Synopsis

ON
A study on AmWays Indian marketing network
Submitted in Partial Fulfillment of

Master of Business Administration

Programme : 2009 -11

of

Uttar Pradesh Technical University, Lucknow

SUBMITTED BY
NAME- SWATI SHARMA
MBA 4th SEMESTER
ROLL NO. 0945070049

Department of Management
Science
Shri Ram Murti Smarak Womens College of Engineering & Technology, Bareilly.

INTRODUCTION
The case 'Amway Indian Network Marketing Experience' examines in detail the experiences of
the leading global direct marketing major Amway in India. In the initial stages, Amway had to
face a host of problems, which are explored in detail. The case then studies the remedial
measures taken by the company to counter these problems.
Amway's Indian Network Marketing Experience
In the late 1990s, the global direct selling giant Amway had to contend with increasing doubts
regarding its survival in India. The company that had become synonymous with network
marketing or multi-level marketing (MLM)1 the worldover was beset with problem. the Indians.
Though the company managed to rope in a substantial number of distributors, the attrition rate
was at an alarming high of 60-65%.
Most of the products that the distributors bought, they consumed themselves. Estimates put the
percentage of self-consumption at almost 50-60% of the total volume. (There were rumors that
some distributors enrolled just to take advantage of the distributor's margin of 18-30%).
In the initial stages, when trials were the only criterion, this worked well. However, this selfconsumption did not translate into repeat purchases. This was because the percentage of 'active'
distributors at any given point of time remained at a low level of 35-40%.
Amway also had to contend with customers complaining of poor customer service on the part of
the company. Analysts commented that as long as the volume of products that moved through the
network was high, network markets such as Amway were satisfied.
1

Even though customers complained of the lack of services, the company deemed it more
beneficial to go for higher sales force motivation programs rather than undertake customer
service initiatives. This was largely due to the fact that the company was almost never involved
directly with the end-consumers and the sales volumes were the end of all discussions.
Pradesh state government enacted a ban on Amway media advertisements.
Amway challenged the ban and in July 2009 the AP High Court refused a
petition the ban should be enforced. As of June, 2009 the original 2006 CID
case was still pending at the Chief Metropolitan Magistrate Court in
Hyderabad.

PROBLEM IDENTIFICATION
As Amways products have high cost with standard quality so
it is not affordable for middle and low class customers to buy
the products of Amway
To store of Amways not found everywhere
Having less advertising

OBJECTIVES

1)-To study the Amways Indian Marketing network.

2)-To analyze the Amways Indian marketing strategies.
DATA COLLECTION
Primary Data:

Interview
Questionnaire.

Secondary Data:

Internet
Books:
Newman Consumer behavior ( 7th edition)
C.R. Kothari Research Methodology ( 9th edition

REAEARCH TOOLS APPLIED

Questionnaire
Interview

RATIONALE OF THE STUDY

Here we do detailed study of Amways Indian marketing network and analyze the marketing
network of Amway in India.