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CHAPTER- 1

Introduction

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Marketing of Amway products

Introduction

The objective of modern marketing is to make profits through satisfying consumer` needs
and wants. Hence, the marketers have to understand the real needs, wants, beliefs and
attitudes of the consumers towards their products and services. Today, network
marketing is a multi-billion business. A number of companies have adopted this business
model. It has grown into one of the driving forces of the 21stcentury economy.
Networking marketing is now regarded by many business leaders as the business for the
future. But this marketing method was misunderstood as a get-rich-quick scheme. It is
also too common for the network marketers world wide to answer the legality and
soundness of their business.
Network marketing was actually pioneered in the year 1945 by Carl Rehnborg, the first
person to introduce a compensation plan to market his nutritional products. His company
was originally called California Vitamin company and on latter it was renamed as
Nutrilite products lnc.
Using a multi-tired plan, it allowed any Nutrilite distributor to get a 3% commission from
a downline on the top of the regular commission from its own sales. With this system,
Nutrilite products inc achieved stunning results as compared to the other companies that
were using direct selling method.
Today, Amway India is one of the leading network marketing companies in the world. In
India, it is the founder member of the Indian Direct selling Association. The Indian Direct
selling association is an industry regulatory and promoting body with several reputed
international and national companies in direct sales as member. The Association swears
by its rules called the code of ethics to which every member adheres to. To administer
and execute the code, a code of administer has been appointed.
Amway allows people the opportunity to enhance their life style by owning their
business. It provides the chance to market a line of quality Amway products such as
personal care, home care and like. The business opportunity provided by Amway can be

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pursued on a part time or full time basis, which involves minimum risk and low up front
investment, yet with a good yielding potential. Amway has a heavy accent on training.
Every Amway distributor enjoys free, unlimited access to training session. These training
session impart products knowledge comprising of motivation session and endeavour to
optimize the business potential of participants. Men and women from different walks of
life with vastly varying socio-economic and educational backgrounds have emerged as
successful Amway distributors. Besides economic independence, the Amway experience
has granted them a sense of self actualization.
The direct selling industry is one of the most potent socio economic forces of the late 20 th
century. Direct selling is remarkable business model, which brings the market to
customer and offers a unique business opportunity. Direct selling can be best be
described as the selling can best be described as the selling of products and services
directly to the customers in face-to-face manner through demonstration of usage by an
independent direct sales person, often called an in dependent business owner. Amway,
the leading direct selling industry sell its products through independent business owner
instead of the traditional retail shop marketing approach of hiring sales staff, conducting
advertising campaigns or marketing blitzes.Independent business owners sponsor and
train new independent business owner to expand the sales network. They are paid
commission when they sell products or on the sales of the products by an independent
business owners sponsored by them. These commission however are paid directly by the
company and do not impinge on the earnings of sponsored independent business owner.
The industry has made a unique contribution in transforming individuals from diverse
strata of society successful entrepreneurs. Women who have been traditionally confined
to a life of state domesticity have benefited tremendously. Over 70% of the distributors
engaged in direct selling in India, are women. It is estimated that these distributors earned
rs. 500 crores in the year 2000.
Direct selling benefits the consumers because it sells high quality products at the
consumer`s convenience often at his/her home work place. Customer value the advantage
of convenience, personalized attention, demonstration of usage and a wide choice of
products backed by customers satisfaction guarantee.

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Amway India faces stiff competition from direct selling companies such as
Modicare,Oriflame and the like. The present study is concerned with marketing of
Amway products in Maduri.

For the modern business organisation, developing goods or services is not enough. Goods
must also be available in the right quantity and at the right location in order to reach the
customer. For the organisations themselves, distribution strategies should never be
underrated. developing an effective way of reaching customers may be the cornerstone
upon which their successes are founded. Take Reader's Digest and the unique way in
which it sells products to its customers. What about Vision Express and the revolutionary
reforms it has prompted in the sale of glasses? One reason for their success is that they
reach their customers in a better and more appropriate way than their competitors.

This case study focuses on Amway and the success it has achieved using the oldest form
of distribution - direct selling.

Founded in Ada, Michigan in 1959, Amway has become one of the world's largest 'Direct
Selling' companies. The company's first product L.O.C. was one of the earliest
biodegradable cleaners and is still marketed by Amway.

Today, the company has developed into a global corporation selling more than 400
products and employing in excess of 13,000 people, in over 70 countries and territories
around the world. It manufactures and markets products, which range from household
cleaners, laundry products, toiletries, cosmetics and housewares to vitamins and food
supplements. Amway also markets products on behalf of other manufacturers, such as
Talkland, Bosch, Black & Decker, Kenwood, Pierre Cardin, Aiwa and Philips.

Amway is one of the world’s leading direct selling companies operating in over 80
countries around the world. As business has expanded, we have connected with
people by offering them the opportunity to experience the business potential of our
quality products. In this regard, our vision of building a brighter future by Helping
People Live Better Lives today is reflected. We respect our employees, recognizing
their dignity, rights and contribution as individuals. We are committed to providing a
workplace that stimulates creativity, quality and dedication. We offer training to

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encourage productivity, achievement and personnel satisfaction. We strongly believe
that Amway is where you can create you own destiny.

Be part of a 20 Billion Baht success story!!! We are looking for partners on the road
of success. Then come and join a truly global enterprise that has won the Award for
Welfare and Labor Relations for 3 years.

Amway (Thailand) Ltd is looking for qualified candidates to become important players
in the challenge of building a 20 billion baht business.
We’re committed to supporting and developing our people, and provide continuous
training, equipment, and techniques to enable you to achieve your full potential. You
will also enjoy an attractive salary and remuneration package designed to enhance
your lifestyle.
• Guaranteed 2 months bonus plus performance bonus, full employee welfare, on-
going training reflecting our commitment to your development, an opportunity to
shine with an international business leader

Founder's Fundamental

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

Provides conducive environment in which to live, work, achieve and grow. The Amway
business recognizes, supports and expands freedom, which is both personal and
economic. It gives the freedom to operate as independent business people and conduct a
full-time or part time business.

Family

The family is our primary social structure, providing love, heritage and legacy. The
Amway business respects and supports the family, as evidenced by the Amway Board of
Directors and the prominence of “family” in Amway business. Amway provides the
opportunity to build a family-owned business which can be passed on to generations.

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Hope

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, irrespective of social status, profession or
educational background.

Reward

Reward involves the shared action of giving and receiving. Reward helps us grow, either
as the giver or the recipient, and there are many ways we are rewarded. Reward is
integral to the Amway business as we help each other grow as people and as
entrepreneurs. Hard work is followed by high rewards.

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CHAPTER – 2

HIST0RY OF THE
ORGANISATION

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History of Amway

Amway Corporation

Amway Corporation was started more than 40 years ago by Jay Van Andel and Rich
DeVos. Its history grew out of an earlier business run by Rich and Jay, who sold
NUTRILITE™ supplements.

Beginning with a highly effective cleaning product that is still part of the Amway
product range, L.O.C.™ Multi-Purpose Cleaner, Amway expanded rapidly, offering
people the chance to become Business Owners selling Amway's growing range of
products. Amway quickly achieved the position it still holds, as a global leader in
multilevel marketing.

From early on, Amway was dedicated to providing quality products as the foundation
of an independent retail business. That dedication led the company to invest in state-of-
the-art product development processes, supported by the finest quality manufacturing
and distribution facilities to be found anywhere in the world.

Today, our business operations reach into more than 80 countries and territories
worldwide and we support more than 3 million Business Owners. We are part of an
international organization with annual sales in excess of US$6.4 billion and we offer
more than 450 different company-branded products and services globally.

We offer a unique business opportunity rooted in a vision of helping people live better
lives. It is an inspiration and an opportunity that is being taken up by millions of people
all over the globe who see it as a way of achieving their own personal and business goals.

Amway India Fact sheet


Amway promotes individual entrepreneurship through its innovative direct selling
approach of world class consumer products. Amway India is the country’s leading direct
selling FMCG-company which manufactures and sells world-class consumer products. Its
business opportunity and all its products are covered by 100% Money Back Guarantee.
Amway sources all its products from within India, thereby providing stimulus to the local
manufacturing industry.

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CORPORATE CREDENTIALS

• Amway India is a wholly owned subsidiary of US $ 7.2 billion Amway


Corporation, Ada, Michigan, USA. Amway Corporation is one of the largest Direct
Selling companies in the world. It has a presence in 80 countries & territories.
• Established in 1995, Amway India commenced its commercial operations in May
1998 and has emerged as the largest Direct Selling FMCG Company. The Company is
headquartered at the National Capital Region of India - New Delhi.
• Amway has invested in excess of US $ 35 million (Rs. 151 crore) in India of this;
US $ 6 million (Rs. 26 crore) is in the form of direct foreign investment.
• Amway India has 400 full time employees and has generated indirect
employment for 1,650 persons at all the contract manufacturer locations.
• The Company has provided income generating opportunity to over 4,50,000
active independent Amway Business Owners.
• 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 in the past 12-months with an attendance of over 1.5 million Amway Business
Owners and prospects.
• Amway India recorded a sales turnover of over Rs. 800 crore during January’07 –
December’07.
• Amway India is a member of the Indian Direct Selling Association (IDSA). The
IDSA is an industry regulatory body, with several reputed international and Indian
Direct Selling companies as members.
• Amway India is also a member of the Confederation of Indian Industries (CII)
and Federation of Indian Chambers of Commerce (FICCI).
• The World Blind Union presented an award and citation to Amway India in 2003,
for its peerless work for the blind children.

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NATIONAL PRESENCE

In ten years of commercial operation, Amway India has established a nation-wide


presence in over 125 offices and 55 city warehouses and four regional mother
warehouses. The distribution and home delivery network set up with the support of
independent logistics partners is spread across over 3,000 locations.

MANUFACTURING

Almost all Amway India products are manufactured in the country through 7 third party
contract manufacturers. To bring the identified contract manufacturers’ production
facilities and skills to international standard, Amway has invested in excess of US$ 4
million (approx. Rs. 17 crore). The transfer of this state-of-the-art, world-class
technology, has been free of cost.

PRODUCTS

• At present, Amway India offers over 105 products in four categories. They are
Personal care category, Home Care category, Nutrition & Wellness category and
Cosmetics category.
• 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.
• The products match Amway’s global quality standards. They carry a tamper-
proof seal and a ‘100% 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.

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CORPORATE RESPONSIBILITY

AMWAY OPPORTUNITY FOUNDATION (AOF)

• Amway Opportunity Foundation (AOF) a registered non-profit organisation


which looks after Amway India’s Corporate Social Responsibility (CSR). Amway
distributors are also volunteers of AOF and they have enthusiastically participated in
all AOF activities. Globally, Amway’s CSR campaign is known as the One By One
Campaign for Children.

PROMOTING FREE ENTERPRISE AND SELF-EMPLOYMENT

• Amway has conducted several seminars on ‘Entrepreneurial Development and


Direct Selling’ in concert with the Confederation of Indian Industries (CII) and the All
India Management Association (AIMA) on the benefits of organised direct selling.
MEMBER - IDSA (Indian Direct Selling Association)

• Amway India Enterprises Pvt Ltd is a member of the India Direct Selling
Association. The Indian Direct Selling Association 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.

Amway mission

Through the partnering of Distributors, Employees, and the Founding Families, and the
support of quality products and service, we offer all people the opportunity to achieve
their goals through the Amway Sales and Marketing Plan.

Business awareness campaign

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Amway is a member of the Direct Selling Association (DSA), the industry body
representing forty direct selling companies. All member companies have to abide by its
Code of Practice which is endorsed by the Office of Fair Trading.

In July 1992 Amway (UK) Ltd launched its Business Awareness Campaign to persuade
the government to tighten up the current pyramid selling legislation.

The campaign had three aims:

• To upgrade the legislation and introduce further safeguards to protect both


distributor and consumer.

• To ensure that the legislation clearly defines the differences between illegal
pyramid selling and direct selling and to changethe name of the legislation, so that
ethical companies no longer have the pernicious label 'legal pyramids'

• To educate the general public, as well as opinion forming bodies such as Trading
Standards Departments and Citizens' Advice Bureaux, about the differences
between reputable direct selling companies

The Amway Sales Plan

The Amway Sales and Marketing Plan is a low risk, low start-up cost business
opportunity that is open to everyone. It allows you to build your business through
retailing products and sponsoring other people who, in turn, can retail products and
offer the business opportunity to others. By passing your sales and marketing
knowledge to your developing team, you not only build your own business network but
also enable others to build one of their own.

The core of the Amway Sales and Marketing Plan's income opportunity is the sale of
quality AMWAY™ products and services to retail customers. As your Amway
business grows, the rewards you earn grow in proportion. The Amway Sales and
Marketing Plan does not compensate anybody for simply recruiting others as
Independent Business Owners.

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Amway sales and marketing plan

The activities of each Amway distributor are determined by the Amway Sales and
Marketing Plan. Amway practices direct selling which is 'A method of selling goods
directly to the consumer by an independent Distributor. A Distributor can then introduce
further Distributors and generate income from retail profits supplemented by bonus
payments based upon the total sales of the group built by a Distributor'.

Income is generated by a distributor through:

• the retailing of goods to consumers. Retail margins (mark-ups) on the basic


wholesale price represent income to the selling distributor.

• additional performance and leadership bonuses, paid on the volume of personal


business of the distributor and the business volume of the distributors he has
introduced to the business.

• various levels of leadership bonuses, dependent upon the overall size and shape of
the business, paid on achieving different levels of business performance.

This plan, therefore, rests upon the twin foundations of retailing and sponsoring.

• Retailing - the selling of goods to consumers on which retail margins are earned
and performance bonuses gained.

• Sponsoring - the introduction of other individuals to establish and develop their


own independent Amway distributorships.

Retailing enables distributors to provide immediate financial incentive rewards.


Sponsoring enables distributors to replicate the base with other people, thus allowing the
organisation to grow. Direct selling involves sales people showing and demonstrating
products to obtain orders.

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The objective involves matching consumer needs with the product. The better the match,
the more lasting the potential for the relationship between the seller and the buyer. The
selling process is aided by Amway's retail strategy to provide high quality, readily
purchasable items with a good environmental positioning, offering consumers good value
for money.

As with all direct selling activities, the process involves two-way communication and this
can be time-consuming. Business success and the resulting financial results are a direct
consequence of effort, commitment and personal group motivation. Personal contact
between distributors at one-to-one or group meetings provides the opportunity for
individuals to discuss strategies, difficulties, levels of involvement and plans for the
future. The income objectives and individual targets may be determined by each
distributor based upon what he or she wants to earn. Distributors who develop direct
selling businesses may come from widely different backgrounds, with vastly different
levels of experience and knowledge - the common factor to their success is the desire to
achieve.

Direct Selling

The concept of direct selling is based upon person-to-person relationships. The seller
goes to the consumer rather than the consumer to a shop. In today's fast changing society,
where more people work and shopping patterns have altered, this type of shopping not
only provides consumers with accessibility to a wide range of products but is also
convenient.

An organisation involved in direct selling cannot sell without a sales force! At the heart
of Amway's approach to direct selling is the critical relationship between Amway and the
seller or distributor. There are more than 2.5 million renewed independent Amway
distributors world-wide, around 37,000 of whom are in the UK. Each of these distributors
is self-employed. Anyone over 18 can establish their own business as an Amway
distributor, either on a part-time or full-time basis. Amway offers individuals the chance

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to set up their own business with little or no experience or capital investment. Working
hours and flexibility can be adjusted to suit each individual.

Individuals may have many different motives for starting their own businesses. Some
individuals strive for achievement and may have tremendous energy and commitment to
succeed. Others may want independence; to work their own hours and have the ability to
make their own decisions. However, for many others the financial incentive is usually
reward enough to engage in activities, where they may measure their success by income
and standard of living.

The vast majority of new Amway distributors have no previous experience running a
business of their own. Participating in the Amway business has helped them with their
personal and professional development, acquiring skills in dealing with people and
developing a wider business acumen.

Amway products are sold person-to-person, rather than door-to-door or via party plan.
Distributors earn their income through retail profit on the goods they sell. In addition,
they receive a commission from Amway based on the volume of sales they generate
personally, as well as those by their own distributor network.

Amway India: We Are Listening

Corporate Brand : Amway


Agency : Rediffusion Dy&R
Brand Analysis Count : 324
Amway is one of the global leaders in direct marketing. The name Amway is derived
from the words "American Way " . Amway was established in 1959 by Jay Van Andel
and Richard Devos. Amway global now have a presence in over 88 countries and has a
$6.5 Billion turnover.

Amway was established in India in 1995 and commenced operation in 1998. Currently
the company have 80 products in 4 categories. Amway operates in the following
categories :

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Personal Care
Home Care
Nutrition and Wellness
Cosmetics

Amway is often used as an example of a direct marketing company. The company sells
its products using direct distributors called Amway Business Owners ( ABO). The model
works on a business networking model .
The ABOs can build a team by recruiting a team of ABOs under him. The ABO earns
commission on the products sold . Further , the ABO also gets commission for the sales
done by other ABOs recruited by him. The payout is decided by the point system. The
Amway business model also divides the ABOs into different categories based on the
sales performance of the team. The payout varies with different levels.

Amway India in now a 800 crore company with its operation spanning across India. It has
more than 4.5 lakh independent distributors and 117 offices across the country.
Considering the nascent stage of Direct Marketing Industry in India, Amway India has
been reasonably successful. According to Business Line, the direct marketing Industry in
India is estimated to be Rs 3150 crore.

The success of Amway products is predominantly driven by the quality of the products.
Amway India's products are mostly sourced from manufacturing units from India. It has
outsourcing contracts with 5 major units in India. The products are sourced after strict
quality checks.

Amway is a 100 % direct marketing company . That means the consumers will not get
any Amway products from shops. The products can be bought through ABO's. Hence the
sales are driven by the efforts of ABOs. Since the company does not advertise its brands,
the only communication channel is through ABOs who visits households and make
presentations. There are two tasks of a typical ABO : the first task is to sell Amway
products and second task is to appoint new ABOs .

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Typically direct marketing firms faces issues of reach and cost. Since the sales depend
entirely on the independant distributors , the company has to pay huge commission. This
results in the increased cost of the product. Hence the products become expensive
resulting in lower sales.

Amways also faces this issue. The products of Amway are excellent but very expensive.
For example, the Persona brand of soaps cost Rs 30 which is almost double the rate of an
ordinary soap. Persona is one of the best soaps in terms of quality but price is definitely a
dampener. Another example is the range of cosmetics under the brands Attitude and
Artistery . Artistery is targeted at the premium class and Attitude at the middleclass. But
the price of these brands make the consumer think twice before buying it. Hence the
ABOs have a tough time convincing the value proposition.

In a value conscious country like India, the expensive tag of Amway products is the
singular reason for the lack of popularity of its products.

Understanding this issue, Amway launched its first corporate branding initiative in India .
The brand came out with a Television campaign highlighting the customer-centric
approach .

Watch the TVC here : Amway

Amway uses the slogan " We are listening " . The idea revolves round the theme that
Amway understands the Indian consumers and the products are derived from this
understanding . The purpose of the campaign is two fold :

a. The company wants to build equity around the corporate brand which will enable the
ABOs to tide over the initial customer resistance.
b. The enhanced corporate image will also attract people to join Amway as independent
business owners.

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Along with this, the company is also rationalising the pricing strategies. The company is
launching a new range of value products like coconut oil , shaving creams. But here again
the company will face certain issues . For lower priced products, the commission payout
will be less and hence the ABO will have to sell more volume to get higher commission.
Amway had introduced sachets for most of the products, but the low commission payout
for sachets has prompted ABOs to try and sell high value items.

Another significant change that the company made was rationalising the entry cost for
new ABOs. Earlier, a person had to shell out Rs 5000 to join the firm. The cost was to
buy the Amway business kit which consists of various Amway products and brochures.
The ABO can recover the money by selling these products. Now the company has
introduced a starter pack for Rs 995 which does not have Amway products but
brochures . This will be a big relief for the existing ABO since the higher joining costs
turned away most of the potential ABOs.

Among the 80 products, one of the best seller for Amway is the Nutrilite brand. Nutrilite
is a nutraceautical supplement and this brand contributes around 50% of Amway's
turnover. The brand virtually faces no competition so far. The Indian nutraceauticals
market is estimated to be around Rs 1500 crore and is rapidly growing. Many Indian
companies are eying this segment and has serious plans to enter this segment.

Amway has understood that doing business in India will require a new business model.
The company has started to take steps in the right direction. It had tried to rationalise
prices and bring in new value products. But to balance the price , cost, quality and higher
commission is no easy task.

Labels: corporate brand, FMCG

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4 COMMENTS:

IBOFightback - Fighting the Amway Myths said...

Nice analysis. One thing to consider with regards to price/commissions is that the
lower expenses involved in setting up and running an Amway business means that
revenues can be lower yet still maintain a decent income.

3:12 PM

subhash patil said...

when 500 people will loose money one person will earn it.

9:29 AM

IBOFightback - Fighting the Amway Myths said...

Theoretically possible, yes. There's nothing in the Amway model that requires it
though. In a group of 500 there's no reason all 500 can't make money, if they
want.

More typically you'd find 200 of them joined then decided to nothing. They
probably bought some starting products, but if they didn't think they were worth
it, then they could send them back. Of the 300 left, 100 were just shoppers. Paid
money, got what they ordered, like any other "store". That's not "losing money".

Of those left, 125 dabbled a little - some of these made money, some lost some
money, probably varies month to month. That leaves 75 folk who made decent
money.

Statistically, very few people "lost" money so that 75-200 people could make
money, and there's no reason at all they couldn't all have made money if they'd
decided to pursue it and work hard.

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4:48 PM

mohd azrey said...

"Among the 80 products, one of the best seller for Amway is the Nutrilite brand. Nutrilite
is a nutraceautical supplement and this brand contributes around 50% of Amway's
turnover. The brand virtually faces no competition so far."

Allow me correct your statement. Nutrilite is a better supplement when you compare to
low grade products/companies. There are other superior supplement (world's best single
selling supplement.....Lifepak) from pharmanex.

Please take note Amway's Nutrilite is listed too. All the challengers failed to meet the
RDA requirements except Lifepak.

Read below article from Pharmanex:

LifePak Challenge

Pharmanex is so confident that the LifePak Family of Products will meet your unique
supplementation needs that we developed the LifePak Challenge and dared the world to
find a better multi-vitamin/mineral supplement. The
LifePak Challenge is based on the most recent U.S. Government
Recommended Dietary Allowances of essential vitamins and minerals
(known as RDA's) set in 1999.

We Challenge you to find a better multi-vitamin/mineral product. When submitting a


request for a LifePak Challenge please use the following 3 check points:

1. Has the comparison already been done? You can verify this by
telephoning or e-mailing Pharmanex Product Support OR see the list of
completed challengers by clicking on the LifePak Challengers button below.

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2. Is the product suitable for a comparison?
a) The product to be compared must be intended as a nutritionally complete multi-
vitamin/mineral product. If the
product is not intended to be a nutritionally complete multi-vitamin/mineral supplement,
we will not be able to
process your request.
b) Pharmanex LifePak is a premium multi-vitamin/mineral supplement. Therefore, to
ensure a fair comparison we
ask that you limit your comparison requests to a company's most complete multi-
vitamin/mineral product. If the
company-in-question has another more comparable multi-vitamin/mineral supplement we
will not be able to
process your request.

3. Sending in Challenger packaging


To initiate a comparison, Pharmanex Product Support must receive the product's original
packaging including
nutritional information. Product brochures, photocopies, or hand copied ingredient lists
will not suffice. For legal
purposes we must have the product's original packaging. It is not necessary to send in
actual product samples.

Amway is more than an income opportunity or a company or products. It’s about putting
people in control of their lives. It’s about connecting people to others who respect them,
who share their goals and aspirations. It’s about supporting people in their achievements.

Amway is about people connecting people to a better way of life.

Amway Corporation is one of the world's largest direct selling companies. Originally
founded by Jay Van Andel and Rich DeVos, Amway operates in more than 88 countries
and territories in Asia, Africa, Europe and the Americas. Amway products and services

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are marketed through independent business owners worldwide. Amway is a wholly
owned subsidiary of Alticor Inc.

PEOPLE

Amway has more than 6000 employees worldwide. In addition, Amway has more than
3.6 million Independent Business Owners (IBOs) around the world. In China, Amway
products are sold by Amway sales representatives.

PRODUCTS AND SERVICES

Over 450 unique, high-quality products carry the Amway name in the areas of nutrition,
wellness, beauty and home, as well as commercial products and a variety of services. In
addition, Amway independent business owners in selected markets sell additional brand-
name goods through local merchandise catalogues, plus a variety of services and
educational products. All products are backed by a customer satisfaction guarantee.

GOVERNANCE AND MANAGEMANT

Doug DeVos is the President of Amway and Steve Van Andel is the chairman.

FACILITIES

Amway operates out of Alticor's world headquarters located at 7575 Fulton Street East,
Ada, Michigan 49355, USA.

COMMUNITY SERVICES

Amway, its Independent Business Owners and employees are involved in improving the
communities in which they do business. Specific and current information is available
upon request.

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AFFILIATIONS

Amway is a prominent and active member of the regional and national direct selling
associations worldwide. Doug DeVos is a member of the U.S. Direct Selling Association
Board of Directors. Former Alticor President Dick DeVos is the current Chairman of the
World Federation of Direct Selling Associations (WFDSA). Globally, direct selling is an
industry with approximately $80 billion in sales and more than 30 million salespeople.

Rules of Conduct

Code of Ethics of Amway Distributors.

As owner of my Amway Distributorship, I agree to conduct my Amway business


according to the following ethical guidelines:

As a basic guideline in my activities as an Amway Distributor, I will endeavor to always


treat others, as I would have them treat me.

I will respect and follow this Code of Ethics and the Rules of Conduct observing not only
“the letter” but also ‘the spirit’ thereof.

I will present AMWAY products and the Amway Sales and Marketing Plan to all
prospective Distributors in a truthful and honest manner, and I will make sure to present
only what is approved in official Amway publications.

I will be courteous and prompt in the handling of any and all claims for exchange and
return and follow the procedures prescribed by Amway from time to time in its official
publications.

I will conduct myself in such a manner as to reflect only the highest standards of
integrity, frankness and responsibility because I recognise that my conduct as an Amway
Distributor has far-reaching effects.

23
I will accept and carry out the responsibilities of an Amway Distributor (and those of
Sponsor and Direct Distributor when I reach such level), as set forth in official Amway
publications.

In my AMWAY product sales activities, and for the purposes of protecting the Amway
Sales and Marketing Plan, I will use only Amway produced or Amway-authorised
publications.

Amway Rules of Conduct

What does the word Amway mean? Amway is an abbreviation for "American Way" and
was coined in 1959 by company founders, Jay Van Andel and Richard DeVos. Short,
unique and easy to remember, Amway has been registered as a corporate name and
trademark ever since.

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


multilevel marketing business, built on strong values and founding principles that
continue to sustain our company today. The business is built on the simple integrity of
helping people lead better lives.

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


opportunity to millions of people in more than 88 countries and territories around the
world. Amway generates US$6.4 billion (September’04 - August’05) in sales at
estimated retail through this global product distribution network. We offer over 3 million
Business Owners the inspiration to grow those businesses, and we work hard to provide
new and better ways for them to achieve their life goals.

AWARDS

• As a corporate leader in promoting environmental awareness and education,


Amway received the prestigious United Nations Environment Programme
Achievement Award in 1989.

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• 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

A SOLID FOUNDATION

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.

THE EARLY YEARS

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 DECADE OF GROWTH

As vowed by Jay Van Andel the night of the 1969 disaster, Amway rebuilt the aerosol
plant and went on. The '70s began with sales of more than $100 million at estimated
retail, and kept going strong. After a lengthy investigation, the FTC verified that Amway
is a genuine business opportunity and not a "pyramid."

THE BILLION-DOLLAR DECADE

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

25
Amway scrambled to keep pace with demand, opening its new cosmetics plant in Ada,
Michigan.

THE NEXT GENERATION

As carefully planned by Rich and Jay, the second generation Van Andel and DeVos
families took the helm 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.,
NEW HORIZONS

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

Almost 50 years after Amway began, the DeVos and Van Andel families created a new
structure to meet the challenges of this new century. A parent company, Alticor, was
established with subsidiaries Amway, Quixtar and Access Business Group—the latter to
consolidate manufacturing and distribution for the enterprise. At the helm of Alticor are
Steve Van Andel (Chairman) and Doug DeVos (President), jointly holding the Office of
the Chief Executive. Today each area of the business, including Amway, has the freedom
to build on its strengths.

Amway continues to be a leading company in the direct selling industry. Its fundamental
principles—freedom, family, hope and reward—hold as true today as they did in the very
beginning

Vision

Inspiring people to live better lives.

26
Mission

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.

Our Values

Amway has established some simple shared values that unite the entire company, and all
of the Business Owners that are associated with Amway. We believe that these values
guide our actions and help us to achieve everything we 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.

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.

27
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 honor, encourage and support individuals and teams who
contribute, through their behavior and actions, to the success of the organization.

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OBJECTIVES OF THE STUDY

The objectives of the study are:


• Problem in the amway marketing.
• To study the marketing practices and problem faced by the Amway consumer..
• To study the factors influencing the attitude of customers towards Amway
products.
• Factor influencing customer`s attitude towards Amway products

29
CHAPTER-3

IMPORTANCE OF THE
STUDY

30
IMPORTANCE OF THE STUDY

• To know the consumer buying behavior of the Amway consumer.


• To know the future of the Amway in India.
• To know the Amway joining procedure.

31
CHAPTER-4

LITRATURE RIVIEW

32
LITRATURE RIVIEW

Organization develop mission statements to share with manager, employee, and


customers. A clear thoughtful mission statement provides employee with a shared sense
of purpose, direction and opportunity. The statement guide geo-graphically dispersed
employees to Work independently and yet collectively toward realizing the
organization`s goals.

Dominating the industry are a few gaint firms- perhaps a quality leader, a services leader
and a cost leader- that serve the whole market and make their profits mainly leader-that
serve the whole market and make their profits mainly through high volume and lower
costs. Surrounding these dominant firms is a multitude of market nichers, including
market specialists, products specialists and customizing firms. The issue facing a firm in
a mature market is whether to struggle to become one of the “big three” and achieve
profits through high volume and low cost or to pursue a niching strategy and achieve
profits through low volume and a high margin.

33
CHAPTER - 5

RESEARCH
METHODOLOGY

34
RESEARCH METHODOLOGY

Research is an art of scientific investigation. Research covers the search for a retrieval of
information for a specific purpose. Research has many categories, from medical research
to literary research. A research paper is a piece of academic writing that requires a more
abstract, critical and thoughtful level of inquiry than you might be used to.

According to Redman and Morry, ‘Research is careful and systematized effort of gaining
new knowledge.’

According to Clifford Woody, ‘Research comprises of defining and redefining


problems, formulating hypothesis or suggested solutions, collecting, organizing and
evaluating data, making deductions and reaching conclusions. And at last carefully
testing the conclusions, to determine, whether they fit the formulating hypothesis or
not.’

The dictionary meaning of research is ‘a careful investigation or inquiry especially


through search for new facts in any branch of knowledge.’

Basically research is a search for truth with the help of some study, observation,
comparison and experiments. It is a search for knowledge with the help of objective and
systematic method of finding solution to a problem. Research is a voyage of dictionary of
knowledge lead by inquisitiveness of human nature.
IMPORTANCE Of RESEARCH

• Research forms the fundamental base on which the economic and legislative
polices can be built.
• Research assists in solving various operational and planning problems of business
and industry.
• Research helps to establish social relationships and solves social problems.

35
• Research is used in all fields for applied economics, applied finance and applied
mathematic etc.
• Research facilitates scientific and methodological and logical thinking of all.
• Research assists in Ph.D. thesis of students.
• Assists philosophers and thinkers to establish their viewpoints.
• Assists analysts and intellectuals to develop new theories and ideas.

RESEARCH METHODS VERSUS METHODOLOGY


It seems appropriate at this juncture to explain the difference between research methods
and research methodology. Research may be understood as all those methods/techniques
that are used for conduction or research. Research methods or techniques, thus refer to
the method the researcher use performing research operations. In other words, all those
methods, which are used by the researcher during the course of studying his research
problem, are termed as research methods. Science the object of research, particularly the
applied research, is to arrive at a solution for a given problem, the available data and the
unknown aspects of the problem have to be related to each other to make a solution
possible. Keeping this in view, research methods can be put into the following there
groups:
In the first group we include those methods, which are concerned with the collection of
data. These methods will be used where the data already available are not sufficient to
arrive at the required solution.
The second group consists of those statistical techniques, which are used for establishing
relationships between the data and the unknowns.
The third group consists of those methods, which are used to evaluate the accuracy of the
results obtained.
Research methods falling in the above stated last two groups are generally taken as the
analytical tools of research. Research methodology is a way to systematically solve the
research problem. It may be understood as a science of studying how research is done
scientifically. In this we study the various steps that are generally adopted by a researcher
in studying his/her research problem along with the logic behind them. It is necessary for

36
the researcher to know not only the research methods/techniques but also the
methodology.
Researcher not only need to know how to develop certain indices or tests, how to
calculate the mean, the mode, the median or the standard deviation or chi-square, how to
apply particular research techniques, are relevant and which are not, and what would they
men and indicate and why. Researchers also need to understand the assumptions
underlying various techniques and they need know the criteria by which they can decide
that certain techniques and procedure will be applicable to certain problems and others
will not. All this means that it is necessary for the researcher to design his/her
methodology for the problem as the same may differ from problem to problem.
For example, an architect, who designs a building, has to consciously evaluate the basis
of his/her decisions, i.e. he/she has to evaluate why and on what basis he/she selects
particular size, number, and location of doors, windows and ventilators, used particular
materials and not others and the like. Similarly, in research the scientist has to expose the
research decisions to evaluation before they are implemented. He has to specify very
clearly and precisely what decisions he/she selects and why he/she selects them so that
others can evaluate them also.
From what has been stated above, we can say that research methodology has many
dimensions and research methods do constitute a part of the research methodology. The
scope of research methodology is wider than that of research methods. Thus, when we
talk to research methodology we not only talk of the research methods but also consider
the logic behind the methods we use in the context of our research study and explain why
we are using a particular method or techniques and why we are not using others so that
research results are capable of being evaluated either by the researcher himself/herself or
by others. Why a research study has been undertaken, how the research problem has been
defined, in what way and why the hypothesis has been adopted, why particular technique
of analyzing data has been used and a host of similar other questions are usually
answered when we talk of research methodology concerning a research problem or study.

37
RESEARCH PROCESS / METHODOLOGY
The research process adopted in this project has the following steps.
FORMULATION OF THE PROJECT TOPIC
This is the starting point of any project. At the very outset it must be singled out i.e. the
decision about the general area of interest has to be taken. This means that the subject
matter of the study has to be defined. Essentially tow steps are involved is formulating
the research topic viz. understanding the problem thoroughly and rephrasing the same
into meaningful terms from an analytical point of view.
DEVELOPMENT OF WORKING HYPOTHESIS
After determining the research problem, the working hypothesis was developed. It is a
tentative assumption made in order to draw out and test its logical or empirical
consequences. The research hypothesis provides the focal point for research. They also
affect the manner in which the tests must be conducted in the analysis of data and
indirectly the quality of data, which is required for the analysis.

DEFINING THE SCOPE AND OBJECETIVE HAVE THE SEARCH


This is the stage at which the research design has to be prepared. This makes the research
as efficient as possible yielding maximum information. In other words, its function is to
provide for the collection of relevant information with minimal expenditure of effort,
time and money.
DETERMINING THE SAMPLE DESIGN
A sample design is a definite plan determined before any data are actually collected for
obtaining a sample from a given population. The samples can be either probability
samples or non-probability samples. With probability sample each element has a known
probability or being included in the sample but the non-probability sampling do not allow
the researcher to determine this probability. In this project the sample was collected on
basis of simple random sampling where each element of the population has equal
probability of getting selected.

COLLECTING THE DATA

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In dealing with any real lie problem it is often found that at hand are in adequate and
hence, it becomes necessary to collect data that are appropriate. There are several ways of
collecting the appropriate data, which differ considerably in the context of money costs,
time and other resources at the hands of the researches. Primary data can be collected
either through experiment or through survey. In case of survey data can be collected by a
number of ways viz. by observation, through personal interviews, through telephone
interviews, by mailing of questionnaires, through schedules. The researcher should select
one of these methods of collecting the data taking into consideration the nature of
investigation, objective and scope of the inquiry, financial resources, available time and
the desired degree of accuracy.
ANALYSIS OF DATA
The analysis of data requires a number of closely related operations such as establishment
of categories, the application of these categories to raw data through coding tabulation
and then drawing statistical inferences. The unwieldy data was condensed into a few
manageable groups and tables for further analysis. The researcher classified the raw data
into some purposeful and usable categories and coding operation was done at this stage
through which the category of data was transferred into symbols that was tabulated and
counted. Editing is the procedure that improves the quality of data for coding. Tabulation
is a part of the technical procedure where in the classified data is put in the form of
tables. The analysis work after tabulation was based on the computation of various
percentages; coefficients etc. by applying various well-defined statistical formulae.

GENERALISATIONS AND INTERPRETATIONS


The real value of research lies in its ability to arrive at certain generalization. The
interpretation means to explain the findings on the basis of some theory.

The interpretation of data has been done on the basis of following: -


Coding of Data Collected
Tabulation of Data
Simple Analysis of Data
Cross Analysis of Data

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RESEARCH DESIGN
Research design provides the glue that holds the research project together. A research
design is used to structure the research, to show how all of the major parts of the research
project - the samples or groups, measures, treatments or programs, and methods of
assignment – work together to try to address the central research questions.
Understanding the relationships among designs is important in making design choices
and thinking about the strengths and weaknesses of different designs. Once the problem
has been carefully defined, the researcher needs to establish the plan that will outline the
investigation to be carried out. The research design indicates the steps that will be taken
and in what sequence they occur.
PREPARING THE RESEARCH DESING
The research problem having been formulated in clear-cut terms, the researcher will be
required to prepare a research design, i.e. he/she will have to state the conceptual
structure within which research would be conducted. The preparation of such a design
facilitates research to be as efficient as possible yielding maximal information. In other
words, the function of research design is to provide for the collection of relevant evidence
with minimal expenditure of effort, time and money. But how all these can be achieved
depends mainly on the research purpose.

Research purposes may be grouped into four categories, viz. (I) Exploration, (II)
Description, (III) Diagnosis, and (IV) Experimentation. A fixable research design, which
provides opportunity for purpose of the research study, is that of exploration. But when
the purpose happens to be an accurate description of a situation or of an association
between variables, the suitable design will be one that minimizes bias and maximizes the
reliability of the data collected and analyzed.
There are several research designs, such as, experimental and non-experimental
hypothesis testing. Experimental designs can be either informal design such as, before-
and-after without control, after only with control, before-and-after with control or formal
designs (such as completely randomized block design, Latin square design, simple and
complex factorial designs), are of which the researcher must select one for his/her
project.

40
The preparation of the research design, appropriate for a particular research problem,
involves usually the consideration of the following:
• The means of obtaining the information.

• The availability and skills of the researcher and his/her staff (if any).

• Explanation of the way in which selected means of obtaining information will be


organized and the reasoning leading to the selection.

• The time available for research.

• The cost factor relating to research, i.e. the finance available for the purpose.

SAMPLING DESIGN

There are two important sources of collection of information:


• Census
• Sample
All the items that fall in the purview of the research are called ‘Universe’ or ‘Population’.
If a study aims at considering all the units of the population it is termed as inquiry.
However, if bias exists in the study then the error, increases manifold if sample size is
large. Simultaneously such a type of study is quite expensive such a type of study is quite
expensive and time consuming. Hence such a study is difficult to adopt. Only the
government organizations conduct such studies.

However, normal researches, take a small sample from the universe. The sample is
selected by applying some technique. The sample should adequately represent the
universe or the population. The selection of sample is called sampling technique. The
survey so conducted is called sample survey.

41
WHY ONLY SAMPLING?
We would not be in apposition to need any statistical theory if we use census to obtain
information from the population. Census is an expensive impractical and uneconomical
way of doing research analysis. The most important reason why one uses sampling rather
than a census is as follows:
Economy: When one uses a sample then he requires fewer amounts of resources as
compared to census, which includes cost, people and time. A wisely selected sample can
provide all answers sought by the researcher very economically.
Time Factors: Sampling decreases the time spent by the researcher in dealing with the
issue. Study of sample and analyzing its results helps the researcher generalize the results
to the whole population within no time as compared to census study.
Large Size of Populations: Representative sampling helps to conduct study for large
populations.
Inaccessibility of Some of the Populations: Sometimes some populations are
inaccessible and in that case the sample units comprising of similar units can be effective
in conducting the research and coming out with results which area applicable to the
whole population including the inaccessible population.
Accuracy: Effective and wisely structured sample provides accurate answers to the study
questions/research needs. Small samples are easy to control and thus reduce normal
errors, which are faced in census studies.
Error and Biasness in Observation and Analysis: Census studies involve more error
and biasness in both observations and analysis as compared to the sampling studies.

TYPES OF SMAPLE
• Non-random Sampling
• The Convenience Sampling
• Judgment Sampling
• Quota Sampling
• Panel Sampling
• Random Sampling

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• Simple Random Sampling
• Systematic Random Sampling
• Stratified Random Sampling
• Cluster Sampling
• Multistage Sampling
DATA COLLECTION & METHODS

Data collection and analysis methods for impact evaluation vary along a continuum. At
the one end of this continuum are methods relying on random sampling; structured data
collection instruments that fit diverse experiences into predetermined response
categories; and statistical data analysis. These methods, generally associated with
quantitative research, produce results that are easy to summarize, compare, and
generalize.

• METHODS OF DATA COLLECTION


• SIMPLE RANDOM SAMPLING
• BY OBSERVATION
• BY MAILING OR QUESTIONNAIRES

SIMPLE RANDOM SAMPLING


This type of sampling is also known as chance sampling or probability sampling where
each and every item in the population has an equal chance of inclusion in the samples and
each one of the possible sample, in case of finite universe, has the same probability of
being selected.
BY OBSERVAION
This method implies the collection of information by way of investigator’s own
observation, without interviewing the respondents, the information obtained relates to
what is currently happening and is not complicated by either the past behavior or future
intensions or attitudes of respondents. This method is also very limited. As such this
method is not suitable in inquiries where large samples are concerned.

43
BY MAILING OR QUESTIONNAIRES
The researcher and respondents do not come in contact with each other if this method or
survey is adopted. Questionnaires are mailed to the respondents with a request to return
after completing the same. It is the most extensively used method in.

COLLECTION OF DATA THROUGH QUESTIONNAIRES


This method of data collection is quite popular, particularly in case of big enquiries. It is
being adopt by private individual research workers and workers, private and public
organizations and even by government. In this method a questionnaire is sent (usually by
post) to the persons concerned with the request to answer the question and return the
questionnaire. A questionnaire consists of a number of questions printed of typed in a
definite order on a form or set of forms. The questionnaire is melt to response then or
expected to read and understand the questions and write down the reply in the space
meant for the purpose in the questionnaire itself. The respondents have to answer the
questions on their own.

The method of collecting data wise mailing the questionnaires to respondents is most
extensively employed in various economy and business surveys.

The merits claimed on behalf on method are as follows:


There is low cast even when the universe is large and is widely spread geographically.
It is free from the bias of the interviewer; answers are in respondent’s own words.
Respondents have adequate time to give well thought out answers.
Respondents, who are not easily approachable, can also be reached conveniently.
Large samples can be made use of and thus the results can be made more dependable and
reliable.

These main demerits of this system can be listed here:


Low rate of return of the duly filled in questionnaires; bias sue to no response is often
indeterminate.
It can be used only when respondents are educated and cooperating.

44
The control over questionnaire may be lost once it is sent. There is in built inflexibility
because of the difficulty of amending the approach once questionnaires have been
dispatched.
There is also possibility of ambiguous replies or omission of replies altogether to certain
questions; interpretation of omissions is difficult.
It is difficult to know whether willing respondents are truly representative.
This method is likely to be the slowest of all.

Before using this method, it is always advisable to conduct ‘Pilot Study’ (Pilot Survey)
for testing the questionnaires. In a big enquiry the significance of pilot survey is felt very
much. Pilot survey is infecting the replica and rehearsal of main survey. Such a survey,
being conducted by expert, brings to the light the weakness of the questionnaires and also
of survey techniques. From the experience gained in this way, improvement can be
affected.

MAIN ASPECTS OF A QUESTIONNAIRE


Quite often questionnaire is considered as the heart of a survey operation, hence it should
be very carefully, if it is not properly set up, then the survey is bound to fail, this fact
requires us to study the main aspects of a questionnaires viz., the general form, question
sequence and question formulation and wording. Researcher should note the fooling with
regard to these three main aspects of questionnaire.
ESSENTIALS OF A GOOD QUESTIONNAIRE
To be successful, questionnaire should be comparatively short and simple i.e. the size of
the questionnaire should be kept to the minimum. Questions should proceed in logical
sequence moving from easy to more difficult questions. Personal and intimate questions
should be left to the end. Technical terms and vague expression capable of different
interpretations should be avoided in a questionnaire.

Question may be dichotomous (yes or no answer), multiple choice (alternative answers


listed) or open ended. The later types of questions are often difficult to analyze and hence
should be avoided in a questionnaire to the extent possible. There should be some control

45
questions in the questionnaire, which indicate the reliability of the respondent. For
instance, a question designed to determine the consumption of particular material may be
asked first in terms of financial expenditure and later in terms of weight. The control
questions, thus, introduce a crosscheck to see whether the information collected or not.
Questions affecting the sentiments of respondents should be avoided. Adequate space for
answers should be provided in the questionnaire to help editing and tabulation. This
should always be provision for indications of uncertainty, e.g. “do not know”, “no
preference” and so on. Brief directions with regard to filling up the questionnaire should
invariably be given in the questionnaire itself. Finally, the physical appearance of the
questionnaire affects the cooperation the researcher receives from the recipients and as
attractive looking questionnaire, particularly in mail surveys, is a plus point for enlisting
cooperating.

After the collection of data these were systematically presented in tables and statistically
analyzed for deriving information. Suitable bar-diagrams and pie-diagrams are presented
for visible documentations of results.
PROCESSING AND ANALYSIS OF DATA
PROCESSING OF DATA
The collected data in a research is processed and analyzed to come to some conclusion or
to verify the hypothesis made. Processing of data is important as it makes further analysis
of data easier and efficient. Processing of data technically means
• Editing of Data
• Coding of Data
• Classification of Data
• Tabulation of Data
EDINTING
Data editing is a process by which collected data is examined to detect any errors or
omissions and further these are corrected as much as possible before proceeding further.
Editing makes careful scrutiny or investigation of collected data like questionnaire,
surveys etc. editing assures accuracy of data and consistency of facts gathered etc. editing
is two types: (a) Field Editing, (b) Central Editing.

46
CODING
Classification of responses may be done on basis of one or more common concepts. In
coding a particular numeral or some symbol is assigned to the answers (collected data) in
order to put the responses in some definite categories or classes. The classes of responses
determined by the researcher should be appropriate and suitable to the study. Coding
enables efficient and effective analysis as the responses are categorized into meaningful
classes. Coding decisions are considered while developing or designing the questionnaire
or any other data collection tool. Coding can be done manually or through computer.

CLASSIFICATION
Classification of data implies that the collected raw data is categorized in to common
group having common features. Data having common characteristics are placed in a
common group. Thus the entire data collected is categorized into various groups or
classes, which convey a meaning to the researcher.
TABULATION
The mass of data collected has to be arranged in some kind of concise and logical order.
This procedure is referred to as tabulation. Tabulation summarizes raw data and displays
data n form of some statistical tables. Tabulation is an orderly arrangement of data in
columns and rows.

47
CHAPTER-6

DATA ANALYSIS

48
DATA ANALYSIS
One or two person in their individual capacities normally carry out an Amway customer.
Individual who are residents in India and are prerequisites for individuals to apply for an
Amway consumer. Individual who are residents in India and are Indian citizens are free
to do the Amway business without satisfying any prior conditions. Individual who are
foreigen passport holders and are not of Indian origin require approval from the Reserve
Bank of India to apply for distributorship. Individual who are non- residents in India are
required to register with the Reserve Bank of India within 90 days of starting their
Amway business in India.

Q: 1 Age-wise classification of distributers?


Table:1
Age Number of distributer
Less then 25 years 24
25-35 Years 32
35-45years 30
Above 45 years 14
Total 100

Graph:1

Less then 25 years


From
25-35 Years the
35-45years
Above 45 years
above
Table
1, it
could
be

49
understood that out of 100 respondent consumer, 24 consumer belong to the age group of
less than years, 32 consumer belong to the age group of above 25 years but below 35
years.
Further the Table shows that the 30 distributor belong to the age group of above 35 years
but below 45 years and 14 consumer belong to the age group of above 45 years.

Q: 2 Gender-Wise classification of consumer ?

50
Consumer are of both gender. The following table shows the gender-wise
classification of consumer.
Table:2

Gender Number of consumer


Men 56
Women 44
Total 100

Graph:2

Men
Women

From the above table 2, it is understood that out of 100 respondent consumers, 56
consumer are men and consumer are women.

Q: 3 Literacy level of Amway consumer?

51
Literacy level of the consumers plays an important role in marketing the Amway
products. The following that shows the qualification of consumers.
Table:3

Literacy level Number of consumer


Higher secondary 22
Diploma 34
Degree 30
Post graduate Degree 12
Total 100

Graph:3

Higher secondary
Diploma
Degree
Post graduate Degree

It is evident from table 3, that the educational qualification of 22Amway consumer


Is higher secondary 34 consumer are diploma holders, 30 consumer are degree holder and
14 consumer are postgraduate degree holder.

Q: 4Income –wise classification of Amway Distributers.?


Table:4

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Income Number of consumer
Below Rs. 5,000 45
Rs.5,000-Rs10,000 43
Above 12
Total 100

Graph:4

Below Rs. 5,000


Rs.5,000-Rs10,000
Above

Table 4 reveals that 45 consumer earn below Rs.5000 per months; 42 consumer earn
above Rs. 5000 but below Rs. 10,000 and 12 consumer earn above Rs.10,000.

Q: 5 Sources of information about Amway business.

In this survey, an attempt is made to find out the sources of information on which most
of the distributors rely for their business.

53
Table:5

Sources Number of distributers


Friends 27
Relative 29
Neighbours 20
Other Amway consumer 24
Total 100

Friends
Relative
Neighbours
Other Amway consumer

Graph:5
From the above table 5, it could be inferred that out of 100 respondent, 29 consumer got
the information from relative, 27 from their friends, 24 from other Amway consumer and
only 20 consumer got the idea from neighbors.
Q: 6 Reason for starting Amway business?
The Amway consumer take up the Amway business for both, self-employment and
additional income.
Table:6

Category Number of respondent


Self employment 67

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Additional 33
Total 100

Self employment
Additional

Graph:6

It is inferred from the above the table that 67 consumer have taken up Amway business
for self-employment and 33 consumer have taken it up for the purpose of additional
income.

Q: 7 Initial investment?
For any business, capital is the most essential thing. Without which, no activity can be
performed. It also one of the four important factors of production. Table 7 shows the
amount of capital invested at the initial stage of starting the business by the respondent
consumer.
Table:7

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Investment Number of consumer
Rs. 4000-Rs. 6000 43
Rs. 6000-Rs. 8000 19
Rs. 8000-Rs. 10,000 25
Above Rs. 10,000 12
Total 1000

Rs. 4000-Rs. 6000


Rs. 6000-Rs. 8000
Rs. 8000-Rs. 10,000
Above Rs. 10,000

Graph:7
The above table reveals that 43 consumers had invested above Rs. 4000; 19 consumer
had invested above Rs. 6000 and below Rs.8000; 25 counsumer had invested above Rs.
8000 and below Rs. 10,000 and 12 consumer had invested above Rs.10,000.

Q: 8 Training program?
The training programme conducted by Amway India enterprice assists the consumer in
selling the Amway products. The following Table shows the classification of consumer
based on training programme.
Table:8

Training programme Number of distributer


Attended 88
Not attented 12
Total 100

56
Attended
Not attented

Graph:8
From above table it could be observed that 88 distributor had attended the tranning
program conducted by Amway India enterprise and 12 distributors had not attended the
training programme.

Q: 9 Sponsoring of consumer is the main criterion for the income of Amway


consumer. The more the number of consumer sponsoring consumer earn greater amount
of concession and receive reward and recognition from Amway India enterprise.
Table:9

Consumer Number of distribution


Sponsored 50
Non-sponsored 50
Total 100

57
Graph:9

Sponsored
Non-sponsored

It is evident from the above Table that 50 consumer have sponsored many Amway
consumer and 50 consumer have not sponsored any Amway consumer.

Q: 10The source ofreaching customer?


The distributor reach the customer through various sources. These sources are classified
into five categories as shown table.
Table:10

Sources Number of distributors


Through friends 28
Through relative 32
Through colleagues 24
Through neighbors 13
Through other sources 03
Total 100

58
Graph:10

Through friends
Through relative
Through colleagues
Through neighbors
Through other sources

The above table shows that 28 distributor reached the consumer through their friends, 32
consumer reached the customer through their friends, 32 distributor reached the
customers through their relatives and 24 distributor reached the customer through
colleagues. Through neighbors 13 distributors reached their customer through other
sources .
Q: 11Targeted customer?
Table:11

Targeted customer Number of customer


High class 15
Middle class 78
Low class 04
Other(lower than middle class) 03
Total 100

Graph:11 High class

Middle class

Low class

Other(lower than middle


class)

59
It is understood from the above table the above table that out of 100 customers, the
targeted customers of 15 customers are high-class people. The targeted customer of 78
are the middle-class people. The targeted customers of 4 customer are low-class people
and the targeted customer of 3 customer are other lower than middle class people.

Q:12Prefrence of products among customer.


It is found that there is preference of Amway products among the consumer from the
point view of the Amway customers. The products are classified into four categories as in
table.
Table:12

Products Number of distributor


Personal care 36
Home care 48
Nutrition and wellness 15
Soft toys 01
Total 100

Graph:12 Personal care


Home care
Nutrition and wellness
Soft toys

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Q: 13 opinion about the price of Amway products?
The price of the Amway products is high when compared to other products. The
following table gives the opinion of the consumer on the price of the Amway products.
Table:13

Price Number of counsumer


Price affect the sales 84
Price does not affect the sales 16
Total 100

Graph:13

Price affect the sales

Price does not affect the


sales

61
It is clear from the table that 84 consumer are of the opinion that the price of the Amway
products affects sales while 16 consumer are of the opinion that the price of the Amway
products does not affects their sales.

Q:14Ways of convincing the customer about the price of Amway products?


If the consumer`s way of convincing are effective eventually their sales may start to
increase.
Table:14
Ways Number of customer
Through effective demonstration 22
Through comparison of Amway products 27
with other products
Explanation about the superior quality of 27
the products
Explanation about the use of small quantity 24
Total 100

Graph:14
Through effective
demonstration

Through comparison of
Amway products with
other products
Explanation about the
superior quality of the
products
Explanation about the use
of small quantity

62
It could be understood that 22 consumer convince through effective demonstration of
Amway products while 27 consumer convinced through comparison of Amway products
with other products. It is noted that 27 consumer explanation about the superior quality of
the products for the purpose of convincing their customer while 24 customer explain the
use of small quantity of Amway products to convince of their consumers.
Q: 14Item Having High Volume of sales?
Table:14

Products Number of consumer


Personal care 45
Home care 19
Nutrition and wellness 36
Soft toys 0
Total 100

Personal care
Home care
Nutrition and wellness
Soft toys

Graph:14

63
It is clear from the above table that home care products shows a high volume of sales
according to 19 customer personal care products shows a high volume of sales according
to 45 customer and nutrition and wellness products show a high volume of sales
according to 36 customer.

Q: 15 Factors influencing the customers to buy Amway products?


Table:15

Factors Number of customer


High quality 28
Long term usage 45
No side effects 27
Total 100
Graph:15

High quality
Long term usage
No side effects

64
from the above table it is clear that 28 customer are of the view that high quality
influence their customer to buy Amway products. Long term usage of Amway products
influence the customer to buy as opined by 45 customer and consumer were of the view
that lack of side effect influences the customer to buy Amway products.

CHAPTER-7

Conclusion

65
Conclusion

direct selling offers the best business opportunity to any individual like other business
activities. The Amway business may be pursued on part time as well as full time basis.
The success of dirct selling compnies depends on the consumer satisfaction backed with
customer satisfaction. The aim of introducing any new products is to reach all classes of
people irrespective of their income class of living and the like. But this concept does not
hold good in case of direct selling.
Direct selling companies must take steps to promote their products to reach all classes of
people. Customer satisfaction is guaranteed to these companies only when the company
takes into consideration the price of the products as well as sales promotion methods even
if it offers world-class quality products at customer convenience.

66
CHAPTER-8

SUGGESTION

67
SUGGESTION

on the basis of the above analysis, the following suggestions are made:

(1)To create awareness, Amway must take effective sales promotion methods
like advertising so that the products reach every class people.

(2)Even though Amway offers quality goods at customer convenience, its


price are very high. The price is the main factor, which curtails the purchase
of Amway products. So, Amway should take steps to reduce the price of the
products to gain more customers.

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LIMITATION OF THAT STUDY

• In Indian contest that is not easy to convince a people to join the Amway.
• The Indian market is not the easy to be taped.
• The existing Amway customer is not be easily find out.
• In rural areas Amway is not so popular.
• Products cost is too high in respect to the products which are using in the rural
areas.

69
APPENDIX

BIBLIOGRAPHY

Philip kotler
C.R. Kothari
W.W.W.Amway.com
W.W.W.AmwayIndia.com
W.W.W.directselling.com
W.W.W.marketing of Amway products.com

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Questionnaire
Q: 1 In which age group respondent lies?
Less then 25 years ( )
25-35 years ( )
35-45 years ( )
Above 45 years ( )
Q: 2 Gender wise classification of respondent?
Male ( )
Female ( )
Q: 3 Education level of the respondent?
Higher secondary ( )
Diploma ( )
Degree ( )
Post graduate degree ( )
Q: 4 Income wise classification of the respondent?
Below Rs.5000 ( )
Rs 5000 – Rs. 10000 ( )
Above 10000 ( )
Q: 5 Sources of information about Amway business?

71
Friends ( )
Relatives ( )
Neighbors ( )
Other Amway distributors ( )
Q: 6 Reason for starting Amway business?
Self employment ( )
Additional ( )
Q: 7 Preferences for initial investment?
Rs.4000-Rs6000 ( )
Rs 6000-Rs8000 ( )
Rs8000-Rs10000 ( )
Above Rs. 10000 ( )
Q: 8 Training program wise classification of respondent?
Attended ( )
Not attended ( )
Q: 9 Classifications on the basis of sponsorship?
Sponsored ( )
Not sponsored ( )
Q: 10 Who will be the target customer?
High class ( )
Middle class ( )
Low class ( )
Other (lower than middle class) ( )
Q: 11 Preferences of products?
Personal care ( )
Home care ( )
Nutrition and wellness ( )
Soft toys ( )
Q: 12 Opinions on the price of Amway products?
Price affects the sales ( )
Price does not affect the sales ( )

72
Q: 13 Ways of convincing the customers?
Through effective demonstration ( )
Through comparison of Amway products with other products ( )
Explanation about the superior quality of the products ( )
Explanation about the use of small quantity ( )
Q: 14 Item having high volume of sales
Personal care ( )
Home care ( )
Nutrition and wellness ( )
Soft toys ( )

Q: 15 Factors influencing the customers to buy Amway products?


High quality ( )
Long term usage ( )
No side effects ( )

73
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