THE INDIAN INSTITUTE OF PLANNING AND MANAGEMENT

NEW DELHI

A SUMMER INTERNSHIP REPORT

ON
AMWAY CORORATION IN INDIA

TOPIC: MARKETING STRATEGIES OF AMWAY IN INDIA

SUBMITTED BY:
MANAB JYOTI BORUAH
UNIQUE ID NO: D1012FWISBE-B10169-(DEL-4-DA-3648)
BATCH: FW 10-12/ISBE-B

E Mail ID: boruah.manab@gmail.com

Contact No. 8860757056

SECTION: FF1

ACKNOWLEDGEMENT

As a result of teaching system that promotes cramming up of facts I

looked upon my research guide as a source of free flowing information
source who will just hand me down the information as I take down notes.
This way I had learnt to learn. This was fortunately not the case with me.
The knowledge gained from independent thinking is something we do not
experience in our way of education. As a result of this research and
interaction with my guide it seems that the real meaning of research is just
beginning to show.
Last but not the least I would like to take this opportunity to
acknowledge my faculty members, Ritu Jhalani (Guide) for her motivation,
teachings and guidance for making this project come to the present stage.

(Manab Jyoti Boruah)

Contents

EXECUTIVE SUMMARY

Chapter 1: Introduction

Chapter 2: Amway Profile

x How it works?
x Current Scenario

Chapter 3: Amways marketing strategies

x Sales & Marketing Plan
x Strategies in the market
x Penetration
x Segmentation

18

Chapter 4: Research Methods

32

Chapter 5: Questioner Analysis

37

Chapter 6: Conclusion & Recommendation

46

Bibliography

51

EXECUTIVE SUMMARY

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 Indias 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 companys 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.
3

INTRODUCTION

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
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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
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 Amways 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
5

sector, so as to give an idea as to how the system is being utilized by

companies like Amway.
MLM -a definition
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 markets 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
companys 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
6

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 Amways
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 suggested recommendations can be considered by
the corporation for further expansion and increasing market share.

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.
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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
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of products. Amways 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 Multibillion 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
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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 5 th,
1998. In the brief period since launch, it has emerged as the Countrys
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)

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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 Indias 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.

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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
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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

14

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
15

and picture added to the Distributor Hall of Fame in Amway's World

Headquarters.
AMWAYS 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.

16

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.
17

AMWAYS 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,
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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.
Amways 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.
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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 Amways 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 Amways 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.
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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.
Amways 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.

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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 tamperproof 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.
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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 cost-per-use
basis, these products are priced very competitively from their local
brands. The consumer is the ultimate judge of price and value, and
Amways sales success over the years speaks volumes about its product
value and customer satisfaction.Amways 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
23

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 Amway India launched with 5 offices (New Delhi,
Mumbai, Bangalore, Chennai, Calcutta) and a Central 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:

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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

25

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.

26

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

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

and

B. Amways 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. Amways distributors are now
spread all over India even across the rural areas.

Demographic:

28

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.

29

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:
Amways 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.
Amways 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.
Amways products being good in quality are also very much
preferred by the upper class segment who can easily afford the
pricing but they dont want to get involved with the business
opportunity. They are mostly associated with Amway as their
customer.

30

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

31

RESEARCH METHODOLOGY

OBJECTIVES

Primary Objective: The main objective is to carry out an in-depth study

of Amways overall marketing strategies in India. In order to achieve this
primary objective, I have focused my research in three main segments:

Where the Company stands at present.

Where do they plan to go with their objectives for the Indian Market?
How do they plan to achieve the set targets?

This report is appropriate for understanding the various concepts used in

international marketing. It is a complete information guide with relevant
information taken from reliable sources, questionnaire and interviews
with people who have achieved success through this organisation

32

methodology

The Methodology adopted was combination of:

Primary Data Collection:

Direct Interview with people who are associated with the Amway
corporation in India
Questionnaire filled by a selected group of people.

Secondary Data Collection: The data has also been

from:

Books
Magazines
Editorials
Internet
Nottingham e-Library
Amway Business Planner
Amway Opportunity Brochure etc.

Sampling Plan: I have tried to gather data on the basis of both the
interview and the questionnaire.
Survey - 1 had been conducted by asking the people to fill in the
questionnaire and express their views about the company.
Survey 2 had been conducted in order to get some valuable data
which has been collected through direct, telephone and online
33

collected

interviews with people associated with Amway to get a better

insight of Amways operations in India.

Survey -1
Sample Design: Questionnaire method
Sample size: 100 respondents
Sample Unit: IBOs, Customers and others

Segment

Respondents

Women

55

Men

36

*Others

Total

100

*Others include elderly people and children.

Survey -2
Sample Design Interview method
Sample size 7
Sample Unit IBOs and people working in Amway India Corp.

Segment

Respondents

IBOs

6
Amway India employee

My project involves the study of Amways marketing strategies in India.

I had planned my work on the project along the following lines:
34

Data Collection
Data Analysis
Data Compilation
The preparation and presentation of the report.

My first step in data collection involved meeting my guide for having a

general understanding of what my product should be like and then some
specific understanding of the company.

After deciding upon the broad frame work of my project, I proceeded on

a search for secondary sources of data. After analysing the data I
prepared, I proceeded towards the primary sources in which direct, phone
and online interview were conducted so as to substantiate my research
with more facts.
.
.

35

LIMITATIONS OF THE PROJECT

The company or the IBOs were hesitant to give time and good
information to students, so information required for the primary
research which is a basic need of this project was not easily available
in required quality and quantity.

I have conducted this type of an elaborate and analytical project for

the first time so information might not be utilized adequately.

Time constraint.

36

QUESTIONNAIRE ANALYSIS

Q1. Are you an:

Independent Business Owner
Customer of Amway products
None of the above.

60%

55%

50%
40%
30%

25%
20%

20%
10%
0%
Independent Business
Owner

Customer of Amway
products

37

None of the above.

Q2. What is your income level: (per Month)

Below Rs.10, 000
Rs 10,000- Rs 20,000
Rs 20,000- Rs 30,000
Rs 30,000- Rs 40,000
Rs 40,000- Rs 50,000
Rs 50,000 and above.

35%

30%

30%

25%

25%
18%

20%
15%
10%

10%

12%

5%

5%
0%
Below
Rs.10, 000

10,00020,000

20,00030,000

38

30,00040,000

40,00050,000

50,000 and
above

Q.3 How do you feel are the Amway products priced:

Too expensive
Expensive
Economical
Cheap
Poor

a)
40%

35%

35%

30%

30%
25%

20%

20%
15%
10%

7%
3%

5%
0%
Too
Expensive

Expensive

Economical

Cheap

Poor

b)

49%
51%

39

Yes
No

Q.4 Do you think they are fairly priced as compared to other similar
products available in the retail stores? Yes / No.

45%

40%

40%

35%

35%
30%
25%
20%

15%

15%
10%
5%

0%

0%

Bad

Poor

0%
Excellent

Good

Average

Q.5 ) Are these products easily accessible? Yes/No

40%
Yes
No
60%

40

Q.6 What is it that attracts you more towards Amway? Give

reasons to support your answer
Retailing
Sponsoring

50%

50%

Retailing

Sponsoring

41

Q.7 How did you learn about Amway?

Independent Business owner
Meetings/Events
Newspaper
Peers
Internet
Others, Please specify________

60%

55%

50%
40%
30%
20%
5%

10%

5%

10%

10%
0%

0%
Independent
Business
owner

Meetings/
Events

Newspape
r

42

Peers

Internet

Others

Q.8 How do you rate the presence of Amway in the market?

Very strong
Strong
Moderate
Weak

60%
50%
50%
40%
30%
20%

15%

13%

12%

10%

10%
0%
Very strong

Strong

Moderate

43

Weak

Low

Q.9 Rate the appeal of Amways advertisement?

Very much
Moderate
Poor

60%
50%
50%
40%
30%

25%

25%

20%
10%
0%
Very much

Moderate

44

Not so much

Q. 10 Do you think the products of Amway are environmentfriendly?

Yes
No
Maybe

70%

60%

60%
50%
35%

40%
30%
15%

20%
10%
0%
Yes

No

45

May be

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 Dont
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-front

cash

from

this
46

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-to-door 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 downthe-line commissions they are given the impression that there is a
limitless market for Amway products.

47

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.

48

RECOMMENDATIONS

After conducting an in-depth analysis of Amways 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.

49

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.

50

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
www.amwayindia.com
www.amway.com
www.onlinemlm.com

51

NAME:MANAB JYOTI BORUAH

EMAIL ID:boruah.manab@gmail.
CONTACT NO : 8860757056

52