PROJECT REPORT ON INDUSTRIAL EXPOSURE

AMWAY GLOBAL

A project report submitted in the partial fulfillment of the requirement

for the award of the degree Bachelor of Business Administration

2008-2011

Submitted By: Under the guidance of:

GUNJIT KHILWANI MS NEHA RALLI

BHARTI VIDYAPEETH UNIVERSITY,

SCHOOL OF DISTANCE EDUCATION,

ACADEMIC STUDY CENTRE: BVIMR, NEW DELHI

STUDENT UNDERTAKING

I GUNJIT KHILWANI have completed the Industrial Exposure in AMWAY

under the guidance of Ms. NEHA RALLI in the partial fulfillment of the

requirement for the award of BBA of BVU, SDE, Academic Study Center

BVIMR, New Delhi.   This is an original piece of work & I have neither

copied and nor submitted it earlier elsewhere.

 

GUNJIT KHILWANI

PREFACE

Project report is a very important part of a BBA curriculum.

It provides an optimistic iconography for ‘Future’ existence through which

students are able to see the real industrial environment which gives an

opportunity to relate theory with practice.

The main objective of making project report is to develop skill in student by

supplement to the theoretical study of business management in general and

gain real life knowledge about the industrial environment and business

practices. The BBA programme provides student with a fundamental

knowledge of business and organizational functions and activities, as well as

an exposure to strategic thinking of management.

In todays globalize world, where cutthroat competition is prevailing in the

market, theoretical knowledge is not sufficient. Beside this one need to have

practical knowledge, which would help an individual in his/her carrier

activities and it is true that “Experience is best teacher”.

ACKNOWLEDGEMENT

“NO GOOD WORK FLOWS WITHOUT THE HELP FROM FACULTY“NO GOOD WORK FLOWS WITHOUT THE HELP FROM FACULTY

MEMBERS, INDUSTRY PROFESSIONALS, COLLEGUES, ORGANISATIONMEMBERS, INDUSTRY PROFESSIONALS, COLLEGUES, ORGANISATION

AND FRIENDS.”AND FRIENDS.”

At the completion of my project, I present a detailed analysis on At the completion of my project, I present a detailed analysis on “AMWAY GLOBAL”.“AMWAY GLOBAL”.

It was an enriching experience to make this Project Report. Through the means of thisIt was an enriching experience to make this Project Report. Through the means of this

work I extend my sincere thanks to those who made it such a pleasant experience.work I extend my sincere thanks to those who made it such a pleasant experience.

I would also like to extend my sincere thanks to I would also like to extend my sincere thanks to Ms. NEHA RALLIMs. NEHA RALLI (Project guide)(Project guide), for, for

her guidance and direction through valuable suggestions and her enthusiasticher guidance and direction through valuable suggestions and her enthusiastic

encouragement throughout the entire period of my work and preparation of this project.encouragement throughout the entire period of my work and preparation of this project.

Finally, I would like to express gratitude to my Friends and Family who have directly orFinally, I would like to express gratitude to my Friends and Family who have directly or

indirectly helped me. Their patience and support has been instrumental in accomplishingindirectly helped me. Their patience and support has been instrumental in accomplishing

this task.this task.

CERTIFICATE

This is to certify that the project entitled “AMWAY GLOBAL” submitted by GUNJIT

KHILWANI of BBA IV-A has been done under my guidance and supervision in partial

fulfillment of the requirement for the award of Bachelor of Business Administration

(BBA) Degree.

The work and analysis mentioned in this project report have been undertaken by the

candidate herself and necessary references have been recognized and acknowledged in

the text of the report.

MS. NEHA RALLI

(PROJECT GUIDE)

CONTENTS

Page No

Executive summary

Scope & Objective

Chapter-1 Introduction

1.1 History

1.2 Primary objective

1.3 Social responsibility

1.4 Awards and recognization

Chapter-2 Products

2.1 Products of Amway

2.2 Selling strategies of Amway

Direct selling

Chapter-3 Marketing strategies

3.1 Product related strategies

3.2 Promotion strategies

3.3 Distribution strategies

3.4 Mega marketing of Amway

3.5 After sales services of Amway

3.6 Marketing mix

3.7 Concept of direct marketing of Amway

Chapter-4 SWOT analysis

Chapter-5 conclusion

Findings and recommendation

Bibliography

1

2

3

CHAPTER-1

INTRODUCTION

1.1 The History of Amway

What does the word Amway mean? Amway is an abbreviation for "American Way"

and was coined in 1959 by company founders, Jay Van Andel and Richard DeVos.

Short, unique and easy to remember, Amway has been registered as a corporate name

and trademark ever since.

Jay Van Andel and Richard DeVos, founders of Amway

In the following decades, Amway Corporation successfully established itself as a

leading multilevel marketing business, built on strong values and founding principles

that continue to sustain our company today. The business is built on the simple

integrity of helping people lead better lives. We have long had a tradition of

opportunity and success.

Today, Amway is a multibillion-dollar international business representing freedom and

opportunity to millions of people in more than 80 countries and territories around the

world. We offer over 3 million Business Owners the inspiration to grow those

businesses, and we work hard to provide new and better ways for them to achieve their

life goals.

1950s

A Solid Foundation

Jay Van Andel and Rich DeVos began their business in the 1950s using direct selling

to market NUTRILITE Dietary Supplements. What they discovered more than 40

years ago still remains true today that people and relationships are at the core of any

successful business.

Always searching for new opportunities, in 1959 Rich, Jay and their associates looked

for new product ideas to expand their business. They realized they wanted products

that everyone needs, all of the time products whose features and benefits anyone

could understand and communicate easily.

"The products we want must be ones that just about anyone is familiar with and can sell.

The examples that come to mind are laundry and cleaning products." Jay Van Andel

The result of their search was Amway's first product, which today is called L.O.C.

Multi-Purpose Cleaner. It was an instant sales success story, opening up a whole new

world of opportunity.

With a strong belief in the power of initiative and free enterprise, Jay Van Andel and

Rich DeVos created the Amway Sales and Marketing Plan. They knew that anyone

who was willing to work hard could succeed using the same business methods. This

simple idea quickly gained popularity throughout the US, and then Canada, as more

and more people discovered what a real opportunity the Amway business offered.

1960s

The Early Years

As Amway's annual sales rapidly expanded, exceeding US$500,000 for the first time, the

company soon outgrew its basement office in Jay Van Andel's home. During this time,

Amway moved to a larger facility and began developing new products, including SA8™

Laundry Detergent, which was launched in 1961.

These Home Care products became big sellers for distributors and led to incredible

growth for the company. Within a few short years, the company had more than 700

employees, over 200 exclusive products and more than 100,000 Distributors.

Rich and Jay knew that the best way to interest people in the Amway business was to

bring the opportunity to them. So, in 1963, the famous "Showcase Bus" began touring

many cities throughout the US. Stocked with products and literature, it helped

distributors introduce Amway's growing product line and unique opportunities to

people all over the country.

In the 1960s, the achievement and enterprise of successful Distributors was recognized

with the introduction of Direct Distributor status. It became a model for re- ward and

recognition programs that continue to be developed in Amway markets around the

world.

In the midst of all this success and growth, however, tragedy struck as Amway's

aerosol factory was completely destroyed by fire in 1969.

1970s

A Decade of Growth

After the fire, Jay Van Andel vowed to reconstruct the aerosol factory and to salvage

the business. The factory was rebuilt and sales reached an estimated retail figure of

US$100 million. The Amway product line was also greatly expanded with

NUTRILITE™ Dietary Supplements becoming a best-selling line, and the

PERSONAL SHOPPERS™ catalogs continued this growth and diversification.

By the mid '70s Amway trucks travelled more than 3.25 million miles (approx 5.23

million kilometres) shipping products to millions of Distributors. At the same time, the

company expanded overseas, opening markets in eight countries on three continents.

Amway launched its second international affiliate half a world away in Australia,

swiftly followed by the UK, Hong Kong and Malaysia.

Amway Japan Limited (AJL), founded in Tokyo in 1979, quickly became one of

Amway's largest markets in terms of product sales. As challenging as it was to enter

new markets―faced

with everything from different languages and laws to difficult distribution

channels―Amway continued to grow globally.

At home, in Ada, Michigan, the Amway World Headquarters complex grew rapidly to

keep up with the exploding business. Amway's manufacturing facility grew to more

than a mile long, and really became a self-contained city, with its own power generator,

water treatment plant, recycling facility, shuttle bus service and fire department.

1980s

The Billion-Dollar Decade

Estimated annual retail sales exceeded $1 billion for the first time. Pressed by

the demands of increased growth, Amway expanded its US headquarters in

Ada, Michigan and built a new cosmetic plant where A R TIS T R Y p roducts

are de- veloped and manufactured. It also pioneered an entirely new product

category, wa- ter treatment systems, with very successful results. In fact,

Amway's water treat- ment product line, under the eS p ring brand name,

continues to hold a top position in the marketplace today.In the meantime,

the Distributor incentive program was enhanced to provide more rewards to

those Distributors who put greater efforts into growing their Amway

businesses.

Always concerned with the environment, Amway was recognized as a corporate

environmental leader and promoter of environmental education when it won the

prestigious United Nations Environmental Programme Achievement Award in

1989.

1990s

The Next Generation

Following in their fathers' footsteps, Steve Van Andel and Dick DeVos succeeded Jay

and Rich as Chairman and President of Amway. At the same time, a new generation of

leaders also began to emerge within Distributor families, building upon and continuing

the successes of their parents.

The 1990s saw continued expansion with estimated retail sales volumes reaching

US$5 billion. In California, Nutrilite's research into the links between diet and health

was given a public face with the inauguration of the Rehnborg Center for Nutrition

and Wellness, which gained world renown and was later renamed the Nutrilite

Health Institute.

Amway's growing role in Asia led Amway Japan to sponsor the 1995 Nagano Winter

Olympic Games in Japan. Around the world, Amway's regional and country affiliates

continued to support their Distributors with the launch of e-c o mmer c e sit e s that extend

the Amway opportunity into cyberspace.

This remarkable decade culminated in the 40th anniversary of the organization in

1999.

2000s

New Horizons

In 2000, Amway prepared for a new century and a new exciting era. Almost 50 years

after Amway began, the DeVos and Van Andel families created a new structure to

meet the challenges of this new century. A parent company, Alticor, was established

with subsidiaries Amway, Quixtar and Access Business Group— the latter to

consolidate manufacturing and distribution for the enterprise. At the helm of Alticor

are Steve Van Andel (Chairman) and Doug DeVos (President), jointly holding the

Office of the Chief Executive. Today each area of the business, including Amway, has

the freedom to build on its strengths.

Amway continues to be a leading company in the multilevel marketing industry. Its

fundamental principles—freedom, family, hope and reward—hold as true today as they

did in the very beginning.

1.2 Primary objectives

Amway is a global organization which markets products in international market places.

Planning for global markets is a much more complex process than for domestic

markets. It presents many more risks than operating in a domestic market where goods

are sold in only one local area. Global marketing involves recognizing that people

from all over the world have different needs, i.e. values; customs; languages; rules and

currencies.

Though it is said that consumer needs around the world are converging, there are

commonly accepted needs and wants that go beyond national barriers. The marketing

mix consists of a complex set of variables which an organization combines together in

order to ensure that both global and local corporate objectives are achieved.

Standardizing elements of the marketing mix is key to operating successfully in

the global marketplace. As a result, common needs and wants are identified

across countries. At the same time, parts of the marketing mix requiring adaptation are

identified so that it can be developed to cater for local differences. This

requires a thorough understanding of every market in which Amway operates.

Many advantages arise from competing in a global marketplace, including:

Economies of scale - over a larger output, costs per unit are decreased to provide the

supplier with a c o m petitive advantag e . Amway is able to spread its research,

development, technology and distribution costs so that it can maximize its production

efficiency.

The development of new business opportunities - in numerous countries, markets are

growing faster than in Europe and America. Overseas markets offer the opportunity

to compete in different marketplaces and extend the life-cycle of products.

To meet the tastes of consumers from different nations - over recent years there has

been a convergence of tastes resulting in a more global market- place.

Founded in ADA, Michigan in 1959, Amway has become one of the largest 'D i rect

Sellin g ' companies in the world with nearly three million Independent Distributors.

Direct selling involves dealing with customers 'Face-to-face' so that personal attention

can be given to each of their requirements. Direct selling differs from traditional

retailing as it often involves selling to consumers on a one-to-one basis, usually in the

comfort of their own homes. The industry has grown rapidly over recent years and is

currently estimated to be worth £40 billion a year world wide. This case study examines

this growth which has helped Amway to become one of the industry's market-leaders

influenced by changing lifestyles, demographics and economic recession.

Direct selling for Amway is undertaken by its own independent distributors. Their

own income is based on the goods they sell, bonuses paid by Amway and the volume

of sales generated through their own distributor network. These distributors sell to

people they know or meet. Amway distributors operate as their own independent

businesses.

Amway is a long-standing member of the Direct Selling Association (DSA) in the UK

and Republic of Ireland. The DSA regulates the industry by providing a Code of

Conduct endorsed by the Office of Fair Trading (OFT).

Amway has developed into a global corporation manufacturing over 450 products and

employing more than 12,000 people in over 80 countries and territories around the

world. To supply a global base of customers, Amway manufactures products ranging

from household cleaners to cosmetics, food supplements to house wares. It also

markets products on behalf of other leading manufacturers, such as Kenwood, Aiwa and

Philips.

1.3 Social responsibilities performed by AMWAY

One by One Campaign for Children

One By One – is Amway’s Global Campaign for Children. In each of the

80 countries and territories that Amway is present it takes up and supports

these Children of Hope.

In India, this work is carried out under the banner of Amway Opportunity Foundation

(AOF) a registered non profit organization. All Amway employees and distributors are

volunteers of AOF.

Amway Opportunity Foundation (AOF)

A Corporate Social Responsibility Initiative of India’s Leading Direct Selling FMCG

Company Former President, Dr Abdul Kalam, has recently been quoted saying that

instead of addressing (them as) ‘street children’, it would be better to refer to them as

‘children of hope’. If we stretch this definition a bit, that is what we are all about –

reaching out to all Children of Hope in the best manner at our disposal:

One By One – is Amway’s Global Campaign for Children. In each of the 80

countries and territories that Amway is present it takes up and supports these

Children of Hope.

In India, this work is carried out under the banner of Amway Opportunity Foundation

(AOF) a registered non profit organization. All Amway employees and distributors are

volunteers of AOF.

And why work for children?

Half of the world’s poor are children. Every year, 10 million children do not live to see

their fifth birthday. More than 115 million children don’t have access to the most basic

education.

With presence in most of the countries across the globe, Amway finds itself in a

position to focuses its philanthropic efforts so as to maximize a positive and

sustainable impact on society.

The program pulls together all of our resources – Business Owners, employees,

affiliates and customers – to make this happen.

Each of Amway’s markets is free to decide in which sphere it would like to concentrate

its resources. But in essence, One by One program is designed to build local

partnerships, addressing issues specific to children in their community – Live, Achieve,

Learn, and Play.

As of December 31, 2006, we have provided hope and opportunity to 5 million

children. Donated more than 600,000 volunteer hours to children’s programs.

Contributed more than $39 million to children’s causes.

In each country, success is measured by impact – whether it is the 250,000 children

in West Michigan whose lives have been changed through the campaign, the 85,000

blind children who received Braille textbooks in India, the 1,135 children who

received cleft palate surgery in Thailand, the 170,000 children in China who were

given the opportunity to attend school, or the 90,000 boys and girls in developing

countries who received vaccines that are giving them a fighting chance.

National Project for the Blind

In India, this work is carried out under the banner Amway Opportunity Foundation

(AOF).Under its National Project for the Blind, AOF has: Ensured that around 85,000

visually challenged school-going children have had access to Braille textbooks. This

project has covered the following states: Rajasthan, Delhi, Maharashtra, Haryana, Uttar

Pradesh, Punjab, Bihar, Gujarat, Tamil Nadu, Andhra Pradesh, Karnataka and Madhya

Pradesh. This work had been carried out in partnership with the Delhi-based All India

Confederation of the Blind (AICB) and the Mumbai-based National Association for the

Blind (NAB).

· Set up computer centers for visually challenged at

· All India Confederation of the Blind – New Delhi

Antarjyoti Balika Vidyalaya – Patna, Bihar

Ramakrishna Mission Blind Boy’s Academy – Kolkata, West Bengal

Rajasthan Netraheen Kendra Sangh – Jaipur, Rajasthan

National Association of Blind – Trivandrum, Kerala

Donated Audio textbooks for Bangalore University and extended support to the

Karnataka Welfare Association for the Blind (KWAB) in conducting a cultural

event in Bangalore in 2001

Presented a 20-volume Braille set of the Webster’s Dictionary in English, to the Delhi

Blind School and donated a Brillion machine to the Indian Blind School at Madurai.

Supported Dr. Shroff's Charity Eye Hospital in conducting communications

workshops for the blind in 2002, and a Car rally for blind children at Surat.

Distributed 1000 Braille kits for blind children in Kerala, and enabled the state- level

chess tournament for the blind, in Tamil Nadu.

Organized cataract operation camp at Surat, and free eye camps at Erode,

Balasore, Delhi and Siliguri - over 25,000 persons had free eye check ups and

around 500 free operations were carried out.

For this work towards the visually challenged, AOF has received a citation and

award from the World Blind Union (WBU), in Dec 03. AOF is the only Indian

NGO to be so recognized by WBU.

Project Sunrise

The objective is to identify one orphanage/institution at each location where Amway

has a modestly-large office (52 cities). On-going assistance to be provided in education,

healthcare and vocational training under the following heads:

Health care

Education and vocational training

Safe drinking water

Children’s Day and AOF Day celebration with Amway staff & Amway

Business Owners

Donation of clothes, books etc. on voluntary basis

Head Office

Amway Opportunity Foundation

9th Floor, Express Trade Towers 1,

Plot 15-16, Sector 16A, Noida, NCR Delhi 201301

Tel.: + 91-120-309 6601 Fax: 91-120-309 6555

Contact

Person: Mr.

Raj Narain

Regional Office - North

Amway Opportunity Foundation

5, DDA Local Shopping Centre,

Okhla Commercial Complex, Phase II,

New Delhi 110020

Tel.: +91-11-422 95 900

Fax: +91-11-26 38 81 41

Contact Person: Mr. Shivam Lall

Regional Office - East

Amway Opportunity Foundation,

The Legacy, First Floor, 25 A Shakespeare Sarani, Kolkata700017

Tel.: 91-33-30215666, 30215500

Fax: 91-33-30215557

Contact Person:

Ms. Sarbani Bhattacharya

Regional Office -West

Amway Opportunity Foundation

"Landmark", A-Wing, Ground Floor,

Andheri-Kurla Road & Suren Road,

Junction Of Western Express Highway,

Andheri East, Mumbai 400093

Tel.: 91-22-66681600

Fax: 91-22-66681555

Contact Person: Mr. Jignesh Mehta

Regional Office -South

Amway Opportunity Foundation

# 243, "Aisshwarya Ambassador" 80 Feet Road, Defence Colony, Indiranagar,

Bangalore 560038

Tel.: 91-80-30561900

Fax: 91-80-25271999

Contact Person: Mr. S. Viswanath

1.4 Awards And Reorganization

Presented the Millennium Outstanding Service Award 2000, by

the All India Confederation for the Blind (AICB), in recognition for

work carried out for the visually challenged.

The Indian Red Cross Society, Orissa awarded AOF a memento & certificate

for conducting a mega-Blood Donation camp of 816 units on 4th May,

2003.

The Surat Raktdaan Kendra felicitated Amway India at their annual function on

5th Oct, 2003, for the largest number of donors at a Blood Donation Camp

(BDC) held by any financial and commercial institution and industry. The

Mayor of

Surat Snehlata Chowan - presented a trophy and a certificate of appreciation.

Amway also received the Hajee Sulaiman Omar Memorial Ever Rolling Shield,

by the Madurai Medical College. Amway was the ONLY corporate entity to

conduct a BDC on such a scale - rest of the camps are held by educational

institutions.

Presented an award by the World Blind Union (WBU), for sterling contribution

to improve and elevate the quality of life of visually impaired children', at a

function in Delhi on Dec 2nd 2004. The award included a citation and a large-

sized statue of Saraswati, the Goddess of Knowledge, was presented by the Lt

Governor of Delhi, Shri Vijai Kapoor. WBU is an apex body for the visually

impaired that enjoys consultative status with the United Nations.

The Central Red Cross Bank, Cuttack awarded Amway Opportunity Foundation

with a trophy and Certificate for contributing the highest num- ber 400 units to

their Blood Bank.

CHAPTER 2

PRODUCTS

2.1 PRODUCTS OF AMWAY

Amway: A World of Product

Amway offers a range of exclusive, competitive brands that meet proven customer

needs around the world. From nutritional supplements to water treatment, cosmetics to

cleaning products, these brands are the solid foundation for a successful, in- dependent

retail business.

Amway And Direct Selling

Amway products are sold directly to consumers by Independent Business Owners

(IBOs) or sales representatives through one-on-one, in-person selling or via the

internet

NUTRILITE Products

NUTRILITE is the world's leading brand of vitamin,

mineral and dietary supplements (based on 2006 sales).

Nutrilite is the only global vitamin and mineral brand to

grow, harvest and process plants on their own certified

organic farms. Nutrilite has made supplement products

using natural plants and plant concentrates since

1934.The same high quality products produced by

Nutrilite are sold under the NUTRIWAY brand in

certain countries.

Nutrilite Health Institute

The Nutrilite Health Institute (NHI) is a worldwide

collaboration of scientists dedicated to helping people

achieve optimal health - through research, education, and

practical, personalized solutions.

Center for Optimal Health

The Center for Optimal Health is a world class teaching

and training facility within the Nutrilite Health Institute.

Science, nutrition, fitness, research and people are brought

together for a one-of-a-kind experience focused on optimal

health and the NUTRILITE brand.

There are products for kids also, at the early age of a

person (childhood) needs some proteins and vitamins

for a proper growth.

Spring Products

The spring Water Purifier is the first in-home system to

combine ultraviolet light technology with a patented multi-

stage carbon-block filter to provide the quality drinking

water your family deserves. The spring Water Purifier

destroys more than 99.99% of waterbourne disease-caus- ing

bacteria and effectively removes more than 140 con-

taminants. Other systems treat water spring purifies it.

spring Water Purifier Technology

spring products are the result of nearly 20 years of research and

technological breakthroughs. Beginning in 1996, a signi- ficant

investment was made in emerging water-related technologies that

led to the innovative spring system. The research was time-

consuming and costly but let to a spec- tacular end result-a product

that is like no other in the marketplace.

iCook Products

iCook Cookware is the healthiest way to cook anywhere

in the world. Trends indicate that consumers are

becoming more focused on healthy and safe foods. The

iCook Cookware brand delivers on its promise of

quality and nutrition.

iCook Technology VITALOK

cooking method - compared to traditional cooking

methods, the iCook VITALOK cooking method locks in

over a third more essential vitamins and minerals.

DURAMIC nonstick coating system - is the

toughest, longest lasting nonstick coating in the

world.

OPTITEMP base - the base improves heat

distribution and retention so foods and sauces cook

evenly. The OPTITEMP base is universally

compatible with any cook top.

Home Care Products

Everyone loves clean. Clean says you are in control of your life and your surroundings.

Amway's Home Care brands provide complete cleaning systems that fit with

everyone's needs. Their versatile, effective product systems offer the features and

benefits consumers want. No matter what your lifestyle, Amway's Home Care

products make light work of your cleaning chores with the SA8, LOC and Dish

Drops brands.

COSMETIC PRODUCTS – ARTISTRY

Since its launch in 1968, the ARTISTRY brand has become a global leader in prestige

beauty. ARTISTRY sets standards in skin science and research and is com- mitted to

the synergy of health and beauty.

ARTISTRY And Direct Selling

ARTISTRY is the only direct-sell brand classified in the prestige category, with

over US $1 billion in annual sales.

ARTISTRY Science

ARTISTRY has researched, acquired and developed the most advanced technology and

tools to evaluate skin and the performance of the brand products. ARTISTRY skin

science and research is conducted in 89 Research and Development facilities around the

world, representing over 4,500 collective years of research and development

experience.

ARTISTRY Brand Worldwide

With more than 250 unique products sold in over 50 markets around the world, the

ARTISTRY brand has attained an international following of loyal users. Superb

quality and devotion to excellence have earned the ARTISTRY brand a reputation as

one of the most admired companies in the skin care and cosmetics industry.

2.2 SELLING STRATEGIES IN AMWAY

Direct selling catching up in India

Turnover and growth trends in direct selling in India have been impressive, a pointer to

the tremendous potential this concept has More importantly, that the trend is fast

catching up here too.

Though the direct selling industry has existed for over 15 years in India, the entry of

international companies and their activities in the last five years has given greater

visibility to the industry, which is still considered to be at a nascent stage in India.

Yet during the last two years, the trends have been encouraging to the supporters of

direct selling, whose basic philosophy is to eliminate middlemen in the sale of

commodities, and instead provide employment to a large number of trained sales staff,

who sell products directly to consumers either through group meetings or by hosting tea

gatherings at their homes.

According to the Indian Direct Selling Association (IDSA), the total turnover through

direct selling in India in 1998-99 was $140 million. As against the expected growth of

anywhere between 30 and 50 per cent, it registered a growth of

38.5 per cent for a turnover of $200 million in 1999-2000. For 2000-01, the growth is

projected at 40 to 60 per cent.

Similarly, the growth in the number of sales people has been impressive during

1998-2000. From a five lakh strong direct selling force in 1998-99, it has grown to

seven lakhs in 1999- 2000, a clear 40 per cent. For 2000-01 this is projected to grow by

50 to 60 per cent.

Does this indicate that the traditional industry is losing its market share to the new

philosophy of taking goods directly from the manufacturer to the consumer? While it

may not be so large as to create panic or alarm the well-established traditional players,

it has created a place for itself in the hearts of the people. Interestingly, the IDSA says

during 1999-2000, it received as many as 27 queries from national and international

companies expressing interest in opening a direct selling business, or to start a new

division for direct selling within their existing businesses in India.

Set up in 1992, the IDSA is an association for companies that sell products directly. It

was started by two companies `Lotus Learning (exclusive distributors of World book)',

and `LB Publishers and Distributors (exclusive distributors for Time Life Books)'.

In 1995 multinational companies such as Avon, Amway and Oriflamme joined the

association. Since then, some more like the Tupperware, Herbalife, Modicare and

Sunrider have joined the association. Of its nine members, three are fully Indian

companies owned and run by Indians and three are wholly owned subsidiaries of

foreign companies. All of them manufacture in India either through their own

facilities or through contract manufacturers.

Another significant development is the emergence of direct selling as a women's

bastion. The direct selling industry in India comprises 72 per cent women, 24 per cent

couples, and four per cent men. In the U.S., this is 69.7 per cent women, 10.4 per cent

couples, and 19.9 per cent men.

In two years, Amway, has emerged as India's leading direct selling company and

registered a turnover of about Rs. 250 crores (September-August). It has ambitious

plans of reaching a target turnover of Rs. 1,000 crores, much before its originally

targeted year 2004.

The company has invested over $35 million in India of which $6 million is in the form

of direct foreign investment, and $4 million is for transferring technology, free of cost,

to contract manufacturers. It has over 32 offices and a reach of 352 locations, and by

2001-end it envisages an office in every city with a population of

10 lakhs and above. It has trained 3.60 lakh distributors last year, overwhelming

majority of whom were women.

Against this background the industry expects to grow at 50 to 100 per cent rate for the

next 3-5 years. Given the socio-economic conditions, the fact that a large proportion of

the country's women are housewives, who can spare some time to take up concepts

such as direct selling, and the growing need and realisation to supplement family

incomes, are seen as encouraging factors for its growth potential. Viewed against the

backdrop of a $80 billion global direct sales turnover already achieved last year, the

future appears bright. Direct selling industry seeks legal framework

THE multi-layer marketing (MLM) companies are worried that their legitimate

businesses are hampered because their direct selling methodology is confused with the

money rolling schemes or the prize chit fund schemes.

This misconception has arisen partly due to lack of information/awareness on the

functioning of the MLM and largely for want of a legal framework that checks the

abuse of direct selling mechanism by unscrupulous elements.

The latter factor is a major issue confronting the genuine MLM companies,

according to Mr Rathin Mathur, General Manager, Sales of the Rs 130-crore

Modicare Ltd, the Delhi-based MLM company.

Pressed against this background, the nascent MLMs coming under the Indian Direct

Selling Association (IDSA) were moving with the Government to put in place a

legislation that would prevent the misuse/abuse of the MLM system by the

unscrupulous operators who had sought to fleece the consumers through `Pyramid

schemes' in the garb of direct selling, said Mr Mathur, who was here on a marketing

binge for Modicare's direct selling of consumer goods, including the personal care

products.

Mr Mathur told newspersons that IDSA had been working with the FICCI in evolving a

legal mechanism and with the support of the FICCI, the association had already put up a

draft legislation to the Government. Now the Government was to suitably come out

with its legislation, which had to be put in place in time; otherwise, the consumers' faith

in this nascent but potential industry would be lost, he added.

The main strength and the ethics of direct selling business, said Mr Mathur, stood

quite distinctively apart from that of the `Pyramid selling systems'.

While the direct selling offers a business opportunity based on the sale of products as

well recruitment of `consultants' or agents, the rewards of `Pyramid system' emanates

from the addition of new participants and their investments not necessarily from the

sale and distribution of real products and the latter schemes need not have

commercially viable products.

The IDSA consists of 13 member-MLM companies of both Indian and MNCs and,

according to Mr Mathur, in the absence of any set code of conduct evolved for direct

selling in India, these IDSA members' business practices are largely governed by the

norms fixed by the world federation of direct selling associations formed in 1992.

Though the MLM concept in India made its way some 15 years ago, the direct selling

took off strongly from 1996 only and the business volume too steadily kept raising

from Rs 300 crore six years ago to Rs 2,000 crore now.

The potential for direct selling is huge (given the vast manpower and human resource

available in teeming unemployed/ underemployed numbers) but it is yet to be fully

exploited, as this system would understand the consumers' needs better.

Indian companies entering into direct selling have understood the needs of the

consumers and their interests better and accordingly, the members taken in as

consultant-recruits are given focussed training.

Modicare currently has about 9.5 lakh persons as `Modicare consultants propagating

its consumer goods ranging from personal care, home care, auto-care products and

these persons are backed up by 52 `Modicare Success' centres that supply the products

and serve as training centres.

In Tamil Nadu, it has product centres in Chennai, Madurai and Coimbatore and

will soon locate one in Tirunelveli.

Direct selling fits into Indian psyche

The great Indian middle class, with little inheritance, is the major ambassador of direct

selling. Though direct selling is a concept considered alien to Indian culture, the sense

of financial insecurity of Indians, especially regarding their post-retirement life, makes

them the ideal candidates to undertake this innovative method, Stephen Beddoe,

Director, Distributor Relations and Marketing, Amway India Enterprises, tells G.

Satyamurty.

In Europe, 80 per cent of the last drawn salary gets back to the employees as pen- sion

after their retirement. But the situation in India is not rosy. Most of the people are at the

mercy of their children or kith and kin. Earning something substantial for the old age is

almost in every Indian's mind. This has offered us the greatest opportunity. China is the

biggest direct selling market in the world as a similar sense of insecurity prevails. It is

way ahead of India because it took to this concept 15 years ago.

"In 1959 we introduced this method in the United States and grandsons and great

grandsons of many of the early distributors are now our proud ambassadors This has

almost become a legacy. In India, it is so fast catching up, with 4.5 lakh direct selling

agents, that we have ambitious plans of opening an office almost once in three days

and have a sales target of Rs. 3,000 crore by 2012 from the current Rs.738 crore," says

Mr.Beddoe.

After all, every entrepreneur is also a consumer and all of us would like to bargain like

hell to get the best price. We want value for the price and we are very careful with the

money. Very few splurge. Direct selling gives an opportunity to make additional

income as consumers.

Our mantra has been "self-reliance and enterprise" and this firmly fits the bill among

Indians Women, especially unemployed and hail from middle class, are our best

entrepreneurs. These women want to supplement their family income. And they have a

vision and a long-term plan. Can I help the family buy a house? Send my children to

better school and provide them better education?

Many middle class people have already been supplementing their income by becoming

insurance agents and Peerless agents as direct selling is nothing but a part- time

avocation. They want to leave something for their children and this direct selling

business itself becomes an asset for them to leave for posterity.

Of course, Mr. Beddoe is not so sure of their enterprise. It depends upon their

individual needs. He considers Coimbatore and Surat as "two islands" of enterprise.

And they have the highest per capita income in the country. Adverting to the spread of

direct selling, he compares it with other markets.

Take for instance, market for the Fast Moving Consumer Goods (FMCG). While

north accounts for lion's share of 30 per cent followed by the west, south is only the

third with 20 per cent to 22 per cent share. East is the hardest market with just 11 per

cent.

The survey with regard to direct selling has revealed that all the four regions are

"exactly the same." There is almost an equitable balance and it looks that direct

selling has been accepted all over the country.

On the great urban-rural divide, Mr.Beddoe observes that there seems to be a greater

need for direct selling in B1 cities and smaller towns.

There is willingness to work harder in these places. In villages and small towns

there is more time whereas metros do not have the same leisurely lifestyle.

He considers that the sense of security among the people in metros is comparatively

much higher than the other parts of the country. Metros have lesser needs. The

future of direct selling lies in small locations.

The AMWAY India Enterprises franchise is a global leader in multilevel marketing.

The direct sales franchise is a part of the US-based Amway Corporation which brought

about the concept of direct selling at the convenience of the customer. From the past 45

years, Amway Corporation has enabled people to have a business of their own,

providing home care and health care products of repute.

Originally, the multi level marketing franchise was known for direct selling of its

household cleaning products; but as time went on hundreds of high-quality products

and brands were introduced to make the Amway India Enterprises Franchise what it

is today. The Amway Corporation created a business opportunity for direct sale of

products to others and later started the concept of sponsoring people to join the

business.

The Amway India Enterprises franchise, a wholly owned subsidiary the USA- based

Amway Corporation, was established in 1995, and commenced commercial operations

in May 1998. Today it has become the largest direct selling FMCG Company in India.

With over 4,50,000 active independent Amway Business Owners, the Amway India

Enterprises Franchise has grown to its present number of 74 offices and 55 city

warehouses. Servicing over 2000 cities & towns of India, this direct sales franchise

provides a 100 per cent money back guarantee if the product ids found unsatisfactory.

Today, Amway India Enterprises franchise promotes individual entrepreneurship

through its novel direct selling approach of world class consumer products. Amway

supplies all its products from within India, thereby providing motivation to the local

manufacturing industry

CHAPTER - 3

MARKETING STRATEGIES

3. Marketing Strategies

3.1 Product strategies

The famous product in Amway is NUTRILITE. In the Olympic Games, it had been the

only designated health food for Chinese sports delegation. NUTRILITE is an authority on

the nutritional food all over the world. Why does this kind of product become famous?

This, of course, can not be separated from the management of Amway. The strict

management for quality is a guarantee of Amway, which will produce efficient and high-

quality goods. In order to produce natural, healthy, nutritional food, Amway have set up

the specialized research centers and laboratories.

Artistry is the brand of the facial care product and cosmetics. Various daily necessities

are provided for consumers. Many products are according to Chinese people’s attitudes

and preferences which are different from American’s. Any of them is given assurance of

quality. The R&D center is the birthplace which is a major discovery and breakthrough of

the skin and the beauty of science. In 2000, Artistry ranked one of the five facial care

products and cosmetics in the world, and became one of the trends of leading brands in

the beauty care products all over the world.The product of Amway is environmental

protection, safety, and the concentration. It is suitable for everyone. Consumers can use

the products they choose at ease.

3.2 Promotion Strategies

The selling method of Amway is Demonstration Act of Products Contrast Amway

stresses the superiority of their products by comparing and testing the quality of products

with others, which brings a big impact to customs. For example: showing the shampoo of

Artistry compared with other well-known shampoo on the market, consumers can see the

phenomenon and judge whether the shampoo of Amway is good or bad. As a result,

consumers witness a better quality of Amway products.

As we all know that Amway is famous for its Direct Selling. In Chinese market,

Amway’s selling was limited by government. For adapting itself to new conditions,

Amway set up its franchised stores and hired salesman. We can see Amway’s franchised

stores in the big cities and they are uniform decoration. Establishing store not only

increased the transparency of company, but also improved the image of company. And it

made up the disadvantage of Chinese transport system. This new method “franchised

stores + hiring salesman” makes consumers buy goods directly, and enjoy the pre-sales

and after sales service.

Amway began to invite some sport stars to make the advertisements. During the time of

Olympic Games, these advertisements created the image of NUTRILITE successfully.

Amway also grasped the opportunity which was held a large-scale musical to promote the

product of Artistry.

 3.3 Distribution strategies

As everyone knows that computer plays an important role on promoting the development

of direct selling. So Amway controls the shop sales and inventory through the Internet.

Amway established its own logistics center. It is convenient for distributors to distribute

the goods. Amway encourages more people to join, and open more franchised and chain

stores. It is necessary to build a big commercial network and attract more consumers. The

franchised stores can bring convenience to people. For instance, if people buy something

they do not satisfy, they can return, consult or complain these products.Amway maintains

the relationship with consumers all over the world, and always pays attention to their

needs by the Internet or telephone.

3.4 Mega marketing of Amway

“In the competition of the future market, those companies, which have the political

powers and the public connections, will win.” This is the famous word said by Philip

Kotler. American government supports Amway. It obtains more commercial

opportunities through the government’s effort. Amway has an excellent staff, and they set

a good example and maintain the relationship with consumers in public. There is no

doubt that Amway has a quick development and a good future.

Amway takes part in the activities of charity, and pays tax actively. Amway also pay

attention to the environment, children, and health. The running match of Nutrilite is a fad

and promotes the word of health. The public activities which are supported by Amway

are more than 770.From these, the consumers in China believe that Amway is an honest

and trustworthy company.

 3.5 After - sale services of Amway

Amway emphasizes on after-sales services and wants to become everyone’s good friend.

If consumers use the cosmetics, Amway will be a professional beautician for them to

make a facial care on a regular time schedule. If consumers use the health food of

Nutrilite, Amway will be a dietitian for them to service their health all-round. If

consumers use the home care product, Amway will provide a professional family

consultant for them. If someone needs any product of Amway, he can call the special

telephone or though the Internet searching. Amway will send the product which

consumers choose to their houses without payment.

After the product selling within 7days, if it has the problem of quality, consumers have

right to return or change it, even return money. That is the promise and respect of Amway

to the consumers.

3.6 MARKETING MIX

Product: The product aspects of marketing deal with the specifications of the actual

goods or services, and how it relates to the end users needs and wants. The scope of a

product generally includes supporting elements such as warranties, guarantees, and

support.

Pricing: This refers to the process of setting a price for a product, including discounts.

The price need not be monetary - it can simply be what is ex- changed for the product or

services, e.g. time, energy, or attention.

Promotion: This includes advertising, sales promotion, publicity, and personal sellin g ,

branding and refers to the various methods of promoting the product, brand, or company.

Place: It refers to how the product gets to the customer; for example, point-of-sale

placement or retailing. This fourth P has also sometimes been called Place, referring to

the channel by which a product or service is sold (e.g. online vs. retail), which

geographic region or industry, to which segment (young adults, families, business

people), etc. also referring to how the environment in which the product is sold in can

affect sales.

These four elements are often referred to as the marketing mix, which a marketer

can use to craft a marketing plan.

3.7 THE CONCEPT OF DIRECT- MARKETING

WHATEVER A PERSON EARNS, HE GOES TO SPEND IT TO THE

MARKET, FOR EXAMPLE IF A PERSON GOES TO A MARKET WITH Rs.

4000 WITH HIM, THERE HE PURCHASE PRODUCTS OF DAY-TO-DAY

USES. THE COST PRICE OF THAT PRODUCT IS Rs.1600 IN THE

FACTORY, BUT HE GETS IT @ Rs.4000 BECAUSE OF THE

MIDDLEMEN (ADVERTISERS, WHOLESALERS & RETAILERS). 60%

OF THE MONEY IS DISTRIBUTED AMONG THE MIDDLEMEN.

BACK TO 45 YEARS, THERE WERE TWO FRIENDS WITH A DREAM

TO GIVE EVERY INDIVIDUAL A CHANCE TO DO A BUSINESS,

WHICH WILL BE TENSION FREE AND IN THE SAME WAY MAKE

RICH. TODAY THEY HAVE ACHIEVED THEIR DREAM.

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I. BENEFITS FOR DISTRIBUTER.

The company provides world class products to the distributers. They also gets profit

from the sales model of the company which is beyond their imagination that’s

because it is fully acceptable and honest so that you can believe and have full trust

and confidence on it.

The products are of world class.

The distributers get help from the easy marketing plan.

There are demonstration lectures on each type of product

1. Full information about the product.

2. Full instruction on how to use the product properly and get 100% Advantages of

it.

3. Qualities of products.

Guarantee of full satisfaction from the use of the product by the company is one of the

most important attractions of this business. These benefits of distributers are kept

reserved by the company’s “CUSTOMER PRODUCT REFUND POLICY”.

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Some important attractions/ benefits for the distributors

With the help of this business after being a distributer can establish his own

(independent) business all over the INDIA.

To be successful in this business one need “VERY LESS AMOUNT” and

“DESIRE TO BE SUCCESSFUL”.

If any distributor wants to leave the business can leave get the money back by

returning the BUSINESS KIT within 90 days of joining.

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CHAPTER -4

SWOT ANALAYSIS

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4. SWOT Analysis

SWOT is the foundation of the marketing plan. Strength, weakness, opportunity, and

threaten will be evaluate in the SWOT analysis. Those are included in the internal and

external factor.

4.1 Strengths

Amway is a united organization and has an excellent staff. The staff will have a special

training on a regular time. Amway has its own farm and factory, and ensures that provide

green product for consumers. Amway also has its own aircraft group and Five-star hotel

for receiving the people who care and support it anywhere in the world. The leisure park

on the sea is preparing for the outstanding staff in Amway. Amway in Guangzhou and

Shanghai establish the research and development center, and have nearly 7 specialized

laboratories and more than 100 technicians.

The quality of Amway’s product is good, and strives for excellence. Because of the high

demand, anybody needs its product anywhere in the world. At present, the business of

Amway spreads around more than 80 countries and regions. The number of franchised

stores in China is more than 100.Amway makes sure that the best product and the kindest

attitude can be provided for consumers.

4.2 Weakness

Amway’s direct selling in China is easily mistaken for “ selling.Amway had ever been

infringed upon “selling”. That made many people misunderstood its products. And

Amway rarely advertises for its goods. Some people do not know what Amway is, which

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function Amway is, though they heard this brand before. It can not only depend on the

Word of Mouth Marketing, which sometimes makes people unclear. Besides, the stores

of Amway are correspondingly passive, and the impact of those is small and restricted by

the area. In resent years, Amway began attaching importance to advertisements, and try

to carry out the strategy for advertising and marketing activities.

4.3 Opportunities

Amway entered in Chinese market in the appropriate time. With the developing of

economy, people began to pursue a better life after solving the problem of food and

clothing. Especially, during the time of SARS, Amway’s health food was pursued by

consumers. In the 27th, 28th Olympic Games, Amway Nutrilite became the only

designated health food for Chinese sports delegation. It is a good chance for Amway to

raise the popularity. As we all know that the incident of “Sanlu Milk Powder” happened.

The investigation proved that most nutritional health food had the quality problems or

lacked the capabilities of research and development in China. Amway products have the

assurance of quality and a good word of mouth. For example, the standard of Nutrilite is

very high. The facilities of production and the means of management are far beyond the

Chinese health food GMP requirements. So, it is a new opportunity to Amway.

4.4 Threats

Although Amway’s nutrition food is recognized by most people, it is still hard to make

all of them accept this product which is expensive in their eyes. As we know that there is

a lot of health food, such as “Gold Partner”, “Melatonin”, etc, they make many

advertisements on TV. Obviously, most people would like to buy them.In the market,

there is keen competition among many daily necessaries. Most people are familiar with

these brands, such as AVON, OLAY, P & G, etc. The prices of these products are lower

than Amway’s daily products. Some people still choose the products which are cheaper

or something they like.

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So, it is really important to make consumers know the value of Amway products.

CONCLUSION

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CONCLUSION

Amway is a direct selling company. The main objective of Amway is to profit their

distributors by eliminating the middlemen and provide the products to the distributors in

a lower price.

Amway is one of the largest direct selling companies in the world. The products are of

the world class quality. They are made up of natural things that why are very good for

the health and environment. Amway covers a wide range of products from beauty

care, health care, skin care, home care to clothing, utensils and daily use products etc.

Te products are costly as compared to other branded products available in market, but

if we compare the quantity while using these products require less amount and thus

can be used for a longer period.

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FINDINGS AND RECOMMENDATION

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FINDINGS AND RECOMMENDATION

TRIAL PACKS SHOULD BE USED.

THE PRODUCTS SHOULD HAVE A RESONABLE PRICE.

THE HOME DELIVERY SYSTEM TAKES ATLEAST TWO DAYS TO

DELIVER

THE PRODUCTS, THE DELIVERY SHOULD BE INSTANT.

IN EVERY CITY OFFICE SHOULD BE SITUATED IN SUCH A

LOCATION SO THAT IT IS IN REACH OF ALL THE DISTRIBUTERS.

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BIBLOGRAPHY

www.google.com

www.yahoo.com

www.amway.com

www.aol.com

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