BLUNDERS MADE IN MARKETING MIX BY AMWAY IN INDIA
Amway did recognize the need for a special India-specific pricing strategy and there were just a fewmarginal cuts in the prices, which were still almost 20% higher than its competitors.
They roped in their Indian distributors through NRI’s living abroad.
They were given introductorykits which included samples of the products, sales material, information on the products etc. But these kits were used by the distributors themselves rather than using them to promote itsprospective consumers. Because of this volumes demanded after did not pick up.
The product quality was sometimes poor.
Problems like distributor attrition, a false 'premium' image had customer dissatisfaction surfacing.
Sales people often used a 'hard sell' for their products, moreover the sales people were poorly trainedand lacking in motivation.
Lack of networked banks, toll free phone lines and online shopping was another cause for Amway not doing well.
Since the sales depend entirely on the independent distributors , the company has to pay hugecommission. This results in the increased cost of the product. Hence the products become expensiveresulting in lower sales.
In a value conscious country like India, the expensive tag of Amway products is the singular reasonfor the lack of popularity of its products.
The Distribution Network was far from reach from common man.Amway used centralized marketingof all products worldwide never focused on the market in the smaller towns.
Distributors and sales team did not know the value of the products they were selling, this aspect wasoverlooked by the company.