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A STUDY ON MWAY COMPANY INDEX CHAPTE R NO. 1 2 3 4 5 6 7 8 9 CONTENTS NO. EXECUTIVE SUMMARY INTRODUCTION AMWAY PROFILE VISION, MISSION & GOALS OF THE AMWAY AMWAY’S MARKETING STRATEGIES SWOT ANALYSIS OF AMWAY FINDING AND SUGGESTION CONCLUSION & RECOMMENDATION BIBLIOGRAPY 10 11 12 13 1. EXECUTIVE SUMMARY T.Y.B.M.S PAGE Page 1 A STUDY ON MWAY COMPANY Amway is a unique company. It is defined by the fundamental philosophy of helping people help themselves. Amway has helped millions of people run their own independent business around the world. Today, Amway continues to grow by offering new products and business opportunities to people from all cultures and walks of life. Whether they are employees, distributors, or citizens in the community, Amway touches their lives for better. India with its rich reservoir of will, talent and enterprise is perhaps the most fertile ground for the Amway Corporation. In short it has made substantial value addition to India‘s social economic life. The focus of this project is based on studying a single organization i.e. The Amway Corporation. This research has been conducted to study the marketing strategy adopted by Amway in the Indian market. An attempt has been made to study the company‘s perspective in the new market and analyse on how the company plans its expansion in India. I have substantiated my research by conducting interviews to gain more insight about the corporation. The data has been analysed on the basis of 2 surveys which were conducted by me. Survey 1 was conducted through direct, phone and online interviews. Survey 2 was conducted by gathering information through structured questionnaire and the interpretation for the same has been provided. I have finally concluded my research by providing a summarized conclusion and also suggested recommendations on the basis of the marketing mix. 2. INTRODUCTION T.Y.B.M.S Page 2 A STUDY ON MWAY COMPANY Direct Selling is a remarkable business model, which brings the market to the customer and offers a unique business opportunity to anyone eager to adopt the spirit of enterprise. Direct Selling can best be described as the selling of products and services directly to consumers in a face-to-face manner, through demonstration of usage, by an independent direct salesperson. Direct Selling benefits consumer because it sells high quality products at the consumer's convenience, often at his/her home or workplace. Customers value the advantages of convenience, personalised attention, demonstration of usage, and a wide choice of products backed by Customer Satisfaction Guarantee. One of the most tangible impacts of Direct Selling in its new advent has been the fact that it has touched the average man and women in a manner never experienced before. Amway India Corporation is the country's leading Direct Selling Company. It is perhaps the best example of the contribution Direct Selling is making to India. In a little over two years of commercial launch Amway India has emerged as the country's largest Direct Selling Company. It closed its financial year with a turnover close to Rs. 250 crores (the Amway Financial year runs from Sept. to Aug.). It will reach its target of Rs. 1000 crore turnover much before its declared target of the year 2004. Because it focuses upon direct selling, Amway is different from more traditional distribution channels. Its Independent Business Owners own their own business, with the flexibility to deal directly with their own clients and to build up personal relationships. These Independent Business Owners also have the ability to deliver Amway's products to their customers' homes. Independent Business Owners sell to people they know or meet. The personal contact and care they provide is an important element in direct selling. They are also self-employed and can introduce T.Y.B.M.S Page 3 A STUDY ON MWAY COMPANY others to the business to form their own sales group of Independent Business Owners. The channel of distribution describes the stages of ownership that take place as a product moves from a manufacturer to a consumer. The increasing use of the Internet by consumers has created a real potential for developing different types of business models and for new approaches to reaching users directly and quickly in their homes. This report examines in detail the marketing strategy of the leading global direct marketing major, Amway in India. In the initial stages of the report I have focused on Amway‘s current position in the Indian market. As the research progresses I have tried to analyse the companies marketing objective for India and how they set out to achieve them. This report also provides a brief introduction to the concept of multilevel marketing and tries to make the reader understand the difference between multilevel marketing and the traditional distribution setup in the FMCG sector, so as to give an idea as to how the system is being utilized by companies like Amway. MLM -a definition T.Y.B.M.S Page 4 A STUDY ON MWAY COMPANY Multilevel marketing allows sellers to build a business through their own sales efforts and by inviting others to become sellers. Remuneration is based on a seller's personal sales AND on the combined sales of those people they have sponsored, trained and motivated. The story of Amway is intended to drive home the point of a company being alert enough to modify its globally accepted practices to suit the local market‘s needs. This report has been made keeping in mind the benefits which can be derived from my research. Benefits to customers This report will be beneficial for consumers who prefer the marketing goods or services directly to them: at their own convenience often in his/her home either on a one-to-one basis, or in the context of a sales party. Through this the customers will get a better idea about the company‘s product offerings and value the advantages of: convenience, personalised attention, and a good selection of quality products available at their door steps. Benefits to sellers Many people have chosen direct selling because they want to build their own business, but do not have: considerable funds required to buy a franchise or start a new company. Among the top five reasons people sell direct because they like and believe in the product, like being their own boss, and working their own hours, like the supplemental family income or making extra money for themselves. It can be beneficial from the sellers point of view as it may give them the idea of exactly how they can go about creating their own business and benefit from the Amway‘s unique business opportunity. Benefits to companies In this report I have deeply analysed the marketing strategy for Amway through personal interviews by many IBOs and Amway customers who have helped in adding valuable data to this project which can be useful for the company. The T.Y.B.M.S Page 5 A STUDY ON MWAY COMPANY suggested recommendations can be considered by the corporation for further expansion and increasing market share. 3. AMWAY PROFILE COMPANY HISTORY Amway began in 1959 with two young entrepreneurs in the United States, Rich DeVos and Jay Van Andel. Their concept for an innovative business opportunity, centered around person-to-person marketing, established itself as a leader among one of today's fastest-growing industries. Today, more than 3.6 million independent business owners distribute Amway products in more than 80 countries and territories. Amway is part of the Alticor family of companies whose global sales totalled $4.5 billion in its most recent fiscal year. 1950s - A Friendship Forms Rich DeVos and Jay Van Andel's friendship actually began with a business proposition, when Rich struck a deal with Jay for a ride to school for 25 cents a week. After high school they entered the military, but they planned to start a business together after separate tours of duty. A friendship formed and became a business relationship that has lasted to this day. 1960s - The Early Years Amway quickly outgrew its original facilities in the basements of Rich DeVos's and Jay Van Andel's homes. In its first full year of business, Amway's sales were more than half a million dollars. T.Y.B.M.S Page 6 1970s - The Decade of Growth As vowed by Jay Van Andel the night of the 1969 disaster, Amway rebuilt the aerosol plant and went on. The ' 70s began with sales of more than $100 million at estimated retail, and kept going strong. After a lengthy investigation, the FTC verified that Amway is a genuine business opportunity and not a "pyramid." 1980s - The Billion-Dollar Decade The ' 80s will be remembered for the first Billion Dollar Year at estimated retail in 1980. Building expansion at Amway World Headquarters continued at breakneck speed as Amway scrambled to keep pace with demand, opening its new cosmetics plant in Ada. 1990s - The Second Generation As carefully planned by Rich and Jay, the second generation Van Andel and DeVos families took the helm during the ' 90s. Steve Van Andel and Dick DeVos succeeded their fathers as Chairman and President. Distributors witnessed a similar trend, with the second generation of many distributor families taking on important leadership roles. 2000s - The New Millennium In 2000, Amway Corporation became a wholly-owned subsidiary of Alticor, Inc. Chairman Steve Van Andel and President Doug DeVos share the Office of the Chief Executive. Amway - The Current Scenario Amway is the largest multi-level marketing (MLM) organization in the world. It is a multi-billion dollar company based on the sale of a variety of products. Amway‘s philosophy is defined by commitments, trusts, enduring relationships, and the ideal of perfection above profit. From a humble beginning in 1959, using an old gas station, Amway the brainchild of Co founders Rich DeVos and Jay Van Andel, is now one of the largest and most successful direct sales companies. Amway has also worked to provide better opportunities for people through active support of various community projects. Corporate Profile: Between then and now, Amway corporation has grown into a US Multi-billion dollar company managed by 12,000 employees. It operates across 80 countries and territories in Asia, Africa, Europe and the Americas with a turnover of US $5.7 billion. Amway is the wholly owned subsidiary of Alticor Inc. It has a sales force of over 3.3 million distributors. The company Manufactures 450 products of which 350 are patented. The company is also a long standing, active member of the World Federation of Direct Selling Association (WFDSA). Over 500 R & D scientists and professionals ensure the exceptional quality of its products across five product lines: Home Care Personal care Home Tech Cosmetics Nutrition and Wellness AMWAY INDIA Amway India is a wholly owned subsidiary of Amway Corporation, Ada, Michigan, USA. Amway Corporation is a 42 year old company, and is among the largest Direct Selling companies in the world. It was established in 1995. It commenced commercial operations in May 5th, 1998. In the brief period since launch, it has emerged as the Country‘s largest Direct Selling Company. Facts: Over 200,000 entrepreneurs have adopted the Amway business opportunity; and are actively involved in building their independent Amway business. Amway has invested US $ 35 million in India. Of this, US $6 Million is in the form of Direct Foreign Investment. (IDSA) US $4 million has been spent in transferring state-of-the-art technology. The company Amway India was launched with 5 offices (New Delhi, Bangalore, Mumbai, Chennai, Kolkatta) which serviced 150 locations. At present, in addition to 32 offices in all metros and major cities, Amway India services over 379 cities and towns in the country. Turnover of Rs 100 cr. and Rs. 250 cr. in the first and second years of operation respectively. Plans to reach Rs. 1000 turnover by the year 2004. In India Amway Corporation comprises of 72% women, 24% Couples, and 4% men. (Source IDSA) Amway India is the founder member of the Indian Direct Selling Association (IDSA) Direct Selling requires expertise and special skills. Using the benefit of Amway's leadership status in the global Direct Selling industry, Amway India has in the past 12 months, conducted over 8000 training sessions with an attendance of approximately 350,000 Distributors. Amway India was honoured by the AICB Millennium Outstanding Service Award, 2000 by the All India Confederation of the Blind in recognition of its sterling contribution to the cause of India's blind. The Karnataka Welfare Association awarded Amway India with the `Rising Business Star of the Millennium' during a ceremony held at Bangalore during October, 2000. In the short period since its advent in the country, Amway has made several contributions to India‘s socio economic milieu. It as either introduced unprecedented benefits, or upgraded existing facilities to international standards. Corporate Responsibility Through its presence in India, Amway continues to enhance human resource development using its experience in entrepreneurial opportunity 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) to educate popular opinion on the benefits of organized direct selling. HOW IT WORKS Amway is different from the more traditional distribution channels in that the business has developed through direct selling. In Amway, one is recruited as an "independent" distributor of Amway products by buying a couple of hundred dollars worth of the products from the one who recruits you, known as your "up-line." Every distributor in turn tries to recruit more distributors. Income is generated by sales of products by the distributor plus "bonuses" from sales of his or her recruits and their recruit-descendents. How do you begin? First, you are sponsored by another Amway distributor and you obtain the Amway Business Kit. The Business Kit contains basic AMWAY products and literature for your use and for sharing with others. You begin by developing both customers and distributors. Customers or clients are the people who buy the AMWAY products from you but who aren't Amway distributors. One of your best sources for building a customer base is a group of people you already know. These acquaintances try AMWAY products and become your customers as they use and re-order various AMWAY items. However, I have found that people everywhere need high-quality, Satisfaction Guaranteed products which they believe Amway is able to provide. Independent Business Owners or Distributors are people who have evaluated the Amway business opportunity and elected to join the business. IBOs deal directly with Clients, build up personal relationships and deliver direct to Clients' homes. They are highly motivated, selling to people they know or meet. The personal contact and care that they provide is an important element in direct selling. IBOs are self-employed and can introduce others to the business, and so form their own sales network. The most successful Amway businesses enjoy a balance of merchandising AMWAY products and sponsoring distributors. Growth in your business comes from sharing the Amway business opportunity with others and helping them decide if it's right for them. This is called sponsoring. Amway distributors who sponsor others generally have higher average sales volumes than those who don't sponsor. Your "Group" is the team of distributors you've sponsored. Many you've sponsored personally, but others were sponsored by those you personally sponsored. You train and motivate your group and, as a result, you earn extra income when they earn income. As you continue to grow your business and they continue to grow theirs, you both can benefit. Like any other business, your Amway distributorship needs frequent input and activity to grow. However, whatever your goals are, you control how quickly or how slowly you build your business. After all, it's your independent Amway business. Over time, a distributorship can grow considerably. The more distributors in your group who become successful in the Amway business, the stronger your business will become, and the higher the pin levels you can qualify for. We call them "pin levels" because you earn incentive pins at the various achievement levels of the business. Each pin level features a set of incentives and rewards for being successful. Income Incentive and more The Amway Opportunity offers distributors many benefits. Some are financial, others are intangibles, such as peer recognition, pride in achievement, the joy of helping others, working with family, and the esteem of owning your own business Income potential As an Amway distributor, you can earn income many different ways. For instance, in the U.S. and Canada, you can earn income in at least 10 different ways. They include retail profit (the difference between Distributor Cost and the Retail Price) and nine different bonuses rewarding various levels of accomplishment. Special leadership programme As you qualify at various levels of achievement, you may be eligible to attend various Amway leadership programs: Annual Business Meetings In countries around the world, company - paid invitations are extended to Amway leaders to meet in a business-building atmosphere. Variety of Special Programs When your business qualifies at a specific distributor level, a special invitation occurs. Imagine your special day at an Amway facility, your own success story featured in our distributor magazine, and your name and picture added to the Distributor Hall of Fame in Amway's World Headquarters. 4. VISION, MISSION & GOALS OF THE AMWAY Company Vision: Corporate vision is a short, succinct, and inspiring statement of what the organization intends to become and to achieve at some point in the future, often stated in competitive terms. Vision refers to the category of intentions that are broad, allinclusive and forward-thinking. It is the image that a business must have of its goals before it sets out to reach them. It describes aspirations for the future, without specifying the means that will be used to achieve those desired ends. Warren Bennis, a noted writer on leadership, says: "To choose a direction, an executive must have developed a mental image of the possible and desirable future state of the organization. This image, which we call a vision, may be as vague as a dream or as precise as a goal or a mission statement." Core values include: Safety – Safety serves as a barometer of our company’s overall success and is a specific measure of our operating excellence. Trust – Trust is the mutual respect for and confidence in people. Trust recognizes the importance of individuals and appreciates their diverse opinions. Trust compels us to share information and encourage new ideas. It requires an open, honest, forthright manner. Confidence – Self-confident people take initiative, handle the unexpected, stand behind their convictions and support the efforts of others. They take bold, innovative, creative actions, capitalize on opportunities, make sound decisions quickly, and mobilize the best resources for rapid action. Teamwork – Teamwork is personal involvement and collaboration in a team environment. It includes setting a common goal in support of business objectives, making an individual commitment to the team’s success and recognizing the success of the team. Accountability – Being accountable means every employee assumes ownership and responsibility for his or her own work, regardless of the job they perform. Being accountable means making decisions and holding oneself responsible for the consequences of those choices. Doing What’s Right – Doing what’s right is being honest, ethical, and having personal and professional integrity. It means consistently treating all people fairly, delivering on promises, and taking personal responsibility for your actions. Quality – Quality is the primary determinant of customer satisfaction and loyalty, and it requires employees to continuously provide internal and external customers with the right product or service...done right...the first time. In today’s increasingly competitive business environment, better quality translates into better value for our customers and, subsequently, better value for their customers-and this is the very essence of competitive differentiation. Mission: Most businesses have some form of mission statement ,whether they know it or not. For example, other names for a mission include: founder's philosophy, statement of purpose, business philosophy. An organization's mission describes its fundemental purpose and overall philosophy. A mission statement (what we are) is different than a vision statement (what we want to become). Mission statement:  Provides thrust and direction to the organization.  Cornerstone of all strategic planning. A mission statement is an organization's vision translated into written form. It makes concrete the leader's view of the direction and purpose of the organization. For many corporate leaders it is a vital element in any attempt to motivate employees and to give them a sense of priorities. A mission statement should be a short and concise statement of goals and priorities. In turn, goals are specific objectives that relate to specific time periods and are stated in terms of facts. The primary goal of any business is to increase stakeholder value. The most important stakeholders are shareholders who own the business, employees who work for the business and clients or customers who purchase products and/or services from the business. The mission statement should be a clear and succinct representation of the enterprise’s purpose for existence. It should incorporate socially meaningful and measurable criteria addressing concepts such as the moral/ethical position of the enterprise, public image, the target market, products/services, the geographic domain and expectations of growth and profitability. The intent of the Mission Statement should be the first consideration for any employee who is evaluating a strategic decision. The statement can range from a very simple to a very complex set of ideas. Specific: The Mission Statement should represent the broadest perspective of the enterprise's mission. You may want to take the approach of being very specific. For instance, a Mission Statement for a fictitious airline could be worded as follows: Your mission statement is an opportunity to define your business at the most basic level. It should tell your company story and ideals in less than 30 seconds: who your company is, what you do, what you stand for, and why you do it. Do you want to make a profit, or is it enough to just make a living? What markets are you serving, and what benefits do you offer them? Do you solve a problem for your customers? What kind of internal work environment do you want for your employees? All of these issues may be addressed in a mission statement. Other ways to think about a mission statement as you begin to write one include:  Answers the question, “What business are we in?”  Provides thrust and direction to the organization.  Must be market-oriented (focusing on the problem the business is solving), not product-oriented. Basic guidelines in mission:  Your mission statement is about you, your company, and your ideals.  Don’t “box” yourself in.  Keep it short.  Ask for input. Goals: The major outcome of strategic road-mapping and strategic planning, after gathering all necessary information, is the setting of goals for the organization based on its vision and mission statement. A goal is a long-range aim for a specific period. It must be specific and realistic. Long-range goals set through strategic planning are translated into activities that will ensure reaching the goal through operational planning. Some company Goals may be as follows:  To promote a profitable and sustainable business activity that meets the customers’ needs.  To increase the company's market share.  To gain the competitive edge.  To increase the company's role in relations to social responsibility.  To provide excellent customer service. 5. AMWAY’S MARKETING STRATEGIES AMWAY’S MARKETING OBJECTIVE The objective involves matching consumer needs with the product. The better the match, the more lasting the potential for the relationship between the seller and the buyer. The selling process is aided by Amway's retail strategy to provide high quality, readily purchasable items with a good environmental positioning, and offering consumers‘ good value for money. AMWAY SALES AND MARKETING PLAN Amway practices direct selling which is a method of selling goods directly to the consumer by an independent Distributor. A Distributor can then introduce further Distributors and generate income from retail profits supplemented by bonus payments based upon the total sales of the group built by a Distributor'. Income is generated by a distributor through: The retailing of goods to consumers. Retail margins (mark-ups) on the basic wholesale price represent income to the selling distributor. Additional performance and leadership bonuses, paid on the volume of personal business of the distributor and the business volume of the distributors he has introduced to the business. Various levels of leadership bonuses, dependent upon the overall size and shape of the business, paid on achieving different levels of business performance. This plan, therefore, rests upon the twin foundations of retailing and sponsoring. Retailing - the selling of goods to consumers on which retail margins are earned and performance bonuses gained. Sponsoring - the introduction of other individuals to establish and develop their own independent Amway distributorships. Retailing enables distributors to provide immediate financial incentive rewards. Sponsoring enables distributors to replicate the base with other people, thus allowing the organization to grow. Direct selling involves sales people showing and demonstrating products to obtain orders. As with all direct selling activities, the process involves two-way communication and this can be time-consuming. Business success and the resulting financial results are a direct consequence of effort, commitment and personal group motivation. Personal contact between distributors at one-to-one or group meetings provides the opportunity for individuals to discuss strategies, difficulties, levels of involvement and plans for the future. The income objectives and individual targets may be determined by each distributor based upon what he or she wants to earn. Distributors who develop direct selling businesses may come from widely different backgrounds, with vastly different levels of experience and knowledge - the common factor to their success is the desire to achieve. AMWAY’S STRATEGIES IN THE INDIAN MARKET INTRODUCTION The launch of any new product requires a considerable amount of time, effort and careful planning. Research and development uses advances in science and technology to enhance products, while market research is carried out to examine changing consumer tastes and fashions. The key to successful marketing is to clearly identify at which market segment the product should be aimed, find out precisely what consumers in this target group want and then plan the marketing strategy accordingly. The focus of brand image and positioning of the product within the marketplace are of paramount importance. All organisations face an external business environment that constantly changes. Changes in the business environment create both opportunities and threats to an organisation's strategic development, and the organisation cannot risk remaining static. It must monitor its environment continually in order to:build the business develop strategic capabilities that move the organisation forward Improve the ways in which it creates products and develops new and existing markets with a view to offering its customers better service. Amway is an interesting example of a company that reviews its strategic capabilities and uses this review to develop its products and markets. More than 450 products carry the Amway name in the areas of nutrition, health, beauty and home. Amway also has a range of products that include other well known branded goods. The company also offers a variety of third party services. Amway’s Market Penetration Strategy Going for market penetration has involved Amway in making the most of current products and competences by 'stretching' those new markets. One great benefit of direct selling is that it is an immediate channel to the marketplace that offers customers a good service, while at the same time providing business opportunities for individuals. Special incentives enable IBOs and end consumers to take advantage of particular offers at certain times of the year and these incentives have also helped to increase market penetration. There are also special events such as Leadership Training Seminars. These enable IBOs to spend time with others involved in the business and to learn about 'best practice' from each other, whilst also sharing ideas. Target Markets and Market Segmentation Segmentation: The Amway business opportunity is open to everyone, regardless of sex, race, age, religion, or political or other personal beliefs. The Amway business appeals to women, men, couples, and families from all backgrounds. Amway also offers a range of Fast Moving Consumer Goods through its five main product categories i.e. Home Care Personal care Cosmetics Nutrition Wellness But initially Amway was launched in India with only 6 products most of which were home and personal care products. Target Audience: Although it was recognised by Amway that groups such as children, men and teenagers are likely to become targets in the future, the Amway‘s range of products was aimed mainly at adult females between 23 and 44 years of age. These products are daily use items catering mainly to the household sector. Through Amway‘s extensive market research it was proved that that women are often looking for new products and technologies that will provide a more satisfying product experience. Thus Amway has segmented its market on the basis of typical consumer from this target group: is probably a professional woman is very product conscious wants professional, quality products Regular user of home care and beauty products relies on recommendations from friends when making any purchase decisions Makes buying decisions based on clinical evidence. Positioning: The focus of brand image and positioning of the product in a new market place are of paramount importance. Thus, it was important for Amway to create a strong brand image for the total product range for entering the Indian market. The image created would reflect a great deal about the product and its consumers. One of the most important challenges for Amway was to develop an appropriate packaging for all its products to appeal to the Indian consumer. Packaging can be crucial to the success of a new product and Amway went to great lengths to ensure that the packaging and design appealed to the target audience. The colours are light, elegant, soft and culturally appealing. Soft, metallic white gives a sense of clarity, while the blue caps represent water and blue sky. The silver metallic touches add luxury and spice. All the colours are designed to suggest cleanliness. This design was used to create a brand image. The following objectives for the brand were set: to increase distributor profitability and productivity by providing a new and exciting business opportunity to optimise consumer convenience and value through enhanced product differentiation by providing them with an exclusive and revolutionary range of products. Amway’s products are positioned as : ―At Amway, quality means innovation in formulas and technology. A commitment to excellence backed by the resources to do the job right and confident that every product will meet your satisfaction -- guaranteed.‖ Having decided on the target audience, we turn our attention to the Marketing Mix: Product: Considering the overwhelming success its receiving in the Indian market, Amway has introduced more products in each category. It is also planning to expand the product category by introducing Home tech and food items in India. Amway has also adapted itself to the local market by introducing the sachets and small bottle packs which can be used by people in small quantities and are very economical. With the exception of the Nutrition & Wellness and Cosmetics range, all Amway India products/bottles are manufactured through 3 third party contract manufacturers using world class technology and processes. The products match Amway's global quality standards. They carry a tamper-proof seal and a 'Customer Refund Policy'. If not completely satisfied with the product, the consumer can return it for a refund. Amway products are environment friendly, and are not tested on animals. Amway encourages the return of its used product bottles for re-cycling and to prevent their misuse. At present, Amway India's product portfolio comprises of:: Ten products in the Personal Care category, Eleven in the Home Care category and Six in the Nutrition & Wellness category. Seven in the cosmetics category One product in the Agricultural Category. 22 The other products are two soft toys. Amway Sales aid. Amway's product range demonstrates its adaptability to the market based on a close, first-hand understanding of the Indian consumer's nuances. An aggressive product launch plan introduces new products every few months. In the coming months, Amway will further expand its product portfolio through the launch of several new core line products. Amway had initially started with 6 products for the Indian market in 1998. At present it has about 45-50 products in its various product categories which is about 11% of its total product category. Pricing: Amway products are price competitive and overall a good value for money. While some of its products are more expensive than their counterparts, others are less expensive and most are competitively priced. Products that are more expensive usually have greater features and benefits over competitive goods. Many AMWAY products are highly concentrated, meaning a single purchase lasts longer. On a costper-use basis, these products are priced very competitively from their local brands. The consumer is the ultimate judge of price and value, and Amway‘s sales success over the years speaks volumes about its product value and customer satisfaction.Amway‘s pricing strategy remains the same but with the introduction of sachets and small bottles, people can now enjoy its products at an economical rate. Place: Amway India enterprise is redefining its structure by overhauling its supply chain. The network marketing company is looking at reducing the lead time by moving closer to the point of consumption, improving its information system and reaching out to homes through a better delivery system. It is expanding its presence across the country and adding new products to its portfolio. The company has done away with its central warehouse at Nagpur and opened four regional ware houses in Bangalore, Kolkatta, Delhi and Mumbai that are serviced directly from the manufacturing units. The company today has 36 offices serving over 385 locations across the country. It plans to add 14 more offices to its network this year taking the total number of offices to 50 which will serve over 450 locations. These new offices will be opened at strategic locations spread across the country and governed by an unwritten rule of ―Be present where Amway distributors are.‖ The Company Mumbai, Amway Bangalore, India Chennai, launched Calcutta) with and 5 offices (New a Central Delhi, Warehouse (Nagpur), which serviced 150 locations. At present Amway India has 32 offices, and a reach to 352 locations. Promotion: Amway promotes its products through its Independent Business Owners. It has a heavy accent on training. Every Amway distributor enjoys free, unlimited access to training sessions. These training sessions impart product knowledge, comprise motivation sessions, and seek to optimise the business potential of participants. Recently Amway has also started advertising about its products in various Newspapers and Magazines to promote its products and reach out to their target markets. Amway has come up with a vast promotional strategy to reach out to its customers and other potential buyers. Amway's Promotion channels There are five different promotion channels: Corporate Events Corporate events include specially arranged functions, such as product fairs, conferences and seminars, which distributors at different levels are invited to attend. Face-to-face communication at a range of events helps Amway and its distributors to get to know each other. They also provide an opportunity for distributors to get to know each other and are useful for relaying messages, giving advice and generating personal discussion. Events include: Pace Setter - a reward incentive to help new and existing distributors reach the 6bonus level within three consecutive calendar months. It also encourages a balanced business, with equal amounts of retailing and sponsoring - essential for long-term success and profitability. Direct Distributor Seminar - allows newly qualified Direct Distributors to meet the Amway Management Team, tour the UK Headquarters, attend key informative, motivational business sessions and go to the New Direct Distributor Gala Dinner. Leadership Seminar - where distributor leaders who have achieved a target criteria set by Amway, travel for a seven day trip with compliments of Amway to some of the world's finest beach locations and hotels where they attend a number of business sessions and exchange thoughts and ideas with corporate staff. Launch into '03 - a major annual launch of new products and services presented by a road show of event. Training Training builds the skills and knowledge of distributors and therefore improves competence levels. For Amway, the starting point of the training process is to identify the skills and knowledge necessary for distributors to carry out their role. Acquiring product knowledge is an important aspect of training and preparation. As Amway relies upon the personal service of its distributors and the quality of its products, it is essential that distributors are not just shown how to use products but also how to merchandise them to their best advantage. Training may involve either Corporate or Group (Line of Sponsorship) Training on specific product brands. Distributor input into these sessions provides informative help for the management of independent businesses. Once a distributor has achieved an advanced knowledge of a specific brand, they can then receive the training and tools required via a 'Train a Trainer' session whereby they will be taught how to train their own group, therefore maximising their expertise. Lines of sponsorship Amway is essentially a people-based business - without people, the business cannot expand. The business of each distributor grows via new customers and through the sponsorship of new distributors. Established distributors are involved in helping newly sponsored associates to merchandise Amway products. Distributor groups meet to discuss company procedures and their goals. The groups also discuss new product launches and promotions, the administration of their businesses and support new and existing distributors. These lines of sponsorship provide constant, face-to-face support from professional associates. Publications Written communication is useful as a permanent source of reference. Amway uses a range of written communications to promote its ideas and products across its target audience. These include: Amagram - This magazine is mailed directly to all Amway distributors in the India. Amagram is used to communicate information about new products, promotions, community news, distributor events and recognitions as well as news of other affiliates throughout the Amway world. Amagram shows how distributors can make more out of their business. It is also used to help distributors understand the philosophy by which the business operates and the legislation regulating the Direct Selling Industry. Special Literature - Occasionally, Amway designs a brochure or leaflet which is used to address a particular change or launch, e.g. new car care product range. 27 B. Amway’s Market Expansion Strategy One method used by Amway involves expanding the ways in which individuals can be involved with the Amway business. Amway has developed a structure known as the IMC model. This increases the number of ways through which people can become involved in the Amway business. Each of the letters IMC stands for a different type of involvement. I - Independent Business Owners (IBOs) M - Members C - Clients (customers) of the IBOs. Members are allowed to purchase Amway products at a price equivalent to that paid by IBOs, but do not participate in the Amway Sales and Marketing Plan. They are a new type of 'customer' who deals directly with Amway. Target Markets and Market Segmentation Segmentation: Geographic: Amway is now trying to reach people by setting offices even in the remote areas of the country. Amway‘s distributors are now spread all over India even across the rural areas. Demographic: Age: Amway products are meant for people of all age groups. It includes a wide variety from soft toys meant for children to health and nutrition products for the entire family. But to join the Amway as an Independent Business Owner a person should be above 18 years of age. Income: Amway business opportunity is more popular among the middle income group since it gives them a chance to increase their income level by using its products and also making others use them as well. Gender: Majority of Amway products cater to the needs of Women Eg: cosmetics, home care and personal care. But Amway is introducing many new products in the Indian market the choices are increasing for both men and women. Family Life cycle: Majority of people joining Amway are young women and newly married couples. Occupation: Most of the people who are engaged in the Amway business are either professionals or small businessmen. Psychographic Personality: It appeals to people who are ambitious and want to earn high incomes with in a short span of time. Amway through it unique business opportunity gives them a chance to earn enough income and show them the path to realise their dreams. Social Class: Majority of Amway people comprise of working class, middle class, Upper-Middle class. Behavioral Benefits: The consumers enjoy the benefit of using a high quality product which is available to them at their door steps. Loyalty status: People working with Amway have a very high loyalty status. They slowly start replacing Amway products with other local products and can continue to use these products for life. Attitude towards product: Amway people are usually very enthusiastic and optimistic in everything they do. Target Audience: Amway‘s products appeal to a large number of buyers all over India. It is targeting people who believe in using high quality products which are conveniently available to them. Amway business opportunity is attracting the middle income group to earn extra income. Amway‘s target audience include a lot of professionals and young couples who are very ambitious to earn high level of income in a short span of time. Amway‘s products being good in quality are also very much preferred by the upper class segment who can easily afford the pricing but they don‘t want to get involved with the business opportunity. They are mostly associated with Amway as their customer. Target group Men – Professionals and small business owners Age - 23 - 50 years Income Status – Working class, Middle income, upper middle income Women – Professional and housewife Age – 20 – 50 years 6. SWOT ANALYSIS OF AMWAY: STRENGTH:  Based on direct selling operations. Hence it can be A home based business. Every can participate in business. It’s easy to get admission in Amway with easy rout like intent.  Training to staff.  Functions are performed by IBOs.  Organize meetings and events time to time.  Have good customer service system.  Backed by a 100% Customer Product Refund Policy produce faith and reselling attitude in customers.  Quality Products that Inspire Confidence. Almost no risk of money as world class quality Minimal start up costs gives strong base to the initiation of business. So everyone can participate in business. The person who wants do something can be make profit with investment of low cost. Products are easy to sell.  A business with national and international scope gives more opportunity to the costumers.  The possibility of financial security and freedom of time to enjoy life. WEAKNESS:  More power to IBOs gives critical structure to organization.  Initially high entry cost leads to somewhat restrictions for business development.  Rumors for direct selling operations.  Focus shifted from selling products to recruiting. OPPURTUNITIES:  Setup a manufacturing plant in all countries leads to better platform for company.  Population of INDIA gives better opportunity to company to receive more profit.  As the company name itself gives reliance and faith for the customer and buyer produce greater opportunity for marketing which leads to decrease in total expenditure of company. THREATS:  Too much freedom to IBOs.  Change in government policy may affect to the profit and freedom of company.  Competitors like AVON, MARY KAY; SUNRIDER creates lot of competition in market which leads to strong marketing competition in market. 7. FINDING AND SUGGESTION FINDING: I’ve written about Amway based entirely on factual, confirmable sources. If you’re researching Amway, especially on the Internet, chances are you’ve encountered people who claim Amway is some kind of scam business, it’s illegal, the products are poor quality, or some other information that has made you think twice about being involved. Skim through these finding and decide for yourself whether those kinds of opinions really have a lot of credibility in the face of all of these facts. Have all these major companies and organizations that have recognized Amway for excellence been conned? For fifty years? Or perhaps the opinions you read on the internet have been formed from limited or even no experience – from encountering some new or inexperienced Amway rep that never bothered to learn how to act professionally or properly explain the concept, and probably never did much more than dabble for a few months. Or perhaps the experience was with just one of dozens and dozens of different Amway affiliated organizations, each with different ways of doing things that may not all appeal to everyone? Or perhaps their opinions driven by business interests working or being paid by competitors or potential competitors to Amway? SUGGESTIONS:  Trial packs should be used because customer must have to introduce the product. Once customer gets idea about product he comes to know advantages of products.  The products should be cheap the home delivery system takes at least two days to deliver the products so the delivery should be instant.  There must be multiple options for purchasing the products for distributers like online, tale and instant purchasing.  In every city, the Amway office should be situated in such a location so that it is in reach of all distributers. 8. CONCLUSION & RECOMMENDATION Positive side to Amway The only positive side to Amway is the chance to make money. It is the chance to get oneself involved in a trade as a side business, especially if one is trying to recover from a failed (or failing business) or one has lost one's job. To the extent that a few people will surely make money, the system works. Amway has also helped solve the problem of unemployment in the country and given a hope to earn high incomes through their independent business to millions of people all over India. It is involved in a lot of community services. Amway feels that it is their responsibility to serve the community in which they live. Through Amway Motivational Organisations (AMOs) it has try reach out to a lot of handicap people and provided them with free services at any time. It is also involved in helping the blind by providing them with proper education. Amway is also actively involved various environmental projects such as planting more trees etc. Amway offers a wide range of good quality products which are easily available to people at their door steps. Underside side of Amway Why Amway Will Make Money Even If You Don’t An interesting calculation: If 1 million people sign up, Amway will receive Rs. 4400 million (Rs. 440 crores or US$ 206.80 million) in up-fron cash from this ‗cash rich‘ country. They will have earned all this money without having sold a single one of their very expensive products but just by sponsoring people to this business. How This Is Done At The Expense Of The Middle Class While doing this research, I have found that the only way to succeed in the business is to be able to sign up vast numbers of people and make them use the products for themselves. The other way is to run around peddling soap from door to door after having bought it from Amway at a discount. This is exactly where the Amway business strategy comes into play. It makes people hand over their savings to Amway to buy them a dream. If all Amway did was to manufacture and sell their products through door-todoor salespeople there would be no problem. The choice of purchase is left up to the individual. By asking for deposits from buyers —in the beginning and again every year as a renewal fee— it looks like Amway seeks to build a captive consumer base. Once someone has paid Rs. 4,400 to Amway, he is naturally disinclined to buy Nivea hand cream instead of Amway Gly-Honey hand lotion. The element of personal choice is thus prejudiced. By involving their "distributors" in a complicated system of down-the-line commissions they are given the impression that there is a limitless market for Amway products. The truth is that the market share for Amway is as limited as the market share for any other product. Traditional retail trade is not about to collapse and because of the expensive price structure; the growth of that market is restricted to the very wealthy. Calling this "an opportunity to use world class products" is a bit like calling the purchase of a Mercedes Benz for Rs. 25 lakhs an "opportunity", when an efficient Maruti 800 for one-tenth of that price will do nicely. With all these constraints, telling people of profit mechanisms tied into several thousand people buying Rs. 1,500 worth of Amway soaps every month seems laughable in a country where entire families lead their lives on less money. RECOMMENDATIONS After conducting an in-depth analysis of Amway’s various marketing strategies in India, I would like to suggest a few recommendations Product: To prolong the life-cycle of a brand or product range, an organization must inject new life into the growth period through readjusting the ingredients of the marketing mix. To ensure the Amway range of products would stay in line with evolving market trends and tastes, Amway should set about upgrading its brand with the additional objective of increasing its global competitiveness. They should introduce more products which are made in India. Eg: Persona Powder. This product will also give the IBOs and customers the cost advantage. Price: As a result of my research I have discovered that all the Amway products are expensively priced. If they are trying to target the middle income group they must reconsider their price structure once again and make it a bit economical for the Indian audience. This way may be they can enjoy a larger market share, as it could be one of the reasons why some people may be hesitant to join the Amway business. Place: There is still a long way to go for Amway to have its presence all over India. But keeping in mind the overwhelming response it is getting from the rural segment of the country to join the Amway business they should focus on the needs of these people i.e to make the products available to them at their conveniences. They should also try to Manufacture their products in India, which will then reduce the cost pressure on its customers. They should also try to set up their offices in states like Kerela, because Kerala is a very good market for the Direct Selling industry for various reasons; the two most important factors seen favouring the industry are the high literacy rate and the willingness to try something different. Promotion: Sine India is advancing on the technological front, I feel its time to Introduce the e-commerce Amway i.e. Quixtar in India. It will help in enhancing the Multi-level marketing to a great extent. It will also create a new business experience for the Indian IBOs and will also help in promoting their sales. 9. BIBLIOGRAPY This project work is based on the information that has been collected from various sources. To mention a few, information from some websites and magazines facilitated the preparation of this project. Books and Secondary data Amway Company Planner Amway Opportunity brochures Websites