Professional Documents
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ON
35196701721
I hereby declare the major project report, entitled “TO STUDY THE MARKETING
STRATEGY OF AMWAY” is based on my original study and has not been
submitted earlier for award of any degree or diploma to any institute or
university.
1. Objective of study
2. INTRODUCTION
3. LITERATURE REVIEW
4. RESEARCH METHODOLOGY
7. BIBLIOGRAPHY
8. ANNEXURES
CHAPTER – 1
INTRODUCTION
The Report contains a brief Introduction of Amway. The company Amway has
Interests in various sectors and they provide consistent quality products to meet
our Market’s Requirement Worldwide.
This Report clearly mentions Objective of the study and the Research Methodology
utilized. The data collection method used is Structured Non-Disguised
Questionnaire in which the types of questions used are open ended, multiple
choice and close ended.
Objective of study
To know the market reference for health care products.
To study the market potential of AMWAY
To study the consumer buying behaviour
To know the popularity of AMWAY products among
individuals.
To study problems faced by AMWAY.
COMPANY PROFILE
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 that 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
consumer awareness towards Amway in the Indian Market. An attempt has been
made tp study the company’s perspective in the new market and analyze on how
the company plan its expansion in India. I have sustained my research by
conducting interviews to gain more insight about the corporation. The data has
been analyzed on the basis of questionnaire which were conducted by me. I have
finally concluded my research by providing a summarized conclusion and also
suggested recommendations on the basis of the marketing mix.
Amway (short for "American Way") is an American company specializing in the use
of multi- level marketing to sell health, beauty, and home care products. The
company was founded in 1959 by Jay Van Andel and Richard DeVos and is based in
Ada, Michigan. Amway and its sister companies under Alticor reported sales of
$9.5 billion in 2015. It conducts business through a number of affiliated companies
in more than a hundred countries and territories. Amway was ranked No. 29
among the largest privately held companies in the United States by Forbes in 2015
based on revenue, and No. 1 among multi-level marketing companies by Direct
Selling News in 2016. Amway has been investigated in various countries and by
institutions such as the Federal Trade Commission (FTC) for alleged pyramid
scheme practices. HISTORY FOUNDING Jay Van Andel and Richard DeVos had been
friends since school days and business partners in various endeavors, including a
hamburger stand, an air charter service, and a sailing business. In 1949, they were
introduced to the Nutrilite Products Corporation by Van Andel's second cousin Neil
Maaskant. DeVos and Van Andel signed up to become distributors for Nutrilite
food supplements in August. They sold their first box the next day for $19.50, but
lost interest for the next two weeks. They traveled to Chicago to attend a Nutrilite
seminar soon after, at the urging of Maaskant, who had become their sponsor.
They watched promotional filmstrips and listened to talks by company
representatives and successful distributors, then they decided to pursue the
Nutrilite business. They sold their second box of supplements on their return trip
to Michigan, and rapidly proceeded to develop the business further. Earlier in
1949, DeVos and Van Andel had formed the Ja-Ri Corporation (abbreviated from
their respective first names) to import wooden goods from South American
countries. After the Chicago seminar, they turned Ja-Ri into a Nutrilite
distributorship instead.[17] In addition to profits on each product sold, Nutrilite
offered commissions on sales made by new distributors introduced to the
company by existing distributors—a system known as multi-level marketing or
network marketing. By 1958, DeVos and Van Andel had built an organization of
more than 5,000 distributors. However, they and some of their top distributors
formed the American Way Association, or Amway, in April 1959 in response to
concerns about the stability of Nutrilite and in order to 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 Ohio. DeVos and Van
Andel bought the rights to manufacture and distribute Frisk, and later changed the
name to LOC (Liquid Organic Cleaner). They subsequently formed the Amway Sales
Corporation to procure and inventory products and to handle sales and marketing
plans, and the Amway Services Corporation to handle insurance and other benefits
for distributors. In 1960, they purchased a 50% share in Atco Manufacturing
Company in Detroit, the original manufacturers of LOC, and changed its name to
Amway Manufacturing Corporation. In 1964, the Amway Sales Corporation,
Amway Services Corporation, and Amway Manufacturing Corporation merged to
form the Amway Corporation. Amway bought control of Nutrilite in 1972 and full
ownership in 1994. JAPAN HEAD OFFICE VIETNAM OFFICE.
CORPORATE STUDY
Amway Corporation was started more than 40 years ago by Jay Van Andel and Rich
DeVos. Its history grew out of an earlier business run by Rich and Jay, who sold
NUTRILITE™ supplements. Beginning with a highly effective cleaning product that
is still part of the Amway product range, L.O.C.™ Multi-Purpose Cleaner, Amway
expanded rapidly, offering people the chance to become Business Owners selling
Amway's growing range of products. Amway quickly achieved the position it still
holds, as a global leader in multilevel marketing. From early on, Amway was
dedicated to providing quality products as the foundation of an independent retail
business. That dedication led the company to invest in state-of-the-art product
development processes, supported by the finest quality manufacturing and
distribution facilities to be found anywhere in the world. Today, our business
operations reach into more than 80 countries and territories worldwide and we
support more than 3 million Business Owners. We are part of an international
organization with annual sales in excess of US$6.2 billion and we offer more than
450 different company-branded products and services globally.
VISION
Everyone needs a guiding vision to help direct their future. A business is no
different. At Amway, our vision is quite simple—we work each and every day to
Help People Live Better Lives. So how can we make a positive difference to you and
to others around the world? By helping people everywhere to discover their
potential and achieve their goals, by offering better products and opportunities for
the future, and by sharing generously with the global community.
• By providing products and services that offer superior quality and value - to
better meet personal and household needs around the world.
• By making the Amway shopping experience faster, easier, and more convenient.
• By creating opportunities that help all employees fulfill their personal and
professional goals.
• Through corporate contributions that help improve the quality of life in every
community where we do business. • By providing personal assistance to
individuals in need—particularly children.
Values
Amway has established some simple shared values that unite the entire company,
and all of the Business Owner organizations that are associated with Amway. We
believe that these values guide our actions and help us to achieve everything we
are capable of without compromise or harm.
Partnership
Working in trust and confidence with each other to maximize everyone's long-
term success.
Personal Worth
Treating people fairly, respecting their unique qualities, and giving them
opportunities to reach their full potential.
Achievement
Encouraging and recognizing creativity, innovation, excellence and
accomplishment in all we do.
Personal Responsibility
Helping people to hold themselves accountable for achieving personal, team, and
corporate goals.
Free Enterprise
Advocating freedom and free markets as the best way to improve standards of
living worldwide.
The Leaders
Chairman Steve Van Andel President Doug DeVos Senior Vice President, Amway
Corporation Managing Director, Amway International Jim Payne Senior Vice
President, Amway Corporation CEO, Amway Greater China Chairman, Eva Cheng
Founders' Fundamentals The way Amway does business was defined right at the
outset by its founders, Jay Van Andel and Rich DeVos. They outlined the ethical
and operational standards that continue to guide both the company and its
Independent Business Owners in all their activities. Those founding principles are
literally carved in stone outside the World Headquarters: Amway will always offer
HOPE to the individual, will support the fundamental FREEDOM of people to
determine their own future, allowing them the time and resources to protect and
nurture their FAMILY, and receive REWARD in proportion to their efforts. Amway is
as proud of these principles as it is of more than forty years of business success. In
fact, the two go hand in hand.
AMWAY SALES PLAN
The Amway Sales and Marketing Plan is a low risk, business opportunity that is
open to everyone. It allows you to build your business through retailing products
and sponsoring other people who, in turn, can retail products and offer the
business opportunity to others. By passing your sales and marketing knowledge to
your developing team, you not only build your own business network but also
enable others to build one of their own.
The Amway Sales and Marketing Plan has been operating for more than 60 years
and is available in 108 countries & territories around the globe.
The core of the Amway Sales and Marketing Plan's income opportunity is the sale
of quality AMWAY products to retail customers. As your Amway business grows,
the rewards you earn grow in proportion. The Amway Sales and Marketing Plan
does not compensate anybody for simply recruiting others as Amway Direct Seller.
PRODUCT PROFILE
Category Products
Hydrating Foundation-Artistry
Hydrating Foundation Golden (Medium to dark)
Skin Care-Artistry Time Defiance Night Recovery Lotion-Artistry
Time Defiance Day Protection Lotion-Artistry
Time Defiance Night Recovery Creme-Artistry
Shaving Cream-Dynamite
Hair Cream-Dynamite
Male Grooming- Dynamite Disposable Razors-Dynamite
Deodorant for Men-Dynamite
After Shave Splash-Dynamite
Sweetshot Mint-Glister
Toothpaste-Glister
Toothpaste-Glister
CHAPTER- 2
LITERATURE REVIEW
The review of literature plays a vital role in providing an insight into the research
problem. It helps a researcher to identify the research gap and develop a
meaningful hypothesis. It gives the idea of how the subject of the study could be
analysed . The researcher reviewed the available literature on agricultural credit by
the public sector commercial banks and farmer’s attitude towards such credits.
Various studies have already been made in respect of agricultural credit. The
findings of the studies in this regard are critically reviewed by the researcher and
they are furnished in this section. A. Muthulakshmi1 (2002) in her study on “Brand
Preference of Cosmetic Products - A Study with Reference to Kovilpatti Town,” has
analyzed consumer awareness of cosmetic Product. Marianne Elizabeth Lien2
(2002) in her study entitled, “Marketing and Modernity” said that multilevel
marketing has broken all the chains of conventional in marketing and especially
Amway products undoubtedly have struck themselves to a good position.
I have used Amway toothpaste bought from my Amway cons friend. I like this
paste Very much. I have toothache where had gone forever by using this Amway
company has Launched many product. Its product range has beauty products such
as lipsticks, face washes, Concealers and other more products. It also has
shampoos, conditioners hair oils, detergents and soaps etc. It price is somewhat
higher than other products but its quality is much better. It products are all very
good and give excellent results. I have also used its lipsticks which are Very soft
and my lips become soft and supple by using it regularly. Its nail paints are very
good Colour range is very good also. Indian is a poor country and a colgate of
39.99 is more accepted than a Glister (Amway toothpaste) of 99.00. No matter
how better Glister is. {yes, my mom and me both used Glister and got instant cure
from some tooth problems} But how many in India can afford 99.00 for teeth
where 50% can’t afford a squire meal a day? More over – MLM is something that’s
doing business with friends and Indians are reluctant to do so, because we believe
money brings bitterness in friendship (B) costly products – which targets middle
class needs MLM (BMW, Merc, Porsche doesn’t need MLM) and Indians are still
reluctant to go for costly products even if the product is good. Same reason you
see Big Bazaar is always crowded but shoppers stops and centrals and Globes and
other malls lack customer s until there is a sale. Amway may work in US. $2 for a
toothpaste is OK and worth giving it a try in US. Amway would have out marketed
Hindustan Unilever, P&G, Glaxosmithkline and others if they had a competitive
price. They somehow knew that since they can’t bring the price down – so let’s
bring people up to a level where some of them get addicted with Amway. But
Amway is not narcotic – so how to addict people? Solution is making some
AMWAY FANATICS. Like jihadis do, like communists do. But I am sure, even if
today Amway brings the price down and brings their products to retail market –
many established brands would get a run for their money. Amway claims financial
independence: They claim that in due course of time you Will be making so much
money that you can afford to leave job and work from home. Now To do that you
really need to have pretty solid savings and guaranteed cash inflow and I am Sure
to reach that level will take a long time Amway. Now if you devote the same time
to your job and give the same dedication I am sure you will do wonders
professionally and will do better financially. In my own case I spent in excess of Rs
10,000 which included the cost of the starter kit (around Rs 7000 in 2006) and cost
of the phone calls and attending meetings, I got negligible returns. If you actually
do income vs. expenses analysis you find out that you are not actually making
much money, by expenses I mean the cost of making phone calls, attending
meetings/seminars and above all your time. Literature overview
Jay Van Andel and Richard DeVos (2009) two friends launched the business
module only on the basis of the friendship and trust they shared with each other.
The company started with a product L.O.C (Liquid Organic Cleaner) and turned out
to be one of American Largest Private company ranking number 29 on Forbes Lists.
This owes a commendable achievement in the private sector by a company which
not only deals with consumer products now but also with other sectors like
insurance, health care and beauty. The company’s success is clearly visible with
19000 employees working over the year thereby making an annual sale of $9.5
billion. Their sale value thereby allows Amway to be in one of the largest
companies in the private sector.
Writankar Mukherjee (2016)2,
*
CHAPTER - 3
RESEARCH METHODOLOGY
Research methodology is a systematic way, which consists of series of action steps,
necessary to effectively carry out research and the desired sequencing to these
steps. The marketing research is a process of involves a no. of inter-related
activities, which overlap and do rigidly follow a particular sequence. It consists of
the following steps :
Books
Magazines
Editorials
Internet
Nottingham e-library
Amway Business Planner
Amway Opportunity Brochure etc.
RESEARCH DESIGN
Research design specifies the methods and procedures for conducting a particular
study. A research design is the arrangement of conditions for collection and
analysis of the data in a manner that aims to combine relevance to the research
purpose with economy in procedure. Research design is broadly classified into
three types as
Sample size
Sample method
Survey period
SAMPLE SIZE
The substantial portions of the target customer that are sampled to achieve
reliable result are 100. The cost and time limitation compelled me to select 100
respondents as sample size.
SAMPLING METHOD
In this marketing research project, I am using Random sampling method
SAMPLE DESIGN
As complete enumeration of all the members of the population (Member and
Non-member) I have understate sampling technique.
SAMPLE SIZE
50 members 50 Non-members
SAMPLE TYPE
AREA SAMPLING
SAMPLE AREA
Moti Nagar
Ghaziabad
SAMPLE SELECTION
Simple random selection sampling
SAMPLE TECHNIQUE
I have taken the Statistical tool of percentage method to analysis and
interpretation of the collected data.
RANDOM SAMPLING :
A random sample gives every unit of the population a known and non-zero
probability of being selected. Since random sampling implies equal probability to
every unit in the population, it is necessary that the selection of the sample must
be free from human judgment. There is some confusion between the two terms
‘random sampling’ and ‘unrestricted’ random sampling. In the latter case, each
unit in the population has an equal chance of being selected in the sample. Such a
sample is drawn‘with replacement’, which means that the unit selected at each
draw is replaced into the population before another draw is made from it, ‘As
such, a unit can be included more than once in the sample. Most statically theory
relates to ‘unrestricted random sampling.
Research
Design
Sample
Design
Data
Collection
Data
Analysis
Report of
the findings
CHAPTER – 4
ANALYSIS OF DATA
The study was conducted by the means of personal interview with respondents
and the information given by they were directly recorded on questionnaire. For
the purpose of analyzing the data it is necessary to collect the vital information.
There are two types of data, this are-
• Primary Data
• Secondary data
Primary Data :-
Secondary Data :-
Secondary data means data that are already available i.e. they refer the data
which have already been collected and analyzed by someone else. When the
researcher utilizes secondary data, then he has to look into various sources from
where he can obtain them, in this case he is certainly not confronted with the
problems
that are usually associated with the collection of original data. Secondary data may
either be published data or unpublished data. Usually published data are available
in:
g) Public records and statistics, historical document and other source of published
information. The source of unpublished data are many; they may be found in
diaries, letters, unpublished biographies and autobiographies and also may be
available with scholars and researcher,
workers, trade associations, labor because and other public private individuals and
organization.
COLLECTION TECHNIQUE:
Data processing and analysis Processing & Analysis the collected data:-
once the field survey is over and questionnaire have been received, the next task is
to aggregate the data in a meaningful manner.
A number of tables are prepare to bring out the main characteristics of the data.
The researcher should have a well thought out framework for processing and
analyzing data, and this should be done prior to the collection. it includes the
following activities—
(i) Editing: the first task in data processing is the editing. Editing is the process of
examining errors and omissions in the collected data and making necessary
corrections in the same.
(ii) Coding: coding is the procedure of classifying the answer to a question into
meaningful categories. Coding is necessary to carry out the subsequent operations
of tabulating and analyzing data. If coding is not done, it will not be possible to
reduce a large number of heterogeneous responses into meaningful categories
with the result that the analysis of data would be weak and ineffective, and
without proper focus. (iii)Tabulation: tabulation comprises sorting of the data into
different categories and counting the number of cases that belong to each
category. The simplest way to tabulate is to count the number of responses to one
question. This is also called universal tabulation. The analysis based on just one
variable is obviously meager. Where two or more variables are involved in
tabulation, it is called bivariate or multivariate tabulation.
(iv) Analysis: After the all three above steps, the most important step is analysis of
the data. Under this step, they can use the various tools of the analysis such as
Central Tendency, Dispersion, Correlation co-efficient, Regression Analysis, and
Test of Hypothesis etc.
Table 1.
Business Man 12 10 02
Service Man 10 08 02
Student 15 12 03
Housewife 13 05 08
Total 50 35 15
YES
30%
N0
70%
INTERPRETATION:
From the above table and graph it shows awareness about Amway 70 % among
the population.
TABLE 2.
BASIC FACTOR INFLUENCES TO PEOPLE
FACTORS RESPONDENT PERCENTAGE (%)
INCOME 30 60
PRODUCT 0 0
QUALITY 10 20
AS A PROFESSION 0 0
PROFIT MARGIN 10 20
TOTAL 50 100
0 10 20 30 40 50 60 70
No.of respondent
INTERPRETATION:
The above data and graph show the most of individuals join any MLM
only for the income 60% and rest for quality and for profit margin i.e.,
FULL TIME 10 20
PART TIME 20 40
INACTIVE 20 40
TOTAL 50 100
ACTIVE MEMBER
20
40
40
INTERPRETATION:
The above data and pie chart show that only total of respondent only 20%
people do it as full time and rest 40% part time and 40% become inactive.
TABLE 4. NATURAL MARKET
Friends 14 28
Relatives 08 16
Neighbour 10 20
Social Affiliate 15 30
Other 03 06
Total 50 100
NATURAL MARKET
6
Friends
28
Relatives
30
Neighbour
Social Affiliate
16
Other
20
INTERPRETATION:
The above data that is so mostly members of natural market is the social affiliate
and then rest like neighbour, friends and relatives once.
TABLE 5. INTEREST IN AMWAY
1. 10 20
2. 12 25
3. 08 15
4. 20 40
TOTAL 50 100
INTEREST IN AMWAY
4 40
20
3 15
PERCENTAGE%
8
PERCENTAGE
NO. OF RESPONDENT
2 25
12
1 20
10
NO. OF RESPONDENT
CHAPTER -5
CONCLUSION
The product of the Amway is very costly and due to this the middle class
families do not prefer it.
The awareness level of about the Amway is about of the seventy
percentages it means it that Amway makes at position in the consumer
minds and Amway got the success in making of its position in the market.
Due to the cost of product people not preferred to use product and the
quality is also rated average it means it fail to attract the consumer by the
offering of the product
After the analysis of all the data and the table, I come on conclusion that the
members are not satisfied with the return, which he got, from it and
members become inactive or drawn.
It resulted in the slow growth rate in Amway. Once it is one a pick but now
the growth speed become reverse.
SUGGESTIONS
The price of product should be low so that all level families use the product.
The entry fee for membership should down that all I income group can
able to take membership in Amway.
There should be increase in the profit margin to the
members.
Awareness about Amway is good but they have to make more programmers
like seminars, Amway meeting and cultural program so that they are able to
make more awareness to more peoples.
LIMITATIONS
BIBLIOGRAPHY
Website
www.google.com
www.amway.com
www.wikipedia.com
www.slideshare.com
www.metachart.com
CHAPTER – 7
ANNEXURES
QUESTIONNAIRE
Nutrition
Soap
Protein powder
Beauty home
Price
Advertisement
Quality
Others
Independent
Newspaper
Internet
Magazine
Likely
Unlikely
Very Likely
Very Unlikely
5) Would you continue to buy Amway products if its price rises up to 10 percent?
Agree
Disagree
Strongly Agree
Strongly Disagree
13) What attracted you in the advertisement (please rate them from 1 to 3)?
Creativity
Idea of delivering message
Frequency of add
Logical reason