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Introduction to marketing communication

Promotion is a communication process, by which the producers of the


products or services draw attention of the consumers or prospective
consumers towards their products and services. Consumers are informed and
reminded about the products and are requested and persuaded to purchase
their products. Such communication may be made either along the product
or well in advance of the introduction of product into the market.

Promotion as communication: - Promotion is that marketing


communication activity that attempts to inform and remind individuals and
persuade them to accept, resell, recommend or use a product, service, idea or
institution.

Promotional communication has the triple purpose to perform. To inform, to


persuade and to remind and the three basic purposes are being fulfilled at the
different stages of product life cycle.

Promotional communication is not always directed towards the ultimate


consumer. It can be for industrial customers, institutions or some times
towards middlemen. Promotion is an important tool for both profit and non
profit organization. As we know that most often it is being used to sell a
product or services, it is also being accepted in the marketing of social
services, political candidates and ideas.
Objectives:

1. Leads to behavior modification.

2. To inform.

3. To persuade.

4. To remind.

5. Specific Objectives. Such as to change the pattern of demand.


Integrated Marketing Communication:

In traditional marketing, promotion activities are handled by various


specialist agencies. The marketing effect is fragmented and the result could
be conflicting communications that confuse the customer. The result is
wasted time, money and effort. Thus, integrated marketing communications
help in channelising all marketing effort through single unified mechanism
which helps in achieving following benefits:

1. Creative integrity.

2. Consistency of message.

3. Unbiased marketing recommendations.

4. Better Use of Media.

5. Greater marketing precision.

6. Operational efficiency.

7. Cost saving.
Tools Of IMC:
There are various tools for Integrated Marketing communication. These are
as follows:

1. Advertising: It includes any informative or persuasive message


carried by a non- personal medium and paid for by a sponsor whose
product is in some way identified in the message.

2. Personnel Selling: It is a person-to-person dialogue between buyer


and seller.

3. Sales Promotion: It includes activities which are used in promoting


sales of the product.

4. Direct Marketing: In it organizations communicate directly with


target customers to generate a response and/or a transaction.
Traditionally, direct marketing has not been considered an element of
the promotional mix. However, because it has become such an
integral part of IMC program of many organizations and often
involves separate objectives, budgets, and strategies, we view direct
marketing as a component of the promotional mix.

5. Word-of-mouth: Of course, an organization’s image can be


projected through channels other than the formal communication
process. Of course, positive word-of-mouth recommendation is
generally dependent on customers having good experiences with an
organization, and studies have shown how unexpectedly high
standards of service from a company can promote recommendation.
Two of the most famous organization Amway and Tupperware’s marketing
communication can be analyzed on above factors.

But before analyzing marketing communication programme we must first


have a look on the company profile and history of the organization
Amway Corporation

Amway is more than an income opportunity or a company or products. It’s


about putting people in control of their lives. It’s about connecting people to
others who respect them, who share their goals and aspirations. It’s about
supporting people in their achievements.

Amway is about people connecting people to a better way of life.

Amway Corporation is one of the world's largest direct selling companies.


Originally founded by Jay Van Andel and Rich DeVos, Amway operates in
more than 88 countries and territories in Asia, Africa, Europe and the
Americas. Amway products and services are marketed through independent
business owners worldwide. Amway is a wholly owned subsidiary of Alticor
Inc.

PEOPLE

Amway has more than 6000 employees worldwide. In addition, Amway has
more than 3.6 million Independent Business Owners (IBOs) around the
world. In China, Amway products are sold by Amway sales representatives.
PRODUCTS AND SERVICES

Over 450 unique, high-quality products carry the Amway name in the areas
of nutrition, wellness, beauty and home, as well as commercial products and
a variety of services. In addition, Amway independent business owners in
selected markets sell additional brand-name goods through local
merchandise catalogues, plus a variety of services and educational products.
All products are backed by a customer satisfaction guarantee.

GOVERNANCE AND MANAGEMENT

Doug DeVos is the President of Amway and Steve Van Andel is the
chairman.

FACILITIES

Amway operates out of Alticor's world headquarters located at 7575 Fulton


Street East, Ada, Michigan 49355, USA.

COMMUNITY SERVICES

Amway, its Independent Business Owners and employees are involved in


improving the communities in which they do business. Specific and current
information is available upon request.
AFFILIATIONS

Amway is a prominent and active member of the regional and national direct
selling associations worldwide. Doug DeVos is a member of the U.S. Direct
Selling Association Board of Directors. Former Alticor President Dick
DeVos is the current Chairman of the World Federation of Direct Selling
Associations (WFDSA). Globally, direct selling is an industry with
approximately $80 billion in sales and more than 30 million salespeople.
The History of Amway

What does the word Amway mean? Amway is an abbreviation for


"American Way" and was coined in 1959 by company founders, Jay Van
Andel and Richard DeVos. Short, unique and easy to remember, Amway has
been registered as a corporate name and trademark ever since.

In the following decades, Amway Corporation successfully established itself


as a leading multilevel marketing business, built on strong values and
founding principles that continue to sustain our company today. The
business is built on the simple integrity of helping people lead better lives.

Today, Amway is a multibillion-dollar international business representing


freedom and opportunity to millions of people in more than 88 countries and
territories around the world. Amway generates US $ 9.2 billion (January -
December '09) in sales at estimated retail through this global product
distribution network. We offer over 3 million Business Owners the
inspiration to grow those businesses, and we work hard to provide new and
better ways for them to achieve their life goals.

AWARDS

As a corporate leader in promoting environmental awareness and education,


Amway received the prestigious United Nations Environment Programme
Achievement Award in 1989.

Corporate Citizenship Award - On November 08, 2005, the United States


Chamber of Commerce awarded Alticor with the Corporate Citizenship
Award in the category of International Community Service for the One by
One Campaign for Children
A SOLID FOUNDATION

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.

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.

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."
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, Michigan.

THE NEXT GENERATION

As carefully planned by Rich and Jay, the second generation Van Andel and
DeVos families took the helm during the ' 90s. The Policy Board was
formed and 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.,
NEW HORIZONS

In 2000, Amway prepared for a new century and a new exciting era.

Almost 50 years after Amway began, the DeVos and Van Andel families
created a new structure to meet the challenges of this new century. A parent
company, Alticor, was established with subsidiaries Amway, Quixtar and
Access Business Group—the latter to consolidate manufacturing and
distribution for the enterprise. At the helm of Alticor are Steve Van Andel
(Chairman) and Doug DeVos (President), jointly holding the Office of the
Chief Executive. Today each area of the business, including Amway, has the
freedom to build on its strengths.

Amway continues to be a leading company in the direct selling industry. Its


fundamental principles—freedom, family, hope and reward—hold as true
today as they did in the very beginning.

Founder's Fundamental

Rich DeVos and Jay Van Andel built the Amway business on the following
principles, which they and their families believe constitute a sound
foundation for a meaningful life.

Freedom

Provides conducive environment in which to live, work, achieve and grow.


The Amway business recognizes, supports and expands freedom, which is
both personal and economic. It gives the freedom to operate as independent
business people and conduct a full-time or part time business.

Family

The family is our primary social structure, providing love, heritage and
legacy. The Amway business respects and supports the family, as evidenced
by the Amway Board of Directors and the prominence of “family” in
Amway business. Amway provides the opportunity to build a family-owned
business which can be passed on to generations.

Hope

Hope gives us the power to transform our lives in positive ways. It is a force
that allows us to envision dreams, establish goals, and achieve great things.
By offering hope, we open windows of possibility for others, irrespective of
social status, profession or educational background.

Reward

Reward involves the shared action of giving and receiving. Reward helps us
grow, either as the giver or the recipient, and there are many ways we are
rewarded. Reward is integral to the Amway business as we help each other
grow as people and as entrepreneurs. Hard work is followed by high
rewards.
Amway India Factsheet
Amway promotes individual entrepreneurship through its innovative direct
selling approach of world class consumer products. Amway India is the
country’s leading direct selling FMCG-company which manufactures and
sells world-class consumer products. Its business opportunity and all its
products are covered by 100% Money Back Guarantee. Amway sources all
its products from within India, thereby providing stimulus to the local
manufacturing industry.

CORPORATE CREDENTIALS

• Amway India is a wholly owned subsidiary of US $ 7.2 billion


Amway Corporation, Ada, Michigan, USA. Amway Corporation is
one of the largest Direct Selling companies in the world. It has a
presence in 80 countries & territories.

• Established in 1995, Amway India commenced its commercial


operations in May 1998 and has emerged as the largest Direct Selling
FMCG Company. The Company is headquartered at the National
Capital Region of India - New Delhi.

• Amway has invested in excess of US $ 35 million (Rs. 151 crore) in


India of this; US $ 6 million (Rs. 26 crore) is in the form of direct
foreign investment.

• Amway India has 400 full time employees and has generated indirect
employment for 1,650 persons at all the contract manufacturer
locations.

• The Company has provided income generating opportunity to over


4,50,000 active independent Amway Business Owners.

• Amway India provides free and unlimited training to all its


distributors to help them grow their business. Amway India conducted
over 29,000 training sessions during in the past 12-months with an
attendance of over 1.5 million Amway Business Owners and
prospects.

• Amway India recorded a sales turnover of over Rs. 800 crore during
January’07 –December’07.

• Amway India is a member of the Indian Direct Selling Association


(IDSA). The IDSA is an industry regulatory body, with several
reputed international and Indian Direct Selling companies as
members.

• Amway India is also a member of the Confederation of Indian


Industries (CII) and Federation of Indian Chambers of Commerce
(FICCI).

• The World Blind Union presented an award and citation to Amway


India in 2003, for its peerless work for the blind children.
NATIONAL PRESENCE

In ten years of commercial operation, Amway India has established a nation-


wide presence in over 125 offices and 55 city warehouses and four regional
mother warehouses. The distribution and home delivery network set up with
the support of independent logistics partners is spread across over 3,000
locations.

MANUFACTURING

Almost all Amway India products are manufactured in the country through 7
third party contract manufacturers. 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.

PRODUCTS

• At present, Amway India offers over 105 products in four categories.


They are Personal care category, Home Care category, Nutrition &
Wellness category and Cosmetics category.

• With the exception of Cosmetics range (Artistry*) and some products


in Nutrition and Wellness category, all Amway India products and
bottles are manufactured in India.

• The products match Amway’s global quality standards. They carry a


tamper-proof seal and a ‘100% Money Back Guarantee'. 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.
CORPORATE RESPONSIBILITY

AMWAY OPPORTUNITY FOUNDATION (AOF)

• Amway Opportunity Foundation (AOF) a registered non-profit


organization which looks after Amway India’s Corporate Social
Responsibility (CSR). Amway distributors are also volunteers of AOF
and they have enthusiastically participated in all AOF activities.
Globally, Amway’s CSR campaign is known as the One By One
Campaign for Children.

PROMOTING FREE ENTERPRISE AND SELF-EMPLOYMENT

• 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) on the benefits of organized direct selling.
MEMBER - IDSA (Indian Direct Selling Association)

• Amway India Enterprises Pvt Ltd is a member of the India Direct


Selling Association. The Indian Direct Selling Association is an
association of companies engaged in the business of direct selling in
India. Its members are of high national and international repute having
set standards in delivering quality goods and in following ethical
business practices.
Vision

Inspiring people to live better lives.

Mission

To provide the best business opportunity. To deliver exceptional quality


products to urban and semi urban homes in the areas of nutrition and
wellness, cosmetics, personal care, home care, home tech and insurance.

Our Values

Amway has established some simple shared values that unite the entire
company, and all of the Business Owners that are associated with Amway.
We believe that these values guide our actions and help us to achieve
everything we are capable of without compromise or harm.

Integrity

We will uphold the highest personal and professional integrity which


demonstrates honestly, loyalty, respect and high ethical standards in all our
responsibilities, obligations and other activities. We are committed to
behave at all times in accordance with the ethical practices of the
organization.

Trust

Building reliability and dependability for self by displaying commitment,


honesty, confidentiality and consistency in all actions.
Transparency

We will promote a culture of openness and mutual trust by interacting


objectively and without underlying personal interests.

Service Orientation

We are committed to serve our customers to fulfill their needs by focusing


efforts on discovering and thereby meeting stated and unstated requirements.

Partnership

We will collaborate across boundaries and find common ground by sharing


ideas and resources, with a wide range of stakeholders. We will develop
networks and build long term alliances with internal and external customers.

Recognition

We are committed to honor, encourage and support individuals and teams


who contribute, through their behavior and actions, to the success of the
organization.
Analysis of Marketing Communication followed in India
Privately held by the DeVos and Van Andel families of US, Amway, short
for American Way, was set up in 1959. Amway and its publicly traded sister
companies supported 53 affiliate operations worldwide. About 70% of
Amway's sales were outside North America. With over 12,000 employees
around the world, Amway was renowned for its strong R&D centre in
Michigan, which had 24 laboratories. Amway was present in over 80
countries and its manufacturing plants were located in US, Hungary, Korea,
China and India. The company had over 3 million distributors across the
world. Besides its direct selling portfolio of 450 products, Amway promoted
around 3,000 products through catalogue sales2 as well.

Amway had received permission from the Foreign Investment Promotion


Board (FIPB) in 1994, to invest $15 million in the Indian operations and to
source products from India. The company began with identifying small and
medium-scale companies to source its products from. Commercial
operations began in May 1998 with a partnership arrangement with Network
21, a company, which acted as a support system and assisted in organizing
training, seminars and meetings. Besides its extensive internal research
efforts before entering India, Amway also conducted market research
through agencies such as Pathfinders and ORG-MARG. Though prior to its
entry into India, Amway did recognize the need for a special India-specific
pricing strategy and eventually there were just a few marginal cuts in the
prices, which were still almost 20% higher than those of the competing
FMCG products. The company began with appointing distributors in the
country by adopting the ‘NRI sponsored’ by getting NRIs to rope in their
friends/relatives in India into Amway distributorship. These distributors
were duly provided with starter business kits containing products, training
material, and sales literature.

The company's introductory product range comprised four home care and
two personal care products, made available to distributors at the Amway
Distribution Centers (ADCs) or through tele-service. A significant portion of
Amway's investment was on transferring state-of-the-art technology and
processes to third-party manufacturers from the small and medium-scale
sectors for the indigenous production of its product range. Amway assisted
its three manufacturing partners, the ISO 9001-certified Jejuplast at Pune,
Naisa Industries at Daman, and the Hyderabad-based Sarvotham Care, to
achieve benchmarking levels of product development, engineering and
quality. These facilities were equipped with advanced machinery and world
class technologies for production, packaging, and water filtration. Amway
scientists and engineers at the India Technical Centre provided assistance in
the processes of technology transfer and quality control. The company
supported its independent distributors with five full service ADCs at New
Delhi, Bangalore, Chennai, Calcutta and Mumbai. ADCs operated as
product selection centers for Amway's entire product range and as training
centers for distributors. Amway appointed Sembawang Shriram Integrated
Logistics, and Mumbai-based First Flight Couriers as its total logistics
partners for home delivery of Amway products across 151 cities in the
country.

Amway's domestic operations fell into five areas - personal care, homecare,
nutrition, cosmetics and home tech. The company introduced India-specific
products, in pursuance of its go ‘glocal ' philosophy. Also, for the first time
in its history, Amway utilized media advertising to promote its products.

Problems faced in India

In the beginning, Amway had to deal with the negative attitude of many
Indians to direct selling. Direct selling was typically seen as unwelcome, an
intrusion into one's privacy. This was true to a certain extent. Sales people
often used a ‘hard sell', the product quality was sometimes poor and most
importantly, the salespeople were poorly trained and lacking in motivation.
However, Amway changed all this radically and a significant change was
brought in the field.

Amway was able to break the time tested and traditional distribution set-up
of manufacturer-distributor-retailer-consumer. Within 11 months, Amway
became the country's largest direct selling company and after two years of
the commercial launch, Amway's distributor base crossed the 200,000 mark.
Its strengths were clearly manifested in the aggressive product launch plans,
its products which claimed to exceed consumer expectations, the ‘money
back’ policy, and a distribution network spread across 26 cities servicing
more than 306 locations. In 1999, Amway reported a sales figure of Rs 100
crore. Reacting to reports stating this as a ‘below-expectations’ figure,
company sources commented that the concept of network marketing had not
been a constraint for Amway. The then CEO & MD Bill Pinckney
commented, “The direct selling model is not new to India. What's new is the
structure. And while it's true that consumers do not rush in to buy an Amway
product, network marketing works as a low-key approach and evolves over
time.”

However, the problems like distributor attrition, a false ‘premium’ image


and customer dissatisfaction soon began surfacing. Amway could not sit
back and let competitors like Oriflame, Avon and Modicare take advantage
of its weaknesses

PICKING UP THE PIECES

Amway soon woke up to the reality that it had to take steps to put its MLM
machinery back to the track. For this, it had to first identify where it had
gone wrong. Amway realized that like most direct marketing networks, it
had hoped to leverage the global promise of the lucrative business
opportunity for its distributors. Though this made sense in the developed
consumer markets of the West, in India, distributors also needed to know the
value of the products they were selling, this aspect was overlooked by the
company.
One of the first ‘corrective' measures it took was putting stickers on its
products, which clearly indicated the number of usages very clearly. For
instance, it introduced stickers on the packs of its car-wash solution to
emphasize the number of washes that a consumer could get per bottle. The
idea was to firmly establish the fact of Amway's products being highly
concentrated and with very low per usage cost. This practice was later
expanded to other products as well.

Amway realized that a complicated market such as India needed a focused


approach for each of the product categories. To strengthen its product focus,
Amway set up strategic business units. Thus, though Amway had centralized
marketing of all products worldwide, its Indian arm appointed category
managers for individual product categories.

Amway also decided to focus on the market in the smaller towns. Quick
expansion of the distribution network to smaller towns was identified as a
major tool to offset the impact of attrition. The game plan was to reach
consumer homes all over directly by making the current distribution system
more effective and decentralized. In early 1999, Amway realized that
servicing distributors in 160 cities through its 13 locations was curbing
growth due to unavailability of critical infrastructure like networked banks,
toll-free phones and multi-service courier companies. The cost of making
long-distance calls, the courier companies’ refusal to accept cash and the
time taken to deliver products were the three major hurdles that Amway
faced. The typical direct selling system comprised a central warehouse
located close to the manufacturing locations, which sent the products to
regional hubs like the metros and then on to the branch offices. As opposed
to the traditional FMCG delivery setup, where the distributors or retailers
carried inventory, here it was taken care of by the company warehouses and
their region-specific distribution centers. Long distance calls and courier
companies took care of distribution in cities where the company had no
presence. However, with these facilities not being upto the mark, Amway
decided that it had to effectively handle these issues and rapidly expand its
offices in order to capture the growing direct selling clientele in the country.

The company also decided to give incentives to cost and freight agents
(C&FAs) who could deliver parcels in the same city within 48 hours outside,
in about 72 hours.

Amway then planned to tap unemployed youth in smaller towns by


subsidizing the entry fee for the starters’ sales kit. Amway also offered to
finance the sales kits through interest-free loans. It even gave free kits to
visually impaired youth in Rajasthan. But media reports were skeptical
about Amway's strategy to use localized strategies for its global products.
This ‘gamble 'as Amway's biggest test case the world over, they remarked.

In a bid to make its products more affordable, Amway introduced value-for-


money ‘chhota (small) packs' in December 1999. The sachets significantly
boosted sales. Sachets had two advantages – they helped Amway shake-off
the ‘super-premium-products-only 'tag, and with their lower prices invited
consumers from lower income levels to try the products. This was expected
to brand penetration.

The most significant of Amway's Indian initiatives were its ‘Indianisation'


efforts. The company started printing Hindi slogan ‘Hamara apna business'
(our own business) on its stationery. The company's first product line,
Persona, was created specially for the Indian consumers. Amway even
named its expansion drives as ‘Operation Gaadi' and ‘Operation
Ghar.'Operation Gaadi was launched in east-Uttar Pradesh where a store was
mounted on a truck and made trips to different regions on different days.
The project was later extended to West Bengal as well. Operation Ghar was
primarily designed to provide better service to the customers as well as to its
large family of distributors. Involving an outlay of Rs 15 crore in its Phase I,
Operation Ghar eventually covered 19 state capitals. Operation Ghar was
designed to provide five Es - ease of ordering, ease of paying, ease of
receiving, ease of returning and ease of information/operations. Amway also
utilized the Internet and electronic kiosks to hook up with its distributors and
give them information.

‘NETWORK'ING ITS WAY INTO THE FUTURE

By 2004, Amway planned to become a Rs 1000 crore company with a


physical presence in 198 centers across India. The company also revealed
that by 2002, it would be selling all the 450 Amway products that were
available abroad, in India. As part of its plans to tap unexplored markets,
Amway announced an ambitious expansion of its distribution infrastructure
in Andhra Pradesh, which included setting up a warehouse. Once the
marketing business in urban areas was strengthened, Amway planned to turn
tis attention to untapped rural areas as well.

Even as Amway was establishing its roots in India, it was already facing
troubles abroad. The very concept of network marketing was being
threatened by the growing popularity of e-commerce and the Internet.
Through the World Wide Web, manufacturers had the opportunity of
engaging in one-on-one direct selling in an even simpler way. This posed a
major threat to multilevel marketers. However, the real threat seemed to be
the merging of telecom networks with the cable television operators. This
brought the customer directly in touch with the company through
telemarketing tools. This would naturally make the salesperson obsolete. Of
course, given the pace of developments on the Indian telecommunications
front, network marketers could take it easy for least some more years.

However, Amway prepared to meet these challenges by taking initiatives to


further strengthen its online presence. With Internet usage levels increasing
and little spare time for shopping, Amway believed that the Indians would
gradually move to online shopping. But it thought the process would take
time, as the pleasure of window-shopping and the actual shopping
experience could not be replaced very easily. Amway provided graphics and
three-dimensional views in the product display sections on its website. The
company also planned to have portals in various Indian languages to ensure
wide coverage.

Competition was intensifying in the industry in the early 21st century.


Amway seemed to be faring better than competitors like Modicare - a fact
attributed mainly to its premium brand image. Both Amway and Modicare
were not the typical door-to-door selling companies, as they sold only to
customers known to their distributors. While Amway targeted only the upper
section customers, Modicare targeted the middle and the upper middle class
customers. Some of Modicare's products were priced at one-fourth of the
price of Amway's products. Modicare sources said this was because its
products were priced for the Indian market, while Amway's pricing was
more in tune with its global counterpart. Modicare was even willing to
reduce its margins in certain cases. Also, Modicare offered 100% refund
even when the product had been used, unlike the 75% refund offered by
Amway. This could turn out to be a cause for concern for Amway in the
long run.

Amway is a 100 % direct marketing company . That means the consumers


will not get any Amway products from shops. The products can be bought
through ABO's. Hence the sales are driven by the efforts of ABOs. Since the
company does not advertise its brands, the only communication channel is
through ABOs who visits households and make presentations. There are two
tasks of a typical ABO : the first task is to sell Amway products and second
task is to appoint new ABOs .

Typically direct marketing firms faces issues of reach and cost. Since the
sales depend entirely on the independent distributors , the company has to
pay huge commission. This results in the increased cost of the product.
Hence the products become expensive resulting in lower sales.

Amway also faces this issue. The products of Amway are excellent but very
expensive. For example, the Persona brand of soaps cost Rs 30 which is
almost double the rate of an ordinary soap. Persona is one of the best soaps
in terms of quality but price is definitely a dampener. Another example is the
range of cosmetics under the brands Attitude and Artistery . Artistery is
targeted at the premium class and Attitude at the middleclass. But the prices
of these brands make the consumer think twice before buying it. Hence the
ABOs have a tough time convincing the value proposition.

In a value conscious country like India, the expensive tag of Amway


products is the singular reason for the lack of popularity of its products.

Understanding this issue, Amway launched its first corporate branding


initiative in India. The brand came out with a Television campaign
highlighting the customer-centric approach.

Amway uses the slogan “We are listening “. The idea revolves round the
theme that Amway understands the Indian consumers and the products are
derived from this understanding. The purpose of the campaign is two fold:

a. The Company wants to build equity around the corporate brand which will
enable the ABOs to tide over the initial customer resistance.
b. The enhanced corporate image will also attract people to join Amway as
independent business owners.

Along with this, the company is also rationalizing the pricing strategies. The
company is launching a new range of value products like coconut oil,
shaving creams. But here again the company will face certain issues. For
lower priced products, the commission payout will be less and hence the
ABO will have to sell more volume to get higher commission. Amway had
introduced sachets for most of the products, but the low commission payout
for sachets has prompted ABOs to try and sell high value items.

Another significant change that the company made was rationalizing the
entry cost for new ABOs. Earlier, a person had to shell out Rs 5000 to join
the firm. The cost was to buy the Amway business kit which consists of
various Amway products and brochures. The ABO can recover the money
by selling these products. Now the company has introduced a starter pack for
Rs 995 which does not have Amway products but brochures. This will be a
big relief for the existing ABO since the higher joining costs turned away
most of the potential ABOs.

Amway has understood that doing business in India will require a new
business model. The company has started to take steps in the right direction.
It had tried to rationalize prices and bring in new value products. But to
balance the price, cost, quality and higher commission is no easy task.

Tupperware Corporation:

In 1937, when Earl Silas Tupper worked in DuPont’s plastic division in


Massachusetts, he transformed a piece of black polyethylene slag, a waste
product produced in crude oil refinement process, into a resilient, tough, non
porous, non greasy and translucent substance
He created many light weight, non breakable containers such as cups, plates,
bowls etc, with this substance. Earl S. Tupper founded the Tupperware
Company in 1938. During the Second World War, the company
concentrated on molding parts for Navy signal lamps and gas masks.

After the war, the company turned its attention to manufacturing plastic
products for the growing consumer market. Its first consumer products were
a bell shaped flexible container called the Bell Tumbler and the Wonderlier
Bowl (a round bottomed bowl with a lid).

These products were superior to the traditional glass and crockery as they
were unbreakable. Tupperware products were durable and were also easy to
handle. They came in various attractive colors and shapes. At a time when
Americans used glass and crockery to store and serve food items,
Tupperware provided a more durable and reliable alternative.

Tupperware also designed the renowned air-tight, liquid proof lid in 1946. It
was modeled on the inverted rim of a paint can. This lid prevented spillage
and wastage of the stored items and kept them fresh for a longer time. From
its inception, Tupperware faced challenges in marketing its products. In
1946, though the Tupperware plastic products were introduced in hardware
and department stores, they failed to generate demand.

It became clear that the company needed to educate the consumers about the
quality and properties of the products. In the late 1940s, Brownie Wise, who
was selling household products for Stanley Home Products was hired by
Tupperware.

She gave Tupperware its unique "Party Plan" method of marketing. In 1948
Tupperware's first Home Party was conducted. Here, Tupperware products
and their uses were demonstrated to consumers.

These demonstrations helped the company to explain to the customers, the


quality, the usage and the reasons for higher cost of its products.
Brownie Wise was appointed the Vice President of the Tupperware
Company in 1951. She removed all Tupperware products from retail outlets
and marketed them through the Party Plan method. The company
concentrated on women as their prime sellers and consumers...

Tupperware in India

Tupperware entered India in November 1996. It started its operations from


New Delhi. It appointed 15 distributors in the first 12 months itself. It
achieved this by directly recruiting candidates and training them, through a
specially designed 14-week training program in Delhi and Mumbai. As the
concept of direct selling was new to India, Tupperware had to sell both the
direct selling concept and its 'Party Plan.'...

The Tupperware Model

Tupperware, though a direct selling company, differed from other direct


selling companies. It adopted a three- tier network structure which made
operations easier for the company.
Analysis Of Marketing Communication Strategies:-

Tupperware's marketing strategy was described by its three Ps- Product,


Party plan and People. The Tupperware products carried a life time
guarantee. Any damaged product (cracks or breaks) could be replaced by
same/similar new Tupperware product from any place in the world.
Philosophy followed at Tupperware "Our product has been the corner stone
of our success for many years."...

Future Outlook

Tupperware was gaining fast recognition in the Indian market. Its 'Party
Plan' worked well because it fitted in the urban and semi urban culture of
'kittie party. By 2002, the company expanded its operations to more than 35
cities in the country.

The company did not face any major competition from other plastic wares in
India, as the quality of Tupperware goods was much better. However,
Tupperware India competed with manufacturers of steel containers as Indian
consumers used steel containers to store and carry food...

Recently, Tupperware spread to India where the percentage of purchase in


household goods was attributed to Tupperware’s global branding strategy.
According to the Nielson Company for 2008, the Tupperware brand has
become ‘top of the mind’ for India’s household. They even influenced the
consumers there so that those who had previously used metal containers
have converted to plastic. With that, the shifting in spending of household
goods came upon the women who in turn were responsible for expenditures
and family planning.

While the familiarity of this story dates back since inception, sticking to the
market which has made Tupperware successful, they are reinventing
themselves again and again in countries all across the world. Women, in
particular, have taken upon this opportunity to really brand themselves.
Thus, without seeing the importance of this need, the Tupperware parties
would not be as popular as it is today.

After all, it was word-of-mouth which made Tupperware successful, not


plastic.