amway corporation in india (marketing research)

8/2/2019 Amway Corporation in India (Marketing Research)

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Amway Corporation in India

INTRODUCTION

Direct Selling is a remarkable business model, which brings the market

to the customer and offers a unique business opportunity to anyone

eager to adopt the spirit of enterprise. Direct Selling can best be

described as the selling of products and services directly to consumers

in a face-to-face manner, through demonstration of usage, by an

independent direct salesperson. Direct Selling benefits consumer

because it sells high quality products at the consumer's convenience,

often at his/her home or workplace. Customers value the advantages

of convenience, personalised attention, demonstration of usage, and a

wide choice of products backed by Customer Satisfaction Guarantee.

One of the most tangible impacts of Direct Selling in its new advent

has been the fact that it has touched the average man and women in a

manner never experienced before. Amway India Corporation is the

country's leading Direct Selling Company. It is perhaps the best

example of the contribution Direct Selling is making to India. In a little

over two years of commercial launch Amway India has emerged as the

country's largest Direct Selling company. It closed its financial year

with a turnover close to Rs. 250 crores (the Amway Financial year runs

from Sept. to Aug.). It will reach its target of Rs. 1000 crore turnover

much before its declared target of the year 2004..

The direct selling industry has grown rapidly over recent years.

Changing lifestyles, demographics and economic recession have all

been factors influencing this growth. Amway provides people with

business opportunities across the globe. Direct selling is not about

'getting rich quick' it is about creating rewards for effort and initiative.

With low risk and low capital investment, Amway provides people with

the opportunity to achieve and to improve their lives.

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As a leading player in the world of direct selling, Amway is helping to

'clean up' the industry and provide a valuable and acceptable form of

product distribution. In an impersonal fast-moving world driven by

technology, Amway provides the personal touch.

Because it focuses upon direct selling, Amway is different from more

traditional distribution channels. Its Independent Business Owners own

their own business, with the flexibility to deal directly with their own

clients and to build up personal relationships. These Independent

Business Owners also have the ability to deliver Amway's products to

their customers' homes. Independent Business Owners sell to people

they know or meet. The personal contact and care they provide is animportant element in direct selling. They are also self-employed and

can introduce others to the business to form their own sales group of

Independent Business Owners.

The channel of distribution describes the stages of ownership that take

place as a product moves from a manufacturer to a consumer. The

increasing use of the Internet by consumers has created a real

potential for developing different types of business models and for newapproaches 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 Amways current position in the Indian

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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 ofmultilevel marketing and tries to make the reader understand the

difference between multilevel marketing and the traditional

distribution setup in the FMCG sector, so as to give an idea as to how

the system is being utilized by companies like Amway.

MLM -a definition

Multilevel marketing allows sellers to build a business through their

own sales efforts and by inviting others to become sellers.

Remuneration is based on a seller's personal sales AND on the

combined sales of those people they have sponsored, trained and

motivated. The story of Amway is intended to drive home the point of a

company being alert enough to modify its globally accepted practices

to suit the local markets needs.

This report has been made keeping in mind the benefits which can bederived 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

his/her home either on a one-to-one basis, or in the context of a sales

party. Through this the customers will get a better idea about the

companys 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

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Many people have chosen direct selling because they want to build

their own business, but do not have: considerable funds required to

buy a franchise or start a new company. Among the top five reasons

people sell direct because they like and believe in the product, like

being their own boss, and working their own hours, like the

supplemental family income or making extra money for themselves. It

can be beneficial from the sellers point of view as it may give them the

idea of exactly how they can go about creating their own business and

benefit from the Amways unique business opportunity.

Benefits to companies

In this report I have deeply analysed the marketing strategy for Amwaythrough 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.

OBJECTIVES

Primary Objective: The main objective is to carry out an in-depth

study of Amways overall marketing strategies in India. In order to

achieve this primary objective, I have focused my research in three

main segments:

A. Where the Company stands at present.

B. Where do they plan to go with their objectives for the IndianMarket.

C. How do they plan to achieve the set targets.

This report is appropriate for understanding the various concepts used

in international marketing. It is a complete information guide with

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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

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.

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Survey 2 had been conducted in order to getsome valuable

data which has been collected through direct, telephone and

online interviews with people associated with Amway to get a

better insight of Amways 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 Interview methodSample size 7

Sample Unit IBOs and people working in Amway India Corp.

Segment Respondents

IBOs 6

Amway India employee 1

My project involves the study of Amways marketing strategies in India.

I had planned my work on the project along the following lines:

1. Data Collection

2. Data Alaysis

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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.

Amway - The Current Scenario

Amway is the largest multi-level marketing (MLM) organization in the

world. It is a multi-billion dollar company based on the sale of a variety

of products. Amways philosophy is defined by commitments, trusts,

enduring relationships, and the ideal of perfection above profit. From ahumble 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 12,000 employees.

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It operates across 80 countries and territories in Asia, Africa,

Europe and the Americas with a turnover of US $5.7 billion.

Amway is the wholly owned subsidiary of Alticor Inc.

It has a sales force of over 3.3 million distributors. The company Manufactures 450 products of which 350 are

patented.

The company is also a long standing, active member of the

World Federation of Direct Selling Association (WFDSA).

Over 500 R & D scientists and professionals ensure the

exceptional quality of its products across five product lines:

Home Care

Personal care

Home Tech

Cosmetics

Nutrition and Wellness

Amway is committed to expanding the environment awareness of all

people of the world. In June 1989, Amway was presented with the

United Nations Environment Programs Environment AchievementAward. This award recognised Amways commitment to environmental

education and awareness.

Quixtar

Quixtar is a Multi-Level-Marketing (MLM) opportunity. It is promoted by

Alticor. In 2001 Quixtar replaced the North American Amway business

opportunity and is currently known as the web version of Amway. It willbe able to bank on Amway agents to aggressively market their

products from the get go. All Amway agents now known as IBOs ie

Independent Business Owners were invited to open up their e-mall,

selling not only Amway products but products of other manufacturers

as well. The emphasis, as with Amway, will be on Multi-level-Marketing

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i.e recruiting new Quixtar agents who are encouraged to recruit further

agents such that the agents will get the cut of sales made by those

they recruit.

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AMWAY INDIA

Amway India is a wholly owned subsidiary of Amway Corporation, Ada,

Michigan, USA. Amway Corporation is a 42 year old company, and is

among the largest Direct Selling companies in the world. IT was

established in 1995. It commenced commercial operations in May

5th,1998. In the brief period since launch, it has emerged as the

Countrys largest Direct Selling Company.

Facts:

Over 200,000 entrepreneurs have adopted the Amway business

opportunity; and are actively involved in building their

independent Amway business.

Amway has invested US $ 35 million in India. Of this, US $6

Million is in the form of Direct Foreign Investment. (IDSA)

US $4 million has been spent in transferring state-of-the-art

technology.

The company Amway India was launched with 5 offices (New

Delhi, Bangalore, Mumbai, Chennai, Kolkatta) which serviced 150

locations.

At present, in addition to 32 offices in all metros and major cities,

Amway India services over 379 cities and towns in the country.

Turnover of Rs 100 cr. and Rs. 250 cr. in the first and second

years of operation respectively. Plans to reach Rs. 1000 turnover

by the year 2004.

In India Amway Corporation comprises of 72% women, 24%

Couples, and 4% men. (Source IDSA)

Amway India is the founder member of the Indian Direct Selling

Association (IDSA)

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Direct Selling requires expertise and special skills. Using the

benefit of Amway's leadership status in the global Direct Selling

industry, Amway India has in the past 12 months, conducted

over 8000 training sessions with an attendance of approximately

350,000 Distributors.

Amway India was honoured by the AICB Millienium Outstanding

Service Award, 2000 by the All India Confederation of the Blind in

recognition of its sterling contribution to the cause of India's

blind.

The Karnataka Welfare Association awarded Amway India with

the `Rising Business Star of the Millenium' 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 Indias socio economic milieu. It as either

introduced unprecedented benefits, or upgraded existing facilities to

international standards.

Corporate Responsibility

Through its presence in India, Amway continues to enhance human

resource development using its experience in entrepreneurial

opportunity and self employment. Amway Distributors follow a Code of

Ethics and Rules of Conduct consistent with the World Federation of

Direct Selling Associations (WFDSA) which defines the goals, principles

and responsibilities in building and operating an Amway business.

Amway has conducted several seminars on "EntrepreneurialDevelopment and Direct Selling" in concert with the Confederation of

Indian Industries (CII) and the All India Management Association (AIMA)

to educate popular opinion on the benefits of organized direct selling.

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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, oneis 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.

Customersor clients are the people who buy the AMWAY products

from you but who aren't Amway distributors. One of your best sources

for building a customer base is a group of people you already know.

These acquaintances try AMWAY products and become your customers

as they use and re-order various AMWAY items. However, I have found

that people everywhere need high-quality, Satisfaction Guaranteed

products which they believe Amway is able to provide.

Independent Business Owners or Distributors are people who

have evaluated the Amway business opportunity and elected to jointhe 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

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so form their own sales network. The most successful Amway

businesses enjoy a balance of merchandising AMWAY products and

sponsoring distributors. Growth in your business comes from sharing

the Amway business opportunity with others and helping them decide

if it's right for them. This is called sponsoring. Amway distributors

who sponsor others generally have higher average sales volumes than

those who don't sponsor.

Your "Group" is the team of distributors you've sponsored. Many

you've sponsored personally, but others were sponsored by those you

personally sponsored. You train and motivate your group and, as a

result, you earn extra income when they earn income. As you continueto grow your business and they continue to grow theirs, you both can

benefit.

Like any other business, your Amway distributorship needs frequent

input and activity to grow. However, whatever your goals are, you

control how quickly or how slowly you build your business. After all, it's

yourindependent 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

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achievement, the joy of helping others, working with family, and the

esteem of owning your own business

Income potential

As an Amway distributor, you can earn income many different ways.

For instance, in the U.S. and Canada, you can earn income in at least

10 different ways. They include retail profit (the difference between

Distributor Cost and the Retail Price) and nine different bonuses

rewarding various levels of accomplishment.

Special leadership programme

As you qualify at various levels of achievement, you may be eligible to

attend various Amway leadership programs:

Annual Business Meetings

In countries around the world, company - paid invitations are extended

to Amway leaders to meet in a business-building atmosphere.

Variety of Special Programs

When your business qualifies at a specific distributor level, a special

invitation occurs. Imagine your special day at an Amway facility, your

own success story featured in our distributor magazine, and your name

and picture added to the Distributor Hall of Fame in Amway's World

Headquarters.

AMWAYS MARKETING OBJECTIVE

The objective involves matching consumer needs with the product. The

better the match, the more lasting the potential for the relationship

between the seller and the buyer. The selling process is aided by

Amway's retail strategy to provide high quality, readily purchasable

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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 further Distributors and generate income from

retail profits supplemented by bonus payments based upon the total

sales of the group built by a Distributor'.

Income is generated by a distributor through:

the retailing of goods to consumers. Retail margins (mark-ups)

on the basic wholesale price represent income to the selling

distributor.

additional performance and leadership bonuses, paid on the

volume of personal business of the distributor and the business

volume of the distributors he has introduced to the business.

various levels of leadership bonuses, dependent upon the overall

size and shape of the business, paid on achieving different levels

of business performance.

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

sponsoring.

Retailing - the selling of goods to consumers on which retail

margins are earned and performance bonuses gained.

Sponsoring - the introduction of other individuals to establish

and develop their own independent Amway distributorships.

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Retailing enables distributors to provide immediate financial incentive

rewards. Sponsoring enables distributors to replicate the base with

other people, thus allowing the organization to grow.

Direct selling involves sales people showing and demonstrating

products to obtain orders. As with all direct selling activities, the

process involves two-way communication and this can be time-

consuming. Business success and the resulting financial results are a

direct consequence of effort, commitment and personal group

motivation. Personal 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.

AMWAYS 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 organisation's strategic development,

and the organisation cannot risk remaining static. It must monitor its

environment continually in order to:

build the business

develop strategic capabilities that move the organisation forward

improve the ways in which it creates products and develops new

and existing markets with a view to offering its customers better

service.

Amway is an interesting example of a company that reviews its

strategic capabilities and uses this review to develop its products and

markets. More than 450 products carry the Amway name in the areas

of nutrition, health, beauty and home. Amway also has a range of

products that include other well known branded goods. The company

also offers a variety of third party services.

A. Amways 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

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special events such as Leadership Training Seminars. These enable

IBOs to spend time with others involved in the business and to learn

about 'best practice' from each other, whilst also sharing ideas.

Target Markets and Market Segmentation

Segmentation:The Amway business opportunity is open to everyone,

regardless of sex, race, age, religion, or political or other personal

beliefs. The Amway business appeals to women, men, couples, and

families from all backgrounds.

Amway also offers a range of Fast Moving Consumer Goods through itsfive main product categories i.e

Home Care

Personal care

Cosmetics

Nutrition and Wellness

But initially Amway was launched in India with only 6 products most of

which were home and personal care products.

Target Audience: Although it was recognised by Amway that groups

such as children, men and teenagers are likely to become targets in

the future, the Amways 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 Amways 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:

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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 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 Amwaywent 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

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to optimise consumer convenience and value through enhanced

product differentiation by providing them with an exclusive and

revolutionary range of products.

Amways 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 & Wellness and

Cosmetics range, all Amway India products/bottles are manufactured

through 3 third party contract manufacturers using world class

technology and processes. The products match Amway's global quality

standards. They carry a tamper-proof seal and a 'Customer Refund

Policy'. If not completely satisfied with the product, the consumer can

return it for a refund. Amway products are environment friendly, and

are not tested on animals. Amway encourages the return of its usedproduct bottles for re-cycling and to prevent their misuse.

At present, Amway India's product portfolio comprises of::

Ten products in the Personal Care category,

Eleven in the Home Care category and

Six in the Nutrition & Wellness category.

Seven in the cosmetics category

One product in the Agricultural Category.

The other products are two soft toys.

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Amway Sales aid.

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 expand its product portfolio through the launch of several

new core line products. Amway had initially started with 6 products

for the Indian market in 1998. At present it has about 45-50

products in its various product categories which is about 11% of its

total product category.

Pricing: Amway products are price competitive and overall a good

value for money. While some of its products are more expensive

than their counterparts, others are less expensive and most are

competitively priced. Products that are more expensive usually

have greater features and benefits over competitive goods. Many

AMWAY products are highly concentrated, meaning a single

purchase lasts longer. On a cost-per-use basis, these products are

priced very competitively from their local brands. The consumer isthe ultimate judge of price and value, and Amways 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 product knowledge, comprise motivation

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sessions, and seek to optimise the business potential of

participants. Recently Amway has also started advertising about its

products in various Newspapers and Magazines to promote its

products and reach out to their target markets.

B. Amways 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:

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Geographic: Amway is now trying to reach people by setting offices

even in the remote areas of the country. Amways distributors are now

spread all over India even across the rural areas.

Demographic:

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 introducingmany 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

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Personality: It appeals to people who are ambitious and want to earn

high incomes with in a short span of time. Amway through it unique

business opportunity gives them a chance to earn enough income and

show them the path to realise their dreams.

Social Class: Majority of Amway people comprise of working class,

middle class, Upper-Middle class.

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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:

- Amways 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.- Amways 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.

- Amways products being good in quality are also very

much preferred by the upper class segment who can easily

afford the pricing but they dont want to get involved with

the business opportunity. They are mostly associated with

Amway as their customer.

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Target group

Men Professionals and small business owners

Age - 23 - 50 years

Income Status Working class, Middle income, upper middle income

Women Professional and housewife

Age 20 50 years

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: Amways 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 presenceacross 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

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company today has 36 offices serving over 385 locations across the

country. It plans to add 14 more offices to its network this year taking

the total number of offices to 50 which will serve over 450 locations.

These new offices will be opened at strategic locations spread across

the country and governed by an unwritten rule of Be present where

Amway distributors are.

Promotion: Amway has come up with a vast promotional strategy to

reach out to its customers and other potential buyers.

Amway's Promotion channels

There are five different promotion channels:

Corporate Events

Corporate events include specially arranged functions, such as productfairs, conferences and seminars, which distributors at different levels

are invited to attend. Face-to-face communication at a range of events

helps Amway and its distributors to get to know each other. They also

provide an opportunity for distributors to get to know each other and

are useful for relaying messages, giving advice and generating

personal discussion. Events include:

Pace Setter - a reward incentive to help new and existing

distributors reach the 6bonus level within three consecutive

calendar months.

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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 DirectDistributors to meet the Amway Management Team, tour the UK

Headquarters, attend key informative, motivational business

sessions and go to the New Direct Distributor Gala Dinner.

Leadership Seminar - where distributor leaders who have

achieved a target criteria set by Amway, travel for a seven day

trip with compliments of Amway to some of the world's finest

beach locations and hotels where they attend a number of

business sessions and exchange thoughts and ideas with

corporate staff.

Launch into '03 - a major annual launch of new products and

services presented by a road show of 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

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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.

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

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business operates and the legislation regulating the Direct

Selling Industry.

Special Literature - Occasionally, Amway designs a brochure or

leaflet which is used to address a particular change or launch,e.g. new car care product range.

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

customers door step.

The initial demographic information will help in understanding of

Amways popularity among a certain group of customer and how they

perceive of it.

1. Are you an:

Independent Business Owner

Customer of Amway products

None of the above.

This question is necessary as it will be able to provide us with a

variety of views as to how Amway is being perceived differently by

people based on their association with it.

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

Below Rs.10, 000 Rs 10,000- Rs 20,000

Rs 20,000- Rs 30,000

Rs 30,000- Rs 40,000

Rs 40,000- Rs 50,000

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Rs 50,000 and above

This question will help in understanding which income categories of

people are more likely to join the Amway business because of it uniqueincome opportunities.

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

Choice)

Too expensive

Expensive

Economical

Cheap

Poor

b. Do you think they are fairly priced as compared to other

similar products available in the retail stores? Yes / No

This will indicate peoples perception of Amways 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 customers

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

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Bad

Poor

This question is necessary for understanding whether the Amway

products meet the customers expectations for being the high qualityproducts as being positioned by the company.

5. Are these products easily accessible?

Yes

No

Amway being a direct selling company totally relies on the door to door

delivery of products. Thus it is important to know if the customers ever

faced any dissonance by Amway in its product and service delivery.

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

Retailing

Sponsoring

This is an important question through which we can understand the

main reason why people would like to associate themselves with

Amway. Is it mostly because they like consuming a good quality

product or is it the unique business opportunity that Amway provides

which is a source of an extra income.

7. How did you learn about Amway? Independent Business owner

Meetings/Events

Newspaper

Peers

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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 Rs.10, 000 10,000-20,000 20,000-30,000 30,000-40,000 40,000-50,000 50,000 and above

Findings

A. Below 10,000: None

B.10,000 20,000: 8C. 20,000 30,000: 17D.30,000 40,000: 4E. 40,000 50,000: 1F. Above 50,000: None

3. a. In your opinion how are the Amway products priced: Too expensive Expensive Economical Cheap Poor

Findings:

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A. Too expensive: 11B. Expensive: 15C. Economical: 4D. Cheap: None

E. Poor: None

b. Do you think they are fairly priced as compared toother products of the same category available in theretail 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: 21B. 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?

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Retailing

Sponsoring

Findings:

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

Meetings/Events

Newspaper

Peers

Internet


Findings:

A. Independent Business owner: 19

B. Meetings/Events: 3

C. 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 ofAmway products which were

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

30,000 per month. This proves that Amways major consumer

group lies in this income segment that get a chance to use

quality products at the same time earn money out of it.

3. According to this survey majority of the people feel that Amway

products are expensive but at the same time they provide

various explanations for them. Eg: If asked why a person would

spend Rs. 290.00 for 4liter of see spray (household cleaner)

instead of buying same quantity of Colin which is worth only Rs.

252. The obvious answer one can expect is that Amway products

are in concentrated form and last for a longer period of time. In

this case one should consider per unit cost of the product which

would make Amway cheaper than other products. Some people

from the middle income group also find these products very

expensive at initial stages but once they start earning through

Amway they dont 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 insimilar categories.

4. 90% people in the sample group are satisfied with Amways

product quality and find them excellent.

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5. Almost everybody agrees that they have easy access to Amway

products whether directly from the company or through the

Amway distributors.

6. 87% of the people as per the sample group feel that they are

more attracted to Amway because of its unique business

opportunity. They get to use the products of an excellent brand

and at the same time benefit from the income opportunities

provided at Amway. Some people also feel that product has an

important role to play in all this because if the products quality

was not upto the desired standards, the business opportunity no

matter how good it is, will have no meaning. So its the

combination of Amways 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. Amways 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 AmwayCorporation.

1. What is Amways Target audience?

To get a clear understanding of who are the main users of Amway

products and business opportunity.

2. a. What is Amways expansion strategy?

b. How is it planning to go about it?

This will indicate Amways 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 companys 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 Amways 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 Amways commitment to the quality of its products

and how they try to maintain the same product standards in India.

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6. a. With what companies does Amway have strategic

alliances in India?

b. What benefits the IBOs/Customers drive from it?

This will indicate Amways 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 Amways reason for their expensive products.

9. What does Amway see as the role of Women in the Amway

business?

This will explain Amways 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 peoples doubts about Amway as not beingassociated with illegal pyramids or cults.

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RESULTS OBTAINED THROUGH THE INTERVIEW


Amways products are used by people of all age groups. It basicallydepends on the distributors 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.



a. Amway plans to add more and more people as its distributors to

facilitate more sales of the Amway products.

b. They plan to achieve this by increasing the consumption of their

products i.e the products are consumed by the distributor as well as

sell them to their respective customers.

3. How is the company planning to expand its home delivery

coverage.

Home delivery coverage will be expanded through e-commerce,

setting up order booking centre at the courier office so that the

products can be ordered through telephone or in person and this

request can be forwarded to the Amway office whereby from therethey are delivered to the respective customers.

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

market?

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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 willintroduce more as the market gets matured and people are ready to

accept new products.

b. Amway is planning launching its new product categories in India i.e

Home tech and food items. In the existing categories they are planning

to bring more indigenous products eg: persona powder etc.


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.


alliances in India

b. What benefits the IBOs/Customers drive from it.

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.

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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 Amways productofferings 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.


Amway products are competitively priced and offer a good value formoney. 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.


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.


pyramids?


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

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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, Amwaydistributors 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

Positive side to Amway

The only positive side to Amway is the chance to make money.

It is the chance to get oneself involved in a trade as a side

business, especially if one is trying to recover from a failed (or

failing business) or one has lost one's job. To the extent that a

few people will surely make money, the system works.

Amway has also helped solve the problem of unemployment in

the country and given a hope to earn high incomes through their

independent business to millions of people all over India.

It is involved in a lot of community services. Amway feels that it

is their responsibility to serve the community in which they live.

Through Amway Motivational Organisations (AMOs) it has try

reach out to a lot of handicap people and provided them with

free services at any time. It is also involved in helping the blind

by providing them with proper education. Amway is also actively

involved various environmental projects such as planting more

trees etc.

Amway offers a wide range of good quality products which are

easily available to people at their door steps.

Underside side of Amway

Why Amway Will Make Money Even If You Dont

An interesting calculation: If 1 million people sign up, Amway will

receive Rs. 4400 million (Rs. 440 crores or US$ 206.80 million) in

up-front cash from this cash rich country.

They will have earned all this money without having sold a single

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one of their very expensive products but just by sponsoring

people to this business.

How This Is Done At The Expense Of The Middle Class

While doing this research, I have found that the only way to

succeed in the business is to be able to sign up vast numbers of

people and make them use the products for themselves.

The other way is to run around peddling soap from door to door

after having bought it from Amway at a discount.

This is exactly where the Amway business strategy comes into

play. It makes people hand over their savings to Amway to buythem a dream.

If all Amway did was to manufacture and sell their products

through door-to-door salespeople there would be no problem.

The choice of purchase is left up to the individual.

By asking for deposits from buyers in the beginning and again

every year as a renewal fee it looks like Amway seeks to build

a captive consumer base. Once someone has paid Rs. 4,400 toAmway, 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

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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 mechanismstied into several thousand people buying Rs. 1,500 worth of

Amway soaps every month seems laughable in a country where

entire families lead their lives on less money.

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RECOMMENDATIONS

After conducting an in-depth analysis of Amways various

marketing strategies in India, I would like to suggest a fewrecommendations

Product: To prolong the life-cycle of a brand or product range, an

organization must inject new life into the growth period through

readjusting the ingredients of the marketing mix. To ensure the Amway

range of products would stay in line with evolving market trends and

tastes, Amway should set about upgrading its brand with the additional

objective of increasing its global competitiveness.

They should introduce more products which are made in India. Eg:

Persona Powder. This product will also give the IBOs and customers the

cost advantage.

Price: As a result of my research I have discovered that all the Amway

products are expensively priced. If they are trying to target the middle

income group they must reconsider their price structure once again

and make it a bit economical for the Indian audience. This way may be

they can enjoy a larger market share, as it could be one of the reasons

why some people may be hesitant to 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 i.e to make

the products available to them at their conveniences.

They should also try to Manufacture their products in India, which will

then reduce the cost pressure on its customers.

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They should also try to set up their offices in states like Kerela,

because Kerala is a very good market for the Direct Selling industry for

various reasons; the two most important factors seen favouring the

industry are the high literacy rate and the willingness to try something

different.

Promotion: Sine India is advancing on the technological front, I feel

its time to Introduce the e-commerce Amway i.e Quixtar in India. It will

help in enhancing the Multi-level marketing to a great extent. It will

also create a new business experience for the Indian IBOs and will also

help in promoting their sales.

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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

Amways 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 distributor's

accomplishments.

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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 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.

FlexibilityGoals 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 supportMore than 12,000 people worldwide are employed in Amway

manufacturing, administration, and distribution facilities totaling 10

million square feet (929,000 square meters). Amway manufactures

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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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LIMITATIONS OF THE PROJECT

The company or the IBOs were hesitant to give

time and good information to students, so

information required for the primary research

which is a basic need of this project was not

easily available in required quality and quantity.

I have conducted this type of an elaborate and

analytical project for the first time so information

might not be utilized adequately.

Time constraint.

``BIBLIOGRAPHY

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Books and Secondary data

Amway Company Planner

Amway Opportunity brochures

Internet

www.amwayindia.com

www.amway.com

www.onlinemlm.com

www.amquix.50megs.com

www.skepdic.com

www.getfacts.com

www.cocs.com

www.google.com

www.msn.com

Newspaper and Magazine The Hindu, Saturday May 10, 2003

The Financial Express, February 1, 2002

The Hindu, February 16, 2001

54
http://www.amwayindia.com/http://www.amway.com/http://www.onlinemlm.com/http://www.amquix.50megs.com/http://www.skepdic.com/http://www.getfacts.com/http://www.cocs.com/http://www.google.com/http://www.msn.com/http://www.amwayindia.com/http://www.amway.com/http://www.onlinemlm.com/http://www.amquix.50megs.com/http://www.skepdic.com/http://www.getfacts.com/http://www.cocs.com/http://www.google.com/http://www.msn.com/


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ANNEXURES

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Final Research Project

Amway Corporation inIndia

Research Guide:Mr. Pankaj Kumar

Submitted by:Ms. Simranbir Kaur

Roll No. 023050MSC - IBM

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ACKNOWLEDGEMENT

With God on my side all things are possible --

Simranbir Kaur.

As a result of teaching system that promotes cramming up of facts I looked

upon my research guide as a source of free flowing information source who

will just hand me down the information as I take down notes. This way I had

learnt to learn. This was fortunately not the case with me. I thank my

research guide Mr. Pankaj Kumar who helped me learn the meaning

of true research and who brought me out of the paradigm and helped me to

think. The knowledge gained from independent thinking is something we do

not experience in our way of education. As a result of this research and

interaction with my guide it seems that the real meaning of research is just

beginning to show.

A special Thanks to my Mother for her untiring support and inspiration

throughout the working of this project without which I would not have been

able to give my best towards this research.

I am indebted to Mr. Balaji Srinivasan, an Independent Business Owner

(US), who imparted his valuable time and views for the clear and better

understanding of Amways operations.

Sincere thanks to Mr. Anirudh Mukherjee, from Amway India Corporation

for his kind support and sharing some unprecedented facts about the

company.

I am also very grateful to Mr. Auravinda Biswas, Faculty at Fore School of

Management, for sharing his experiences of working with the Amway

Corporation.

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Last but not the least I would like to take this opportunity to acknowledge my

friends, family members and other faculty members for their motivation,

teachings and guidance for making this project come to the present stage.

CERTIFICATE OF DECLARATION

I hereby declare that the research project executed

by me on Amway Corporation in India as a part of

my MSC IBM Course is authentic. It is the outcome

of individual efforts and embodies original

contribution based on empirical evidence and

analysis emanating from the data/information

gathered during the course of my research work.

Simranbir Kaur Mr. Pankaj Kumar Mr. AbhisekNirjar

Roll NO. 23050 Research Guide Program Director

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AMWAY VISION

Helping people live better lives. In all aspects

of our products, businesses and social

responsibility, we strive to make a meaningful

difference in the communities in which we

operate.

AMWAY MISSION

Through the partnering of Distributors,

Employees, and the Founding Families, and the

support of quality products and service, we

offer all people the opportunity to achieve

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their goals through the Amway Sales and

Marketing Plan.

EXECUTIVE SUMMARY

Amway is a unique company. It is defined by the fundamental

philosophy of helping people help themselves. Amway has helped

millions of people run their own independent business around the

world. Today, Amway continues to grow by offering new products and

business opportunities to people from all cultures and walks of life.

Whether they are employees, distributors, or citizens in the

community, Amway touches their lives for better.

India with its rich reservoir of will, talent and enterprise is perhaps the

most fertile ground for the Amway Corporation. In short it has made

substantial value addition to Indias social economic life.

The focus of this project is based on studying a single organization i.e

The Amway Corporation. This research has been conducted to study

the marketing strategy adopted by Amway in the Indian market. An

attempt has been made to study the companys 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 thebasis 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.

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I have finally concluded my research by providing a summarized

conclusion and also suggested recommendations on the basis of the

marketing mix.

Contents

Executive Summary

Introduction 1

Objectives 4

Methodology 5

Amway Current Scenario 7

How it works 11

Amway Sales and Marketing Plan14

Amway Strategies in the Indian Market15

A.Amways market Penetration Strategy16

B. Amways Market Extension Strategy 21

Survey 1 Questionnaire 28

Survey 2 Interview 36

Recommendations45

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Conclusion 47

Limitation of the project 50

Bibliography

Annexures

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INTERVIEW




3. How is the company planning to expand its home delivery

coverage.

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

market?


product category?



alliances in India?

b. What benefits the IBOs/Customers drive from it?

7. Has there been any changes made in the Amway product

offerings according to the Indian Market?



business?


pyramids?


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QUESTIONNAIRE

Name: ___________________________ Age: _____________________

Address: _________________________ Status: ___________________Occupation: ______________________ Sex: _____________________

6. Are you an:

Independent Business Owner

Customer of Amway products

None of the above.

7. What is your income level: (per Month)

Below Rs.10, 000

Rs 10,000- Rs 20,000

Rs 20,000- Rs 30,000

Rs 30,000- Rs 40,000

Rs 40,000- Rs 50,000

Rs 50,000 and above

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

Too expensive

Expensive Economical

Cheap

Poor

b. Do you think they are fairly priced as compared to other

similar products available in the retail stores. Yes / No

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

Excellent

Good

Average

Bad

Poor

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10.Are these products easily accessible? Yes/No

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

support your answer

Retailing

Sponsoring

________________________________________________________

_____________________________________________________________

_____

7. How did you learn about Amway?

Independent Business owner

Meetings/Events

Newspaper

Peers

Internet


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COMPANY HISTORY

Amway began in 1959 with two young entrepreneurs in the United

States -- Rich DeVos and Jay Van Andel. Their concept for an innovative

business opportunity, centered around person-to-person marketing,

established itself as a leader among one of today's fastest-growing

industries.

Today, more than 3.6 million independent business owners distribute

Amway products in more than 80 countries and territories. Amway is

part of the Alticor family of companies whose global sales totaled $4.5billion in its most recent fiscal year.

1950s - A Friendship Forms

Rich DeVos and Jay Van Andel's friendship actually began with a

business proposition, when Rich struck a deal with Jay for a ride to

school for 25 cents a week. After high school they entered the military,

but they planned to start a business together after separate tours ofduty. A friendship formed and became a business relationship that has

lasted to this day.

1960s - The Early Years

Amway quickly outgrew its original facilities in the basements of Rich

DeVos's and Jay Van Andel's homes. In its first full year of business,

Amway's sales were more than half a million dollars.

1970s - The Decade of Growth

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As vowed by Jay Van Andel the night of the 1969 disaster, Amway

rebuilt the aerosol plant and went on. The ' 70s began with sales of

more than $100 million at estimated retail, and kept going strong.

After a lengthy investigation, the FTC verified that Amway is a genuine

business opportunity and not a "pyramid."

1980s - The Billion-Dollar Decade

The ' 80s will be remembered for the first Billion Dollar Year at

estimated retail in 1980. Building expansion at Amway World

Headquarters continued at breakneck speed as Amway scrambled to

keep pace with demand, opening its new cosmetics plant in Ada.

1990s - The Second Generation

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

and DeVos families took the helm during the ' 90s. Steve Van Andel

and Dick DeVos succeeded their fathers as Chairman and President.

Distributors witnessed a similar trend, with the second generation of

many distributor families taking on important leadership roles.

2000s - The New Millennium

In 2000, Amway Corporation became a wholly-owned subsidiary of Alticor, Inc.

Chairman Steve Van Andel and President Doug DeVos share the Office of the Chief

Executive.

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Many Ways to Receive Income

You have read about the first two ways:

Retail Profit. Averages 20% + of Business Volume (BV) on products you

sell.

Performance Incentive, ranges from 3% to 21% and is paid monthly.

There are many more ways for Direct Distributors to earn income when

they meet qualifications.

These are: (a) Leadership Commission. (Paid monthly)

(b) Monthly Depth Commission. (Paid monthly)

(c) Ruby Commission. (Paid monthly)

(d) Emerald Commission. (Paid yearly)

(e) Diamond Commission. (Paid yearly)

(f) Diamond Plus Commission. (Paid yearly)

(g) Double Diamond Payment. (Rs. 500,000. One time cash award)

(h) Triple Diamond Payment. (Rs. 10,00,000. One time cash award)

(i) Crown Payment. (Rs. 20,00,000. One time cash award)

(j)Crown Ambassador Payment. (Rs. 30,00,000. One time cash award)

Special Leadership Programmes

As you attain various levels of achievement, you may also be eligible

for various AMWAY leadership programmes:

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Direct Distributor Seminar: A special two-day meeting for new

Direct Distributors. With all expenses paid by AMWAY, new Direct

Distributors meet the AMWAY India management team, and re

amway corporation in india (marketing research)

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