CHAPTER 1

INTRODUCTION

 1.1Introduction To Topic
Marketing strategy is the goal of increasing sales and achieving a sustainable competitive
advantage. Marketing strategy includes all basic and long-term activities in the field of
marketing that deal with the analysis of the strategic initial situation of a company and the
formulation, evaluation and selection of market-oriented strategies and therefore
contributes to the goals of the company and its marketing objectives.

Marketing strategies serve as the fundamental underpinning of marketing plans designed

to fill market needs and reach marketing objectives. Plans and objectives are generally
tested for measurable results. Commonly, marketing strategies are developed as multiyear plans, with a tactical plan detailing specific actions to be accomplished in the current
year. Time horizons covered by the marketing plan vary by company, by industry, and by
nation, however, time horizons are becoming shorter as the speed of change in the
environment increases. Marketing strategies are dynamic and interactive. They are
partially planned and partially unplanned. Marketing strategy needs to take a long term
view, and tools such as customer lifetime value models can be very powerful in helping to
simulate the effects of strategy on acquisition, revenue per customer and churn rate.

The launch of any new product requires a considerable amount of time, effort and careful
planning. Research and development uses advances in science and technology to enhance
products, while market research is carried out to examine changing consumer tastes and
fashions. The key to successful marketing is to clearly identify at which market segment
the product should be aimed, find out precisely what consumers in this target group want
and then plan the marketing strategy accordingly. The focus of brand image and
positioning of the product within the marketplace are of paramount importance.
All organisations face an external business environment that constantly changes. Changes
in the business environment create both opportunities and threats to an organisation's
strategic development, and the organisation cannot risk remaining static. It must monitor
its environment continually in order to:

build the business

develop strategic capabilities that move the organisation forward

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

Amway is an interesting example of a company that reviews its strategic capabilities and
uses this review to develop its products and markets. More than 450 products carry the
Amway name in the areas of nutrition, health, beauty and home. Amway also has a range
of products that include other well known branded goods. The company also offers a
variety of third party services.

Amways Market Penetration Strategy

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

Target Markets and Market Segmentation

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

Home Care

Personal care

Cosmetics

Nutrition and Wellness

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 recognized 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:

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 Amway went to great
lengths to ensure that the packaging and design appealed to the target audience.
The colours are light, elegant, soft and culturally appealing. Soft, metallic white gives a
sense of clarity, while the blue caps represent water and blue sky. The silver metallic
touches add luxury and spice. All the colours are designed to suggest cleanliness. This
design was used to create a brand image. The following objectives for the brand were set:

to increase distributor profitability and productivity by providing a new and

exciting business opportunity

to optimize 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: 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.
With the exception of the Nutrition & Wellness and Cosmetics range, all Amway India
products/bottles are manufactured through 3 third party contract manufacturers using
world class technology and processes. The products match Amway's global quality

standards. They carry a tamper-proof seal and a 'Customer Refund Policy'. If not
completely satisfied with the product, the consumer can return it for a refund. Amway
products are environment friendly, and are not tested on animals. Amway encourages the
return of its used product bottles for re-cycling and to prevent their misuse.
At present, Amway India's product portfolio comprises of::

Ten products in the Personal Care category,

Eleven in the Home Care category and

Six in the Nutrition & Wellness category.

Seven in the cosmetics category

One product in the Agricultural Category.

The other products are two soft toys.

Amway Sales aid.

Amway's product range demonstrates its adaptability to the market based on a close, firsthand understanding of the Indian consumer's nuances. An aggressive product launch plan
introduces new products every few months. In the coming months, Amway will further
expand its product portfolio through the launch of several new core line products. Amway
had initially started with 6 products for the Indian market in 1998. At present it has about
45-50 products in its various product categories which is about 11% of its total product
category.
Pricing: Amway products are price competitive and overall a good value for money.
While some of its products are more expensive than their counterparts, others are less
expensive and most are competitively priced. Products that are more expensive usually
have greater features and benefits over competitive goods. Many AMWAY products are
highly concentrated, meaning a single purchase lasts longer. On a cost-per-use basis, these
products are priced very competitively from their local brands. The consumer is the
ultimate judge of price and value, and Amways sales success over the years speaks
volumes about its product value and customer satisfaction. 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 presence across the country and
adding new products to its portfolio. The company has done away with its central
warehouse at Nagpur and opened four regional ware houses in Bangalore, Kolkatta, Delhi
and Mumbai that are serviced directly from the manufacturing units. The company today
has 36 offices serving over 385 locations across the country. It plans to add 14 more
offices to its network this year taking the total number of offices to 50 which will serve
over 450 locations. These new offices will be opened at strategic locations spread across
the country and governed by an unwritten rule of Be present where Amway distributors
are.
The Company Amway India launched with 5 offices (New Delhi, Mumbai, Bangalore,
Chennai, Calcutta) and a Central Warehouse (Nagpur), which serviced 150 locations. At
present Amway India has 32 offices, and a reach to 352 locations.
Promotion: Amway promotes its products through its Independent Business Owners. It
has a heavy accent on training. Every Amway distributor enjoys free, unlimited access to
training sessions. These training sessions impart product knowledge, comprise motivation
sessions, and seek to optimise the business potential of participants. Recently Amway has
also started advertising about its products in various Newspapers and Magazines to
promote its products and reach out to their target markets. Amway has come up with a
vast promotional strategy to reach out to its customers and other potential buyers.

 1.2 Objectives Of The Study

The main objective of the study is to know about the different marketing strategies
adopted by the Amway.

To know about the expectation of the customers.

To know about the position of the company in the market.

To know about the competitors.

To find out the customer satisfaction in industry that means to study whether the
customers are satisfied by the products and services provided or not.

To conduct a study of various services provided by the company providers by

specifying the various factors on the basis of those we can check the satisfaction
level of the customers.

To know and understand various strategies used by the service providers in order
to increase consumer satisfaction.

To identify the customer response towards the industry.

To promote the products and services of the industry.

SWOT analysis of the products and services offered in the company.

To assess competitive strength and policies

To estimate potential buying power

To know customer acceptance

 1.3 Literature Review

Business organizations are constantly seeking ways to enhance their performances in
order to compete actively and aggressively in the market. Profit-seeking organizations
have long recognized the importance of creating value in the products and services they
offer to the customers, all in the common objective to deliver commercial goods
efficiently in order to keep the current customer-base satisfied. Aside from inculcating
loyalty among the members of the clients and customers of a business organization,
companies are likewise aware of the need to widen and extend the reach of the companys
products and services to new markets in order to increase its share on clients and
customers. Strategies, plans and techniques in the areas of operations, communication and
marketing, sales, supply chain, logistics, research and development, performance
measurements as well as social and corporate obligations and responsibility are
continuously improved all for the benefit of the target market. Once companies become
successful in these organizational and managerial areas, sustained economic development
is envisioned. This literature review aims to present a critique of existing, published
literatures that analyse the relationship between marketing strategies and the firms
performance.

Historically, marketing strategy formulation is viewed as an antecedent to performance

outcomes (Lages 2000). It is the modus operandi that allows an organization to
concentrate its limited resources on the best available opportunities to increase sales and
achieve a sustainable competitive advantage (Michael Baker 2008).
Marketing strategy has been a salient focus of academic inquiry since the 1980s,
according to (Mavondo 2000). There are numerous definitions of marketing strategy in
the literature and such definitions reflect different perspectives (Li et al 2000). A
traditional definition of marketing strategy is a plan for pursuing the firms objectives or
how the company is going to obtain its marketing goals with a specific market segment
(Orville and Walker 2008; Theodosio, Leonidus, 2003; Kotler, Armstrong, 2009) while
Brodrechtova (2008) explains that marketing strategy is a roadmap of how a firm assigns
its resource and relates to its environment and achieves corporate objective in order to
generate economic value and keep the firm ahead of its competitors. In laymen terms it is

to determine the nature, strength, direction, and interaction between the marketing mixelements and the environmental factors in a particular situation (Li et al 2000). According
to Levie (2006), the aim of the development of an organizations marketing strategy
development is to establish, build, defend and maintain its competitive advantage. A
thorough analysis of the newest scientific articles on strategic management and
organisational behaviour indicates that 71% of them analyse company performance as a
dependent variable, 12% of them analyse it as an independent variable while 11% of the
studies analyse performance as a dependent as well as an independent variable (March
and Sutton1997).
Firms performance, on the other hand, is a well established measure in marketing
literature. We measure it through sales volume, profitability and market share for the
current period (current firm performance), and perceived satisfaction with these measures
when considering the previous year. (Past firm performance)

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CHAPTER 2
COMPANY
PROFILE

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Chapter-2 Company Profile

2.1 About The Industry
The direct selling industry has grown rapidly over recent years. Changing lifestyles,
demographics and economic recession have all been factors influencing this growth.
Amway provides people with business opportunities across the globe. Direct selling is not
about 'getting rich quick' it is about creating rewards for effort and initiative. With low
risk and low capital investment, Amway provides people with the opportunity to achieve
and to improve their lives.
As a leading player in the world of direct selling, Amway is helping to 'clean up' the
industry and provide a valuable and acceptable form of product distribution. In an
impersonal fast-moving world driven by technology, Amway provides the personal touch.
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 an important element in direct selling. They
are also self-employed and can introduce others to the business to form their own sales
group of Independent Business Owners.

Figure 1 Alternative Distribution Channels

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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 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 market. As the research progresses I have tried to
analyse the companies marketing objective for India and how they set out to achieve
them.
This report also provides a brief introduction to the concept of multilevel marketing and
tries to make the reader understand the difference between multilevel marketing and the
traditional distribution setup in the FMCG sector, so as to give an idea as to how the
system is being utilized by companies like Amway.

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

Benefits to customers
This report will be beneficial for consumers who prefer the marketing goods or services
directly to them: at their own convenience often in 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.

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

Benefits to companies
In this report I have deeply analyzed the marketing strategy for Amway through personal
interviews by many IBOs and Amway customers who have helped in adding valuable
data to this project which can be useful for the company. The suggested recommendations
can be considered by the corporation for further expansion and increasing market share.
Network marketing Industry there is no clear rule mentioned as it is not considered as an
Industry yet. Department of Industrial Policy and Promotion (DIPP) classifies direct
selling under wholesale trade for the purpose of FDI inflows. However, it was later
clubbed with retail trade (non-store format retail) under NIC (National Industrial
Classification), 2008.
Right Quadrant's research report says direct selling is not clearly specified in DIPP's
consolidated FDI policy. Since it covers both business-to-business and business-toconsumers aspects, some experts point out direct selling is neither wholesale nor retail,
but only a specialized channel of distribution.
India is on the radar of many companies from all regions whether it is USA, Europe, and
South East Asia. And many more are waiting for the government to pass legislation for
Direct Selling industry in India, which is not considered as an industry yet.

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 2.2 About The Company

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.

Figure 2 Map Location for Amway Operation

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

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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 fastestgrowing industries.
Today, more than 3.6 million independent business owners distribute Amway products in
more than 80 countries and territories. Amway is part of the Alticor family of companies
whose global sales totaled $4.5 billion in its most recent fiscal year.

1950s - A Friendship Forms

Rich DeVos and Jay Van Andel's friendship actually began with a business proposition,
when Rich struck a deal with Jay for a ride to school for 25 cents a week. After high
school they entered the military, but they planned to start a business together after
separate tours of duty. A friendship formed and became a business relationship that has
lasted to this day.

1960s - The Early Years

Amway quickly outgrew its original facilities in the basements of Rich DeVos's and Jay
Van Andel's homes. In its first full year of business, Amway's sales were more than half a
million dollars.

1970s - The Decade of Growth

As vowed by Jay Van Andel the night of the 1969 disaster, Amway rebuilt the aerosol
plant and went on. The ' 70s began with sales of more than $100 million at estimated
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.

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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.

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 a humble beginning in 1959, using an old gas station,
Amway the brainchild of Co founders Rich DeVos and Jay Van Andel, is now one of the
largest and most successful direct sales companies. Amway has also worked to provide
better opportunities for people through active support of various community projects.

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

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

Home Care

Personal care

Home Tech

Cosmetics

Nutrition and Wellness

Amway is committed to expanding the environment awareness of all people of the world.
In June 1989, Amway was presented with the United Nations Environment Programs
Environment Achievement Award. 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 will be able to bank on Amway agents to
aggressively market their products from the get go. All Amway agents now known as
IBOs ie Independent Business Owners were invited to open up their e-mall, selling not
only Amway products but products of other manufacturers as well. The emphasis, as with
Amway, will be on Multi-level-Marketing i.e recruiting new Quixtar agents who are
encouraged to recruit further agents such that the agents will get the cut of sales made by
those they recruit.

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.

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

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

Figure 3 Promotional Channels

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

Pace Setter
A reward incentive to help new and existing distributors reach the 6bonus level

within three consecutive calendar months.

It also encourages a balanced business, with equal amounts of retailing and

sponsoring - essential for long-term success and profitability.

Direct Distributor Seminar
Allows newly qualified Direct Distributors to meet the Amway Management
Team, tour the UK Headquarters, attend key informative, motivational business

sessions and go to the New Direct Distributor Gala Dinner.

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

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Launch into '03

a major annual launch of new products and services presented by a road show of
event

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

Lines of sponsorship
Amway is essentially a people-based business - without people, the business cannot
expand. The business of each distributor grows via new customers and through the
sponsorship of new distributors.
Established distributors are involved in helping newly sponsored associates to
merchandise Amway products. Distributor groups meet to discuss company procedures
and their goals.
The groups also discuss new product launches and promotions, the administration of their
businesses and support new and existing distributors. These lines of sponsorship provide
constant, face-to-face support from professional associates.

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

Amagram - This magazine is mailed directly to all Amway distributors in the

India. Amagram is used to communicate information about new products,
promotions, community news, distributor events and recognitions as well as news
of other affiliates throughout the Amway world. Amagram shows how distributors
can make more out of their business. It is also used to help distributors understand
the philosophy by which the business operates 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.

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

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.

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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 introducing many new products in the Indian
market the choices are increasing for both men and women.
Family Life cycle: Majority of people joining Amway are young women and newly
married couples.
Occupation: Most of the people who are engaged in the Amway business are either
professionals or small businessmen.

Psychographic:
Personality: It appeals to people who are ambitious and want to earn high incomes
within 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, UpperMiddle class.

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Behavioural:
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.

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 year

25

CHAPTER 3
RESEARCH
METHODOLOGY

26

 3.1 Research Objectives of the study

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 Indian Market?
C. How do they plan to achieve the set targets?
This report is appropriate for understanding the various concepts used in international
marketing. It is a complete information guide with relevant information taken from
reliable sources, questionnaire and interviews with people who have achieved success
through this organization.

3.2 Research Methodology of the study

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.

27

Survey 2 had been conducted in order to get some valuable data which has been
collected through direct, telephone and online interviews with people associated with
Amway to get a better insight of Amways operations in India.
Survey -1
Sample Design: Questionnaire method
Sample size: 100 respondents
Sample Unit: IBOs, Customers and others
Segment
Respondents
Men
56
Women
36
*Others
09
Total
100
*Others include elderly people and children.

Survey -2
Sample Design Interview method
Sample size 7
Sample Unit IBOs and employees of Amway India Corp.
Segment
IBOs
AMWAY INDIA Employees
Total

Respondents
6
1
7

28

 3.3 Methods Of Data Collection

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 Analysis
3. Data Compilation
4. The preparation and presentation of the report.
My first step in data collection involved meeting my guide for having a general
understanding of what my product should be like and then some specific understanding of
the company.
After deciding upon the broad frame work of my project, I proceeded on a search for
secondary sources of data. After analysing the data I prepared, I proceeded towards the
primary sources in which direct, phone and online interview were conducted so as to
substantiate my research with more facts.

3.4 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.

29

CHAPTER 4
ANALYSIS
&
INTERPRETATION

30

Q1. Are you an:

Independent Business Owner

Customer of Amway products

None of the above

Chart1: Association of people with Amway.

Interpretation:
Most of the people who filled up the questionnaire were Independent Business Owners
followed by regular customers of Amway products and about 25 % were neither IBO nor
customers of Amway.

31

Q2. 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

Chart2: Income Category of People.

Interpretation:
40% of the people fall in the Income group of Rs 10,000 Rs 40,000 per month
highlighting 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.

32

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

Too expensive

Expensive

Economical

Cheap

Poor

Chart 3a: Perception of Amway Product prices.

33

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

Chart 3b: Comparison with other products.

Interpretation:
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
products in similar categories.

34

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

Excellent

Good

Average

Bad

Poor

Chart 4: Customers expectation of quality.

Interpretation:
75% people in the sample group are satisfied with Amways product quality and majority
found them good.

35

Q.5 Are these products easily accessible?

Yes

No

Chart5: Distribution and delivery of product.

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

36

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

Retailing

Sponsoring

Chart6: Reason for association

Interpretation:
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 up to 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.

37

Q.7 How did you learn about Amway?

Independent Business owner

Meetings/Events

Newspaper

Peers

Internet

Others, Please specify________

Chart7: Amway marketing means.

Interpretation:
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.

38

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

Very strong
Strong
Moderate
Weak
Low

Chart8: Amways Penetration

Interpretation:
Majority of the sample size is of the opinion that Amways market share in India is
moderate and improving.

39

Q.9 Rate the appeal of Amways advertisement?

Very much
Moderate
Poor

Chart9: Amway advertisement appeal

Interpretation:
Majority of the sample size is of the opinion that Amways advertisement does appeal the
masses but few are of the opinion that Amways advertisement has no effect in Indian
market.

40

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

Yes
No
Maybe

Chart10: Amways Products.

Interpretation:
Majority of the sample size is of the opinion that Amways products are environmental
friendly and of good quality.

41

RESULTS OBTAINED THROUGH THE INTERVIEW

1. What is Amways Target audience?

Amways products are used by people of all age groups. It basically depends 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.
2. a. What is Amways expansion strategy?
b. How is it planning to go about it?
a. Amway plans to add more and more people as its distributors to facilitate more sales of
the Amway products.
b. They plan to achieve this by increasing the consumption of their products i.e the
products are consumed by the distributor as well as sell

them to their respective

customers.
3. How is the company planning to expand its home delivery coverage?
Home delivery coverage will be expanded through e-commerce, setting up order
booking centre at the courier office so that the products can be ordered through
telephone or in person and this request can be forwarded to the Amway office
whereby from there they are delivered to the respective customers.
4. a. How many products has Amway launched in the Indian market?
b. How many more are they planning to launch and in what product category?
a. So far Amway has launched about 45-50 products in the Indian market which is about
10-11% of its total product range. They will introduce more as the market gets matured
and people are ready to accept new products.
b. Amway is planning launching its new product categories in India i.e. Home tech and
food items. In the existing categories they are planning to bring more indigenous products
e.g.: persona powder etc.

42

5. Are all these products sourced in India?

Almost all Amway India products are manufactured in the country through 3 third party,
contract manufacturers (Sarvotham Care, Hyderabad; Jejuplast; Pune; Naisa Industries,
Daman). To bring the identified contract manufacturers' production facilities and skills to
international standard, Amway has invested in excess of US$ 4 million (approx. Rs 17
crore*). The transfer of this state-of-the-art, world class technology, has been free of cost.
6. a. With what companies does Amway have strategic alliances in India?
b. What benefits the 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.
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 product offerings according to
the Indian Market.
To meet the local market requirements Amway has now introduced sachets instead of big
bottles which are more economical and can also be given to customers on trial basis.
8. We have heard Amway products are expensive. Why is this?
Amway products are competitively priced and offer a good value for money. Many
AMWAY products are highly concentrated, meaning a single purchase lasts longer. On a
cost-per-use basis, these products are priced very competitively from their local brands.

43

9. What does Amway see as the role of Women in the Amway business?
Amway has helped to empower millions of women around the world by offering them a
low-cost, low-risk opportunity to achieve their goals by owning their own business. This
fact is especially gratifying to us. There are countless examples of single women who
have achieved success in the Amway business, just as there are of women who have
succeeded in partnership with their spouses.
10. a. What is the difference between Amway and illegal pyramids?
b. I have heard rumors that Amway is a cult? Is this true?
a. Unlike illegal pyramids, Amway and other legitimate direct selling business. A pyramid
scheme is something in which a person gets benefited the most by other people working
for him. Eg: An owner of a big company gets paid more while the employees work the
maximum number of hours, but in case of Amway, people gets paid according their
capability to work. The harder they work, the more they earn. The best answer to this
question is that pyramid schemes typically operate for a few months before they
ultimately collapse and disappear. Amway, however, has been in business for more than
40 years.
b. No, Amway Corporation is a business and, similar to other large and established
companies, has a distinct environment defined by shared business goals. Shared business
philosophies should not be misinterpreted as a cult. While unique as individuals, Amway
distributors share a desire to succeed in a business of their own and recognize Amway as
an excellent opportunity to achieve their goals. New distributors receive training,
motivation and support in building independent businesses, and are rewarded for their
achievements.
A close look at Amway will reveal that any reference to Amway as a cult is incorrect.

44

CHAPTER 5
FINDINGS
&
CONCLUSIONS

45

On the basis of the above report we can derive the following findings:
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.

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.

46

Flexibility
Goals and rewards are different for each distributor. You have the flexibility of working
part time while keeping a full-time job or building an Amway business into a full-time
career. You choose the time you invest in building your Amway business.

Product support
The Amway business opportunity is supported by a diverse line of hundreds of quality
AMWAY products and, in many markets, thousands of other brand-name products and
services. Amway has established a reputation for innovation in developing top quality
products and packaging.

Corporate support
More than 12,000 people worldwide are employed in Amway manufacturing,
administration, and distribution facilities totaling 10 million square feet (929,000 square
meters). Amway manufactures products in the United States, China and Korea and
maintains product warehousing facilities around the globe.

Equality of opportunity
Anyone starting an Amway business gets in at the same level. Each new distributor has
the same opportunity to 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.

47

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 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.

48

The other way is to run around peddling soap from door to door after having bought it
from Amway at a discount.
This is exactly where the Amway business strategy comes into play. It makes people hand
over their savings to Amway to buy them a dream.
If all Amway did was to manufacture and sell their products through door-to-door
salespeople there would be no problem. The choice of purchase is left up to the
individual. By asking for deposits from buyers in the beginning and again every year as
a renewal fee it looks like Amway seeks to build a captive consumer base. Once
someone has paid Rs. 4,400 to Amway, he is naturally disinclined to buy Nivea hand
cream instead of Amway Gly-Honey hand lotion. The element of personal choice is thus
prejudiced.
By involving their "distributors" in a complicated system of down-the-line commissions
they are given the impression that there is a limitless market for Amway products.
The truth is that the market share for Amway is as limited as the market share for any
other product. Traditional retail trade is not about to collapse and because of the
expensive price structure; the growth of that market is restricted to the very wealthy.
Calling this "an opportunity to use world class products" is a bit like calling the purchase
of a Mercedes Benz for Rs. 25 lakhs an "opportunity", when an efficient Maruti 800 for
one-tenth of that price will do nicely.
With all these constraints, telling people of profit mechanisms tied into several thousand
people buying Rs. 1,500 worth of Amway soaps every month seems laughable in a
country where entire families lead their lives on less money.

49

50

CHAPTER 6
RECOMMENDATION
&
SUGGESTIONS

51

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

52

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

Amway Company Planner

Amway Opportunity brochures

KOTHARI C.R., Research Methodology, WISHWA PRAKASHAN
Publishing, Printed in India, Bangalore, Year 1998.

KOTLER PHILIP, Marketing Management, Ninth Edition, Prentice

Hall, Printed In India, Year 1999.

Websites

www.amwayindia.com

www.amway.com

www.onlinemlm.com

www.amquix.50megs.com

www.skepdic.com

www.getfacts.com

www.cocs.com

www.msn.com

Newspaper and Magazine

The Hindu, Saturday May 10, 2003

The Financial Express, February 1, 2002

The Hindu, February 16, 2001

53

Annexure 1
QUESTIONNAIRE
Name: ___________________________
Address: _________________________
Occupation: ______________________

Age: _____________________
Status: ___________________
Sex: _____________________

1. Are you an:

Independent Business Owner

Customer of Amway products
None of the above.

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

Below Rs.10, 000

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

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

Too expensive
Expensive
Economical
Cheap
Poor
3. B. Do you think they are fairly priced as compared to other similar products available
in the retail stores?
Yes / No
4. How would you describe the quality of the products:
Excellent
Good
Average
Bad
Poor
5. Are these products easily accessible?
Yes/No

54

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

Retailing
Sponsoring
7. How did you learn about Amway?
Independent Business owner
Meetings/Events
Newspaper
Peers
Internet
Others, Please specify________
8. How do you rate the presence of Amway in the market?

Very strong
Strong
Moderate
Weak

9. Rate the appeal of Amways advertisement?

Very much
Moderate
Poor

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

Yes
No
Maybe
Thank You.

55