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BMM 36 Introduction to Advertising Professor Mitul March 2011
The following report contains the marketing stratergy and plans for Amway's CTM (Cleaner, Toner and Moisturizer) product. The report contains a basic Introduction of the company and the myriad of products under the brand name, Amway. It is then followed with basic research on the above mentioned product. Which includes its marketing strategies and plans, unique selling prepositions, relation with consumer and competition, social role of organization, advertisement plan, targeted audience, targets and means to achieve the targets? The data procured through research is further analyzed and concluded with further recommendations for the company and its product. Not to mention
We would personally like to thank Professor. Mitul for giving me an opportunity to present a project on such a professional scale at such a nascent stage in our career. The importance of making a report at such a professional magnitude will surely be realized at the later stage in our lives and career.
Introduction Research Analysis Conclusion 24 Recommendation 26 References
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Amway Global (formerly known as Quixtar North America) is a multi-level marketing (MLM) or network marketing company, founded 1959 in Ada, Michigan, United States. It is privately owned by the families of Rich DeVos and Jay Van Andel through Alticor which is the holding company for businesses including Amway, Amway Global, Fulton Innovation, Amway Hotel Corporation, Gurwitch Products and manufacturing and logistics company Access Business Group. After the launch of Amway Global originally operating under the name Quixtar, it replaced the Amway business in United States, Canada and the Caribbean, with the Amway business continuing to operate in other countries around the world. Company officials confirmed in June 2007 that, over the subsequent 18 to 24 months, Quixtar will merge with its sister companies of Amway organizations around the globe to form under one new name Amway Global. Amway Global is also a member of the Direct Selling Association and the Better Business Bureau.
Rich DeVos and Jay Van Andel initially founded the Ja-Ri Corporation, a multi-level marketing distributorship for Nutrilite products, in 1949. Ja-Ri was incorporated in 1959, and changed its name to "Amway" in 1963. As of 2007, Amway operates in more than 80 countries around the world. In 1999, the founders of the Amway Corporation launched a sister Internet-based Company named Quixtar. The Alticor Corporation owns Amway and Quixtar, plus several other concerns. Quixtar replaced the North American business of Amway in 2001 after the majority of the distributors moved to Quixtar, with Amway operating in the rest of the world. On June 13, 2007, the Associated Press confirmed that over the next 18 to 24 months, the Quixtar business will be under global Amway brand in North America.
Quixtar is the exclusive distributor of Alticor products in the United States and Canada, including Nutrilite dietary supplements, XS Energy Drinks, personal care, home care, air and water purifiers and Artistry cosmetics. Quixtar also markets through their website products from partner stores. Quixtar utilizes the Employee & Affiliates Purchase Program discount pricing structure for purchases from most of these thirdparty partner stores. Purchases from some of them (generally called discount-only partner stores) may not gain the P/V & B/V (measures of sales volumes, used for calculating bonuses to be paid) normally associated with an IBO's purchases.
Amway's product line grew from LOC, with the laundry detergent SA8 added in 1960, and later the hair care product Satinique (1965) and Artistry(1968). Today Amway manufactures over 450 products, with manufacturing facilities in Ada, Michigan, China, and India, as well as Nutrilite organic farms in California, Washington State, Mexico, and Brazil. In addition Amway affiliates market products
from hundreds of other manufacturers offering everything from books (e.g. Barnes & Noble, North America) to wine (World of Wine, Europe).
Amway is best known in North America for its original cleaning products, LOC, SA8 clothes washing products and Dish Drops dish cleaning products. In the January 2007 issue of Consumer Reports, SA8 with Bioquest was rated as the best performing laundry detergent, scoring 99 out of a possible 100. Consumer Reports did however criticise SA8's pricing, which was disputed by Amway. In 2008, Amway's cleaning products were named Favourite of Experts by an independent consumer survey in Ukraine.
Health and beauty
The majority of Amway's sales today come from the Health & Beauty sector and in North America the Amway Global/Quixtar website is ranked the #1 Health & Beauty website by Internet Retailer. In South Korea Amway is ranked one of the top two companies in toiletries and cosmetics. Amway's health & beauty brands include Artistry, Time Defiance, Satinique, Tolsom, Body Series, Glister, Moiskin (South America), Nutrilite, Nutriway (Scandinavia and Australia/New Zealand),eSpring, Atmosphere and iCook as well as XL and XS Energy drinks.
Amway's Artistry products include skin care, cosmetics, and antiaging creams and serums. Euromonitor International, an independent researcher and publisher of market reports, business reference books and online information databases, ranks Artistry as one of the world's top 5 best selling brands in the prestige brand category, alongside Clinique, Estee Lauder, Lancome, and Shiseido. Artistry is the only direct sales brand classifed in the "prestige" category.
Amway's Largest selling brand is the Nutrilite range of health supplements (marketed as Nutriway in some countries), and in 2008 Nutrilite sales exceeded US$3billion globally Nutrilite products incorporate organically grown whole-plant concentrates. Euromonitor has for several years ranked Nutrilite the world's bestselling nutritional brand in tablet or capsule form. In 2001, five Nutrilite products were the first dietary supplements to be certified by NSF International. Surveys by independent group Consumerlab.com since 2002 have rated Nutrilite as having the highest customer satisfaction rating (96% in 2006) in the direct selling/MLM brand category. In 2006, 2007, 2008, and 2009 in the nutrient and health food category, Nutrilite won "Platinum" and "Gold" awards in Malaysia, China, Taiwan, Thailand, and Asia overall in the Reader's Digest "Trusted Brands of Asia" survey. In 2008 Nutrilite scientists, in partnership with Alticor subsidiary Interleukin Genetics won the 12th John M. Kinney Award for Nutrition and Metabolism for their research into the interaction between nutrition and genetics.
Amway's eSpring water filter, introduced in 2000, was the first home water treatment system to incorporate a carbon block filter and Ultraviolet disinfection unit, becoming the first home system to achieve certification for ANSI/NSF Standards 42, 53 and 55. The unit was also the first commercial product to include sister company Fulton Innovations eCoupled wireless power induction technology. Fulton Innovation introduced the technology in other consumer electronic products at the 2007 International Consumer Electronics Show. Companies licensing this technology include General Motors, Motorola and Visteon. In 2006 eSpring was named Product of the Year by the Poland-based non-profit World Foundation of Health, Heart and Mind. eSpring has won numerous Gold and Platinum awards in the Reader's Digest Most Trusted Brand Asia surveys.
In 2008 Amway's HEPA air filtration system became the first air cleaner certified Asthma and Allergy Friendly by the Asthma and Allergy Foundation of America.
Sales and ranking
Forbes ranked Alticor, as America's 27th largest privately owned company with estimated revenue of $7.29 billion. In 2006, Internet Retailer ranked Quixtar.com as the number one site in the "health and beauty" category. and 18th largest e-commerce site (for revenue) overall. In a survey of the top 40 e-commerce sites, ForSeeResults ranked Quixtar.com equal 5th for customer satisfaction. Since 1999, IBOs powered by Quixtar have earned more than $2.2 billion in bonuses and other incentives by generating sales of more than $6.8 billion at www.quixtar.com, and another $500 million for Quixtar Partner Stores. Quixtar-powered IBOs generated revenues of $1.118 billion for Quixtar for the fiscal year ended December 31, 2006, the fourth consecutive year in which the company surpassed the billion-dollar mark. IBOs also generated record $84.6 million in revenues for Quixtar’s Partner Stores in 2006.
Artistry was founded in 1968 by Edith Rehnborg, the wife of Nutrilite owner Carl Rehnborg. The brand was originally named Edith Rehnborg Cosmetics but a name change followed. Artistry is among the top 5 selling prestige brands in the world along with Estée Lauder, Lancôme, Clinique and Shiseido based on a EuroMonitor study of global 2005 sales. Artistry is a part of Amway Global and is the best selling cosmetics and skin care brand in direct sales today. The Artistry headquarters are situated in Ada, Michigan, USA. Artistry has over 250 patents and 500 scientists, engineers and technicians. There are over 400 products available Artistry as of 2004. The Artistry skin care consists of four lines; Time Defiance, Essentials, Pure White and Creme Lux ( only available in Europe) as well as a cosmetics line. In India Artistry is targeted to the upper class and the middle class consumers. Whereas the cosmetic range for the middle class is marketed under the Attitude label.
Time Defiance is the Artistry brand's age defying product line
The essentials line is a more simplistic product in terms of skin care, primarily aimed at teenagers, or people with limited time. The line boasts natural, organic ingredients as well as patents.
Pure White is a skin care line designed for the clarity of skin. Extremely popular with asian woman due to the desire for whiter skin with out the use of skin bleaches. The skin appears whiter due to the increase in skin's clarity.
Only available in Europe, the cream was endorsed by Sandra Bollock. Artistry is available in over 70 countries worldwide today. Kim Tyo is currently the face of Artistry.
Q. Competition to Artistry range of cosmetics in the market? A. In Indian Market Amway it has no potential competition. But internationally it is in competition with four other cosmetic manufacturers Q. How is it stacked against its competition? A. Euromonitor International, a researcher and publisher of market reports, business reference books and online information databases, independently categorises Artistry as a prestige brand and ranks it as one of the top five in sales in this category, alongside Clinique, Estee Lauder, Lancome, and Chanel. Q. Advertisement Plans? A. In India, Amway has been in the market since 11 years and has relied on direct sales for most of its business. But since the last 2 years Amway has started to advertise its products. Amway relies on all form of advertisement. It also promotes its products through famous personalities (viz. Asafa Powell, Jennifer Stuczynski, Sanya Richards, Liu Xiang, Ronaldinho, Evander Holyfield, Emmitt Smith, Sandra Bullock, Kim Tyo, Ron Dayne and Tim Foley). Q. Sales Plan? A. Cannot be divulged to outsiders. Q. How does Amway plan to achieve its sales plan? A. Spread Awareness about its product, Concenterate on penetrating new segments and market by increasing its ABO (Amway Business Owner) strength, Maintain optimum quality and Educating Customers. Q. How does Amway plan to increase its ABO strength? A. Earlier the cost of becoming an ABO was INR 4400/- which has now been reduced to INR 995/-. It has also recently introduced a variety of first purchase offers for new ABO's which entitles them to a host of benefits and discounts.
Q. Target Customers? A. Amway India focuses only on higher class and upper middle class consumers. Q. Any social recognition or awards to substantiate the data provided? 2010 *Amway Poland recognized for Corporate Social Responsibility by Responsible Business Forum *Amway named one of the best and brightest companies to work for in Western Michigan *Amway Russia/UNICEF children's program named one of the best CSR programs in Russia * eSpring wins GPEC Environmental Stewardship Award 2009 * Alticor named America's 39th largest private company * Nutrilite - Most Trusted Brand China 2009 * Amway's cleaning products certified as Designed for the Environment * Amway recognized as a US Environmental Protection Agency Climate Leader * Amway wins Gulfstream Aerospace Outstanding Flight Award * Amway's Candace Matthews named Black Executive of the Year, United States * Artistry Creme Luxury wins Glosscars Best New Age Management Product, Australia * Amway named of one China's top consumer brands * Amway named one of Korea's favorite foreign companies * Nutrilite Positrim named "Favorite of Consumers" in the Weightloss Supplements category, Ukraine * Artistry named "Favorite of Consumers" in the Skin Care category, Ukraine * eSpring named a "Best Buy" in the Premium Water Filter category by Consumer Digest, United States * Nutrilite Sports drink deemed "superlative for recovery" by New York Times reviewer * Amway Global ranked #1 online Health & Beauty retailer by Internet Retailer
* Nutrilite - Most Trusted Brand Asia 2009 * eSpring - Most Trusted Brand Asia 2009 * Amway's Atmosphere Becomes The First Air Cleaner Certified Asthma and Allergy friendly * ARTISTRY™ Creme LuXury Nominated For UK Beauty Awards 2009 * Nutrilite Top's Consumer Labs' Satisfaction Survey again * Nutrilite Valerian & Hopps rated Best in Class by Men's Health * Amway China recognized for Excellent Corporate Social Responsibility by China Enterprise News * Consumer Reports recognize Amway for excellence in "green" packaging * Nutrilite - Most Trusted Brand Malaysia 2009 * eSpring - Most Trusted Brand Malaysia 2009 * Nutrilite - Most Trusted Brand Taiwan 2009 * eSpring - Most Trusted Brand Taiwan 2009 * eSpring - Most Trusted Brand Thailand 2009 * 2009 PRoof Awards - Gold Award, Special Public Relations Artistry for the Skin Diaries Editor Event * Amway Korea wins Korean Marketing Association Frontier Award * Amway rated a "Global Power in Retailing" by Deloitte 2008 * Artistry Creme Luxury Wins Design Award * Amway HomeCare products win Favourite of Experts Award for Amway Ukraine * eSpring - Most Trusted Brand - Asia 2008 * eSpring - Most Trusted Brand - Malaysia 2008 * eSpring - Most Trusted Brand - Taiwan 2008 * eSpring - Most Trusted Brand - Thailand 2008 * Nutrilite - Most Trusted Brand - Asia 2008 * Nutrilite - Most Trusted Brand - Malaysia 2008 * Nutrilite - Most Trusted Brand - Thailand 2008 * Nutrilite - Most Trusted Brand - China 2008 * Amway Hong Kong wins "Best Direct Selling Company" Lisa Quality Life Award * Emmy - Advance Media - Animator/Motion Graphic Designer * Amway Named Best Employer of Russia * Amway China wins award for contribution to communities * Amway's Eva Cheng named one of the World's Most Powerful Women
* Amway wins "Corporate Donor of Russia" award * Nutrilite and Interleukin Genetics win International Research Award * Amway wins "Best Brand" Award * Artistry Essentials wins IOPP design Award * Nutrilite tops consumer satisfaction survey * Alticor ranked 114 in Deloitte's "Global Power of Retailing" * Quixtar ranked #1 in Health & Beauty by Internet Retailer * Amway ranked 44th largest Private Company in the United States 2007 * Amway Poland - eSpring product of the year * eSpring - Most Trusted Brand - Asia 2007 * eSpring - Most Trusted Brand - Malaysia 2007 * eSpring - Most Trusted Brand - Singapore 2007 * eSpring - Most Trusted Brand - Taiwan 2007 * eSpring - Most Trusted Brand - Thailand 2007 * Nutrilite - Most Trusted Brand - Asia 2007 * Nutrilite - Most Trusted Brand - Malaysia 2007 * Nutrilite - Most Trusted Brand - Thailand 2007 * Amway - The Brand Laureate: Excellence in Branding - Malaysia 2006-2007 * Amway ranked 2nd in Cosmetics & Toiletries in South Korea * Amway Online Project for Amway Europe wins Project Excellence Awards Polska 2007 * Amway Australia website ranked No.2 in it's category * Amway recognised as a Global Power in Retailing * Amway China received the top Supply Chain Operational Excellence Award * Amway Ukraine - European Vector Award 2007 * PrintNSW Excellence Awards 2007 - GEON Australia for Amway Australia Shoppers Catalogue * Amway Brazil named one of Brazil's top companies * Quixtar ranked #1 in Online Health & Beauty Sales for Fourth Consecutive Year 2006 * eSpring - Most Trusted Brand - Asia 2006 * eSpring - Most Trusted Brand - Malaysia 2006
* eSpring - Most Trusted Brand - Taiwan 2006 * eSpring - Most Trusted Brand - Thailand 2006 * Nutrilite - Most Trusted Brand - Amway China 2006 * Nutrilite - Most Trusted Brand - Asia 2006 * Nutrilite - Most Trusted Brand - Malaysia 2006 * Nutrilite - Most Trusted Brand - Taiwan 2006 * Nutrilite - Most Trusted Brand - Thailand 2006 * Amway China wins AmCham Shanghai Corporate Social Responsibility Award - Corporate * Amway Philippines wins Anvil Award of Merit for its corporate social responsibility program, "One by One Campaign for Children * Amway Philippines wins Anvil Award of Excellence for its entry under the Crisis Management Category * Aprimo Excellence (APEX) Award 2006 - Alticor * Quixtar wins IBM System i Innovation Award in Business Resiliency for using IBM's System i to help achieve high website availability for Independent Business Owners. * IVCA Clarion Awards: International Trade Award Winner - Amway for Nutrilite - Perfect Balance * Quixtar ranked #1 in Online Health & Beauty * Access Business Group wins Supply Chain Operations Excellence Award * Access Business Group wins Global Award for Supply Chain Excellence * PRoof Award- ThisBizNow.com: Excellence in Interactive Media 2005 * eSpring - Most Trusted Brand - Asia 2005 * eSpring - Most Trusted Brand - Taiwan 2005 * eSpring - Most Trusted Brand - Thailand 2005 * Nutrilite - Most Trusted Brand - Asia 2005 * Nutrilite - Most Trusted Brand - Malaysia 2005 * Nutrilite - Most Trusted Brand - Taiwan 2005 * Artistry - Most Trusted Brand - Malaysia 2005 * Recipient of the Corporate Citizenship Award in the category of International Community Service from the United States Chamber of Commerce Center for Corporate Citizenship * The One by One Campaign was recognized as the Best Corporate Social Responsibility Programme in the International Business Awards * Alticor wins Secretary of Defense Employer Support Freedom
Award * Amway Singapore - Amway Corporation receives a Special Recognition Award for its consistent endorsement and support of Singapore as a Business Events Travel destination * Quixtar wins 9 Golden Reels for Excellence in Video Production * Quixtar tops Internet Health & Beauty rankings * Alticor wins DSA Vision for Tomorrow Award * Amway's Jon Voskuil wins "Customer Champion" Award * Alticor wins CSR International Business Award ("Stevie") * Amway Germany - DNUG Award - Amway EIP - Enterprise Information Portal, Amway GmbH * Direct Selling Association Vision for Tomorrow Award 2004 * Nutrition Business Journal 2004 Business Achievement Award Growth in a Very Large Company Gold Award * Amway India - Presented an award by the World Blind Union (WBU), for sterling contribution to improve and elevate the quality of life of visually impaired children', at a function in Delhi on Dec 2nd 2004. The award included a citation and a large-sized statue of Saraswati, the Goddess of Knowledge, was presented by the Lt Governor of Delhi, Shri Vijai Kapoor. WBU is an apex body for the visually impaired that enjoys consultative status with the United Nations. * Amway Malaysia wins KPMG "Shareholder Value Award" 2004 * Quixtar Receives Three Golden Reel Awards for Excellence in Video Production * Quixtar Receives Gold Award From MultiView for Electronic Publishing * Quixtar's 'Power of a Single Digit' and 'The Business of Life' Video Recieve Top Awards * Nutrilite tops Consumer Satisfaction Survey 2003 * Amway India - The Indian Red Cross Society, Orissa awarded AOF a memento & certificate for conducting a mega-Blood Donation camp of 816 units on 4th May, 2003 * Amway India - The Surat Raktdaan Kendra felicitated Amway India at their annual function on 5th Oct, 2003, for the largest number of donors at a Blood Donation Camp (BDC) held by any
financial and commercial institution and industry. The Mayor of Surat - Snehlata Chouhan - presented a trophy and a certificate of appreciation. * MicroStrategy Best Enterprise Deployment Award * Amway Malaysia wins KPMG "Shareholder Value Award" 2003 * Amway Korea wins 1to1 Innovator Award 2003 * Alticor nominated for American Business Award 2002 * Amway Malaysia wins KPMG "Shareholder Value Award" 2002 * Michigan Retailer of the Year Award 2002 * Nutrilite tops Consumer Satisfaction Survey 2001 * Quixtar 'Laundry Games' Video Sweeps Top Awards at 2001 Media Communications Association International (MCAI)-MN Media Festival * Quixtar wins Gold Camera Award * Quixtar wins Golden Reel Award 2000 * Amway India - Presented the Millenium Outstanding Service Award 2000, by the All India Confederation for the Blind (AICB), in recognition for work carried out for the visually challenged. * AEGIS Video & Film Production Awards 2000 - Amway/CRI Film and Video Group. * International Film and Video Festival Awards 2000 - Amway Corporation: "SYMPHONY FOR SUCCESS - AMWAY 40TH ANNIVERSARY" - GOLD CAMERA. * International Film and Video Festival Awards 2000 - Amway Corporation: "LAUNDRY GAMES" - GOLD CAMERA. * Artistry Pure White Toner & Moisturizer wins IOPP design award. 1999 * Meeting Planners International Global Paragons Award 1999 Amway * International Film and Video Festival Awards 1999 - Amway Corporation: "CLICK START YOUR FUTURE"- GOLD CAMERA
1998 * AEGIS Video & Film Production Awards 1998 - Amway/CRI Film and Video Group * International Film and Video Festival Awards 1998 - Amway Corporation: "AMWAY FOOD STORAGE"- GOLD CAMERA 1997 * Amway wins 1997 Rainforest Alliance The Green World Award. * Recipient of the Gold Triangle Award from the American Academy of Dermatology * Recipient of the National Performance Review Award presented by U.S. Vice President Mr. Al Gore 1997 1996 * Recipient of the Outstanding Human Performance Intervention Award from the Triad International Society for Performance Improvement 1996 1994 * Amway Water Treatment System - 1994 Consumer Plastics Product Design Award: UNIQUE & USEFUL PRODUCT CONSUMER AWARD . * Recipient of the International Unique & Useful Plastic Consumer Product Award from the Society of Plastics Engineers 1993 * 6As Awards Malaysia - Five Silvers and Three Bronzes for Amway Corporate Campaign 1992 * Recipient of the Transpolar Medal from the United Nations Education, Scientific and Cultural Organisation. * Michigan Recycling Coalition Recycler of the Year. * Recipient of the Honor Roll Company Award from the United States National Environmental Development Association.
1991 * Recipient of the Conservation Achievement Award for Corporate Leadership from the National Wildlife Federation. 1989 * Recipient of the United Nations Environmental Programme Insignia Pin from the United Nations Environmental Programme Achievement Award. Undated * Amway India - Amway also received the Hajee Sulaiman Omar Memorial Ever Rolling Shield, by the Madurai Medical College. Amway was the ONLY corporate entity to conduct a BDC on such a scale - rest of the camps are held by educational institutions. * Amway India - The Central Red Cross Bank, Cuttack awarded Amway Opportunity Foundation with a trophy and Certificate for contributing the highest number 400 units to their Blood Bank.
The data collected through research can be analyzed as follows. • It is a multi-level marketing company. • It relies primarily on person-to-person referral rather than advertisements for sale of products. • It has recently allowed end users to purchase directly over the internet with just the reference number needed from the ABO. • Though the company is present in the Indian market since more than 11 years. It is yet to make its mark. • The company's core targets are the higher class economy. • Middle class is given negligible importance while the lower class is completely neglected. • Quality is of prime most importance at Amway. • The company has recently announced ad campaigns. • The structure of an Amway organization is hierarchical, but an individual can earn more than those who bring them into the organization. • The pyramid structure on which the company does business is criticized a lot nationally and well as globally.
It can be concluded from the above research that: • Amway is the top direct selling brand in Indian market today. • It is also amongst the handful of brands that have a myriad of products under a single label. • One of the largest retailers in the world. • Its product lines include home care products, personal care products, jewellery, electronics, Nutrilite dietary supplements, water purifiers, air purifiers, insurance and cosmetics.
Although amongst the top private company in the Indian market the company is yet to make its presence felt throughout India. The following the recommendations for making the company's presence stronger in the Indian market: • Amway has to invest more into advertisement and promotion. • It also has to target and manufacturer products for the rural
mass of India. • It has to allow its products to be sold in retail stores rather than just relying on direct sales. • Proper brand endorsement is necessary. • Has to make attempts to infiltrate the interiors of India. • PR activity which media involvement is an absolute must, which itself is amongst the biggest promoter in the nation. Indulging in PR activity thus helps increase brand image and presence in general public. • Has to target internet as a media. • Up-market shops and malls have to be properly targeted to spread brand awareness. • Advertising should not only be restricted to electronic media. • Some other suggested forms of media. (Brands on wheels, Wall projection, OOH, Pixman, Retail, Public Transport branding, etc)
The data in project was provided by the following sources:
Vadivel Muthu Kumar (PUC – In charge, Amway India) • Devyani Jodhani (ABO since 2004) • Pankaj Jodhani (ABO since 2004) • Dinesh Patel (Emarald ABO since 2002) • Dipti Palchoudhary (ABO since 2008) • www.wikipedia.org • www.amwaywiki.com • www.amway.in • www.amway.com • www.thetruthaboutamway.com • www.alticor.com • www.google.com
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