Presentation on amway case

1. Presentation on Amway
Case
 Submitted By :-
 Akshay Sisodiya
 Siddharth Singh
 Sudhanshu shekhar
 Himanshu vats

2. Content
s
 Introduction
 Case facts
 Analysis
 Issued identified in the case
 Problem regarding marketing
 SWOT Analysis
 P.E.S.T Analysis
 Learning and Findings

3. • Amway (THE AMERICAN WAY). Basically it’s a concept of
direct selling, where no middle man is required for selling the
products, its just company and customer.
• Amway have 3 million distributor all over world and 3000
products, it enter the Indian market in late 1990s, ever since
than its growing.
• The perception of people towards Amway’s product being very
expensive added insult to the injury. It was assumed that the
products are exclusively for the higher income groups and very
exclusive. This turned to be the biggest reason for high attrition
rate.
• However it faced problem initially, after 2 years of its launch it
became the country’s largest direct selling company.

4. Case facts
 Amway was World’s leading firm with humongous
direct sales and a multi-level marketing model. But
when it applied the same strategy to Indian
market, it didn’t repeat the success story.
 However, the number of distributors in the network
marketing was substantial, majority of the products
purchased were used for self-consumption. Also,
this did not translate into repeat purchase.
 To increase the market share AMWAY gave job to
unemployed youth and provided them free kit or
on loan, it also introduced the sachets which
boosted the sales, it started printing Hindi slogans.

5. Analysis
 Amway wants to implement its direct
selling policy on Indian customers,
without any alteration.
 They were not considering traditional
selling approach as a option.
 They were only targeting the classes not
the masses.

6. ISSUES IDENTIFIED IN THE
CASE
 Misconception regarding premium segment
products.
 After sale service.
 Negative attitude towards direct selling.
 Distribution channel was poorly handled.
 Amway always taken as a foreign
company.
 Unavailability of critical infrastructure like
networked banks, toll-free phones and
multi-service courier company.

7. PROBLEM REGARDING
MARKETING
 However, the number of distributors in the
network marketing was substantial,
majority of the products purchased were
used for self-consumption. Also, this did
not translate into repeat purchase.
 One of the biggest reason was the low
level of active participation of the
distributors. About 10% distributors only
depicted high activity. Another reason was
that many people who joined initially
returned the product kits within initial
months.

8. SWOT ANALYSIS
 STRENGTHS-
1-Amway focus on each products with
individual ideas.
2-more than 3000 products available in the
Indian market
3- Amway has 198 centers across India till
2004 and increasing.
4- Amway offers around 100 products in five
categories of personal care, home care, nutrition and
wellness, cosmetics and toys.
5- The range of consumers is very large
from babies to elder, women are the main consumers.

9. WEAKNES
S
 The only mode of availability of product
is online and business agents hence
missing out on retail sales.
 Products are somewhat on costly side.
 Not much of TV advertisement or brand
ambassador, only mode of
communication is word of mouth.

10. OPPORTUNITI
ES
 Increase the availability of product in
Indian markets.
 Using various medium of
communication like it is international
brand; online can be a good platform
 Can tie up with chains of beauty salons
and health experts

11. THREA
TS
 Increasing competition in both national
and international markets.
 Switching cost is low.
 Replacement by local products.

12. P.E.S.T. ANALYSIS
POLITICAL
 Government allowance.
 Production base in china for export to
Asian countries
 Supportive for china’s entry into WTO.

13. ECONOMICAL
 localization of production and raw
materials.
Own warehouses in India.
 Localization of employees.
 More than 2000 employees were Indian.
 Manufacturing partners from daman,
pune , hyderabad

14. SOCIAL
 Active involvement of community
 Financial and human support in areas of
human services education ,art ,culture
etc.
 Invested $ 4 million for this purpose

15. TECHNOLOGI
CAL
 Setup R&D department.
 Developed new and tailored products
like new range cosmetics for women.

16. LEARNING AND FINDING
 Got to understand difference between
MLM and traditional sales approach.
 Indian customers didn’t want to come
out of their comfort zone.
 If company want be successful in Indian
market ,they have to be flexible.

17. RECOMMENDATION
 If they were not getting favorable result ,
so they should have opted for traditional
approach.
 Product should be easily available to
customers.
 Valid pricing.
 Proper advertising of product.