Description
Multi-level marketing (MLM) is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of the other salespeople that they recruit.
Origin of Multi Level Marketing: Amway Corporation
1. MULTI LEVEL MARKETI G - A I TRODUCTIO
1
Origin of Multi Level Marketing: Amway Corporation
Have you ever recommended a movie, book or restaurant or anything else to a friend or the family member? Of course we all have. We do this all the time. If someone acts on your recommendation and actually enjoyed the movie, it is likely that he/she recommends that movie to someone else. It is quite obvious that this kind of 'Word of Mouth' recommendations occur in our daily life. Here is an intriguing aspect that everyone should think about. You paid money to see the movie, and also the people to whom you recommended movie, paid the money to watch it. But neither party received any returns (money) from the theatre thanking for the referral. The only people who got paid were theatre owners and distributors, while you did the advertising for them. The amazing concept of Multi Level Marketing (MLM) starts from this question, "How would it be if you got paid for every recommendation you made, and so did those people who told you?" Some of you might say" How it is possible?" or "It is impossible" But this has been made possible today by 'Multi Level Marketing'. "MLM is a hierarchical marketing system in which the goal of salespersons is not only to buy and sell the product, but also to recruit others to buy and sell the product, who will in turn recruit others and so on. Each salesperson receives a portion of the entrance fee paid by his/her recruits." MLM or Network Marketing has changed the lives of many across the world and continues to do so. This innovative style of marketing was introduced by Amway Corporation in USA, in the year of 1959. Then in the year of 1998 Amway successfully introduced MLM in India also. In less than a decade, the organized and self-regulated Rs. 2400-crore direct selling industry has become a successful and kosher business model, logging in 25-30 percent growth annually, with companies like Amway, Tupperware, Herbalife, Modicare and others riding the wave. Corporate India too has taken note of it- Max New York Life and HLL have formally adopted this model.
2
Origin of Multi Level Marketing: Amway Corporation
VIEWS OF LEADI G I DUSTY PLAYERS:
"Direct Selling differs from other sales models mainly in the kind of value added services it offers. We don't get this kind of value added service in any other business model. Also there's a lifetime-warranty on all products sold."- William S Pinckney, M.D. & C.E.O. of Amway India. "Though the biggest advantage is the people-centric nature of this business, today's consumer is ready to pay a higher price for a good product. Though we have value driven nation and will remain so, there's a sweeping change in the desire and mindset patterns today."- Asha Gupta, General Manager of Tupperware India. "it's the value-conscious market that's driving this industry as our products are exclusive and result oriented. Coupled with this is the effective product demonstration that this selling system allows."- Manoj Shirodkar, country director of Herbalife India. Thus, Today MLM has become a multi core industry with an association of its own that's fighting to counter its not strictly kosher image. More importantly, millions of people have tried their hand at it at one time or another. Many drop out after tasting the waters but many others do stay on. Let's have a look into this methodology in detail beginning retailing its types and the Indian retailing scenario.
BE EFITS OF MULTI LEVEL MARKETI G:
Benefits to customers This form of marketing goods or services directly to consumers takes place at the customer's convenience often in his/her home either on a one-to-one basis, or in the context of a sales party. Customers value the advantages of convenience, personalized attention. A good selection of products, ability to examine the products for a period of time protected by a customer refund policy.
3
Origin of Multi Level Marketing: Amway Corporation Benefits to sellers Many of these people have chosen direct selling because they want to own 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 are that they like and believe in the product like being their own boss, and working their own hours like the supplemental family income or like making extra money for themselves feel that the harder they work, the more money they can make enjoy selling and meeting people. Benefits to companies In today's world of rapid change, direct selling offers companies a direct distribution channel that can be accessed immediately bypassing rigid and costly traditional distribution channels
4
Origin of Multi Level Marketing: Amway Corporation
2. RETAILI G
5
Origin of Multi Level Marketing: Amway Corporation
Multi Level Marketing is a part of retailing. So, let's have a look at what is retailing.
RETAILI G:
In the words of Philip Kotler, "Retailing includes all the activities involved in selling the goods or services directly to final consumers for personal, non- business use. It does not matters how the goods or services are sold (by person, mail, telephone, vending machine or internet) or where they are sold (in a store, on the street, or in the consumers home). According to Berman & Evens, Retailing can be defined as "business activities involved in selling goods & services to consumers for their personal, family or household use."
TYPES OF RETAILI G:
The retailing can be classified as Store Retailing, Corporate Retailing & Non-store Retailing. Store Retailing includes retailing the goods & services through store or department. In India nearly 97% of the goods & services are sold through stores. In Corporate Retailing, the retail organizations enjoy economies of scale, greater purchasing power, wide brand recognition and trained employees. The major types of corporate retailing are- corporate chain stores, retail cooperatives, franchises, etc. The well known examples are Big Bazaar, Apna Bazaar, Mc Donald's, etc. Although most of the goods & services are sold through stores, Non-store Retailing has been growing much faster than Store Retailing. Non-store Retailing can be divided in four major categories.
6
Origin of Multi Level Marketing: Amway Corporation 1. Direct Marketing (including telemarketing & internet selling) Direct marketing has its roots in direct mail, telemarketing, television direct response marketing (Tele Brands, Asian Sky Shop, etc.) and electronic shopping. Out of these, electronic shopping experienced a major take off in 1990's as consumers flocked to dotcom sites to buy books, music, electronics, etc. 2. Automatic Vending It is used for variety of merchandise including impulse goods such as cigarettes, soft drinks, chocolates, coffee, etc. These vending machines take a loose change and returns products in exchange. Vending machines are found in factories, offices, large retail stores, petrol pumps, hotels, etc. they offer 24 hours selling, self service and merchandise that is always fresh. 3. Buying Services It is a store less retailer having specific clients-usually employees of large organizations who are entitled to buy from a list of retailers that have agreed to give discounts in return for membership. 4. Direct Selling It is also called as multi level marketing or network marketing; this system consists of recruiting independent business people who act as distributors. The distributor's compensation includes a percentage of sales of those whom the distributor recruits as well as earnings on direct sales to the customers. MLM has been growing at an exponential rate all over India. Sales through most alternative selling channels are tiny or nonexistent. The only exception being MLM, this has grown rapidly over the past 10 years. The main reason for this was that direct selling companies could easily attract a huge number of "distributors", who constitute the key element for the success of any MLM company. Many of these are unemployed Indian housewives who welcomed this opportunity to earn additional income for their households. The low start-up costs meant that they could be easily starts this business.
7
Origin of Multi Level Marketing: Amway Corporation
3. DIRECT SELLI G
8
Origin of Multi Level Marketing: Amway Corporation According to the Indian Direct Selling Association, Direct Selling can be best described as "The marketing of products and services directly to consumers in a face to face manner, generally in their homes or the homes of others, at their workplace and other places away from retail locations, usually through explanation or personal demonstration, by an independent direct salesperson." Amway, the leading direct selling company defines direct selling as "The selling of consumer product or service through personal contact, away from a fixed retail location or shop." Direct Selling and home selling are almost synonymous. The two terms which have emerged concurrently seem to denote the same thing. Both of them are person to person selling and both take place away from and without the help of any retail store. However there are distinctions between the two terms. While home selling takes place at homes, direct selling can take place anywhere. Second, while home selling is always one to one, direct selling can at times to be a group.
MODES OF DIRECT SELLI G
1. MLM also known as network marketing, relationship marketing and multi level direct selling, MLM is building a business through a sellers own sales efforts and by inviting others to become sellers. The remuneration is based on seller's personal sales and on the combined sales of those the seller has sponsored, trained and motivated. Most genuine Direct Selling companies follow this model. 2. SLM The model under which an agent earns commission directly from the sales he/she does. Avon beauty products follow this model. 3. PARTY PLA Here an agent has an equal opportunity to earn regardless of the
time of joining the scheme. Tupperware and AMC cookware follow this. The major difference here is that generally these products are sold by inviting guests in a party plan. This is used as an opportunity to make future sales leads.
9
Origin of Multi Level Marketing: Amway Corporation
4. DIFFERE CE BETWEE DIRECT SELLI G & DIRECT MARKETI G
10
Origin of Multi Level Marketing: Amway Corporation
As per the IDSA the main difference between the two methods of selling is the face to face or personal contact with the consumers in case of Direct Selling versus a contact through some form of media in case of Direct Marketing. However Direct Selling organizations may sometimes use direct mail to enhance their business.
Rakhshin Patel, Senior VP and general manager, Thompson Connect
Rakhshin Patel, one of the pioneers in relationship marketing in India, has worked in ThompsonConnect since 1995. Part of the Executive Committee of J. Walter Thompson, she has led ThompsonConnect India operations to market leadership. In her 15 years of experience in the direct marketing industry, Patel has been widely acknowledged for her considerable skills in innovative database development and management. In her career, she has advised over 250 clients on loyalty and relationships. She is also the architect of the ThompsonConnect Loyalty model. Passionate about numbers and communication effectiveness, Rakhshin spearheaded the implementation of Connexions™ - ThompsonConnect's Oracle 11i based eCRM m odul e Q. Many people confuse Direct Marketing (DM) with Direct Selling - the Amway model, or the way Eureka Forbes sold vacuum cleaners. So, what really is Direct Marketing, and how is it different from Direct Selling? 11
Origin of Multi Level Marketing: Amway Corporation Ans. Direct Marketing or customer relationship management is as different from Direct Selling, as chalk is to cheese. Direct selling as the very word implies, simply cuts off middlemen like distributors, dealers or the retail shop, thus enables in selling a company's products directly to the end consumer. It is essentially a distribution channel. There are of course variations to this basic model, such as Multi Level Marketing as practiced by Amway. Direct Marketing, on the other hand, has been defined by the DMA as "an interactive system of marketing that uses one or more advertising media to effect a measurable response and/or transaction at any location, with this activity stored on a database." It really boils down to any direct communication to a consumer that is designed to generate a response in the form of an order, or a request for further information, and/or a visit to a store. I believe direct marketing adds to the brand surround of a marketing programme, with a deep focus on understanding the customer, providing insights into her behavioral pattern and thereby leading to a one-to-one communication. In effect, the difference between Direct Selling and Direct Marketing is between a distribution channel that focuses on the sale and a marketing system that focuses on an ongoing customer relationship.
Direct Selling
Manufacturer
Direct Marketing
Manufacturer
Distributors
Consumers
Consumers
12
Origin of Multi Level Marketing: Amway Corporation
5. IDSA (I DIA DIRECT SELLI G ASSOCIATIO )
13
Origin of Multi Level Marketing: Amway Corporation
Where,
Incredible Dreams Sure Are
true.
What is The Indian Direct Selling Association (IDSA)?
The Indian Direct Selling Association, formed in 1996, is an association of companies engaged in the business of direct selling in India. Its members are of high national and international repute having set standards in delivering quality goods and in following ethical business practices. It is affiliated to the World Federation of Direct Selling Associations, USA (an umbrella body for 58 DSAs across the world).
OBJECTIVES OF IDSA
•
To Promote and protect the interests of the direct selling industry and of consumers.
•
To support and protect the character and status of the direct selling industry and to assist and guide in maintaining qualitative standards in direct selling.
Keeping in mind the above objectives, the IDSA will work towards the enhancement of direct selling as a profession so that all those engaged in it can work in a congenial ambience of growth and achieve their objectives to earn, learn, and become self- fulfilled and well respected. The concept of direct selling creates the need for a Code of Conduct which would respect the rights of the customer and ensure that the companies and their sales people practice ethical behavior. This is why the IDSA lays down a Code of Conduct which is to be followed by all its members.
14
Origin of Multi Level Marketing: Amway Corporation
MEMBERS OF IDSA
Amway India Forever Living ModiCare Sunrider India Altos Enterprises Limited AMC Cookware Hindustan Lever Network Oriflame India Direct Educational Technologies India Pvt. Ltd. Daehsan Trading (India) Pvt. Ltd. Avon Beauty Herbalife Quantum Int'l Pvt. Ltd. Tupperware India Max New York Life
15
Origin of Multi Level Marketing: Amway Corporation
6. WFDSA (WORLD FEDERATIO OF DIRECT SELLI G ASSOCIATIO )
16
Origin of Multi Level Marketing: Amway Corporation
WFDSA is a non governmental voluntary organization, globally representing the direct selling industry as a federation of national Direct Selling Associations.
HISTORY:
Founded in 1978, the WFDSA is a nongovernmental, voluntary organization representing the direct selling industry globally as a federation of national Direct Selling Associations. The United States Direct Selling Association serves as the Secretariat for the Federation and is based in Washington DC. It is governed by a board of directors consisting of one director representing each national DSA with equal votes and six officers elected from the board.
MISSIO :
The mission of the WFDSA is to support direct selling associations in the areas of governance, education, communications, consumer protection and ethics in the marketplace and to promote personal interaction among direct selling executives regarding issues of importance to the industry.
17
Origin of Multi Level Marketing: Amway Corporation
7. DIRECT SELLI G STATISTICS I I DIA
18
Origin of Multi Level Marketing: Amway Corporation
To understand the pulse of the customer about the direct selling industry, from the perspectives of awareness, the leading category drivers, the whys of this rising acceptance, customer's future shopping plans, as also to vet marketer's claims objectively, Pitch magazine commissioned leading global market research agency Synovate to survey the key decision maker- the housewives. The survey carried out in New Delhi, Mumbai and Bangalore from May 20 to 28, 2005 has many good news for these marketers as it shows a rising acceptance level of this sales model, thanks to quality products, effective demonstration by agents, good post-sales support as also good brand recall, despite it being a push-driven channel. The 300 odd respondents were all women in the age bracket of 20-45 in the SEC-A1 & A2 market.
Increasing Awareness & Acceptance Levels
120 100 80 60 40 20 0 Delhi Mumbai Banglore
Kirana
Supermarket/ mall
DS
The salient finding of the survey is the rising awareness levels amongst the customers. This mode is now increasingly accepted by the urban customer which is also clear from the high brand recall rate of these companies. 20.4% people in Delhi, 46.3% in Mumbai and 2% in Bangalore shop through this format. The south is a huge untapped potential for all DS companies.
19
Origin of Multi Level Marketing: Amway Corporation
TOP OF THE MI D BRA D RECALL
AVO AMWAY ORIFLAME TUPPERWARE HLL ETWORK MODICARE
20
Origin of Multi Level Marketing: Amway Corporation Satisfactory Response
Delhi
strongly agree
somewhat agree 16% 32% 11% somewhat disagree 5% 0% 36% dk/cs not sure
strongly disagree
Mumbai
strongly agree
11% 5% 11%
4% 34%
somewhat agree
not sure somewhat disagree
strongly disagree 35% dk/cs
Bangalore
0% 6% 18% 40%
strongly agree
somewhat agree
not sure
somewhat disagree 12% strongly disagree 24% dk/cs
This was to check the experience with direct selling, both as a shopping experience &also as a reason for doing shopping through this medium. Though there are many reasons for this, the primary one is product quality. 21
Origin of Multi Level Marketing: Amway Corporation Good Product Quality
Delhi
strongly agree
somewhat agree 19% not sure 5% 0% 8% strongly disagree 19% dk/cs 49% somewhat disagree
Mumbai
1% 4% 7% 7% 46%
strongly agree
somewhat agree
not sure
somewhat disagree
35%
strongly disagree dk/cs
Bangalore
strongly agree
somewhat agree 0% 12% not sure 41% 29% somewhat disagree
strongly disagree 12% 6% dk/cs
22
Origin of Multi Level Marketing: Amway Corporation Products Are Safe
Delhi
strongly agree
somewhat agree 24% 30% not sure
0% 5% 14% 27%
somewhat disagree
strongly disagree
dk/cs
Mumbai
4% 2% 7% 4%
strongly agree
somewhat agree not sure
50% 33%
somewhat disagree
strongly disagree
dk/cs
Bangalore
strongly agree
somewhat agree 6% 6% not sure 18% 46% somewhat disagree 6% 18% dk/cs
strongly disagree
23
Origin of Multi Level Marketing: Amway Corporation Pricing not a Deterrent
Delhi
strongly agree
somewhat agree 16% 32% not sure
somewhat disagree 3% 3% 16% dk/cs 30% strongly disagree
Mumbai
2% 4% 11% 33% 13%
strongly agree
somewhat agree
not sure
somewhat disagree
strongly disagree 37% dk/cs
Bangalore
strongly agree
somewhat agree 12% 6% 41% somewhat disagree 23% strongly disagree 6% 12% dk/cs not sure
24
Origin of Multi Level Marketing: Amway Corporation WHAT ARE PRODUCTS SUIT THE MOST?
Cosmetics & Skincare Products
80 60 40 23.5 20 0 Delhi Kirana Mumbai Supermarket/ mall DS Banglore 7 34.7 40 21 8 0 69.4 75
Personal Care Products
100 79 75 57.1 50 25 0 Delhi Kirana Mumbai Supermarket/ mall DS Banglore 22.4 11.6 2 10 0 37.9 49.5
Homecare Items
100 75 54 50 25 0 Delhi Kirana Mumbai Supermarket/ mall DS Banglore 17 1 1 41 93 86
10 0
25
Origin of Multi Level Marketing: Amway Corporation Herbal Products
80 60 41.8 40 20 0 Delhi Kirana Mumbai Supermarket/ mall DS Banglore 17.3 4 34.7 23.2 10.5 7 0 74
What are the goods and wares that are on the fast track, or what are the products for which these people are ready to cough up an extra premium? Its cosmetics and skincare products that lead the chart. Water Purifiers 20% in Mumbai, 3.1% in Delhi and nil in Bangalore. Plastic Containers 17.9% in Mumbai, 2% in Delhi and 0% in Bangalore.
FUTURE SHOPPING TRENDS
Before winding up the research results, let's have peek at the emerging shopping trends. According to our findings the direct selling need to pull up their socks and be ready for a long haul.
26
Origin of Multi Level Marketing: Amway Corporation Direct Sales Agents Delhi
strongly agree
8% 11% 5% 41%
somewhat agree
not sure
somewhat disagree
27% 8%
strongly disagree
dk/cs
Mumbai
strongly agree
somewhat agree 13% 11% somewhat disagree 8% 35% strongly disagree 18% dk/cs 15% not sure
Bangalore
strongly agree
somewhat agree 0% 12% 0% not sure
somewhat disagree
strongly disagree 88% dk/cs
27
Origin of Multi Level Marketing: Amway Corporation Supermarkets/ Malls Delhi
3% 8% 13% 0% not sure strongly agree
somewhat agree
somewhat disagree 11% 65% strongly disagree
dk/cs
Mumbai
1% 2% 1% 24% 31%
strongly agree
somewhat agree
not sure
somewhat disagree
strongly disagree 41% dk/cs
Bangalore
6% 0% 0% 24%
strongly agree
somewhat agree
not sure
41%
somewhat disagree
strongly disagree 29% dk/cs
28 Project source URLhttp://www.mbaguys.net/t632/
Origin of Multi Level Marketing: Amway Corporation Interest Delhi
strongly agree
somewhat agree 16% 27% 3% not sure
somewhat disagree 14% 3% 37% dk/cs
strongly disagree
Mumbai
strongly agree
15%
3% 17%
somewhat agree
not sure
somewhat disagree 31% 20% strongly disagree 14% dk/cs
Bangalore
strongly agree
somewhat agree 0% 12% 0% not sure
somewhat disagree
strongly disagree 88% dk/cs
29
Origin of Multi Level Marketing: Amway Corporation
8. THE BEGI I G OF AMWAY
30
Origin of Multi Level Marketing: Amway Corporation 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 todays fastest -growing industries.
. 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. 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. The ' 70s began with sales of more than $100 million at estimated retail, and kept going strong. After a lengthy investigation, the FTC (Federal Trade Commission) verified that Amway is a genuine business opportunity and not a "pyramid". 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, Michigan, USA. As carefully planned by Rich and Jay, the second generation Van Andel and DeVos families took the controls during the ' 90s. The Policy Board was formed and 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. Today, more than 3 million Independent Business Owners (IBOs) distribute Amway products in more than 88 countries and territories. Amway generates US$6.4 billion
31
Origin of Multi Level Marketing: Amway Corporation (September'04 - August'05) in sales at estimated retail through this global product distribution network.
FOU DERS' FU DAME TALS
Rich DeVos and Jay Van Andel built the Amway business on the following principles, which they and their families believe constitute a sound foundation for a meaningful life. Freedom Freedom is natural state and most conducive environment in which to live, work, achieve and grow. It allows for our belief in god and for the opportunity to build a meaningful and purposeful life. The Amway business recognizes, supports and expands our freedom which is both personal and economic. Thus it is our responsibility to ensure, protect and sustain our freedom. Family The family is our primary social structure, providing love and nurturing, heritage and legacy. The family provides us with a consistent set of values and a framework for the growth and the ability to thrive as individuals. The Amway business respects and supports the family as evidenced by the Amway policy board and the prominence of 'family' in Amway distributorships. H op e Hope gives us the power to transform our lives in positive ways. It is a force that allows us to envision dreams, establish goals and achieve great things. By offering hope, we open windows of possibility for others and it is why Amway speaks so meaningfully to the needs of people around the world. Reward Reward involves the shared action of giving and receiving. Reward helps us to grow either as the giver or the recipient and these are many ways we are rewarded. At the most basic, it is to be acknowledged and loved as a person. To be rewarded also means to be recognized for one's commitments, valued for one's contributions and compensated for one's efforts. Reward helps productivity flourish by providing both 32
Origin of Multi Level Marketing: Amway Corporation closure for one action. Reward is the integral to the Amway business, as we help each other grow as people and as entrepreneurs.
MISSIO
To provide the best business opportunity. To deliver exceptional quality products to urban and semi urban homes in the areas of nutrition and wellness, cosmetics, personal care, home care, home tech and insurance.
VISIO
Inspiring people to live better lives.
VALUES
Amway has established some simple shared values that unite the entire company, and all of the Business Owners that are associated with Amway. They believe that these values guide their actions and help them to achieve everything they are capable of without compromise or harm. Integrity We will uphold the highest personal and professional integrity which demonstrates honestly, loyalty, respect and high ethical standards in all our responsibilities, obligations and other activities. We are committed to behave at all times in accordance with the ethical practices of the organization. Trust Building reliability and dependability for self by displaying commitment, honesty, confidentiality and consistency in all actions. Transparency We will promote a culture of openness and mutual trust by interacting objectively and without underlying personal interests.
33
Origin of Multi Level Marketing: Amway Corporation Service Orientation We are committed to serve our customers to fulfill their needs by focusing efforts on discovering and thereby meeting stated and unstated requirements.
Partnership We will collaborate across boundaries and find common ground by sharing ideas and resources, with a wide range of stakeholders. We will develop networks and build long term alliances with internal and external customers.
Recognition We are committed to honour, encourage and support individuals and teams who contribute, through their behaviour and actions, to the success of the organization.
34
Origin of Multi Level Marketing: Amway Corporation
9. AMWAY I I DIA
35
Origin of Multi Level Marketing: Amway Corporation
William Pinckney, Managing director & C.E.O, Amway
Amway entered in India in 1995 and began its operation from May, 1998. During this three years gestation period a lot of research went into developing and packaging the products. College students were hired and taught networking strategies. They were trained to rope in the housewives interested in earning money by selling products from home. Amway India provides free and unlimited training to all its distributors to help them grow their business. Amway India conducted over 29,000 training sessions during September'03-August'04 with an attendance of over 1.3 million Amway Business Owners and prospects. The Company is headquartered at New Delhi. Amway has invested in excess of US$35 million in India of this; US$6 million is in the form of direct foreign investment. Amway has grown from 91 crore in its first year to 636 crore in 2003-04. The company has 50 centers across the country that supplies products to all over India. Amway offers products in the categories of nutrition and wellness, cosmetics, personal care, home care, home tech and insurance. All these products are backed by 100 % money back guarantees and are developed by company's own highly experienced 500+ scientists and technical staff at its R & D centers. All products are formulated according to international standards and developed in accordance with the Indian tastes. Amway has R & D facilities in its origin country .i.e. USA. The Company has provided the income generating opportunity to over 4,50,000 active independent Amway Business Owners, out of which 62% are females, 25% are couples and 13% are males. Amway India has established a nation-wide presence with 74 offices, 55 city warehouses and four regional mother warehouses. With the exception of Cosmetics range (Artistry*) and some products in Nutrition and Wellness category, all Amway India products and bottles are manufactured in India through 5 third party contract manufacturing facilities located in Gujarat, Maharashtra, Chennai, Himachal Pradesh and Hyderabad. 36
Origin of Multi Level Marketing: Amway Corporation
10. AMWAY BUSI ESS OPPORTU ITY
37
Origin of Multi Level Marketing: Amway Corporation
STARTI G A BUSI ESS GE ERALLY REQUIRES ??..
CAPITAL
TIME
HUMA RESOURCE
I FRASTRUCTURE
RISK
As we all know, the pre-requisite for starting any business is lots of capital. The entrepreneur also needs to devote a lot of time to his business and the business demands his presence. It will also need intelligence manifested by being smart. The premises are a must for any business to function. The entrepreneur also required to employ human resource for performing various activities. After investing the capital, time, human resource and suitable infrastructure the fifth element comes into picture i.e. RISK!!!! The risk of losing financial security, time for yourself and family, recognition, realization of dreams. The cash flow in the traditional business is not good. It is a noted fact that 80% of new business close down in the first year itself. However the Amway business opportunity is very different from the conventional businesses. It may seem small in the beginning but there is an immense earning potential. This fact is testified by the lakhs of Indians who took up this opportunity very seriously and most of them get success in it.
38
Origin of Multi Level Marketing: Amway Corporation
BE EFITS OF AMWAY BUSI ESS OPPORTU ITY
LESS CAPITAL REQUIREME T
CA BE DO E AS PART TIME BUSI ESS
IMMEDIATE I COME
CA BE START AT HOME
O RISK
Any one can start his/her Amway business by paying a sum of Rs.4400/as registration fees. To become an Amway Business Owner he/she has to be sponsored by an existing Amway Business Owner. He/she has to fill out a consultant Application Form, give identity and residence proof, pay registration fees and take the starter kit. The person who sponsors him/her would then further provide guidelines and support about the business. Amway also runs regular training programs that will further equip him/her in the development of his/her business. Amway business does not require long hours of work and can be successfully started part time. In the Amway business the cash flow is very quick and the system is turned so as to give returns to the new consultants in the first month it self. So unlike to conventional business it does not require years to break even. The Amway business opportunity does not require any formal qualification. All the necessary business training is imparted to the consultants by the company. Over the years Amway has developed many successful entrepreneurs, many of them not even educated up to 10th standard. All one needs is a DREAM and a burning desire to make it in life. The Amway opportunity model is such that it does not require any infrastructure. All the necessary tools are provided by Amway. So the business can be successfully conducted in one's own home. 39
Origin of Multi Level Marketing: Amway Corporation The best aspect about Amway business is that it does not involves an element of risk. If a new consultant feels that he would not be able to do the business, he can return the starter kit within 45 days of starting the business and get back the registration fees paid at the time of admission as per the Amway consultant registration policy. Amway Business Owner is entitled to use Amway's offices all over the country and so does not need to incur costs such as overheads, staff and premises. Also need not require to spend anything on business skills training as Amway's highly trained and efficient staff is available at all times to assist him/her in every aspects of his/her business. He/she is free to decide the people whom he/she wants to work with, his/her working hours and even how long those hours should be. He/she may take it up as a part time business also. Thus he/she does not require to take a part in any risk as all risk is taken by Amway.
WHAT THE CO SULTA T HAS TO DO?
Talk to People and Locate Customers The consultants are require to talk to the people about Amway products and to convince them to buy Amway products and in return the consultants get paid. Locate Other Consultants The consultants are also require to empower others to achieve personal and financial independence through the powerful and time tested compensation plan.
40
Origin of Multi Level Marketing: Amway Corporation
AMWAY BUSI ESS OPPORTU ITY
V/S
OTHER JOBS OR BUSI ESS
Amway Business Opportunity TRUE
Other Jobs/Business 1. Low-to- o Financial Risk Start your own business for a few thousand rupees plus learn all you need to get going in a single afternoon. 2. B e you r ow n B os s Working for yourself. Doing what you choose to do where you want with people you choose to work with. 3. Offering innovative and Superior Quality Products Not found in retail stores, spas, clubs, mail order catalogs or anywhere else! Unlimited market potential. 4. Working Part time or Full time When and where you want the hours you choose. 5. Have a mentor Somebody who will be with you till the time you achieve success. 6. o Area Restrictions No set hours, no time clock, no commuting, no employees, no high overhead, no dress code, no franchise fees or royalties to pay, no limitations on how high up you can go. 7. Open to everyone Regardless of age, sex, religion, education, experience, income level, capital investment, family or business background, past success or failure. FALSE
FALSE
TRUE
FALSE
TRUE
FALSE
TRUE
FALSE
TRUE
FALSE
TRUE
FALSE
TRUE
41
Origin of Multi Level Marketing: Amway Corporation 8. Providing in depth Training That promotes the highest levels of personal and professional growth, business and leadership development. 9. Immediate Income plus the very real opportunity to earn from Rs. 5,000 - Rs.15,000 a month part time, to Rs. 1,00,000, Rs. 2,00,000 a month and more as a full time career. 10. Be paid what you're really worth Your success comes from cooperation, not competition. Plus, get the fulfillment and satisfaction of making a positive difference in hundreds, even thousands of people's lives. 11. Creates the kind of income recording artists and authors enjoy Residual. Get paid over and over again for your work. You can even reach the point where you stop working and your income continues. 12. Pursuing your own dream Instead of trading your time for money building someone else's dream. 13. Live the lifestyle of Millionaire without the burdens and responsibilities. Your time and your life are your own. Have more fun, travel, play, meet friends, enjoy your family. Live as you dream. You are Free!
FALSE
TRUE
FALSE
TRUE
FALSE
TRUE
FALSE
TRUE
FALSE
TRUE
FALSE
TRUE
42
Origin of Multi Level Marketing: Amway Corporation
BUSI ESS STARTER KIT
To become an Amway Business Owner all one has to do is to buy a Business Starter Kit which costs only Rs. 4,400/-. He/ she can choose from the completely Flexible Kit which gives him/her complete freedom to choose products of his/her choice. Contents of the Business Kit
PRODUCTS
LOC 500ml SA8 NS 500ml See Spray 500ml NSCHS 250ml G&H BS 250ml G& H Lotion 250ml Pursue 200ml Car Wash Sachets Sat 2 in 1 60ml Dish Drop Sachets Zoom 500ml Sat DCS Sachets Sat DCC Sachets
NEW LITERATURE
Quick start guide ROC Know Your Business Know Your Products Flip Chart Multi-lingual brochure
NEW SALES AID
Pistol Grip Bottle Turret Top Bottle PC Pump Dispenser PC Pump Dispenser Pour & Measure Cap
OR Take the New Home Care -Personal Care Kit which has an assortment of products from our Home Care/ personal Care range. The kit contents are: LOC 500ml Dish Drops 500ml Pursue 500ml Zoom 500ml SA8 500ml See Spray 500ml G&H Body Shampoo 250ml G & H Body Lotion 250ml Glister Persona Sr Tooth Brush Persona Talc Persona Soap Literature Kit Sales Aid
43
Origin of Multi Level Marketing: Amway Corporation
SUCCESS STORIES
There is a pot of gold at the end of the rainbow, it is said, that pot is yours to reach out and grab. All you need is a little enterprise, a dynamic personality and determination. After becoming Amway Business Owners many people's life has been changed completely. Let's have a look at some examples.
Mukesh & Kokila Patel I was first introduced to the Amway business by one of my office colleague. At that time, I wanted to enjoy financial security and have time for myself. I immediately realized the potential of this business and its inherent enormous opportunity which I felt was conceptually designed for me. We worked consistently and persistently and my wife and I resigned from our Government jobs. We are now full-time Mom and Dad to our loving daughter Komal and son Rony. We have gradually understood that the Amway business is truly the world's best business opportunity. We believe that Amway not only gives us tremendous financial returns but also time for our family. Now we share a great relationship with our family, friends, down lines and up lines. When we first joined the Amway business, we shared this business with our friends and brothers. They eventually became Platinums and above and we became Sapphires. Within just eleven months, we straightaway reached the Diamond level from Sapphire. We made this possible with our good work ethics, by being focused, dedicated and working in a self-disciplined manner towards our goal. Our dream of reaching the Diamond level has been one that was very close to our hearts. By reaching this level of achievement, that is exactly what we have done. Of course, it would not have been possible for me to reach here without my wife's hard work and support. As Diamonds, we are leading a balanced lifestyle with quality time, money 44
Origin of Multi Level Marketing: Amway Corporation and freedom. We are now resetting our goals at higher levels as well as helping our group to accomplish their dreams, just like we did. Now, this business is our mission in life. It is my belief that one should 'Dream Big and Act Fast' and realize that the best is yet to come because the Amway business has the potential to make one's dreams come true.
Ajitpal Singh & Randhir Kaur We were brought up in a very middle class farmer family, in a small village known as Haruwal in Gurdaspur district of Punjab. I completed my schooling and then got my post graduate degree from Khalsa College, Amritsar. My wife Randhir belonged to Amritsar, we first saw each other at college and got married in 1980. Though I taught for 11 years in a rural school, I just wasn't satisfied hence we moved to Chandigarh to chase our dreams.We also wanted to live in a better city and look for new opportunities. We had very tough time at Chandigarh but never lost heart. Because when 'dreams are big, facts do not count.' We always kept on trying one thing or the other. In 1998 we got a telephone call from one of our relatives who tried to show the Amway business plan to us. We saw the plan half heartedly because at that time we were not ready to see it. Besides, our relative could not raise our curiosity to see the business. Why we rejected the plan, we do not know even today. After a few months we were invited to a house meeting where we were introduced to the plan again. This time got we excited and I could not sleep that night. Next day we joined the business and today we believe that Amway is THE BEST business on this planet. Frankly speaking, I joined Amway for money only, as I didn't knew the meaning of security at that time. Initially, we came across many challenges and problems but they could not stop us. Our main challenge was that our sponsor did not know anything about this
45
Origin of Multi Level Marketing: Amway Corporation business because he had joined Amway just a few days before us. Our uplines were American. Initially there was nobody to help and mentor us. We met our uplines when we attained the Ruby level. After that we started getting great mentorship from our uplines. Now I am working full time to build my Amway business. My wife Randhir and I feel blessed. Our children are learning the values which this business provides along with money and recognition. My daughter Ritu got married last year; she and her husband Mandeep are also very positive about the business and are brand new gold producers. Due to this business we have travelled to Bangkok, Singapore, South Africa, Bintan and Pattaya. For all these trips Amway bears all the expenses and you are treated like royalty. This is their recognition for our hard work. We are thankful to Amway management, our uplines and leadership for their support.
46
Origin of Multi Level Marketing: Amway Corporation
11. PRODUCTS
47
Origin of Multi Level Marketing: Amway Corporation
The Amway products match global quality standards. They carry a tamper-proof seal and a 100 per cent Money Back Guarantee'. 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. Amway India offers its products in five categories. They are Personal care category, Home Care category, Nutrition & Wellness category, Agricultural category and Cosmetics category. At present Amway offers over 75 products, few of them are as follows.
A Concentrated Liquid Car Wash that helps loosen surface grease without dulling the car's shine 500 m l M R P: R s.2 1 9 .0 0
For sparkling dishes, clean cookware and shining silverware, get Dish Drops* Hand Dishwashing Liquid Detergent.
Ground - dirt on tile floors... fingerprints on the walls... greasy stains on washable fabrics... These are just a few of the household cleaning jobs L.O.C.* High Suds Liquid Organic Cleaner handles with ease. 500 m l M R P: R s.2 1 5 .0 0
48
Origin of Multi Level Marketing: Amway Corporation PURSUE* Disinfectant helps maintain a hygienic environment. It kills germs and odor-causing bacteria, as well as fights against athlete's foot fungus and common viruses.
SA8* Delicate Detergent is a gentle, yet effective detergent for hand washing or machine washing most delicate fabrics and washable wool in cool water. Any fabric which can be washed in water, can be washed in SA8* Delicate. 500 m l M R P: R s.3 4 5 .0 0
SA8* Liquid with Natural Softener is a highly concentrated laundry liquid with added softener and a pleasant fragrance. Just a small amount will remove stains, dirt and grime from your clothes as well as soften and freshen your clothes and linen.
Depending on the task at hand and personal preferences, SEE SPRAY* Window Cleaner Concentrate can be custom mixed using an Amway* Pistol Grip Sprayer. Use a 1:3 ratio (1 part See Spray* Concentrate to 3 parts water) for everyday cleaning efforts. 500 m l M R P: R s.2 0 9 .0 0
For getting rid of household grease and stains, ZOOM*, Spray Cleaner Concentrate works fast! Crayon, lipstick, greasy hand prints, oil, pencil, and smoke stains disappear in a flash. Just spray, wait a moment, and wipe with a clean, dry cloth or paper towel. 500 ml: MRP: Rs.209.00
49
Origin of Multi Level Marketing: Amway Corporation Pamper your fine leather and vinyl with AMWAY* leather and Vinyl Cleaner, a cleaning formula that also softens conditions, polishes and helps resist stains and water damage. 500 m l M R P: R s.2 5 9 .0 0
AMWAY* Buff Up Furniture Crème makes it easy for wood furnishings to maintain their luxurious appearance year after year with a minimum of effort. Simply apply to fine wood furniture, cupboards and wood paneling in one easy step - no buffing required - to polish and protect fine wood finishes. 500 m l M R P: R s.3 5 9 .0 0
Amway Pre Wash liquid Soil and Stain Remover gives detergent five times the stain fighting power against tough laundry problems like motor oil, ink, lipstick, grass, blood, and messy stains. 500 ml - MRP: Rs. 330.00
Emollients and the goodness of nature are two reasons your customers will like G&H Body* lotion. On arms, elbows, legs, knees, and all over, G&H* Lotion contains glycerin and natural honey and leaves skin feeling soft and smooth. 250 ml : MRP: Rs. 349.00 60 ml : MRP: Rs. 105.00
50
Origin of Multi Level Marketing: Amway Corporation Convenience and versatility are two excellent reasons your customers will want to use G&H* Body Shampoo. With just one product, your customers get the benefits of three separate cleansers. The entire family can indulge in luxurious, lightly-scented lather from head to toe, every day 250 m l M R P: R s.3 4 9 .0 0 60m l M R P: R s.1 0 5
The new Glister comes with the advantage of Sylodent, a polishing agent unique to Glister. Sylodent particles are a combination of flat surfaces and contours which safely yet effectively polish the teeth without excessive abrasion on the enamel. 100gm Multi-Action Toothpaste M R P : R s . 1 1 5 .0 0
This dual-action shampoo with cleansing agents and light conditioners will clean and condition in a single step. The cleansers are derived from natural sources like Oats, Kelp and Soap Wort to gently clean out the dirt and pollutants from the hair. 250 m l M R P : R s . 3 4 9 .0 0
This liquid hand soap is mild to the skin. Natural Aloe Vera and 5 skin conditioners leave hands feeling soft and clean. 250 m l M R P: R s.3 4 9 .0 0
51
Origin of Multi Level Marketing: Amway Corporation The New Advanced Persona Toothbrush comes with all new Accu Pressure RIBS Persona Senior: pack of 4 M R P : R s . 1 1 9 .0 0 Persona Junior: pack of 4 M R P : R s . 9 9 .0 0
Get yourself silky smooth skin and cool, soft, refreshing comfort with the finest talcum powder in the country. The lingering fragrance of lilac rose and jasmine gives you the day long freshness. 350gm M R P R s . 1 7 9 .0 0 Persona soap is India's first and only "Rich Moisturizing Bar Soap with Deodorant Protection". Pack of 3, 100g each: M R P R s . 1 0 8 .0 0
The New NUTRILITE Protein Powder is a high quality, low fat, low cholesterol protein source which naturally supplies all essential amino acids with the added benefit of soy is flavones and naturally occurring calcium &iron. 500 gm: M R P : R s . 1 ,6 0 9 .0 0 This NUTRILITE 200 gm: M R P : R s . 7 7 9 .0 0 product crafts three distinct,
organically grown forms of Echinacea into an innovative supplement which helps strengthen body's natural defense.
52
Origin of Multi Level Marketing: Amway Corporation This NUTRILITE Product uses standardized Siberian Ginseng and Ginkgo Biloba extracts to promote product consistency. This product also provides NUTRILITE Acerola and Citrus Bioflavonoid Concentrates. 100 tablets: M R P : R s . 2 ,3 6 9 .0 0
Finally, an eye crème that targets more then the appearance of dark circles. Because ARTISTRY Replenishing Eye Crème has been clinically proven both to reduce the appearance of puffiness with in 24 hours and to reduce the appearance of dark circles by 30% in 16 weeks. Result: Eyes with nothing to hide 15m l M R P : R s . 5 9 9 .0 0 Artistry's Alpha Hydroxy Serum Plus is a clinically proven, facial skin treatment that combines Alpha Hydroxy Acids for exfoliation with Hydrolipid Matrix that helps to hydrate, smooth and protect the skin against moisture loss resulting in a smooth, younger looking skin. Recommended for Adults of all Skin Types
The Time Defiance Nighttime products are Anti Aging, Wrinkle fighting, Intensive, Anti oxidant, Skin
Revitalizing treatments that help skin recuperate from daily stresses. For All Day, Everyday Protection 50m l : M R P : R s . 2 ,0 9 9 .0 0
53
Origin of Multi Level Marketing: Amway Corporation To prevent sun induced aging, protect yourself with Artistry's Anti Aging Daytime Protection Crème with S P F 15.
APSA-80 is an all-purpose spray adjuvant that is mixed with pesticides (insecticides, fungicides and postemergent herbicides) to control insects, disease and weeds. 1 liter: 500m l : MRP: Rs.: 585.00 MRP.: Rs. 349.00
54
Origin of Multi Level Marketing: Amway Corporation
100% MO EY BACK GUARA TEE
A lot of companies offer product guarantees or promises of Money Back Guarantee, but only few can match the guarantee offered by Amway. The company's faith in its product and its commitment to quality extends to an unconditional 100% Money Back Guarantee on its products.
Amway products are manufactured under rigid quality control and are exhaustively tested to ensure top quality. The Amway's 100% Money Back Guarantee is assurance of full value on purchase of Amway products. A customer can use a reasonable amount of product to assess satisfaction. In case he is dissatisfied he can return the used products as per company policy for a 100% money refund.
Amway believes in the highest standards of quality and to lend credibility to the claims of high quality. Amway products wherever applicable carry 100% Amway Money Back Guarantee. Whenever you buy an Amway product or a Amway distributed product you have the right to use it for a reasonable time to determine whether you are satisfied or not.
If you are dissatisfied for any reason, you have the right to return the unused portion back to the Amway Business Owner from whom you made the purchase. The Amway Business Owner will either replace the product or refund the full purchase price. This guarantee however does not apply to products, which have been internationally damaged or mishandled.
55
Origin of Multi Level Marketing: Amway Corporation
12. AMWAY OPPORTU ITY FOU DATIO (AOF)
56
Origin of Multi Level Marketing: Amway Corporation
Amway Opportunity Foundation (AOF) is a registered non-profit organization which looks after Amway India's Corporate Social Responsibility (CSR). Vision Enable the less privileged child to lead a better life. Mission To be the front-runner in providing opportunities for child education and health to attain economic independence, with special focus on the blind child. Amway launched the National Project for the Blind in 1998, when it entered into a partnership with the Delhi-based NGO, All India Confederation of the Blind (AICB). In 2000, it entered into understanding with the Mumbai-based National Association for the Blind, India (NAB). Under this project, AOF and AICB/NAB print and distribute Braille textbooks to all school-going children in a state. This partnership has printed and distributed Braille textbooks across the country. The states covered so far are:
• • • • • • • • • • • • • •
Rajasthan Delhi Haryana Punjab Uttar Pradesh Bihar Maharashtra Gujarat Andhra Pradesh • Karnataka Madhya Pradesh Tamil Nadu Rajasthan - second time Delhi - second time Punjab - second time
57
Origin of Multi Level Marketing: Amway Corporation Besides the Braille project, AOF has also helped NGOs celebrate the International White Cane Day for the past 5 years. On this day, visually challenged take out a dignified procession and over 2000 White Canes are distributed. AOF has also helped the Ramakrishna Mission Blind Boys Academy (RKMBBA), Narendarpur (Kolkatta) set up a computer centre. This is the first such computer centre for the blind in Eastern India. Set in a sprawling and green campus, this efficiently run institution has a host of facilities for its students, which includes music, crafts, vocational training, besides the routine classes. One of the various pressing requirements was a computer centre, which would enable students to pick up this much-needed skill. AOF was honored with the All India Confederation of the Blind (AICB) Millennium Outstanding Service Award, 2000, in recognition of its sterling contribution to the cause of India's blind. AOF has funded a state-of-the-art, fully equipped Mobile Dental Clinic for the Rotary Club, Delhi. The Clinic caters to the oral healthcare needs of underprivileged sections of society, in and around Delhi, free of charge. AOF has partnered with NGOs like AICB and NAB (National Association for the Blind) in printing and distributing Braille textbooks to all school-going visually challenged children in 15 states which includes - Rajasthan, Delhi, Haryana, Uttar Pradesh, Punjab, Bihar, Gujarat, Maharashtra and Tamilnadu. Seven more states are on the anvil. AOF has also set up a computer centre at the Ram Krishna Mission Blind Boys Academy, Narendrapur (West Bengal). A total of 80,000 visually impaired children have benefited from this Project. AOF received a citation and award from the World Blind Union (WBU) in 2003 for the 'sterling contribution to improve and elevate the quality of life of visually impaired children in India'. It is the first Indian NGO to get this distinction. WBU is an apex body of the visually challenged and enjoys consultative status with the UN. Support to CRY: AOF had sent 'Child Relief and You' (CRY), a sum of Rs. 30 lacs to be used in the Jan 2001 earthquake-affected areas in Gujarat. This money was used to run Activity centers that CRY and its partners had set up at the worst affected villages in Gujarat.
58
Origin of Multi Level Marketing: Amway Corporation Over the past five years, AOF has helped celebrate the White Cane Day where over 10,000 visually challenged persons, have been given white canes. It has also been making made Children's Day, a special one for over 1,500 underprivileged children. AOF made possible cataract operation camps at Surat, Erode, Coimbatore and Delhi. Over 20,000 persons (majority which were children) have been screened at these camps. AOF has also organized over 120 blood donation camps in collaboration with Red Cross Society, in as many cities where over 13000 AOF volunteers, comprising of Amway distributors and staff, have donated blood. In the past
Donations Made
• • • •
In 1996 (two years prior to the start of commercial operations) Amway donated a fully-equipped mobile dental van to Rotary Club of Delhi mid-town. In 1997, it donated a set of Webster's Dictionary in Braille to the school run by the Blind Relief Association. AOF volunteers donated sports equipment to the MGD School for the Deaf and Blind at Bhatinda. AOF volunteers at Guwahati - comprising the local Amway distributors collected and donated Rs 30,000 to the district administration to help combat the flood crisis in the north eastern state.
•
AOF volunteers and Amway distributors donated necessary furniture and clothing to St Micheal Blind School Ranchi. These funds were raised at a special filmscreening in Ranchi which was supported by Amway distributors of Ranchi.
• •
AOF donated study material and sports equipment to the NAB hostel for blind boys at Bhopal. AOF donated a group hearing system to the 'Red Cross Koshish School' for the Deaf, Dumb and Blind. Using an amplifier, this equipment enables 12 deaf persons/children to 'hear' lessons being imparted by teachers. These funds too, were raised locally by the AOF volunteers - Amway distributors.
•
Amway volunteers donated Musical instruments and toys to the Anubhab school for mentally challenged children, Siliguri
59
Origin of Multi Level Marketing: Amway Corporation
•
At Bhubaneshwar AOF donated Braille textbooks and other study material to the Bhima Bhoi Blind School, Bhubaneshwar, from funds raised by AOF volunteers of that city.
•
The January 26th killer-quake that rocked Gujarat in 2001 devastated almost the entire state. Tens of thousand lost their lives, uncounted others lost their homes. A whole slew of aid-agencies rushed into the beleaguered state, offering first aid, medicine, food, blankets etc. After sifting through a host of possible partners through whom Amway could channelise its relief money, AOF proposed that CRY would seem a preferred partner. AOF took a conscious decision to channelise the 35 lacs the Amway distributors, employees and Amway as a company, had collected. CRY utilized the Amway funds in the following villages of Anjar (Bhuj) and Dhrol (Jamnagar), Rambav Rapar, Kuda Jampar Rapar, Kakavav Bhachau, Nilper Bhachau, Meghpar Bhachau, Saran Vandh Rapar, Trambau Rapar, Vanoi Rapar, Suvai Rapar, Gauripar Rapar, Naranpar Rapar.
•
Amway raised close to Rs 50 lacs, post the Dec 2004 Tsunami that wrecked havoc on India's eastern coast. Currently, it is jointly building a school-cumorphanage-cum-old-age-home at Nagapattinam.
60
Origin of Multi Level Marketing: Amway Corporation
13. AWARDS & RECOG ITIO
61
Origin of Multi Level Marketing: Amway Corporation
As a corporate leader in promoting environmental awareness and education, Amway received the prestigious United Nations Environment Programme Achievement Award in 1989. Corporate Citizenship Award - On November 08, 2005, the United States Chamber of Commerce awarded Alticor with the Corporate Citizenship Award in the category of International Community Service for the One by One Campaign for Children. 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 Chouhan - 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 i ns t i t ut i ons . Presented an award by the World Blind Union (WBU), for 'its (AOFs) 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 largesized statue of Saraswati, the Goddess of Knowledge, was presented
62
Origin of Multi Level Marketing: Amway Corporation 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. On another occasion, the Central Red Cross Bank, Cuttack awarded Amway Opportunity Foundation with a trophy and Certificate for contributing the highest no of 400 units to their Blood Bank.
63
Origin of Multi Level Marketing: Amway Corporation
14. COMPETITIO
64
Origin of Multi Level Marketing: Amway Corporation The main competitors of the Amway are the baniyas (general stores) who deal in similar products. People traditionally buy their household goods from these baniyas. Therefore they are hesitant to buy the same type of products from Amway Business Owners. According to the executives, there is a large blue ocean for Amway or any other direct selling companies to explore. However other Direct Selling Companies present in India are also the competitors. Amongst the other Direct Selling Companies the ones which can act as a major threat are:
Avon Beauty Products
The Rs 100-crore Avon is wholly owned subsidiary of the $6.2 billion New York headquartered Avon Products Inc. the company entered India in 1996 and is based in New Delhi. With over 1.25 lakh distributors, it is present in 30 cities directly and another 50 indirectly and has five percent share in the domestic cosmetics, fragrances and skincare market. Sells make up products, color cosmetics, skin care, fragrances, talcs, lipsticks, nail enamels, fairness creams etc. plans to enter jewellery, intimate apparel, and nutrition and wellness categories.
Oriflamme India
This world cosmetics leader in high quality natural skincare and cosmetics entered India in 1995. the $750 million Swedish parent Oriflame International stated in 1967 and is listed on the Stockholm Stock Exchange. With operations in 60 countries, it has a sales force of over 1.5 million. Has a complete range of high quality products numbering over 550 items in the skincare, fragrances, cosmetics toiletries and natural Swedish cosmetics. Based in New Delhi, it has distribution set up in over 200 locations.
Tupperware India
The Rs 100 plus crore Tupperware India started its operations in 1996 and is based in New Delhi. A subsidiary of the Tupperware Corporation of the US, it is a global company with a local spirit. Listed on the New York Stock Exchange, the $1.2 billion
65
Origin of Multi Level Marketing: Amway Corporation Orlando, Florida based company was founded in 1946 and is present in over 100 countries today. It has an all-women team of over 55,000 across 48 cities in India. Sells virgin plastic wares in seven categories: dry storage, food preparation, food saving, microwave, refrigeration and freezer, outdoors and mobile and for kids.
Herbalife India
Began in 1999, it's based in Bangalore and is 75 percent owned by Herbalife international of the US. Had Rs 330 crore turnover in 2003. Headquartered in Los Angeles, the $1.8 billion company is listed on the New York Stock Exchange and began operations in 1980. has over 23000 active distributors selling seven products in the nutrition and dietary supplements category. Across the world, it has over a million distributors in 59 countries selling 40 products.
HLL etwork
Started in 2003 by the domestic FMCG leader Hindustan Lever, as Aviance. With 3.5 lakh consultants, it clocked over Rs 110 crore sales in 2003. offers home and personal care and food products in 1500 towns and cities, backed by 42 offices and over 250 service canters. The range of products include detergents, personal care and cosmetics for women, soaps, oral care, male grooming, kids care and food.
66
Origin of Multi Level Marketing: Amway Corporation
15. I TERACTIO
67
Origin of Multi Level Marketing: Amway Corporation I visited Amway India's office situated at Andheri, where Mr. Jignesh Mehta, Associate Manager Corporate Communications, Amway India Enterprises, provided me with all the necessary information. Let's have a look at the answers given by Mr. Jignesh to the following questions. Q. How has the Indian market and consumer behavior changed since Amway's entry? A Consumers here are very price sensitive. But in Amway's context, it's not an issue of being 'too expensive'; it's an issue of price points. Also, there is a greater awareness of international products and the quality that goes with them. Indians have become very brand aware. Take Amway's stance on the global environment. In India we are starting to see that consumers actually buying in to the 'eco- friendly' element of Amway. They do react to the positive 40 years that Amway has spent doing the right things for the environment. Q. The company is not in a direct relation with the ultimate consumers, so how does it forecast its sales figures? A. It is not necessary on the part of the company to be directly interactive with the consumers to forecast its sales figures. The consultants are asked to create their own goals and propose them to the company. They are at a better position to judge market behavior and the planning is done accordingly. Q. Does the company have a suggestion and complaint system? A. Yes all the offices have a suggestion box where consultants can drop their complaints or suggestions if any. Q. Do you conduct customer satisfaction surveys? A. Yes we do undertake consumer satisfaction surveys on periodic basis. Q. How much percentage of market share do you have? A. According to market research companies, Amway has 24% (approx) market share in India. Q. While setting prices what goal is kept in the mind? A. Customer Satisfaction, Maximization of profit and Maximization of market share.
68
Origin of Multi Level Marketing: Amway Corporation Q. Do you conduct lost consultant analysis? A. Yes the consultant before quitting up the business has to fiil in a form called as the decision form. The reason for quitting the business has to be written in the form. Along with this we also conduct the lost customer analysis. Q. How does the company positions it self? A. Number 1 Direct selling Company. Q. What is the general mark up difference that the consultants of the company enjoy while retailing these products? A. Generally it is 18% - 20%. Q. Your products are comparatively higher in costs compared to the products generally available through other sales channels. So what do you think how much amount of money are the people generally willing and able to spend on buying these products? A. Yes, the products are expensive but are again high quality. As far as consumers' paying is concerned, it depends on the products and their expectations from it. However, as the people have started using the products, they have gradually accepted them at the price, which is reasonable as per the quality.
Q. What type of Marketing Information System (MIS) does the company have? A. The backbone of the company is its strong IT base. We have a comprehensive MIS, which contains all the data, trends, usage patterns, etc.
Q. How are the functions of the company organized along geographic lines? A. The company practices Branchising. Branchising means empowering the company's district or local offices to operate like franchises. The branches resembles profit centers and local managers have more freedom in deciding on strategy except for the promotion strategies.
Q. What are the future challenges that the company perceive? A. To increase the number of consultants and thereby to increase sales from current Rs.636 crore to Rs.1000 crore in next 3 to 4 years.
69
Origin of Multi Level Marketing: Amway Corporation
16. SUGGESTIO S
70
Origin of Multi Level Marketing: Amway Corporation As a student of Bachelor in Management Studies, here I wanted to express some suggestions, which I think if implemented will result in the benefit of the company.
Amway has won various awards till the date, but these awards would not have been possible without its consultants. Therefore, company should conduct periodic award functions and recognition programs for its consultants in order to motivate them. Such programs can be very useful to encourage the consultants for making more and more customers and consultants for the company.
The consultants share an emotional bond with the company and the staff. The company should communicate to the consultants about the genuine reasons behind company decisions and policies affecting the consultants in any manner. This would build confidence among the consultants on the part of company, ultimately resulting in increased retention and more active consultants. It would give way to new standards of corporate transparency.
The company should start a Consultant Suggestion Scheme (CSS), apart from its usual feedback boxes placed at the company's offices. The CSS should invite suggestions as well as their implementation procedures from the consultants with regards to improving any of the company activities. The entries should be sincerely analyzed once a month or as per convenience and rewards should be declared for those consultants giving innovative and productive ideas. This would make the consultants feel that the company listens to them and strengthen their bond and respect towards the company.
The attendance for the New Consultant Orientation (NCO) program should be made mandatory. This would motivate the newly sponsored person to attend NCO. Attending NCO would give him a clear picture of the opportunity and increase the retention rate of the company and more of active consultants.
The company should conduct a well designed, nation-wide PR campaign of how the business of the company is growing. This would help in making new consultants and also in bringing the inactive consultants back to the business.
71
Origin of Multi Level Marketing: Amway Corporation
BIBLIOGRAPHY
Pitch- June 15, 2005 (magazine)
WEBLIOGRAPHY
www.amwayindia.com www.amway.com www.google.com www.indiandsa.com www.wfdsa.com www.agencyfaqs.com www.thehindubusinessline.com
72
doc_702722178.docx
Multi-level marketing (MLM) is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of the other salespeople that they recruit.
Origin of Multi Level Marketing: Amway Corporation
1. MULTI LEVEL MARKETI G - A I TRODUCTIO
1
Origin of Multi Level Marketing: Amway Corporation
Have you ever recommended a movie, book or restaurant or anything else to a friend or the family member? Of course we all have. We do this all the time. If someone acts on your recommendation and actually enjoyed the movie, it is likely that he/she recommends that movie to someone else. It is quite obvious that this kind of 'Word of Mouth' recommendations occur in our daily life. Here is an intriguing aspect that everyone should think about. You paid money to see the movie, and also the people to whom you recommended movie, paid the money to watch it. But neither party received any returns (money) from the theatre thanking for the referral. The only people who got paid were theatre owners and distributors, while you did the advertising for them. The amazing concept of Multi Level Marketing (MLM) starts from this question, "How would it be if you got paid for every recommendation you made, and so did those people who told you?" Some of you might say" How it is possible?" or "It is impossible" But this has been made possible today by 'Multi Level Marketing'. "MLM is a hierarchical marketing system in which the goal of salespersons is not only to buy and sell the product, but also to recruit others to buy and sell the product, who will in turn recruit others and so on. Each salesperson receives a portion of the entrance fee paid by his/her recruits." MLM or Network Marketing has changed the lives of many across the world and continues to do so. This innovative style of marketing was introduced by Amway Corporation in USA, in the year of 1959. Then in the year of 1998 Amway successfully introduced MLM in India also. In less than a decade, the organized and self-regulated Rs. 2400-crore direct selling industry has become a successful and kosher business model, logging in 25-30 percent growth annually, with companies like Amway, Tupperware, Herbalife, Modicare and others riding the wave. Corporate India too has taken note of it- Max New York Life and HLL have formally adopted this model.
2
Origin of Multi Level Marketing: Amway Corporation
VIEWS OF LEADI G I DUSTY PLAYERS:
"Direct Selling differs from other sales models mainly in the kind of value added services it offers. We don't get this kind of value added service in any other business model. Also there's a lifetime-warranty on all products sold."- William S Pinckney, M.D. & C.E.O. of Amway India. "Though the biggest advantage is the people-centric nature of this business, today's consumer is ready to pay a higher price for a good product. Though we have value driven nation and will remain so, there's a sweeping change in the desire and mindset patterns today."- Asha Gupta, General Manager of Tupperware India. "it's the value-conscious market that's driving this industry as our products are exclusive and result oriented. Coupled with this is the effective product demonstration that this selling system allows."- Manoj Shirodkar, country director of Herbalife India. Thus, Today MLM has become a multi core industry with an association of its own that's fighting to counter its not strictly kosher image. More importantly, millions of people have tried their hand at it at one time or another. Many drop out after tasting the waters but many others do stay on. Let's have a look into this methodology in detail beginning retailing its types and the Indian retailing scenario.
BE EFITS OF MULTI LEVEL MARKETI G:
Benefits to customers This form of marketing goods or services directly to consumers takes place at the customer's convenience often in his/her home either on a one-to-one basis, or in the context of a sales party. Customers value the advantages of convenience, personalized attention. A good selection of products, ability to examine the products for a period of time protected by a customer refund policy.
3
Origin of Multi Level Marketing: Amway Corporation Benefits to sellers Many of these people have chosen direct selling because they want to own 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 are that they like and believe in the product like being their own boss, and working their own hours like the supplemental family income or like making extra money for themselves feel that the harder they work, the more money they can make enjoy selling and meeting people. Benefits to companies In today's world of rapid change, direct selling offers companies a direct distribution channel that can be accessed immediately bypassing rigid and costly traditional distribution channels
4
Origin of Multi Level Marketing: Amway Corporation
2. RETAILI G
5
Origin of Multi Level Marketing: Amway Corporation
Multi Level Marketing is a part of retailing. So, let's have a look at what is retailing.
RETAILI G:
In the words of Philip Kotler, "Retailing includes all the activities involved in selling the goods or services directly to final consumers for personal, non- business use. It does not matters how the goods or services are sold (by person, mail, telephone, vending machine or internet) or where they are sold (in a store, on the street, or in the consumers home). According to Berman & Evens, Retailing can be defined as "business activities involved in selling goods & services to consumers for their personal, family or household use."
TYPES OF RETAILI G:
The retailing can be classified as Store Retailing, Corporate Retailing & Non-store Retailing. Store Retailing includes retailing the goods & services through store or department. In India nearly 97% of the goods & services are sold through stores. In Corporate Retailing, the retail organizations enjoy economies of scale, greater purchasing power, wide brand recognition and trained employees. The major types of corporate retailing are- corporate chain stores, retail cooperatives, franchises, etc. The well known examples are Big Bazaar, Apna Bazaar, Mc Donald's, etc. Although most of the goods & services are sold through stores, Non-store Retailing has been growing much faster than Store Retailing. Non-store Retailing can be divided in four major categories.
6
Origin of Multi Level Marketing: Amway Corporation 1. Direct Marketing (including telemarketing & internet selling) Direct marketing has its roots in direct mail, telemarketing, television direct response marketing (Tele Brands, Asian Sky Shop, etc.) and electronic shopping. Out of these, electronic shopping experienced a major take off in 1990's as consumers flocked to dotcom sites to buy books, music, electronics, etc. 2. Automatic Vending It is used for variety of merchandise including impulse goods such as cigarettes, soft drinks, chocolates, coffee, etc. These vending machines take a loose change and returns products in exchange. Vending machines are found in factories, offices, large retail stores, petrol pumps, hotels, etc. they offer 24 hours selling, self service and merchandise that is always fresh. 3. Buying Services It is a store less retailer having specific clients-usually employees of large organizations who are entitled to buy from a list of retailers that have agreed to give discounts in return for membership. 4. Direct Selling It is also called as multi level marketing or network marketing; this system consists of recruiting independent business people who act as distributors. The distributor's compensation includes a percentage of sales of those whom the distributor recruits as well as earnings on direct sales to the customers. MLM has been growing at an exponential rate all over India. Sales through most alternative selling channels are tiny or nonexistent. The only exception being MLM, this has grown rapidly over the past 10 years. The main reason for this was that direct selling companies could easily attract a huge number of "distributors", who constitute the key element for the success of any MLM company. Many of these are unemployed Indian housewives who welcomed this opportunity to earn additional income for their households. The low start-up costs meant that they could be easily starts this business.
7
Origin of Multi Level Marketing: Amway Corporation
3. DIRECT SELLI G
8
Origin of Multi Level Marketing: Amway Corporation According to the Indian Direct Selling Association, Direct Selling can be best described as "The marketing of products and services directly to consumers in a face to face manner, generally in their homes or the homes of others, at their workplace and other places away from retail locations, usually through explanation or personal demonstration, by an independent direct salesperson." Amway, the leading direct selling company defines direct selling as "The selling of consumer product or service through personal contact, away from a fixed retail location or shop." Direct Selling and home selling are almost synonymous. The two terms which have emerged concurrently seem to denote the same thing. Both of them are person to person selling and both take place away from and without the help of any retail store. However there are distinctions between the two terms. While home selling takes place at homes, direct selling can take place anywhere. Second, while home selling is always one to one, direct selling can at times to be a group.
MODES OF DIRECT SELLI G
1. MLM also known as network marketing, relationship marketing and multi level direct selling, MLM is building a business through a sellers own sales efforts and by inviting others to become sellers. The remuneration is based on seller's personal sales and on the combined sales of those the seller has sponsored, trained and motivated. Most genuine Direct Selling companies follow this model. 2. SLM The model under which an agent earns commission directly from the sales he/she does. Avon beauty products follow this model. 3. PARTY PLA Here an agent has an equal opportunity to earn regardless of the
time of joining the scheme. Tupperware and AMC cookware follow this. The major difference here is that generally these products are sold by inviting guests in a party plan. This is used as an opportunity to make future sales leads.
9
Origin of Multi Level Marketing: Amway Corporation
4. DIFFERE CE BETWEE DIRECT SELLI G & DIRECT MARKETI G
10
Origin of Multi Level Marketing: Amway Corporation
As per the IDSA the main difference between the two methods of selling is the face to face or personal contact with the consumers in case of Direct Selling versus a contact through some form of media in case of Direct Marketing. However Direct Selling organizations may sometimes use direct mail to enhance their business.
Rakhshin Patel, Senior VP and general manager, Thompson Connect
Rakhshin Patel, one of the pioneers in relationship marketing in India, has worked in ThompsonConnect since 1995. Part of the Executive Committee of J. Walter Thompson, she has led ThompsonConnect India operations to market leadership. In her 15 years of experience in the direct marketing industry, Patel has been widely acknowledged for her considerable skills in innovative database development and management. In her career, she has advised over 250 clients on loyalty and relationships. She is also the architect of the ThompsonConnect Loyalty model. Passionate about numbers and communication effectiveness, Rakhshin spearheaded the implementation of Connexions™ - ThompsonConnect's Oracle 11i based eCRM m odul e Q. Many people confuse Direct Marketing (DM) with Direct Selling - the Amway model, or the way Eureka Forbes sold vacuum cleaners. So, what really is Direct Marketing, and how is it different from Direct Selling? 11
Origin of Multi Level Marketing: Amway Corporation Ans. Direct Marketing or customer relationship management is as different from Direct Selling, as chalk is to cheese. Direct selling as the very word implies, simply cuts off middlemen like distributors, dealers or the retail shop, thus enables in selling a company's products directly to the end consumer. It is essentially a distribution channel. There are of course variations to this basic model, such as Multi Level Marketing as practiced by Amway. Direct Marketing, on the other hand, has been defined by the DMA as "an interactive system of marketing that uses one or more advertising media to effect a measurable response and/or transaction at any location, with this activity stored on a database." It really boils down to any direct communication to a consumer that is designed to generate a response in the form of an order, or a request for further information, and/or a visit to a store. I believe direct marketing adds to the brand surround of a marketing programme, with a deep focus on understanding the customer, providing insights into her behavioral pattern and thereby leading to a one-to-one communication. In effect, the difference between Direct Selling and Direct Marketing is between a distribution channel that focuses on the sale and a marketing system that focuses on an ongoing customer relationship.
Direct Selling
Manufacturer
Direct Marketing
Manufacturer
Distributors
Consumers
Consumers
12
Origin of Multi Level Marketing: Amway Corporation
5. IDSA (I DIA DIRECT SELLI G ASSOCIATIO )
13
Origin of Multi Level Marketing: Amway Corporation
Where,
Incredible Dreams Sure Are
true.
What is The Indian Direct Selling Association (IDSA)?
The Indian Direct Selling Association, formed in 1996, is an association of companies engaged in the business of direct selling in India. Its members are of high national and international repute having set standards in delivering quality goods and in following ethical business practices. It is affiliated to the World Federation of Direct Selling Associations, USA (an umbrella body for 58 DSAs across the world).
OBJECTIVES OF IDSA
•
To Promote and protect the interests of the direct selling industry and of consumers.
•
To support and protect the character and status of the direct selling industry and to assist and guide in maintaining qualitative standards in direct selling.
Keeping in mind the above objectives, the IDSA will work towards the enhancement of direct selling as a profession so that all those engaged in it can work in a congenial ambience of growth and achieve their objectives to earn, learn, and become self- fulfilled and well respected. The concept of direct selling creates the need for a Code of Conduct which would respect the rights of the customer and ensure that the companies and their sales people practice ethical behavior. This is why the IDSA lays down a Code of Conduct which is to be followed by all its members.
14
Origin of Multi Level Marketing: Amway Corporation
MEMBERS OF IDSA
Amway India Forever Living ModiCare Sunrider India Altos Enterprises Limited AMC Cookware Hindustan Lever Network Oriflame India Direct Educational Technologies India Pvt. Ltd. Daehsan Trading (India) Pvt. Ltd. Avon Beauty Herbalife Quantum Int'l Pvt. Ltd. Tupperware India Max New York Life
15
Origin of Multi Level Marketing: Amway Corporation
6. WFDSA (WORLD FEDERATIO OF DIRECT SELLI G ASSOCIATIO )
16
Origin of Multi Level Marketing: Amway Corporation
WFDSA is a non governmental voluntary organization, globally representing the direct selling industry as a federation of national Direct Selling Associations.
HISTORY:
Founded in 1978, the WFDSA is a nongovernmental, voluntary organization representing the direct selling industry globally as a federation of national Direct Selling Associations. The United States Direct Selling Association serves as the Secretariat for the Federation and is based in Washington DC. It is governed by a board of directors consisting of one director representing each national DSA with equal votes and six officers elected from the board.
MISSIO :
The mission of the WFDSA is to support direct selling associations in the areas of governance, education, communications, consumer protection and ethics in the marketplace and to promote personal interaction among direct selling executives regarding issues of importance to the industry.
17
Origin of Multi Level Marketing: Amway Corporation
7. DIRECT SELLI G STATISTICS I I DIA
18
Origin of Multi Level Marketing: Amway Corporation
To understand the pulse of the customer about the direct selling industry, from the perspectives of awareness, the leading category drivers, the whys of this rising acceptance, customer's future shopping plans, as also to vet marketer's claims objectively, Pitch magazine commissioned leading global market research agency Synovate to survey the key decision maker- the housewives. The survey carried out in New Delhi, Mumbai and Bangalore from May 20 to 28, 2005 has many good news for these marketers as it shows a rising acceptance level of this sales model, thanks to quality products, effective demonstration by agents, good post-sales support as also good brand recall, despite it being a push-driven channel. The 300 odd respondents were all women in the age bracket of 20-45 in the SEC-A1 & A2 market.
Increasing Awareness & Acceptance Levels
120 100 80 60 40 20 0 Delhi Mumbai Banglore
Kirana
Supermarket/ mall
DS
The salient finding of the survey is the rising awareness levels amongst the customers. This mode is now increasingly accepted by the urban customer which is also clear from the high brand recall rate of these companies. 20.4% people in Delhi, 46.3% in Mumbai and 2% in Bangalore shop through this format. The south is a huge untapped potential for all DS companies.
19
Origin of Multi Level Marketing: Amway Corporation
TOP OF THE MI D BRA D RECALL
AVO AMWAY ORIFLAME TUPPERWARE HLL ETWORK MODICARE
20
Origin of Multi Level Marketing: Amway Corporation Satisfactory Response
Delhi
strongly agree
somewhat agree 16% 32% 11% somewhat disagree 5% 0% 36% dk/cs not sure
strongly disagree
Mumbai
strongly agree
11% 5% 11%
4% 34%
somewhat agree
not sure somewhat disagree
strongly disagree 35% dk/cs
Bangalore
0% 6% 18% 40%
strongly agree
somewhat agree
not sure
somewhat disagree 12% strongly disagree 24% dk/cs
This was to check the experience with direct selling, both as a shopping experience &also as a reason for doing shopping through this medium. Though there are many reasons for this, the primary one is product quality. 21
Origin of Multi Level Marketing: Amway Corporation Good Product Quality
Delhi
strongly agree
somewhat agree 19% not sure 5% 0% 8% strongly disagree 19% dk/cs 49% somewhat disagree
Mumbai
1% 4% 7% 7% 46%
strongly agree
somewhat agree
not sure
somewhat disagree
35%
strongly disagree dk/cs
Bangalore
strongly agree
somewhat agree 0% 12% not sure 41% 29% somewhat disagree
strongly disagree 12% 6% dk/cs
22
Origin of Multi Level Marketing: Amway Corporation Products Are Safe
Delhi
strongly agree
somewhat agree 24% 30% not sure
0% 5% 14% 27%
somewhat disagree
strongly disagree
dk/cs
Mumbai
4% 2% 7% 4%
strongly agree
somewhat agree not sure
50% 33%
somewhat disagree
strongly disagree
dk/cs
Bangalore
strongly agree
somewhat agree 6% 6% not sure 18% 46% somewhat disagree 6% 18% dk/cs
strongly disagree
23
Origin of Multi Level Marketing: Amway Corporation Pricing not a Deterrent
Delhi
strongly agree
somewhat agree 16% 32% not sure
somewhat disagree 3% 3% 16% dk/cs 30% strongly disagree
Mumbai
2% 4% 11% 33% 13%
strongly agree
somewhat agree
not sure
somewhat disagree
strongly disagree 37% dk/cs
Bangalore
strongly agree
somewhat agree 12% 6% 41% somewhat disagree 23% strongly disagree 6% 12% dk/cs not sure
24
Origin of Multi Level Marketing: Amway Corporation WHAT ARE PRODUCTS SUIT THE MOST?
Cosmetics & Skincare Products
80 60 40 23.5 20 0 Delhi Kirana Mumbai Supermarket/ mall DS Banglore 7 34.7 40 21 8 0 69.4 75
Personal Care Products
100 79 75 57.1 50 25 0 Delhi Kirana Mumbai Supermarket/ mall DS Banglore 22.4 11.6 2 10 0 37.9 49.5
Homecare Items
100 75 54 50 25 0 Delhi Kirana Mumbai Supermarket/ mall DS Banglore 17 1 1 41 93 86
10 0
25
Origin of Multi Level Marketing: Amway Corporation Herbal Products
80 60 41.8 40 20 0 Delhi Kirana Mumbai Supermarket/ mall DS Banglore 17.3 4 34.7 23.2 10.5 7 0 74
What are the goods and wares that are on the fast track, or what are the products for which these people are ready to cough up an extra premium? Its cosmetics and skincare products that lead the chart. Water Purifiers 20% in Mumbai, 3.1% in Delhi and nil in Bangalore. Plastic Containers 17.9% in Mumbai, 2% in Delhi and 0% in Bangalore.
FUTURE SHOPPING TRENDS
Before winding up the research results, let's have peek at the emerging shopping trends. According to our findings the direct selling need to pull up their socks and be ready for a long haul.
26
Origin of Multi Level Marketing: Amway Corporation Direct Sales Agents Delhi
strongly agree
8% 11% 5% 41%
somewhat agree
not sure
somewhat disagree
27% 8%
strongly disagree
dk/cs
Mumbai
strongly agree
somewhat agree 13% 11% somewhat disagree 8% 35% strongly disagree 18% dk/cs 15% not sure
Bangalore
strongly agree
somewhat agree 0% 12% 0% not sure
somewhat disagree
strongly disagree 88% dk/cs
27
Origin of Multi Level Marketing: Amway Corporation Supermarkets/ Malls Delhi
3% 8% 13% 0% not sure strongly agree
somewhat agree
somewhat disagree 11% 65% strongly disagree
dk/cs
Mumbai
1% 2% 1% 24% 31%
strongly agree
somewhat agree
not sure
somewhat disagree
strongly disagree 41% dk/cs
Bangalore
6% 0% 0% 24%
strongly agree
somewhat agree
not sure
41%
somewhat disagree
strongly disagree 29% dk/cs
28 Project source URLhttp://www.mbaguys.net/t632/
Origin of Multi Level Marketing: Amway Corporation Interest Delhi
strongly agree
somewhat agree 16% 27% 3% not sure
somewhat disagree 14% 3% 37% dk/cs
strongly disagree
Mumbai
strongly agree
15%
3% 17%
somewhat agree
not sure
somewhat disagree 31% 20% strongly disagree 14% dk/cs
Bangalore
strongly agree
somewhat agree 0% 12% 0% not sure
somewhat disagree
strongly disagree 88% dk/cs
29
Origin of Multi Level Marketing: Amway Corporation
8. THE BEGI I G OF AMWAY
30
Origin of Multi Level Marketing: Amway Corporation 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 todays fastest -growing industries.
. 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. 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. The ' 70s began with sales of more than $100 million at estimated retail, and kept going strong. After a lengthy investigation, the FTC (Federal Trade Commission) verified that Amway is a genuine business opportunity and not a "pyramid". 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, Michigan, USA. As carefully planned by Rich and Jay, the second generation Van Andel and DeVos families took the controls during the ' 90s. The Policy Board was formed and 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. Today, more than 3 million Independent Business Owners (IBOs) distribute Amway products in more than 88 countries and territories. Amway generates US$6.4 billion
31
Origin of Multi Level Marketing: Amway Corporation (September'04 - August'05) in sales at estimated retail through this global product distribution network.
FOU DERS' FU DAME TALS
Rich DeVos and Jay Van Andel built the Amway business on the following principles, which they and their families believe constitute a sound foundation for a meaningful life. Freedom Freedom is natural state and most conducive environment in which to live, work, achieve and grow. It allows for our belief in god and for the opportunity to build a meaningful and purposeful life. The Amway business recognizes, supports and expands our freedom which is both personal and economic. Thus it is our responsibility to ensure, protect and sustain our freedom. Family The family is our primary social structure, providing love and nurturing, heritage and legacy. The family provides us with a consistent set of values and a framework for the growth and the ability to thrive as individuals. The Amway business respects and supports the family as evidenced by the Amway policy board and the prominence of 'family' in Amway distributorships. H op e Hope gives us the power to transform our lives in positive ways. It is a force that allows us to envision dreams, establish goals and achieve great things. By offering hope, we open windows of possibility for others and it is why Amway speaks so meaningfully to the needs of people around the world. Reward Reward involves the shared action of giving and receiving. Reward helps us to grow either as the giver or the recipient and these are many ways we are rewarded. At the most basic, it is to be acknowledged and loved as a person. To be rewarded also means to be recognized for one's commitments, valued for one's contributions and compensated for one's efforts. Reward helps productivity flourish by providing both 32
Origin of Multi Level Marketing: Amway Corporation closure for one action. Reward is the integral to the Amway business, as we help each other grow as people and as entrepreneurs.
MISSIO
To provide the best business opportunity. To deliver exceptional quality products to urban and semi urban homes in the areas of nutrition and wellness, cosmetics, personal care, home care, home tech and insurance.
VISIO
Inspiring people to live better lives.
VALUES
Amway has established some simple shared values that unite the entire company, and all of the Business Owners that are associated with Amway. They believe that these values guide their actions and help them to achieve everything they are capable of without compromise or harm. Integrity We will uphold the highest personal and professional integrity which demonstrates honestly, loyalty, respect and high ethical standards in all our responsibilities, obligations and other activities. We are committed to behave at all times in accordance with the ethical practices of the organization. Trust Building reliability and dependability for self by displaying commitment, honesty, confidentiality and consistency in all actions. Transparency We will promote a culture of openness and mutual trust by interacting objectively and without underlying personal interests.
33
Origin of Multi Level Marketing: Amway Corporation Service Orientation We are committed to serve our customers to fulfill their needs by focusing efforts on discovering and thereby meeting stated and unstated requirements.
Partnership We will collaborate across boundaries and find common ground by sharing ideas and resources, with a wide range of stakeholders. We will develop networks and build long term alliances with internal and external customers.
Recognition We are committed to honour, encourage and support individuals and teams who contribute, through their behaviour and actions, to the success of the organization.
34
Origin of Multi Level Marketing: Amway Corporation
9. AMWAY I I DIA
35
Origin of Multi Level Marketing: Amway Corporation
William Pinckney, Managing director & C.E.O, Amway
Amway entered in India in 1995 and began its operation from May, 1998. During this three years gestation period a lot of research went into developing and packaging the products. College students were hired and taught networking strategies. They were trained to rope in the housewives interested in earning money by selling products from home. Amway India provides free and unlimited training to all its distributors to help them grow their business. Amway India conducted over 29,000 training sessions during September'03-August'04 with an attendance of over 1.3 million Amway Business Owners and prospects. The Company is headquartered at New Delhi. Amway has invested in excess of US$35 million in India of this; US$6 million is in the form of direct foreign investment. Amway has grown from 91 crore in its first year to 636 crore in 2003-04. The company has 50 centers across the country that supplies products to all over India. Amway offers products in the categories of nutrition and wellness, cosmetics, personal care, home care, home tech and insurance. All these products are backed by 100 % money back guarantees and are developed by company's own highly experienced 500+ scientists and technical staff at its R & D centers. All products are formulated according to international standards and developed in accordance with the Indian tastes. Amway has R & D facilities in its origin country .i.e. USA. The Company has provided the income generating opportunity to over 4,50,000 active independent Amway Business Owners, out of which 62% are females, 25% are couples and 13% are males. Amway India has established a nation-wide presence with 74 offices, 55 city warehouses and four regional mother warehouses. With the exception of Cosmetics range (Artistry*) and some products in Nutrition and Wellness category, all Amway India products and bottles are manufactured in India through 5 third party contract manufacturing facilities located in Gujarat, Maharashtra, Chennai, Himachal Pradesh and Hyderabad. 36
Origin of Multi Level Marketing: Amway Corporation
10. AMWAY BUSI ESS OPPORTU ITY
37
Origin of Multi Level Marketing: Amway Corporation
STARTI G A BUSI ESS GE ERALLY REQUIRES ??..
CAPITAL
TIME
HUMA RESOURCE
I FRASTRUCTURE
RISK
As we all know, the pre-requisite for starting any business is lots of capital. The entrepreneur also needs to devote a lot of time to his business and the business demands his presence. It will also need intelligence manifested by being smart. The premises are a must for any business to function. The entrepreneur also required to employ human resource for performing various activities. After investing the capital, time, human resource and suitable infrastructure the fifth element comes into picture i.e. RISK!!!! The risk of losing financial security, time for yourself and family, recognition, realization of dreams. The cash flow in the traditional business is not good. It is a noted fact that 80% of new business close down in the first year itself. However the Amway business opportunity is very different from the conventional businesses. It may seem small in the beginning but there is an immense earning potential. This fact is testified by the lakhs of Indians who took up this opportunity very seriously and most of them get success in it.
38
Origin of Multi Level Marketing: Amway Corporation
BE EFITS OF AMWAY BUSI ESS OPPORTU ITY
LESS CAPITAL REQUIREME T
CA BE DO E AS PART TIME BUSI ESS
IMMEDIATE I COME
CA BE START AT HOME
O RISK
Any one can start his/her Amway business by paying a sum of Rs.4400/as registration fees. To become an Amway Business Owner he/she has to be sponsored by an existing Amway Business Owner. He/she has to fill out a consultant Application Form, give identity and residence proof, pay registration fees and take the starter kit. The person who sponsors him/her would then further provide guidelines and support about the business. Amway also runs regular training programs that will further equip him/her in the development of his/her business. Amway business does not require long hours of work and can be successfully started part time. In the Amway business the cash flow is very quick and the system is turned so as to give returns to the new consultants in the first month it self. So unlike to conventional business it does not require years to break even. The Amway business opportunity does not require any formal qualification. All the necessary business training is imparted to the consultants by the company. Over the years Amway has developed many successful entrepreneurs, many of them not even educated up to 10th standard. All one needs is a DREAM and a burning desire to make it in life. The Amway opportunity model is such that it does not require any infrastructure. All the necessary tools are provided by Amway. So the business can be successfully conducted in one's own home. 39
Origin of Multi Level Marketing: Amway Corporation The best aspect about Amway business is that it does not involves an element of risk. If a new consultant feels that he would not be able to do the business, he can return the starter kit within 45 days of starting the business and get back the registration fees paid at the time of admission as per the Amway consultant registration policy. Amway Business Owner is entitled to use Amway's offices all over the country and so does not need to incur costs such as overheads, staff and premises. Also need not require to spend anything on business skills training as Amway's highly trained and efficient staff is available at all times to assist him/her in every aspects of his/her business. He/she is free to decide the people whom he/she wants to work with, his/her working hours and even how long those hours should be. He/she may take it up as a part time business also. Thus he/she does not require to take a part in any risk as all risk is taken by Amway.
WHAT THE CO SULTA T HAS TO DO?
Talk to People and Locate Customers The consultants are require to talk to the people about Amway products and to convince them to buy Amway products and in return the consultants get paid. Locate Other Consultants The consultants are also require to empower others to achieve personal and financial independence through the powerful and time tested compensation plan.
40
Origin of Multi Level Marketing: Amway Corporation
AMWAY BUSI ESS OPPORTU ITY
V/S
OTHER JOBS OR BUSI ESS
Amway Business Opportunity TRUE
Other Jobs/Business 1. Low-to- o Financial Risk Start your own business for a few thousand rupees plus learn all you need to get going in a single afternoon. 2. B e you r ow n B os s Working for yourself. Doing what you choose to do where you want with people you choose to work with. 3. Offering innovative and Superior Quality Products Not found in retail stores, spas, clubs, mail order catalogs or anywhere else! Unlimited market potential. 4. Working Part time or Full time When and where you want the hours you choose. 5. Have a mentor Somebody who will be with you till the time you achieve success. 6. o Area Restrictions No set hours, no time clock, no commuting, no employees, no high overhead, no dress code, no franchise fees or royalties to pay, no limitations on how high up you can go. 7. Open to everyone Regardless of age, sex, religion, education, experience, income level, capital investment, family or business background, past success or failure. FALSE
FALSE
TRUE
FALSE
TRUE
FALSE
TRUE
FALSE
TRUE
FALSE
TRUE
FALSE
TRUE
41
Origin of Multi Level Marketing: Amway Corporation 8. Providing in depth Training That promotes the highest levels of personal and professional growth, business and leadership development. 9. Immediate Income plus the very real opportunity to earn from Rs. 5,000 - Rs.15,000 a month part time, to Rs. 1,00,000, Rs. 2,00,000 a month and more as a full time career. 10. Be paid what you're really worth Your success comes from cooperation, not competition. Plus, get the fulfillment and satisfaction of making a positive difference in hundreds, even thousands of people's lives. 11. Creates the kind of income recording artists and authors enjoy Residual. Get paid over and over again for your work. You can even reach the point where you stop working and your income continues. 12. Pursuing your own dream Instead of trading your time for money building someone else's dream. 13. Live the lifestyle of Millionaire without the burdens and responsibilities. Your time and your life are your own. Have more fun, travel, play, meet friends, enjoy your family. Live as you dream. You are Free!
FALSE
TRUE
FALSE
TRUE
FALSE
TRUE
FALSE
TRUE
FALSE
TRUE
FALSE
TRUE
42
Origin of Multi Level Marketing: Amway Corporation
BUSI ESS STARTER KIT
To become an Amway Business Owner all one has to do is to buy a Business Starter Kit which costs only Rs. 4,400/-. He/ she can choose from the completely Flexible Kit which gives him/her complete freedom to choose products of his/her choice. Contents of the Business Kit
PRODUCTS
LOC 500ml SA8 NS 500ml See Spray 500ml NSCHS 250ml G&H BS 250ml G& H Lotion 250ml Pursue 200ml Car Wash Sachets Sat 2 in 1 60ml Dish Drop Sachets Zoom 500ml Sat DCS Sachets Sat DCC Sachets
NEW LITERATURE
Quick start guide ROC Know Your Business Know Your Products Flip Chart Multi-lingual brochure
NEW SALES AID
Pistol Grip Bottle Turret Top Bottle PC Pump Dispenser PC Pump Dispenser Pour & Measure Cap
OR Take the New Home Care -Personal Care Kit which has an assortment of products from our Home Care/ personal Care range. The kit contents are: LOC 500ml Dish Drops 500ml Pursue 500ml Zoom 500ml SA8 500ml See Spray 500ml G&H Body Shampoo 250ml G & H Body Lotion 250ml Glister Persona Sr Tooth Brush Persona Talc Persona Soap Literature Kit Sales Aid
43
Origin of Multi Level Marketing: Amway Corporation
SUCCESS STORIES
There is a pot of gold at the end of the rainbow, it is said, that pot is yours to reach out and grab. All you need is a little enterprise, a dynamic personality and determination. After becoming Amway Business Owners many people's life has been changed completely. Let's have a look at some examples.
Mukesh & Kokila Patel I was first introduced to the Amway business by one of my office colleague. At that time, I wanted to enjoy financial security and have time for myself. I immediately realized the potential of this business and its inherent enormous opportunity which I felt was conceptually designed for me. We worked consistently and persistently and my wife and I resigned from our Government jobs. We are now full-time Mom and Dad to our loving daughter Komal and son Rony. We have gradually understood that the Amway business is truly the world's best business opportunity. We believe that Amway not only gives us tremendous financial returns but also time for our family. Now we share a great relationship with our family, friends, down lines and up lines. When we first joined the Amway business, we shared this business with our friends and brothers. They eventually became Platinums and above and we became Sapphires. Within just eleven months, we straightaway reached the Diamond level from Sapphire. We made this possible with our good work ethics, by being focused, dedicated and working in a self-disciplined manner towards our goal. Our dream of reaching the Diamond level has been one that was very close to our hearts. By reaching this level of achievement, that is exactly what we have done. Of course, it would not have been possible for me to reach here without my wife's hard work and support. As Diamonds, we are leading a balanced lifestyle with quality time, money 44
Origin of Multi Level Marketing: Amway Corporation and freedom. We are now resetting our goals at higher levels as well as helping our group to accomplish their dreams, just like we did. Now, this business is our mission in life. It is my belief that one should 'Dream Big and Act Fast' and realize that the best is yet to come because the Amway business has the potential to make one's dreams come true.
Ajitpal Singh & Randhir Kaur We were brought up in a very middle class farmer family, in a small village known as Haruwal in Gurdaspur district of Punjab. I completed my schooling and then got my post graduate degree from Khalsa College, Amritsar. My wife Randhir belonged to Amritsar, we first saw each other at college and got married in 1980. Though I taught for 11 years in a rural school, I just wasn't satisfied hence we moved to Chandigarh to chase our dreams.We also wanted to live in a better city and look for new opportunities. We had very tough time at Chandigarh but never lost heart. Because when 'dreams are big, facts do not count.' We always kept on trying one thing or the other. In 1998 we got a telephone call from one of our relatives who tried to show the Amway business plan to us. We saw the plan half heartedly because at that time we were not ready to see it. Besides, our relative could not raise our curiosity to see the business. Why we rejected the plan, we do not know even today. After a few months we were invited to a house meeting where we were introduced to the plan again. This time got we excited and I could not sleep that night. Next day we joined the business and today we believe that Amway is THE BEST business on this planet. Frankly speaking, I joined Amway for money only, as I didn't knew the meaning of security at that time. Initially, we came across many challenges and problems but they could not stop us. Our main challenge was that our sponsor did not know anything about this
45
Origin of Multi Level Marketing: Amway Corporation business because he had joined Amway just a few days before us. Our uplines were American. Initially there was nobody to help and mentor us. We met our uplines when we attained the Ruby level. After that we started getting great mentorship from our uplines. Now I am working full time to build my Amway business. My wife Randhir and I feel blessed. Our children are learning the values which this business provides along with money and recognition. My daughter Ritu got married last year; she and her husband Mandeep are also very positive about the business and are brand new gold producers. Due to this business we have travelled to Bangkok, Singapore, South Africa, Bintan and Pattaya. For all these trips Amway bears all the expenses and you are treated like royalty. This is their recognition for our hard work. We are thankful to Amway management, our uplines and leadership for their support.
46
Origin of Multi Level Marketing: Amway Corporation
11. PRODUCTS
47
Origin of Multi Level Marketing: Amway Corporation
The Amway products match global quality standards. They carry a tamper-proof seal and a 100 per cent Money Back Guarantee'. 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. Amway India offers its products in five categories. They are Personal care category, Home Care category, Nutrition & Wellness category, Agricultural category and Cosmetics category. At present Amway offers over 75 products, few of them are as follows.
A Concentrated Liquid Car Wash that helps loosen surface grease without dulling the car's shine 500 m l M R P: R s.2 1 9 .0 0
For sparkling dishes, clean cookware and shining silverware, get Dish Drops* Hand Dishwashing Liquid Detergent.
Ground - dirt on tile floors... fingerprints on the walls... greasy stains on washable fabrics... These are just a few of the household cleaning jobs L.O.C.* High Suds Liquid Organic Cleaner handles with ease. 500 m l M R P: R s.2 1 5 .0 0
48
Origin of Multi Level Marketing: Amway Corporation PURSUE* Disinfectant helps maintain a hygienic environment. It kills germs and odor-causing bacteria, as well as fights against athlete's foot fungus and common viruses.
SA8* Delicate Detergent is a gentle, yet effective detergent for hand washing or machine washing most delicate fabrics and washable wool in cool water. Any fabric which can be washed in water, can be washed in SA8* Delicate. 500 m l M R P: R s.3 4 5 .0 0
SA8* Liquid with Natural Softener is a highly concentrated laundry liquid with added softener and a pleasant fragrance. Just a small amount will remove stains, dirt and grime from your clothes as well as soften and freshen your clothes and linen.
Depending on the task at hand and personal preferences, SEE SPRAY* Window Cleaner Concentrate can be custom mixed using an Amway* Pistol Grip Sprayer. Use a 1:3 ratio (1 part See Spray* Concentrate to 3 parts water) for everyday cleaning efforts. 500 m l M R P: R s.2 0 9 .0 0
For getting rid of household grease and stains, ZOOM*, Spray Cleaner Concentrate works fast! Crayon, lipstick, greasy hand prints, oil, pencil, and smoke stains disappear in a flash. Just spray, wait a moment, and wipe with a clean, dry cloth or paper towel. 500 ml: MRP: Rs.209.00
49
Origin of Multi Level Marketing: Amway Corporation Pamper your fine leather and vinyl with AMWAY* leather and Vinyl Cleaner, a cleaning formula that also softens conditions, polishes and helps resist stains and water damage. 500 m l M R P: R s.2 5 9 .0 0
AMWAY* Buff Up Furniture Crème makes it easy for wood furnishings to maintain their luxurious appearance year after year with a minimum of effort. Simply apply to fine wood furniture, cupboards and wood paneling in one easy step - no buffing required - to polish and protect fine wood finishes. 500 m l M R P: R s.3 5 9 .0 0
Amway Pre Wash liquid Soil and Stain Remover gives detergent five times the stain fighting power against tough laundry problems like motor oil, ink, lipstick, grass, blood, and messy stains. 500 ml - MRP: Rs. 330.00
Emollients and the goodness of nature are two reasons your customers will like G&H Body* lotion. On arms, elbows, legs, knees, and all over, G&H* Lotion contains glycerin and natural honey and leaves skin feeling soft and smooth. 250 ml : MRP: Rs. 349.00 60 ml : MRP: Rs. 105.00
50
Origin of Multi Level Marketing: Amway Corporation Convenience and versatility are two excellent reasons your customers will want to use G&H* Body Shampoo. With just one product, your customers get the benefits of three separate cleansers. The entire family can indulge in luxurious, lightly-scented lather from head to toe, every day 250 m l M R P: R s.3 4 9 .0 0 60m l M R P: R s.1 0 5
The new Glister comes with the advantage of Sylodent, a polishing agent unique to Glister. Sylodent particles are a combination of flat surfaces and contours which safely yet effectively polish the teeth without excessive abrasion on the enamel. 100gm Multi-Action Toothpaste M R P : R s . 1 1 5 .0 0
This dual-action shampoo with cleansing agents and light conditioners will clean and condition in a single step. The cleansers are derived from natural sources like Oats, Kelp and Soap Wort to gently clean out the dirt and pollutants from the hair. 250 m l M R P : R s . 3 4 9 .0 0
This liquid hand soap is mild to the skin. Natural Aloe Vera and 5 skin conditioners leave hands feeling soft and clean. 250 m l M R P: R s.3 4 9 .0 0
51
Origin of Multi Level Marketing: Amway Corporation The New Advanced Persona Toothbrush comes with all new Accu Pressure RIBS Persona Senior: pack of 4 M R P : R s . 1 1 9 .0 0 Persona Junior: pack of 4 M R P : R s . 9 9 .0 0
Get yourself silky smooth skin and cool, soft, refreshing comfort with the finest talcum powder in the country. The lingering fragrance of lilac rose and jasmine gives you the day long freshness. 350gm M R P R s . 1 7 9 .0 0 Persona soap is India's first and only "Rich Moisturizing Bar Soap with Deodorant Protection". Pack of 3, 100g each: M R P R s . 1 0 8 .0 0
The New NUTRILITE Protein Powder is a high quality, low fat, low cholesterol protein source which naturally supplies all essential amino acids with the added benefit of soy is flavones and naturally occurring calcium &iron. 500 gm: M R P : R s . 1 ,6 0 9 .0 0 This NUTRILITE 200 gm: M R P : R s . 7 7 9 .0 0 product crafts three distinct,
organically grown forms of Echinacea into an innovative supplement which helps strengthen body's natural defense.
52
Origin of Multi Level Marketing: Amway Corporation This NUTRILITE Product uses standardized Siberian Ginseng and Ginkgo Biloba extracts to promote product consistency. This product also provides NUTRILITE Acerola and Citrus Bioflavonoid Concentrates. 100 tablets: M R P : R s . 2 ,3 6 9 .0 0
Finally, an eye crème that targets more then the appearance of dark circles. Because ARTISTRY Replenishing Eye Crème has been clinically proven both to reduce the appearance of puffiness with in 24 hours and to reduce the appearance of dark circles by 30% in 16 weeks. Result: Eyes with nothing to hide 15m l M R P : R s . 5 9 9 .0 0 Artistry's Alpha Hydroxy Serum Plus is a clinically proven, facial skin treatment that combines Alpha Hydroxy Acids for exfoliation with Hydrolipid Matrix that helps to hydrate, smooth and protect the skin against moisture loss resulting in a smooth, younger looking skin. Recommended for Adults of all Skin Types
The Time Defiance Nighttime products are Anti Aging, Wrinkle fighting, Intensive, Anti oxidant, Skin
Revitalizing treatments that help skin recuperate from daily stresses. For All Day, Everyday Protection 50m l : M R P : R s . 2 ,0 9 9 .0 0
53
Origin of Multi Level Marketing: Amway Corporation To prevent sun induced aging, protect yourself with Artistry's Anti Aging Daytime Protection Crème with S P F 15.
APSA-80 is an all-purpose spray adjuvant that is mixed with pesticides (insecticides, fungicides and postemergent herbicides) to control insects, disease and weeds. 1 liter: 500m l : MRP: Rs.: 585.00 MRP.: Rs. 349.00
54
Origin of Multi Level Marketing: Amway Corporation
100% MO EY BACK GUARA TEE
A lot of companies offer product guarantees or promises of Money Back Guarantee, but only few can match the guarantee offered by Amway. The company's faith in its product and its commitment to quality extends to an unconditional 100% Money Back Guarantee on its products.
Amway products are manufactured under rigid quality control and are exhaustively tested to ensure top quality. The Amway's 100% Money Back Guarantee is assurance of full value on purchase of Amway products. A customer can use a reasonable amount of product to assess satisfaction. In case he is dissatisfied he can return the used products as per company policy for a 100% money refund.
Amway believes in the highest standards of quality and to lend credibility to the claims of high quality. Amway products wherever applicable carry 100% Amway Money Back Guarantee. Whenever you buy an Amway product or a Amway distributed product you have the right to use it for a reasonable time to determine whether you are satisfied or not.
If you are dissatisfied for any reason, you have the right to return the unused portion back to the Amway Business Owner from whom you made the purchase. The Amway Business Owner will either replace the product or refund the full purchase price. This guarantee however does not apply to products, which have been internationally damaged or mishandled.
55
Origin of Multi Level Marketing: Amway Corporation
12. AMWAY OPPORTU ITY FOU DATIO (AOF)
56
Origin of Multi Level Marketing: Amway Corporation
Amway Opportunity Foundation (AOF) is a registered non-profit organization which looks after Amway India's Corporate Social Responsibility (CSR). Vision Enable the less privileged child to lead a better life. Mission To be the front-runner in providing opportunities for child education and health to attain economic independence, with special focus on the blind child. Amway launched the National Project for the Blind in 1998, when it entered into a partnership with the Delhi-based NGO, All India Confederation of the Blind (AICB). In 2000, it entered into understanding with the Mumbai-based National Association for the Blind, India (NAB). Under this project, AOF and AICB/NAB print and distribute Braille textbooks to all school-going children in a state. This partnership has printed and distributed Braille textbooks across the country. The states covered so far are:
• • • • • • • • • • • • • •
Rajasthan Delhi Haryana Punjab Uttar Pradesh Bihar Maharashtra Gujarat Andhra Pradesh • Karnataka Madhya Pradesh Tamil Nadu Rajasthan - second time Delhi - second time Punjab - second time
57
Origin of Multi Level Marketing: Amway Corporation Besides the Braille project, AOF has also helped NGOs celebrate the International White Cane Day for the past 5 years. On this day, visually challenged take out a dignified procession and over 2000 White Canes are distributed. AOF has also helped the Ramakrishna Mission Blind Boys Academy (RKMBBA), Narendarpur (Kolkatta) set up a computer centre. This is the first such computer centre for the blind in Eastern India. Set in a sprawling and green campus, this efficiently run institution has a host of facilities for its students, which includes music, crafts, vocational training, besides the routine classes. One of the various pressing requirements was a computer centre, which would enable students to pick up this much-needed skill. AOF was honored with the All India Confederation of the Blind (AICB) Millennium Outstanding Service Award, 2000, in recognition of its sterling contribution to the cause of India's blind. AOF has funded a state-of-the-art, fully equipped Mobile Dental Clinic for the Rotary Club, Delhi. The Clinic caters to the oral healthcare needs of underprivileged sections of society, in and around Delhi, free of charge. AOF has partnered with NGOs like AICB and NAB (National Association for the Blind) in printing and distributing Braille textbooks to all school-going visually challenged children in 15 states which includes - Rajasthan, Delhi, Haryana, Uttar Pradesh, Punjab, Bihar, Gujarat, Maharashtra and Tamilnadu. Seven more states are on the anvil. AOF has also set up a computer centre at the Ram Krishna Mission Blind Boys Academy, Narendrapur (West Bengal). A total of 80,000 visually impaired children have benefited from this Project. AOF received a citation and award from the World Blind Union (WBU) in 2003 for the 'sterling contribution to improve and elevate the quality of life of visually impaired children in India'. It is the first Indian NGO to get this distinction. WBU is an apex body of the visually challenged and enjoys consultative status with the UN. Support to CRY: AOF had sent 'Child Relief and You' (CRY), a sum of Rs. 30 lacs to be used in the Jan 2001 earthquake-affected areas in Gujarat. This money was used to run Activity centers that CRY and its partners had set up at the worst affected villages in Gujarat.
58
Origin of Multi Level Marketing: Amway Corporation Over the past five years, AOF has helped celebrate the White Cane Day where over 10,000 visually challenged persons, have been given white canes. It has also been making made Children's Day, a special one for over 1,500 underprivileged children. AOF made possible cataract operation camps at Surat, Erode, Coimbatore and Delhi. Over 20,000 persons (majority which were children) have been screened at these camps. AOF has also organized over 120 blood donation camps in collaboration with Red Cross Society, in as many cities where over 13000 AOF volunteers, comprising of Amway distributors and staff, have donated blood. In the past
Donations Made
• • • •
In 1996 (two years prior to the start of commercial operations) Amway donated a fully-equipped mobile dental van to Rotary Club of Delhi mid-town. In 1997, it donated a set of Webster's Dictionary in Braille to the school run by the Blind Relief Association. AOF volunteers donated sports equipment to the MGD School for the Deaf and Blind at Bhatinda. AOF volunteers at Guwahati - comprising the local Amway distributors collected and donated Rs 30,000 to the district administration to help combat the flood crisis in the north eastern state.
•
AOF volunteers and Amway distributors donated necessary furniture and clothing to St Micheal Blind School Ranchi. These funds were raised at a special filmscreening in Ranchi which was supported by Amway distributors of Ranchi.
• •
AOF donated study material and sports equipment to the NAB hostel for blind boys at Bhopal. AOF donated a group hearing system to the 'Red Cross Koshish School' for the Deaf, Dumb and Blind. Using an amplifier, this equipment enables 12 deaf persons/children to 'hear' lessons being imparted by teachers. These funds too, were raised locally by the AOF volunteers - Amway distributors.
•
Amway volunteers donated Musical instruments and toys to the Anubhab school for mentally challenged children, Siliguri
59
Origin of Multi Level Marketing: Amway Corporation
•
At Bhubaneshwar AOF donated Braille textbooks and other study material to the Bhima Bhoi Blind School, Bhubaneshwar, from funds raised by AOF volunteers of that city.
•
The January 26th killer-quake that rocked Gujarat in 2001 devastated almost the entire state. Tens of thousand lost their lives, uncounted others lost their homes. A whole slew of aid-agencies rushed into the beleaguered state, offering first aid, medicine, food, blankets etc. After sifting through a host of possible partners through whom Amway could channelise its relief money, AOF proposed that CRY would seem a preferred partner. AOF took a conscious decision to channelise the 35 lacs the Amway distributors, employees and Amway as a company, had collected. CRY utilized the Amway funds in the following villages of Anjar (Bhuj) and Dhrol (Jamnagar), Rambav Rapar, Kuda Jampar Rapar, Kakavav Bhachau, Nilper Bhachau, Meghpar Bhachau, Saran Vandh Rapar, Trambau Rapar, Vanoi Rapar, Suvai Rapar, Gauripar Rapar, Naranpar Rapar.
•
Amway raised close to Rs 50 lacs, post the Dec 2004 Tsunami that wrecked havoc on India's eastern coast. Currently, it is jointly building a school-cumorphanage-cum-old-age-home at Nagapattinam.
60
Origin of Multi Level Marketing: Amway Corporation
13. AWARDS & RECOG ITIO
61
Origin of Multi Level Marketing: Amway Corporation
As a corporate leader in promoting environmental awareness and education, Amway received the prestigious United Nations Environment Programme Achievement Award in 1989. Corporate Citizenship Award - On November 08, 2005, the United States Chamber of Commerce awarded Alticor with the Corporate Citizenship Award in the category of International Community Service for the One by One Campaign for Children. 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 Chouhan - 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 i ns t i t ut i ons . Presented an award by the World Blind Union (WBU), for 'its (AOFs) 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 largesized statue of Saraswati, the Goddess of Knowledge, was presented
62
Origin of Multi Level Marketing: Amway Corporation 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. On another occasion, the Central Red Cross Bank, Cuttack awarded Amway Opportunity Foundation with a trophy and Certificate for contributing the highest no of 400 units to their Blood Bank.
63
Origin of Multi Level Marketing: Amway Corporation
14. COMPETITIO
64
Origin of Multi Level Marketing: Amway Corporation The main competitors of the Amway are the baniyas (general stores) who deal in similar products. People traditionally buy their household goods from these baniyas. Therefore they are hesitant to buy the same type of products from Amway Business Owners. According to the executives, there is a large blue ocean for Amway or any other direct selling companies to explore. However other Direct Selling Companies present in India are also the competitors. Amongst the other Direct Selling Companies the ones which can act as a major threat are:
Avon Beauty Products
The Rs 100-crore Avon is wholly owned subsidiary of the $6.2 billion New York headquartered Avon Products Inc. the company entered India in 1996 and is based in New Delhi. With over 1.25 lakh distributors, it is present in 30 cities directly and another 50 indirectly and has five percent share in the domestic cosmetics, fragrances and skincare market. Sells make up products, color cosmetics, skin care, fragrances, talcs, lipsticks, nail enamels, fairness creams etc. plans to enter jewellery, intimate apparel, and nutrition and wellness categories.
Oriflamme India
This world cosmetics leader in high quality natural skincare and cosmetics entered India in 1995. the $750 million Swedish parent Oriflame International stated in 1967 and is listed on the Stockholm Stock Exchange. With operations in 60 countries, it has a sales force of over 1.5 million. Has a complete range of high quality products numbering over 550 items in the skincare, fragrances, cosmetics toiletries and natural Swedish cosmetics. Based in New Delhi, it has distribution set up in over 200 locations.
Tupperware India
The Rs 100 plus crore Tupperware India started its operations in 1996 and is based in New Delhi. A subsidiary of the Tupperware Corporation of the US, it is a global company with a local spirit. Listed on the New York Stock Exchange, the $1.2 billion
65
Origin of Multi Level Marketing: Amway Corporation Orlando, Florida based company was founded in 1946 and is present in over 100 countries today. It has an all-women team of over 55,000 across 48 cities in India. Sells virgin plastic wares in seven categories: dry storage, food preparation, food saving, microwave, refrigeration and freezer, outdoors and mobile and for kids.
Herbalife India
Began in 1999, it's based in Bangalore and is 75 percent owned by Herbalife international of the US. Had Rs 330 crore turnover in 2003. Headquartered in Los Angeles, the $1.8 billion company is listed on the New York Stock Exchange and began operations in 1980. has over 23000 active distributors selling seven products in the nutrition and dietary supplements category. Across the world, it has over a million distributors in 59 countries selling 40 products.
HLL etwork
Started in 2003 by the domestic FMCG leader Hindustan Lever, as Aviance. With 3.5 lakh consultants, it clocked over Rs 110 crore sales in 2003. offers home and personal care and food products in 1500 towns and cities, backed by 42 offices and over 250 service canters. The range of products include detergents, personal care and cosmetics for women, soaps, oral care, male grooming, kids care and food.
66
Origin of Multi Level Marketing: Amway Corporation
15. I TERACTIO
67
Origin of Multi Level Marketing: Amway Corporation I visited Amway India's office situated at Andheri, where Mr. Jignesh Mehta, Associate Manager Corporate Communications, Amway India Enterprises, provided me with all the necessary information. Let's have a look at the answers given by Mr. Jignesh to the following questions. Q. How has the Indian market and consumer behavior changed since Amway's entry? A Consumers here are very price sensitive. But in Amway's context, it's not an issue of being 'too expensive'; it's an issue of price points. Also, there is a greater awareness of international products and the quality that goes with them. Indians have become very brand aware. Take Amway's stance on the global environment. In India we are starting to see that consumers actually buying in to the 'eco- friendly' element of Amway. They do react to the positive 40 years that Amway has spent doing the right things for the environment. Q. The company is not in a direct relation with the ultimate consumers, so how does it forecast its sales figures? A. It is not necessary on the part of the company to be directly interactive with the consumers to forecast its sales figures. The consultants are asked to create their own goals and propose them to the company. They are at a better position to judge market behavior and the planning is done accordingly. Q. Does the company have a suggestion and complaint system? A. Yes all the offices have a suggestion box where consultants can drop their complaints or suggestions if any. Q. Do you conduct customer satisfaction surveys? A. Yes we do undertake consumer satisfaction surveys on periodic basis. Q. How much percentage of market share do you have? A. According to market research companies, Amway has 24% (approx) market share in India. Q. While setting prices what goal is kept in the mind? A. Customer Satisfaction, Maximization of profit and Maximization of market share.
68
Origin of Multi Level Marketing: Amway Corporation Q. Do you conduct lost consultant analysis? A. Yes the consultant before quitting up the business has to fiil in a form called as the decision form. The reason for quitting the business has to be written in the form. Along with this we also conduct the lost customer analysis. Q. How does the company positions it self? A. Number 1 Direct selling Company. Q. What is the general mark up difference that the consultants of the company enjoy while retailing these products? A. Generally it is 18% - 20%. Q. Your products are comparatively higher in costs compared to the products generally available through other sales channels. So what do you think how much amount of money are the people generally willing and able to spend on buying these products? A. Yes, the products are expensive but are again high quality. As far as consumers' paying is concerned, it depends on the products and their expectations from it. However, as the people have started using the products, they have gradually accepted them at the price, which is reasonable as per the quality.
Q. What type of Marketing Information System (MIS) does the company have? A. The backbone of the company is its strong IT base. We have a comprehensive MIS, which contains all the data, trends, usage patterns, etc.
Q. How are the functions of the company organized along geographic lines? A. The company practices Branchising. Branchising means empowering the company's district or local offices to operate like franchises. The branches resembles profit centers and local managers have more freedom in deciding on strategy except for the promotion strategies.
Q. What are the future challenges that the company perceive? A. To increase the number of consultants and thereby to increase sales from current Rs.636 crore to Rs.1000 crore in next 3 to 4 years.
69
Origin of Multi Level Marketing: Amway Corporation
16. SUGGESTIO S
70
Origin of Multi Level Marketing: Amway Corporation As a student of Bachelor in Management Studies, here I wanted to express some suggestions, which I think if implemented will result in the benefit of the company.
Amway has won various awards till the date, but these awards would not have been possible without its consultants. Therefore, company should conduct periodic award functions and recognition programs for its consultants in order to motivate them. Such programs can be very useful to encourage the consultants for making more and more customers and consultants for the company.
The consultants share an emotional bond with the company and the staff. The company should communicate to the consultants about the genuine reasons behind company decisions and policies affecting the consultants in any manner. This would build confidence among the consultants on the part of company, ultimately resulting in increased retention and more active consultants. It would give way to new standards of corporate transparency.
The company should start a Consultant Suggestion Scheme (CSS), apart from its usual feedback boxes placed at the company's offices. The CSS should invite suggestions as well as their implementation procedures from the consultants with regards to improving any of the company activities. The entries should be sincerely analyzed once a month or as per convenience and rewards should be declared for those consultants giving innovative and productive ideas. This would make the consultants feel that the company listens to them and strengthen their bond and respect towards the company.
The attendance for the New Consultant Orientation (NCO) program should be made mandatory. This would motivate the newly sponsored person to attend NCO. Attending NCO would give him a clear picture of the opportunity and increase the retention rate of the company and more of active consultants.
The company should conduct a well designed, nation-wide PR campaign of how the business of the company is growing. This would help in making new consultants and also in bringing the inactive consultants back to the business.
71
Origin of Multi Level Marketing: Amway Corporation
BIBLIOGRAPHY
Pitch- June 15, 2005 (magazine)
WEBLIOGRAPHY
www.amwayindia.com www.amway.com www.google.com www.indiandsa.com www.wfdsa.com www.agencyfaqs.com www.thehindubusinessline.com
72
doc_702722178.docx