Case Study

Marketing Management

Shashwat Saha (PGP25334)

Kanishka Nigam (PGP25167)
Pranay Bharti (PGP25253)
Aditi Sangar (PGP25030)
Ishika Garg (PGP25446)
 Introduction
• The American Way – Amway was established by DeVos and VanAndel families in 1959.

• It’s a multi-level marketing (MLM) company that specializes in the sale of health, beauty, and home care products,

and has grown into one of the largest direct selling companies in the world.
• It has 53 affiliated operations worldwide and consists of 12000 employees. It has 24 laboratories worldwide with a

network of 3 million distributors.

• Amway faced both praise and controversy. Supporters applauded it’s entrepreneurial opportunities for IBOs and

the product quality however critics raised concern about MLM Business Model suggesting for future financial

losses.
• There were some disruptions in the company and how it tackled those situations have been discussed in this case

study.
 Problems & Challenges
• Products was mostly used for self – • Network marketing was threatened by
consumption emergence of Internet, E-Commerce,
• Attrition Rate was 60-65 % and telecom marketing
• To convince the Indian consumers about the • Competition from Oriflame, Modicare, Avon
quality of Amway Products
• Distributors did not have thorough
knowledge about the products
• Company did not tackle the problem of
customer complaints.
 P.E.S.T. Analysis
Political
1. Government Allowances
2. Production based on China for export to other
Asian Counties
3. Support for China to enter the WTO (World
Trade Organization)
Social
1. Active involvement in community and society
2. Financial and human support in areas of
education, arts, and culture
3. Indians preferred the security of a typical job
and being a salesman of Amway’s MLM
structure did not provide them that security
Economical
1. Owned multiple warehouses in India
2. More than 2000 employees were
Indians
3. Localization of production and raw
materials
Technological
1. Renowned for it’s Research and Development
center based on Michigan
2. Developed new and tailored range of
cosmetics specially for women
3. The popularity of the Internet posed a threat
on MLM structured companies such as
Amway as it bought customers directly in
touch with the manufacturers
 Solutions
• The company invested in transferring technology and processes to third party
manufacturers and supported its independent distributors with full-service ADCs
and logistics partners for home delivery.
• Amway also introduced India-specific products and utilized media advertising
to promote its products.
• Introduced stickers on their products that clearly indicated the number of
usages per bottle, emphasizing that their products were highly concentrated and
had a low per-usage cost.
• Provided graphics and 3D views on website. Planned to have the portal in
different languages for wider coverage.
 Solutions
• Had company warehouses and region-specific distribution centres.

• Gave incentives to cost and freight agents who could deliver within 48 hrs in the
same city and outside in about 72 hrs.

• Introduced “Chhota Packet” pack which helped remove the super-premium

product only tag.

• Indianization efforts - printed “Humara Apna Business” on stationery.

• Launched “Operation Ghar” & “Operation Gaadi”.

 S.W.O.T. Analysis
Strengths Weaknesses
• Strong R&D centers • High attrition rate
• Presence in over 80 countries • False ‘Premium’ image
• Aggressive products launch plans • Poor Customer services

Opportunities Threats
• Focus on smaller towns • Increase in competition
• Target on unemployed youth to • Growing popularity of internet
become it’s distributors
THANK YOU