Synopsis

ON
“ A study on AmWay’s Indian marketing network”

Submitted in Partial Fulfillment of

Master of Business Administration
Programme : 2009 -11
of
Uttar Pradesh Technical University, Lucknow
SUBMITTED BY

NAME- SWATI SHARMA

MBA – 4th SEMESTER
ROLL NO. – 0945070049

Department of Management Science

Shri Ram Murti Smarak Women’s College of Engineering & Technology, Bareilly.

INTRODUCTION
The case 'Amway Indian Network Marketing Experience' examines in detail the experiences of

the leading global direct marketing major Amway in India. In the initial stages, Amway had to

face a host of problems, which are explored in detail. The case then studies the remedial

measures taken by the company to counter these problems.

Amway's Indian Network Marketing Experience

In the late 1990s, the global direct selling giant Amway had to contend with increasing doubts

regarding its survival in India. The company that had become synonymous with network

marketing or multi-level marketing (MLM)1 the worldover was beset with problem. the Indians.

Though the company managed to rope in a substantial number of distributors, the attrition rate

was at an alarming high of 60-65%.

Most of the products that the distributors bought, they consumed themselves. Estimates put the

percentage of self-consumption at almost 50-60% of the total volume. (There were rumors that

some distributors enrolled just to take advantage of the distributor's margin of 18-30%).

In the initial stages, when trials were the only criterion, this worked well. However, this self-

consumption did not translate into repeat purchases. This was because the percentage of 'active'

distributors at any given point of time remained at a low level of 35-40%.

Amway also had to contend with customers complaining of poor customer service on the

part of the company. Analysts commented that as long as the volume of products that moved

through the network was high, network markets such as Amway were satisfied.

Even though customers complained of the lack of services, the company deemed it more

beneficial to go for higher sales force motivation programs rather than undertake customer
1
service initiatives. This was largely due to the fact that the company was almost never involved

directly with the end-consumers and the sales volumes were the end of all discussions.

Pradesh state government enacted a ban on Amway media advertisements. Amway challenged

the ban and in July 2009 the AP High Court refused a petition the ban should be enforced. As of

June, 2009 the original 2006 CID case was still pending at the Chief Metropolitan Magistrate

Court in Hyderabad.

PROBLEM IDENTIFICATION
  As Amway’s products have high cost with standard quality so it is not

affordable for middle and low class customers to buy the products of

Amway

 To store of Amway’s not found everywhere

 Having less advertising

OBJECTIVES
1)-To study the Amway’s Indian Marketing network.

2)-To analyze the Amway’s Indian marketing strategies.

DATA COLLECTION

Primary Data:

 Interview
 Questionnaire.

Secondary Data:

 Internet
 Books:
 Newman “ Consumer behavior” ( 7th edition)
 C.R. Kothari “ Research Methodology” ( 9th edition

REAEARCH TOOLS APPLIED

 Questionnaire
 Interview

RATIONALE OF THE STUDY

Here we do detailed study of Amway’s Indian marketing network and analyze the marketing
network of Amway in India.