Project report on

Amway Products

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TO WHOMS OVE !T MA" #O$#E $

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This is to certify that the project report titled is carried out by Miss., D/o has been accomplished under my guidance & supervision as a duly registered MB student of the. This project is being submitted by him/her in the partial fulfilment of the re!uirements for the a"ard of the Master of Business $niversity. %is dissertation represents his original "or& and is "orthy of consideration for the a"ard of the degree of Master of Business dministration. ''''''''''''''''''''''''''''''''''' ()ame & *ignature of the +aculty dvisor, Title- '''''''''''''''''''''''''''''' Date- '''''''''''''''''''''''''''''' dministration from #unjb Technical

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/, ", hereby declare that the "or& presented herein is genuine "or& done originally by me and has not been published or submitted cited else"here this for the re!uirement has been of a degree due programmed. "ithin ny literature, data or "or&s done by others and dissertation given

ac&no"ledgement and listed in the reference section.

''''''''''''''''''''''' (Student's name & Signature)

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Ac(now)ed*ement
%eartily than&s to all those "ho supported me 111 c&no"ledging any one in mere "ords is a very difficult job. / "ould li&e to pay my sincere than&s to all those people "ho helped me during this project "or& "ith their guidance and invaluable advice. The process of preparing this report on 23onsumer a"areness and satisfaction to"ards 45Ban&ing provided by %D+3 ban& and /3/3/ ban&6, "as a learning e7perience for me. During the course of my preparation of this report / had to delve deeply into many details and thus "as able to enlighten myself.

/ am than&ful to for her support and encouragement throughout the completion of my project. / am than&ful for her active co5operation and her &een involvement in my project. / am indebted to her for understanding and appreciating my problems, "hich emerged during the course of my project / am highly privileged to all the people, related directly or indirectly and the respondents for being cooperative and sparing a fe" moments from their busy schedule8 "ithout their help this project "ouldn9t have proven meaningful.

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Introduction

Successful businesses do more than simply provide goods and services for customers. They also make a real contribution to the communities in which they operate. Successful ethical enterprises: create employment and job security provide products that give consumers good value for money contribute to creating a more caring and cared for community and hence a better world.

Amway provides a good example of a business that recognises its wider responsibilities. It is one of the world s largest direct sales companies. Amway works with around ! million Independent "usiness #wners $I"#s% in more than &' countries. These I"#s are the link between Amway and the final consumer. They are also Amway s links with citi(ens and communities across the globe. In the )* Amway distributes a variety of products+ including:

As well as its business aims the company has a range of social aims that are part of a ,lobal -ause .rogram . These are outlined below.

The world s most respected companies recognise that being a good corporate citi(en means supporting causes that matter to the communities in which they operate. This is why Amway /urope has created links with the )nited 0ations -hildren s 1und $)0I-/1%. )0I-/1 is a global champion for children s rights. It seeks to make a lasting difference and improve children s lives. The )nited 0ations -onvention on the 2ights of the -hild sets out the right of all children to reach their full potential. It is the foundation of )0I-/1 s work. 3orking with )0I-/1+ Amway has launched an exciting pan4/uropean fundraising campaign for children. It recognises the importance of building good working relationships with )0I-/1 s 0ational -ommittees in each market in order to roll4out fundraising programmes to Amway s I"#s and their customers.

Amway $short for American 3ay% is an American company using multi4level marketingtechni5ues+ that sells a variety of products+ primarily in the health+ beauty+ and home care markets.6!7687697 Amway was founded in :;9; by <ay =an Andel and 2ichard >e=os. "ased
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in Ada+ ?ichigan+ the company and family of companies under Alticor reported sales of )S>@::.! billion for the year ended >ecember !:+ A':ABthe seventh consecutive year of growth for the company.6:7 Its product lines include home care products+ personal care products+ jewelry+ electronics+ 0utrilite dietary supplements+ water purifiers+ air purifiers+ insurance and cosmetics. Amway conducts business through a number of affiliated companies in more than a hundred countries and territories around the world.6C7 Amway was ranked 0o.::8 among the largest global retailers by >eloitte in A''C+ and 0o.A9 among the largest private companies in the ).S. by 1orbes in A':A.6D7

Founding

Amway <apan Eead #ffice. Amway =ietnam $EF -hG ?inh since A''&%. <ay =an Andel and 2ich >e=os+ friends since school days+ had been business partners in various endeavors including a hamburger stand+ air charter service+ and a sailing business. In :;8; they were introduced by 0eil ?aaskant $=an Andel s second cousin% to the Nutrilite Products -orporation.0utrilite was a -alifornia4based direct sales
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company founded by >r. -arl 2ehnborg+ developer of the first multivitamin marketed in the )nited States. In August :;8;+ after a night4long talk+ >e=os and =an Andel signed up to become distributors for 0utrilite food supplements. They sold their first box the next day for @:;.9'+ but lost interest for the next two weeks. Shortly thereafter+ at the urging of ?aaskant+ who had become their sponsor+ they traveled to -hicago to attend a 0utrilite seminar. The meeting was at a downtown hotel+ with over a hundred people in attendance. After seeing promotional filmstrips and listening to talks by company representatives and successful distributors+ they decided to pursue the 0utrilite business opportunity with enthusiasm. They sold their second box of supplements on their return trip to ?ichigan+ and rapidly proceeded to develop their new business further In :;8;+ >e=os and =an Andel had formed Ja-Ri Corporation $abbreviated from their respective first names% for importing wooden goods from South American countries. After their trip to the 0utrilite seminar+ they drop this business and <a42i became their 0utrilite distributorship.6;7 In addition to profits on each product sold+ 0utrilite also offered commission on the sales of products by new distributors introduced to the company by existing distributorsBa system today known as multi4level marketing or network marketing. "y :;9&+ >e=os and =an Andel had built an organi(ation of over 9+''' distributors. Eowever+ following concerns about the stability of 0utrilite+ in April :;9; they and some of their top distributors formed The American Way Associationto represent the distributors and look for additional products to market. Their first product was called Frisk+ a concentrated organic cleaner developed by a scientist in #hio. >e=os and =an Andel bought the rights to manufacture and distribute 1risk+ and later changed the name to
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H#- $Hi5uid #rganic -leaner% They subse5uently formed Amway Sales Corporation to procure and inventory products and to handle the sales and marketing plan+ and Amway Services Corporation to handle insurance and other benefits for distributors $Amway being an abbreviation of IAmerican 3ayI.In :;C' they purchased a 9'J share in Atco Manufacturing Company in >etroit+ the original manufacturers of H#-+ and changed its name to Amway Manufacturing Corporation. 6:!7 In :;C8 the Amway Sales -orporation+ Amway Services -orporation+ and Amway ?anufacturing -orporation merged to form a single entity+ Amway Corporation6:87 Amway bought control of 0utrilite in :;DA and full ownership. International expansion Amway expanded overseas to Australia in :;D:+ to /urope in :;D!+ to parts of Asia in :;D8+ to <apan in :;D;+ to Hatin America in :;&9+ to -hina in :;;9+ to Africa in :;;D+ to India and Scandinavia in :;;&+ to )kraine in A''!+ to 2ussia in A''9+ and to =ietnam in A''&. Quixtar6edit7 Main article Amway !lo"al In :;;; the founders of the Amway corporation established a new holding company+ named Alticor+ and launched three new companies: a sister $and separate% Internet4focused company named Kuixtar+ Access "usiness ,roup+ and .yxis Innovations. .yxis+ later replaced by 1ulton Innovation+ pursued research and development and Access "usiness ,roup handled manufacturing and logistics for Amway+ Kuixtar+ and third party clients.6:C7 The main difference was that all IIndependent "usiness #wnersI $I"#% could order directly from Amway on the Internet+ rather than from their upline Idirect distributor+I and have products shipped directly to
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their home. The Amway name continued being used in the rest of the world. After virtually all Amway distributors in 0orth America switched to Kuixtar+ Alticor elected to close Amway 0orth America after A'':. In <une A''D it was announced that the Kuixtar brand would be phased out over an :& to A8 month period in favor of a unified Amway brand $Amway ,lobal% worldwide. In A''C+ Kuixtar published The #ui$tar %ndependent &usiness 'wner Compensation Plan+ in which the company reported that the average monthly gross income for IActiveI I"#s was @::9.6:D7 ,lobal markets6edit7 According to the Amway website+ as of A':: the company operates in over :'' countries and territories+ organi(ed into regional markets: the Americas+ /urope+ greater -hina+ <apan and *orea+ and S/ AsiaLAustralia. In A''&+ Alticor announced that two4thirds of the company s 9& markets reported sales increases+ including strong growth in the -hina+ 2ussia+ )kraine and India markets.6:&7 Brands[edit] Amway s product line grew from H#-+ with the laundry detergent SA& added in :;C'+ and later the hair care product Satini5ue $:;C9% and the cosmetics line Artistry $:;C&%. Today Amway manufactures over 89' products+ with manufacturing facilities in -hina+ India and the )nited States+ as well as 0utrilite organic farms in "ra(il+ ?exico and the )nited States $-alifornia and 3ashington State%. Amway brands include: Artistry+ Atmosphere+ "ody "lends+ "ody 3orks+ -lear 0ow+ eSpring+ 1ulton Street+ ,lister+ i-ook+ *ahve+ Hegacy of -lean+ 0utrilite+ .eter Island+ .erfect /mpowered

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>rinking 3ater+ .ersonal Accents+ 2ibbon+ Satini5ue+ Tolsom+ MS+ and Nsenso Household leaners[edit] Amway is best known in 0orth America for its original multi4purpose cleaning product H#-+ SA& laundry detergent+ and >ish >rops dishwashing li5uid. In the <anuary A''D issue of Consumer (eports+ SA& with "io5uest was rated the best4performing laundry detergent+ scoring ;; out of a possible :'' points.6A97 -onsumer 2eports did+ however+ criticise SA& s pricing+ a situation which was disputed by Amway.6AC7 -onsumer 2eports conducted blind testing of detergents in A':' and ranked versions of Amway s Hegacy of -lean detergents ;th and :&th of A' detergents tested. -onsumer 2eports program manager .at Slaven recommended against buying the products because consumers can Igo to the grocery store and get something that performs a whole lot better for a whole lot less money.I6AD76A&7 Health and !eauty[edit] Amway s health and beauty brands include Artistry+ "eautycycle+ Time >efiance+ Artistry /ssentials+ .ure 3hite+ Satini5ue+ Tolsom+ "ody Series+ ,lister+ Moiskin $South America%+ 6A;7 0utrilite+ Nutriway $Scandinavia and AustraliaL0ew Nealand%+ eSpring+ Attitude$India%+ Atmosphere and iCook as well as )* and MS /nergy drinks. Artistry[edit] Main article Artistry +cosmetics, Amway s Artistry products include skin care+ cosmetics+ and anti4aging creams and serums. "utrilite[edit] Main article Nutrilite
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Amway s largest selling brand is the 0utrilite range of health supplements $marketed as 0utriway in some countries%+ and in A''& 0utrilite sales exceeded )S@!billion globally.6!'7 In A'':+ five 0utrilite products were the first dietary supplements to be certified by0S1 International.6!:7 In A''C+ A''D+ A''&+ and A''; in the nutrient and health food category+ 0utrilite won I.latinumI and I,oldI awards in ?alaysia+ -hina+ Taiwan+ Thailand+ and Asia overall in the 2eader s >igest ITrusted "rands of AsiaI survey.6!A7 In A''& 0utrilite scientists+ in partnership with Alticor subsidiary Interleukin ,enetics won the :Ath -ohn M. /inney Award for Nutrition and Meta"olism for their research into the interaction between nutrition and genetics.6!!7 In <anuary A'';+ Amway announced a voluntary recall of 0utrilite and MS /nergy "ars after learning that they had possibly been manufactured with Salmonella4contaminated ingredients from .eanut -orporation of America. The company indicated that it had not received any reports of illness in connection with the products.6!87 e#pring[edit] Amway s eSpring water filter+ introduced in A'''+ was the first home water treatment system to incorporate a carbon block filter and )ltraviolet disinfection unit+ becoming the first home system to achieve certification for A0SIL0S1 Standards 8A+ 9! and 99.6!97 The unit was also the first commercial product to include sister company 1ulton Innovations e-oupled wireless power induction technology. 1ulton Innovation introduced the technology in other consumer electronic products at the A''D International -onsumer /lectronics Show. -ompanies licensing this technology include ,eneral ?otors+ ?otorola and =isteon.6!C76!D7 In A''C eSpring was named Product of the 0ear by the .oland4based non4profit World Foundation of 1ealth2 1eart and Mind.6!&7 eSpring has won
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numerous !old andPlatinum awards in the (eader3s 4igest Most Trusted &rand Asia surveys.6!;7 Atmosphere[edit] In A''; Amway s Atmosphere Air .urifier became the first air cleaner certified Asthma and Allergy 1riendly by the Asthma and Allergy 1oundation of America.68'768:7 $itto $eli%ery[edit] Amway owns a patent on the online shopping method of >itto >elivery+ which allows consumers to specify an automatic monthly delivery of each product.68A7 In ?ay A'':+ >itto >elivery accounted for !'J of Kuixtar s 0orth American sales.68!7 Business model[edit] Amway combines direct selling with a multi4level marketing strategy. IIndependent "usiness #wnersI $I"#s% may market products directly to potential customers and may also recruit $sponsor% and train other people to become I"#s. I"#s may earn income both from the retail markup on any products they sell personally+ plus a performance bonus based on the sales volume they and their downline $I"#s they have sponsored% have generated.6!7 .eople may also register as I"#s to buy products at discounted prices. Amway provides training to the I"#s on products and business skills through the sale of Ibusiness support materialsIO for example+ >=>s+ ->s+ books+ websites+ seminars+ and business conventions. >irect selling and supply chain

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A supply chain contains a set of links that bring finished products to end consumers. As a direct selling company+ selling consumable products directly to consumers and by4 passing the traditional retail or high street . Amway has its own distinct chain+ placing a strong emphasis on I"#s who are able to focus on individual customers and their needs. Amway manufactures the majority of its own brand products at their manufacturing plant in Ada+ ?ichican. It then distributes these directly to the I"#s through a centralised warehouse in =enlo+ 0etherlands. Eaving signed a contract to work within Amway s 2ules of -onduct and -ode of /thics+ I"#s are trusted to operate flexibly within a self regulatory environment. They develop direct supply channels and sell products to friends and customers that they know or meet.

Amway s supply chain is different from a more conventional supply chain that normally sells goods to final consumers through retail outlets. Amway s way of working depends on building lasting connections with the end consumer. 1eedback provided by consumers and I"#s helps to shape future changes in products and the service provided. As a global company+ Amway has built up a strong regional structure around regional affiliates such as Amway )* and the 2epublic of

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Ireland. #perating through the regional structure+ affiliates are responsible for: forecasting $ensuring stocks are sufficient to meet demand% customer service efficient distribution: ensuring products reach I"#s on time and in top condition product promotion and I"# support e.g. supplying brochures to I"#s. ,etting the image right is vital in a business that relies on building relationships with individuals and the wider community. I"#s often sell directly to friends and it is essential to provide high 5uality+ value for money products with a :''J satisfaction guarantee. Amway spends time+ money and effort on creating an appropriate design and appearance for Amway products. It also develops campaigns that support the business and social aims of the company.

>eveloping a global strategy In the same way that Amway has a global strategy for producing+ distributing and marketing its products worldwide+ its strategy for promoting -S2 is also global. Amway defines a global cause as a social issue affecting many people around the world engaged in a struggle or a plight that warrants a charitable response. The company recognises that as a successful enterprise it must build its business based on the principles of relevance+ simplicity and humanity . Amway s vision is helping people live better lives . >eveloping the ,lobal -ause .rogram: helps Amway to bring this vision to life declares what the organisation stands for builds trust and respect in Amway brands establishes -orporate Social 2esponsibility as a high priority. Amway developed its ,lobal -ause .rogram in A''A. It is the result of extensive research. This involved studying relevant issues and holding
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discussions with organisations involved in providing help to the needy and underprivileged in communities worldwide. Some research was primary research+ e.g. interviewing potential partners. #ther research was secondary+ e.g. examining published sources about global trends in poverty+ lack of educational opportunities etc. 1rom the outset+ Amway established some clear objectives. These were to: build loyalty and pride among I"#s and employees enhance Amway s reputation as a caring organisation make a real difference to human lives.

1urther research indicated that people linked to Amway had a clear favourite area for the ,lobal -ause .rogram to cover. They wanted it to develop initiatives concerned with children and the family. They felt that there are millions of compelling reasons to focus on helping children including. 1or example: Amway is a business owned by and operated by families. -hildren are the world s future. -hildren embody hope. 3ith children it is possible to make a lifelong difference. 2esearch showed that: Ealf of the world s poor people are children. /very year :A million children die before their fifth birthday. 98' million children live in crisis situations. #ver :A9 million children have no access to basic education. /ven in the most developed countries some children are left behind. 2esearch also showed+ however+ that children s needs differ from one part of the world to another. Amway therefore recognises that if its ,lobal -ause .rogram is to have maximum impact it will need to be tailored to the specific needs of particular regions and areas.
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&eeting glo!al responsi!ilities !y aring 'or ommunities An Amway case study Con lusion

Amway s #ne"P#ne campaign provides a good example of the way in which businesses can make a difference in the communities in which they operate.

2esearch showed that Amway s stakeholders are committed to activities which better the lives of families and children. The company has therefore been able to formulate a plan and a well targeted programme to harness the commitment of its people to help others and to create a more prosperous world.

"y working with )0I-/1 it is partnering one of the world s most highly regarded children s organisations. Together they are able to help children enjoy a better future.

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Sponsor s 2esponsibilities #()"#)R*# R+#()"#IBI,I-I+# -he Amway !usiness pro%ides opportunities 'or people 'rom all wal.s o' li'e/ !ut li.e anything o' %alue/ with opportunity omes responsi!ility0 "y sponsoring others and helping them you will influence the success of their business and multiply your own efforts and business turnover. 3hen you sponsor new Independent "usiness #wners those people have expectations about the level of support they should receive as they+ in turn+ seek to build their futures with Amway. The 2ules of -onduct outline the responsibilities that each sponsor undertakes when they bring a new I"# into the business. The fulfillment of these responsibilities can be the difference between a new I"# staying and productively working in the business or leaving with their aspirations unfulfilled. In summary the Rules re1uire sponsors to2

forward the applicant s application immediately to AmwayO regularly train and motivate I"#sO where re5uired deal with product orders+ bonuses and returns in a prompt and efficient mannerO use their best endeavours to ensure 2ules compliance by members of the groupO achieve in a 5ualifying month a minimum performance bonus schedule re5uirement of which 9'.= is derived from personal activityO ensure that I"#s are aware of their responsibilities. I2esponsibilities of a sponsorI are some of the critical elements in ensuring that every I"# has an e5ual opportunity to prosper in the
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Amway business. They are also important indicators that a sponsor is IactiveI in their leadership role and that they will satisfy minimum re5uirements to attend Amway business seminar events. Invitations to Amway business seminars are offered at the discretion of Amway. *ey criteria are that an I"# is active+ fulfilling the responsibilities of a sponsor and in compliance with the 2ules of -onduct. Amway+ and I"#s contracted to Amway+ have demonstrated global success over decades based upon the combination of state of the art products+ a proven Sales and ?arketing .lan and an unsurpassed leadership team. It is the commitment to each of these elements+ and to compliance with the 2ules of -onduct that will provide the blueprint for future.

-orporate 2esponsibility at Amway /urope 3hy -orporate 2esponsibility matters "uilding a strong+ sustainable business means putting people+ products and performance at the centre of everything we do. A business like Amway is founded on people Q whether they live in our communities+ distribute our products or work in our offices. #ur 0)T2IHIT/ product range has relied on sustainable farming for decades. 3e also recognise that in todayRs world of scarcer resources

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and in the face of increasing risks of climate change+ our performance needs to be sustainable Q using energy and water more efficiently+ recycling more+ and reducing our carbon footprint. "y building -orporate 2esponsibility principles into our business model+ our customers can be confident that they are dealing with an ethical+ trusted company. In A':A+ we received a number of awards and certificates for sustainability. Amway )kraine achieved the -S2 business rating from the national ,vardia rating agency for fulfilling transparent and systematic -S2 practices Q the only direct selling company to do so. Amway -(ech 2epublic was recognised as a Sreliable companyT by the portal SHive companiesT+ a -(ech independent body monitoring and valuating local business and entrepreneurial environment. Histening to our stakeholders -onsulting and working closely with a range of stakeholders helps to shape Amway /uropeRs sustainability strategy and keep it on track. #ur key stakeholders include our consumers+ employees+ distributors+ national and
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/uropean )nion policy makers and the wider community. As part of our commitment to stakeholder engagement+ we conduct a range of -orporate 2esponsibility consultations. #ur employees and distributors are key stakeholders for Amway and we recognise the importance of listening to their views on how the company is performing for them. Hast year+ we consulted over 8+8'' employees and distributors on our sustainability performance and reporting+ covering areas such as the workplace+ people satisfaction+ environmental protection and our commitment to helping local communities Q particularly children and the vulnerable. The results of the surveys were published in our mid4term -orporate 2esponsibility 2eview. 3e are already planning our next stakeholder consultation in A':!. A recognised leader in -orporate 2esponsibility by A':9 #ur overarching goal at Amway is to be a recognised leader in -orporate 2esponsibility by A':9 and beyond. To achieve that+ we aim to provide life4long learning opportunities to our communities and support the three
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pillars of our -orporate 2esponsibility activities Q .eople+ .roducts and .erformance. Amway relies on our employees and distributors to keep our business strong and growing. 3e always strive to provide opportunities for our people to live up to their full potential. Amway also believes that entrepreneurship is a gateway to new opportunities and individual empowerment+ which is why we aim to support entrepreneurship in /urope Q particularly at a time when /urope needs a growing economy and more jobs. 3e have been supporting people in the community for the last 8' years Q our #ne by #ne -ampaign for -hildren brings together employees and distributors to make a difference in the lives of children. 3e also recognise that we can make a difference through our products Q whether they are sustainably produced or whether they can support people and communities directly. #ne example is 0)T2IHIT/ Hittle "its Q a product designed to fight chronic malnutrition in children under five years old. Hittle "its is a food supplement containing essential vitamins and minerals that are often lacking
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in childrenRs diets in the developing world. 3e work in collaboration with -A2/ International and the ,lobal Alliance for Improved 0utrition $,AI0% to help make childrenRs lives better. #ur performance is also fundamental to whether+ as a company+ we meet best practice in sustainable management+ production and distribution. Amway believes that building understanding about the environment in which we live+ and the positive contribution that individuals and communities can make+ is key to creating a sustainable future. 0ot only are we committed to minimising the companyRs environmental footprintO we also aim to help foster a spirit of sustainability in our people and communities Q whether at work or at home

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