury and spice. All the colours are designed to suggest cleanliness. This design was used to create a brand image. The following ob"ectives for the brand were set9

to increase distributor profitability and productivity by providing a new and e#citing business opportunity

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

Amway#! 0roduct! are 0o!itioned a! A


'At Amway, quality means innovation in formulas and technology. A commitment to e#cellence backed by the resources to do the "ob right and confident that every product will meet your satisfaction )) guaranteed.U Daving decided on the target audience, we turn our attention to the 'ar etin$ 'ixA

ProductA onsidering the overwhelming success its receiving in the Indian market,
Amway has introduced more products in each category. It is also planning to e#pand the

??

product category by introducing Dome tech and food items in India. Amway has also adapted itself to the local market by introducing the sachets and small bottle packs which can be used by people in small quantities and are very economical. With the e#ception of the 7utrition M Wellness and osmetics range, all Amway India

products+bottles are manufactured through ? third party contract manufacturers using world class technology and processes. The products match Amway*s global quality standards. They carry a tamper)proof seal and a * ustomer .efund Eolicy*. If not completely satisfied with the product, the consumer can return it for a refund. Amway products are environment friendly, and are not tested on animals. Amway encourages the return of its used product bottles for re)cycling and to prevent their misuse. At present, Amway India*s product portfolio comprises of99 Ten products in the Eersonal are category, Fleven in the Dome are category and %i# in the 7utrition M Wellness category. %even in the cosmetics category -ne product in the Agricultural ategory. The other products are two soft toys. Amway %ales aid.

?4

Amway*s product range demonstrates its adaptability to the market based on a close, first) hand understanding of the Indian consumer*s nuances. An aggressive product launch plan introduces new products every few months. In the coming months, Amway will further e#pand its product portfolio through the launch of several new core line products. Amway had initially started with 8 products for the Indian market in &;;@. At present it has about 4/)/0 products in its various product categories which is about &&G of its total product category.

Pricin$A Amway products are price competitive and overall a good value for money.
While some of its products are more e#pensive than their counterparts, others are less e#pensive and most are competitively priced. Eroducts that are more e#pensive usually have greater features and benefits over competitive goods. 6any A6WAC products are highly concentrated, meaning a single purchase lasts longer. -n a cost)per)use basis, these products are priced very competitively from their local brands. The consumer is the ultimate "udge of price and value, and Amway!s sales success over the years speaks volumes about its product value and customer satisfaction.Amway!s pricing strategy remains the same but with the introduction of sachets and small bottles, people can now en"oy its products at an economical rate.

PlaceA 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 e#panding its presence across the country and adding new products to its portfolio. The company has done away with its central warehouse at 7agpur and opened four regional ware houses in 5angalore, Jolkatta, (elhi

?/

and 6umbai that are serviced directly from the manufacturing units. The company today has ?8 offices serving over ?@/ locations across the country. It plans to add &4 more offices to its network this year taking the total number of offices to /0 which will serve over 4/0 locations. These new offices will be opened at strategic locations spread across the country and governed by an unwritten rule of '5e present where Amway distributors are.U The ompany Amway India launched with / offices 17ew (elhi, 6umbai, 5angalore,

hennai, alcutta3 and a entral Warehouse 17agpur3, which serviced &/0 locations. At present Amway India has ?$ offices, and a reach to ?/$ locations. Eromotion9 Amway promotes its products through its Independent 5usiness -wners. It has a heavy accent on training. Fvery Amway distributor en"oys free, unlimited access to training sessions. These training sessions impart product knowledge, comprise motivation sessions, and seek to optimise the business potential of participants. .ecently Amway has also started advertising about its products in various 7ewspapers and 6agazines to promote its products and reach out to their target markets. Amway has come up with a vast promotional strategy to reach out to its customers and other potential buyers. AmwayH! Promotion c(annel! There are five different promotion channels9

?8

orporate Fvents
orporate events include specially arranged functions, such as product fairs, conferences and seminars, which distributors at different levels are invited to attend. 2ace)to)face communication at a range of events helps Amway and its distributors to get to know each other. They also provide an opportunity for distributors to get to know each other and are useful for relaying messages, giving advice and generating personal discussion. Fvents include9

Pace Setter ) a reward incentive to help new and e#isting distributors reach the
8bonus 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.

:irect :i!tri/utor Seminar ) allows newly qualified (irect (istributors to


meet the Amway 6anagement Team, tour the <J Deadquarters, attend key informative, motivational business sessions and go to the 7ew (irect (istributor ,ala (inner.

;eader!(i0 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 world*s finest beach locations and hotels where they attend a number of business sessions and e#change thoughts and ideas with corporate staff.

;aunc( into H=3 ) a ma"or annual launch of new products and services presented by a road show of eventTrainin$

Training builds the skills and knowledge of distributors and therefore improves competence levels. 2or 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 "ust shown how to use products but also how to merchandise them to their best advantage. Training may involve either orporate or ,roup 1Iine of %ponsorship3 Training on

specific product brands. (istributor input into these sessions provides informative help for the management of independent businesses. -nce 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 ma#imising their e#pertise.

;ine! of !0on!or!(i0

Amway is essentially a people)based business ) without people, the business cannot e#pand. The business of each distributor grows via new customers and through the sponsorship of new distributors. ?@

Fstablished distributors are involved in helping newly sponsored associates to merchandise Amway products. (istributor 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 e#isting distributors. These lines of sponsorship provide constant, face)to)face support from professional associates.

Pu/lication!
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 include9

Ama$ram ) 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 and the legislation regulating the (irect %elling Industry.

S0ecial ;iterature ) -ccasionally, Amway designs a brochure or leaflet which is used to address a particular change or launch, e.g. new car care product range.

.7 Amway#! 'ar et Ex0an!ion Strate$y

?;

-ne method used by Amway involves e#panding the ways in which individuals can be involved with the Amway business. Amway has developed a structure known as the I6 model. This increases the number of ways through which people can become involved in the Amway business. Fach of the letters I6 stands for a different type of involvement.

I ) Independent 5usiness -wners 1I5-s3 6 ) 6embers ) lients 1customers3 of the I5-s.

6embers are allowed to purchase Amway products at a price equivalent to that paid by I5-s, but do not participate in the Amway %ales and 6arketing Elan. They are a new type of *customer* who deals directly with Amway.

Tar$et 'ar et! and 'ar et Se$mentation Se$mentationA

?eo$ra0(icA Amway is now trying to reach people by setting offices even in the
remote areas of the country. Amway!s distributors are now spread all over India even across the rural areas.

:emo$ra0(icA
40

A$e9 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. 5ut to "oin the Amway as an Independent 5usiness -wner a person should be above &@ years of age.

Income9 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.

?enderA 6a"ority of Amway products cater to the needs of Women Fg9 cosmetics, home care and personal care. 5ut Amway is introducing many new products in the Indian market the choices are increasing for both men and women.

+amily ;ife cycleA 6a"ority of people "oining Amway are young women and newly married couples.

Occu0ationA 6ost of the people who are engaged in the Amway business are either professionals or small businessmen.

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P!yc(o$ra0(ic

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

Social Cla!!A 6a"ority of Amway people comprise of working class, middle class, <pper)6iddle class. .e(avioral .enefit!A The consumers en"oy the benefit of using a high quality product which is available to them at their door steps. ;oyalty !tatu!9 Eeople 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 toward! 0roductA Amway people are usually very enthusiastic and optimistic in everything they do. Tar$et AudienceA Amway!s products appeal to a large number of buyers all over India. It is targeting people who believe in using high quality products which are conveniently available to them.

4$

Amway business opportunity is attracting the middle income group to earn e#tra income.

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

Amway!s products being good in quality are also very much preferred by the upper class segment who can easily afford the pricing but they don!t want to get involved with the business opportunity. They are mostly associated with Amway as their customer.

Tar$et $rou0
'en V Erofessionals and small business owners A$e ) $? ) /0 years

Income Statu! F Working class, 6iddle income, upper middle income

6omen F Erofessional and housewife A$e F $0 V /0 years

4?

)ESEA)CH 'ETHO:O;O?5

O.GECTI4ES

Primary O/Iective9 The main ob"ective is to carry out an in)depth study of Amway!s overall marketing strategies in India. In order to achieve this primary ob"ective, I have focused my research in three main segments9

A. Where the ompany stands at present. 5. Where do they plan to go with their ob"ectives for the Indian 6arketT . Dow do they plan to achieve the set targetsT

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

44

'ETHO:O;O?5
The 6ethodology adopted was combination of9 Primary :ata CollectionA (irect Interview with people who are associated with the Amway corporation in India Nuestionnaire filled by a selected group of people.

b. Secondary :ata CollectionA The data has also been collected from9 5ooks 6agazines Fditorials Internet 7ottingham e)Iibrary Amway 5usiness Elanner Amway -pportunity 5rochure etc.

Sam0lin$ PlanA I have tried to gather data on the basis of both the interview and the questionnaire. Survey < % had been conducted by asking the people to fill in the questionnaire and e#press their views about the company. Survey F - had been conducted in order to get some valuable data which has been collected through direct, telephone and online interviews with people associated with Amway to get a better insight of Amway!s operations in India. 4/

Survey <% %ample (esign9 Nuestionnaire method %ample size9 &00 respondents %ample <nit9 I5-s, ustomers and others

%egment Women 6en J-thers Total


)*thers include elderly people and children.

.espondents // ?8 ; &00

Survey <%ample (esign V Interview method %ample size V : %ample <nit V I5-s and people working in Amway India orp.

%egment I5-s Amway India employee

.espondents 8 &

48

6y pro"ect involves the study of Amway!s marketing strategies in India. I had planned my work on the pro"ect along the following lines9

&. (ata ollection $. (ata Analysis ?. (ata ompilation 4. The preparation and presentation of the report.

6y 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 pro"ect, I proceeded on a search for secondary sources of data. After analysing the data I prepared, I proceeded towards the primary sources in which direct, phone and online interview were conducted so as to substantiate my research with more facts.

Survey % < )ationale .e(ind T(e 1ue!tion!


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

4:

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

%7 Are you anA

Inde0endent .u!ine!! Owner Cu!tomer of Amway 0roduct! None of t(e a/ove7

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.

-7 6(at i! your income levelA D0er 'ont(E

.elow )!7%=8 === )! %=8===< )! -=8=== )! -=8===< )! 3=8=== )! 3=8===< )! *=8=== )! *=8===< )! 5=8=== )! 5=8=== and a/ove

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

4@

37 a7 How do you feel are t(e Amway 0roduct! 0ricedA D'ulti0le C(oiceE

Too ex0en!ive Ex0en!ive Economical C(ea0 Poor

/7 :o you t(in

t(ey are fairly 0riced a! com0ared to ot(er !imilar

0roduct! availa/le in t(e retail !tore!" 5e! K No

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

*7 How would you de!cri/e t(e Luality of t(e 0roduct!A

Excellent ?ood
4;

Avera$e .ad Poor

This question is necessary for understanding whether the Amway products meet the customer!s e#pectations for being the high quality products as being positioned by the company.

57 Are t(e!e 0roduct! ea!ily acce!!i/le"

5e! 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.

8. 6(at i! it t(at attract! you more toward! Amway" w(y"

)etailin$ S0on!orin$

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

/0

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

:. How did you learn a/out Amway"

Inde0endent .u!ine!! owner 'eetin$!KEvent! New!0a0er Peer! Internet Ot(er!8 Plea!e !0ecifyMMMMMMMM

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

/&

;I'ITATIONS O+ THE P)OGECT

The company or the I5-!s were hesitant to give time and good information to students, so information required for the primary research which is a basic need of this pro"ect was not easily available in required quality and quantity.

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

Time constraint.

/$

+IN:IN? & ANA;5SIS

S3)4E5 <- )ATIONA;E .EHIN: 13ESTIONS


?uideline! for con!ultin$ 0eo0le a!!ociated wit( t(e Amway Cor0oration7 &. 6(at i! Amway#! Tar$et audience" To get a clear understanding of who are the main users of Amway products and business opportunity. -7 a7 6(at i! Amway#! ex0an!ion !trate$y" /7 How i! it 0lannin$ to $o a/out it" This will indicate Amway!s plans to increase its market share in India and the strategy it uses to achieve it. 37 How i! t(e com0any 0lannin$ to ex0and it! (ome delivery covera$e" This will indicate the company!s idea of e#pansion by making its products available at every corner of the country *7 a7 How many 0roduct! (a! Amway launc(ed in t(e Indian mar et" /7 How many more are t(ey 0lannin$ to launc( and in w(at 0roduct cate$ory" This will indicate the increasing demand for Amway!s products in the Indian market and highlighting the emerging trends of both buyers and sellers.

/?

57 Are all t(e!e 0roduct! !ourced in India" This will indicate Amway!s commitment to the quality of its products and how they try to maintain the same product standards in India. >7 a7 6it( w(at com0anie! doe! Amway (ave !trate$ic alliance! in /7 6(at /enefit! t(e I.O#!KCu!tomer! drive from it" This will indicate Amway!s value added services to its distributors by forming strategic alliances with companies which have products and services that are relevant and of use to them. ,7 Ha! t(ere /een any c(an$e! made in t(e Amway 0roduct offerin$! accordin$ to t(e Indian 'ar et" This will indicate the e#tent to which Amway has adapted its product keeping in mind the needs of the Indian customers. @7 6e (ave (eard Amway 0roduct! are ex0en!ive7 6(y i! t(i!" %ince Amway products are considered highly priced, this question will "ustify Amway!s reason for their e#pensive products. 97 6(at doe! Amway !ee a! t(e role of 6omen in t(e Amway /u!ine!!" This will e#plain Amway!s strategy as to why there are ma"ority of the women doing the Amway business. %=7 a7 6(at i! t(e difference /etween Amway and ille$al 0yramid!" India"

/4

/7 I (ave (eard rumor! t(at Amway i! a cult" I! t(i! true" This will help clearing people!s doubts about Amway as not being associated with illegal pyramids or cults.

//

)ES3;TS O.TAINE: TH)O3?H THE INTE)4IE6


%7 6(at i! Amway#! Tar$et audience" Amway!s products are used by people of all age groups. It basically depends on the distributor!s way of targeting people. %o 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 7agaland, >ammu and Jashmir, Arunachal Eradesh etc how use Amway products and make use of the Amway business opportunity. $. a7 6(at i! Amway#! ex0an!ion !trate$y"

/7 How i! it 0lannin$ to $o a/out it"


a. Amway plans to add more and more people as its distributors to facilitate more sales of the Amway products. b. They plan to achieve this by increasing the consumption of their products i.e the products are consumed by the distributor as well as sell customers. ?. How i! t(e com0any 0lannin$ to ex0and it! (ome delivery covera$e7 Dome delivery coverage will be e#panded 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. them to their respective

/8

*7 a7 How many 0roduct! (a! Amway launc(ed in t(e Indian

mar et"

/7 How many more are t(ey 0lannin$ to launc( and in w(at 0roduct cate$ory"
a. %o far Amway has launched about 4/)/0 products in the Indian market which is about &0)&&G of its total product range. They will introduce more as the market gets matured and people are ready to accept new products. b. Amway is planning launching its new product categories in India i.e Dome tech and food items. In the e#isting categories they are planning to bring more indigenous products eg9 persona powder etc.

57 Are all t(e!e 0roduct! !ourced in India"


Almost all Amway India products are manufactured in the country through ? third party, contract manufacturers 1%arvotham are, Dyderabad K >e"uplast, Eune K 7aisa Industries, (aman3. To bring the identified contract manufacturers* production facilities and skills to international standard, Amway has invested in e#cess of <%A 4 million 1appro#. .s &: croreW3. The transfer of this state)of)the)art, world class technology, has been free of cost.

>7 a7 6it( w(at com0anie! doe! Amway (ave !trate$ic alliance! in India /7 6(at /enefit! t(e I.O#!KCu!tomer! drive from it7

/:

In India Amway has tie ups with 5harat Eetroleum

orporation Itd. for its customer

loyalty programme and has come up with co)branded Amway)5E I Eetro card for its distributors. The company also has strategic alliance with standard chartered 5ank for a co)branded Amway ) % 5 credit card for the distributors. b. The benefits the I5-s gets is in the form of additional Eoint =alue which adds up to their total earnings from Amway. -n collecting a certain point value they can also redeem it for a free gift.

,7 Ha! t(ere /een any c(an$e! made in t(e Amway#! 0roduct offerin$! accordin$ to t(e Indian 'ar et7
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.

@7 6e (ave (eard Amway 0roduct! are ex0en!ive7 6(y i! t(i!"


Amway products are competitively priced and offer a good value for money. 6any A6WAC products are highly concentrated, meaning a single purchase lasts longer. -n a cost)per)use basis, these products are priced very competitively from their local brands.

97 6(at doe! Amway !ee a! t(e role of 6omen in t(e Amway /u!ine!!"
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 e#amples of single women who have achieved success in the Amway business, "ust as there are of women who have succeeded in partnership with their spouses.

%=7 a7 6(at i! t(e difference /etween Amway and ille$al 0yramid!" /7 I (ave (eard rumor! t(at Amway i! a cult" I! t(i! true"
<nlike 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. Fg9 An owner of a big company gets paid more while the employees work the ma#imum 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. /7 7o, Amway orporation is a business and, similar to other large and established

companies, has a distinct environment defined by shared business goals. %hared 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 e#cellent opportunity to achieve their goals. 7ew 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.

/;

13ESTIONNAI)E ANA;5SIS

1%7

60% 50% 40% 30% 20% 10% 0%

55%

20%

25%

Independent Business Owner

Customer of Amway products

None of t e a!o"e#

1-7
35% 30% 25% 20% 15% 10% 5% 0% Be%ow &s#10' 000 10'000( 20'000 20'000( 30'000 30'000( 40'000 40'000( 50'000 50'000 and a!o"e 5% 10% 12% 1$% 25%

30%

80

173

aE
40% 35% 30% 25% 20% 15% 10% 5% 0% *oo +,pensi"e +,pensi"e +conomica% C eap -oor )% 3% 30% 20%

35%

/E

4.% 51%

/es No

8&

17*

45% 40% 35% 30% 25% 20% 15% 10% 5% 0% +,ce%%ent 35%

40%

15%

0% 0ood A"era1e Bad

0% -oor

175

40% /es No 60%

8$

17>

50%

50%

&etai%in1

2ponsorin1

8?

17,

10% 55% 5% 5% 10% 10%

30% 20%

40%

50%

60%

0% Independent Business owner 3eetin1s4+"ents Newspaper -eers Internet 0% Ot ers

84

17@ 60% 50% 40% 30% 20% 10% 0% 5ery stron1 2tron1 3oderate 6ea7 8ow 15% 12% 13% 10%

50%

179 60% 50% 40% 30% 20% 10% 0% 5ery muc 3oderate Not so muc 25% 25%

50%

8/

17 %=

)0% 60% 50% 40% 30% 20% 10% 0%

60%

35%

15%

/es

No

3ay !e

88

INTE)P)ETATIONS

&. 6ost of the people who filled up the questionnaire were Independent 5usiness -wners followed by regular customers of Amway products which were

$. /:G of the people fall in the Income group of .s $0,000 V .s

?0,000 per

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

?. According to this survey ma"ority of the people feel that Amway products are e#pensive but at the same time they provide various e#planations for them. Fg9 If asked why a person would spend .s. $;0.00 for 4liter of see spray 1household cleaner3 instead of buying same quantity of olin which is worth only .s. $/$.

The obvious answer one can e#pect 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. %ome people from the middle income group also find these products very e#pensive at initial stages but once they start 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. earning through Amway they don!t mind

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4. ;0G people in the sample group are satisfied with Amway!s product quality and find them e#cellent.

/. 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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@:G 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 e#cellent brand and at the same time benefit from the income opportunities provided at Amway. %ome people also feel that product has an important role to play in all this because if the product!s quality was not upto the desired standards, the business opportunity no matter how good it is, will have no meaning. %o it!s the combination of Amway!s e#cellent quality products and the income opportunities that has brought more and more people to "oin 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.

:. Amway!s I5-s are a strong medium through which Amway reaches out to the masses. It conducts special training programs for its I5-s 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 I5-s and in turn rewards them depending on the number of sales they make.

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On t(e /a!i! of t(e a/ove re0ort we can derive t(e followin$ conclu!ion!A ;ow !tart u0 co!t
With an Amway 5usiness Jit being the only start)up cost, .s4400 virtually anyone can own an Amway business. ompared 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. Iow risk Amway!s product)buy)back policy and no inventory requirement ensure a very low risk when starting an Amway business. Its '%atisfaction ,uaranteeU has always been a measure of confidence in the quality and value of A6WAC products, one more way Amway supports the business opportunity for distributors. Performance /a!ed Amway is a performance)based business that rewards people in direct proportion to their effort. The bigger the financial goal, the more time and effort a distributor will need to put into his or her business. With an Amway business, a distributor can work as much or little as he or she likes. The rewards are based directly on the distributor*s accomplishments. :irect !ellin$ i! trend Thirty)four million people worldwide are engaged in direct selling, which is a A@$ billion industry 1%ource9 (%A $00$3. As people become busier, they are looking for ways to

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save time on routine tasks, such as shopping for everyday needs. (irect 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. +lexi/ility ,oals and rewards are different for each distributor. Cou have the fle#ibility of working part time while keeping a full)time "ob or building an Amway business into a full)time career. Cou choose the time you invest in building your Amway business. Product !u00ort The Amway business opportunity is supported by a diverse line of hundreds of quality A6WAC 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. Cor0orate !u00ort 6ore than &$,000 people worldwide are employed in Amway manufacturing, administration, and distribution facilities totaling &0 million square feet 1;$;,000 square meters3. Amway manufactures products in the <nited %tates, maintains product warehousing facilities around the globe. ELuality of o00ortunity Anyone starting an Amway business gets in at the same level. Fach 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. :0 hina and Jorea and

CONC;3SION
Po!itive !ide 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 1or failing business3 or one has lost one*s "ob. To the e#tent 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 6otivational -rganisations 1A6-s3 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 pro"ects 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.

3nder!ide !ide of Amway


6(y Amway 6ill 'a e 'oney Even If 5ou :on#t An interesting calculation9 If & million people sign up, Amway will receive .s. 4400 million 1.s. 440 crores or <%A $08.@0 million3 in up)front cash from this Xcash rich!

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country. They will have earned all this money without having sold a single one of their very e#pensive products but "ust by sponsoring people to this business. How T(i! I! :one At T(e Ex0en!e Of T(e 'iddle Cla!!

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 e#actly 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. 5y asking for deposits from buyers Yin the beginning and again every year as a renewal feeY it looks like Amway seeks to build a captive consumer base. -nce someone has paid .s. 4,400 to Amway, he is naturally disinclined to buy 7ivea hand cream instead of Amway ,ly)Doney hand lotion. The element of personal choice is thus pre"udiced. 5y involving their BdistributorsB 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 e#pensive price structureK the growth of that market is restricted to the very wealthy.

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alling this Ban opportunity to use world class productsB is a bit like calling the purchase of a 6ercedes 5enz for .s. $/ lakhs an BopportunityB, when an efficient 6aruti @00 for one)tenth of that price will do nicely. With all these constraints, telling people of profit mechanisms tied into several thousand people buying .s. &,/00 worth of Amway soaps every month seems laughable in a country where entire families lead their lives on less money.

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)ECO''EN:ATIONS
After conductin$ an in<de0t( analy!i! of Amway#! variou! mar etin$ !trate$ie! in India8 I would li e to !u$$e!t a few recommendation!

ProductA To prolong the life)cycle of a brand or product range, an organization must


in"ect new life into the growth period through read"usting the ingredients of the marketing mi#. 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 ob"ective of increasing its global competitiveness. They should introduce more products which are made in India. Fg9 Eersona Eowder. This product will also give the I5-s and customers the cost advantage. PriceA As a result of my research I have discovered that all the Amway products are e#pensively 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 en"oy a larger market share, as it could be one of the reasons why some people may be hesitant to "oin the Amway business.

PlaceA There is still a long way to go for Amway to have its presence all over India. 5ut
keeping in mind the overwhelming response it is getting from the rural segment of the country to "oin the Amway business they should focus on the needs of these people i.e to make the products available to them at their conveniences. They should also try to 6anufacture their products in India, which will then reduce the cost pressure on its customers.

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They should also try to set up their offices in states like Jerela, because Jerala is a very good market for the (irect %elling industry for various reasonsK the two most important factors seen favouring the industry are the high literacy rate and the willingness to try something different.

PromotionA %ine India is advancing on the technological front, I feel its time to
Introduce the e)commerce Amway i.e Nui#tar in India. It will help in enhancing the 6ulti)level marketing to a great e#tent. It will also create a new business e#perience for the Indian I5-s and will also help in promoting their sales.

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.I.;IO?)APH5

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

.oo ! and Secondary data


Amway Com0any Planner Amway O00ortunity /roc(ure!

6e/!ite!
www7amwayindia7com www7amway7com www7onlinemlm7com www7amLuix75=me$!7com www7! e0dic7com www7$etfact!7com www7coc!7com www7m!n7com

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New!0a0er and 'a$aNine


T(e Hindu8 Saturday 'ay %=8 -==3 T(e +inancial Ex0re!!8 +e/ruary %8 -==T(e Hindu8 +e/ruary %>8 -==%

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13ESTIONNAI)E

NameA MMMMMMMMMMMMMMMMMMMMMMMMMMM Addre!!A MMMMMMMMMMMMMMMMMMMMMMMMM Occu0ationA MMMMMMMMMMMMMMMMMMMMMM

A$eA MMMMMMMMMMMMMMMMMMMMM Statu!A MMMMMMMMMMMMMMMMMMM SexA MMMMMMMMMMMMMMMMMMMMM

%Are you anA


Inde0endent .u!ine!! Owner Cu!tomer of Amway 0roduct! None of t(e a/ove7

-6(at i! your income levelA D0er 'ont(E


.elow )!7%=8 === )! %=8===< )! -=8=== )! -=8===< )! 3=8=== )! 3=8===< )! *=8=== )! *=8===< )! 5=8=== )! 5=8=== and a/ove

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3a7 How do you feel are t(e Amway 0roduct! 0ricedA


Too ex0en!ive Ex0en!ive Economical C(ea0 Poor

/7 :o you t(in t(ey are fairly 0riced a! com0ared to ot(er !imilar 0roduct! availa/le in t(e retail !tore!7 5e! K No

*How would you de!cri/e t(e Luality of t(e 0roduct!A


Excellent ?ood Avera$e .ad Poor

57Are t(e!e 0roduct! ea!ily acce!!i/le" 5e!KNo

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>7 6(at i! it t(at attract! you more toward! Amway" ?ive rea!on! to !u00ort your an!wer

)etailin$ S0on!orin$

,7 How did you learn a/out Amway"

Inde0endent .u!ine!! owner 'eetin$!KEvent! New!0a0er Peer! Internet Ot(er!8 Plea!e !0ecifyMMMMMMMM

@7 How do you rate t(e 0re!ence of Amway in t(e mar et"

4ery !tron$ Stron$ 'oderate 6ea

@0

97 )ate t(e a00eal of Amway#! adverti!ement"


4ery muc( 'oderate Poor

%=7:o you t(in$ t(e 0roduct! of Amway are environment<friendly"

5e! No 'ay/e

Eriyachodhary bba gen ?rd sem section A

"riya 'houdhary Sec A +eneral , ,rd Semster (#(#A

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