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Amway

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Founded by Jay Van Andel and Rich DeVos, Amway Corp is one of the largest Direct Selling FMCG companies in the world offering over 450 products.

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Amway

  1. 1. ADVERTISING STRATEGY OF AMWAY BACHELOR IN COMMERCE SECTION : C
  2. 2. AMWAY GLOBAL CENTER
  3. 3. INTRODUCTION  Amway Global was founded in Ada, Michigan, USA in 1959. Founded by Jay Van Andel and Rich DeVos, Amway Corp is one of the largest Direct Selling FMCG companies in the world offering over 450 products.  These products carry the Amway name in the areas of nutrition, health, beauty and home.  Amway's innovation and industry-leading R&D has seen more than 1,100 patents granted and another 700 patents pending. Amway has more than 900 scientists across 75 research and development and quality assurance laboratories worldwide.
  4. 4. AMWAY INDIA  Amway India is a wholly owned subsidiary of $10.8 billion Amway Corp. Established in 1995, Amway India commenced commercial operations in May 1998 and has emerged as the largest Direct Selling FMCG Company.  Amway India recorded a total turnover of over Rs. 2046 crores for the financial year 2013-2014.  Amway India has 500 full time employees and was awarded for its peerless work for the blind child in 2003. The Company has its headquarters located in the New Delhi.
  5. 5. AMWAY HOME PRODUCTS
  6. 6. PRODUCTS  Amway India offers Indian citizens an unparalleled opportunity to own and operate their own business selling more than 140 high quality consumer products. These products in the areas of:  Nutrition and wellness,  Health care,  Beauty and Personal care and  Home  Products in its portfolio include some well known brands like Nutrilite, Artistry, Attitude, Satinique, Dynamite and Persona.
  7. 7. ARTISTRY BEAUTY PRODUCTS Artistry is a brand of skin care and color cosmetics marketed by Amway. It has been ranked among the top five in sales in this category.
  8. 8. MARKETING STRATEGY  Amway is different from the more traditional distribution channels as the business has developed through direct selling. Amway has over three million Independent Business Owners (ABOs) worldwide.  ABOs deal directly with Clients, build up personal relationships and deliver directly to Clients' homes. The personal contact and care that they provide is an important element in direct selling.  It demonstrates the connection between Amway's own strategies and the defining matrix of strategies developed by Ansoff in his article 'Strategies for Diversification' published by the Harvard Business Review in 1957.
  9. 9.  Competition analysis is a key factor within market research. It helps Amway to identify the nature and extent of competition at a number of levels. For example, it helps marketers within Amway to find out how well products are meeting consumer needs and what aspects of competitors' brands appeal to consumers.  Amway has helped millions of people around the world to start their own independent business, through which they engage in person-to- person marketing. This type of direct selling involves matching a consumer's needs with the goods and services on offer. The better the match, the more lasting the relationship between the seller and the buyer.
  10. 10. ANSOFF’S PRODUCT/MARKET MIX Ansoff's product/market matrix is an accepted way of identifying and categorising market and product developments and opportunities. Amway makes good use of the technique. ANSOFF’S MIX PRODUCT EXISTING NEW MARKET EXISTING MARKET PENETRATION PRODUCT DEVELOPMENT NEW MARKET DEVELOPMENT DIVERSIFICATION
  11. 11. BUSINESS STRUCTURE  Amway is what’s known as a multilevel marketing company. 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.  I – Independent (Amway) Business Owners (ABOS)  M - Members  C - Clients (customers) of the ABOs.  Members are allowed to purchase Amway products at a price equivalent to that paid by ABOs, but do not participate in the Amway Sales and Marketing Plan. They are a new type of 'customer' who deal directly with Amway.
  12. 12. ABOs  The ABOs earns commission on the products sold. Further, the ABO also gets commission for the sales done by other ABOs recruited by him. The payout varies with different levels divided in different categories based on the sales performance  Amway is a 100 % direct marketing company, i.e. the consumers will not get any Amway products from shops. Hence the sales are driven by the efforts of ABOs. Since the company does not advertise its brands, the only communication channel is through ABOs who visits households and make presentations. There are two tasks of a typical ABOs:  to sell Amway products  to appoint new ABOs.
  13. 13. MARKET PENETRATION  Going for market penetration has involved Amway in making the most of current products and competences by 'stretching' them to improve Amway's competitive position within existing 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 ABOs 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.
  14. 14. PROBLEMS  Typically direct marketing firms faces issues of reach and cost. Since the sales depend entirely on the independent distributors , the company has to pay huge commission. This results in the increased cost of the product. Hence the products become expensive resulting in lower sales.  In a value conscious country like India, the expensive tag of Amway products is the singular reason for the lack of popularity of its products.  Understanding this issue, Amway launched its first corporate branding initiative in India . The brand came out with a Television campaign highlighting the customer-centric approach.
  15. 15. CONCLUSION  In today's highly competitive environment, an organisation has to develop a business strategy that provides a strategic fit between its resources and the changing business environment.  This case study illustrates how Amway India has continued to develop by using a range of advertising strategies based upon Ansoff's product/market matrix.  These strategies have enabled Amway to build its business by continuing to broaden its customer base and enhance the service it offers. But to balance the price, cost, quality and higher commission is no easy task.
  16. 16. THANKS

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