INTRODUCTION TO PROJECT

Our objective of the study is to understand the Amway’s operations in

international marketing with respect to PESTLE analysis, SWOT analysis,

Marketing Mix (Product, Price, Place, Promotion, Packaging and People) and also

we have compared its operation domestically and internationally. To understand

the former part, we have visited ‘Amway India’ and gathered appropriate

information with regards to project.

We have analyzed the information of the companies with respect to above

determinants and prepared relevant statement. After all our proceeds we get to

know that this retail company enhanced its business through Direct Marketing and

created both Health & Wealth to its customers.

Executive SummaryAs the leader of the Japan direct selling market and the most successful company in the Amway group, Amway Japan Limited (AJL) has seen above market success in recent years. However, in the first half of 1997, AJL has suffered a net sales decline of 11.6% from the first half of the previous year, and net income was down 27.6%. This decline is attributed to several factors: (1) In 1996, new products accounted for 47% of AJL’s sales and no major “big ticket” items were released in the first half of 1997; (2) The weakening Japanese economy and declining value of the Yen relative to the Dollar has decreased AJL’s sales volume and profit margin; and (3) New laws recently passed by the Japanese government have confused AJL’s distributors and discouraged potential consumers from buying certain product lines. In addition, Amway Japan Limited still suffers from a negative public image with over 70% of their customer base having a neutral or negative opinion of the company.In order to rebuild growth in the second half of 1997 and achieve AJL’s long-term sales goal of ¥300 billion by FY2000, the following strategy must be implemented immediately. First, Amway Japan Limited needs to strengthen the overall Amway brand image in Japan by reverting back to its roots, promoting high quality products with a competitively fair price. In addition, AJL needs to target their advertising campaigns to specific groups by promoting individual products and product lines to build upon their brand equity. Second, AJL needs to undertake a focused and widespread distributor training program which emphasizes distributor

ethics, techniques on building stringer down-line relations, and greater understanding of Japan’s door-to-door sales laws and regulations. Third, as part of the internal marketing strategy, AJL needs to extend target marketing initiatives toward specific demographic distributor groups to add upon their recent success of The Club Artistry program....

Amway is the largest direct selling company and manufacturer in the world

that uses network marketing to sell a variety of products, primarily in the health,

beauty, and home care markets. Amway was founded in 1959 by Jay Van Andel

and Richard DeVos. Based in Ada, Michigan, the company and family of

companies under Alticor reported sales growth of 2.3%, reaching US$ 8.4 billion

for the year ending December 31, 2009. Its product lines include home care

products, personal care products, jewelry, electronics, Nutrilite dietary

supplements, water purifiers, air purifiers, insurance and cosmetics. In 2004,

Health & Beauty products accounted for nearly 60% of worldwide sales. Amway

conducts business through a number of affiliated companies in more than ninety

countries and territories around the world. It is ranked by Forbes as one of the

largest private companies in the United States and by Deloitte as one of the largest

retailers in the world.

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 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.

Vision of Amway

Helping people live better lives.

Showing where the business wishes to be in the future.

Mission of Amway

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. Broad over riding statement of purpose.

To facilitate best business opportunities.

To deliver high-quality products to semi-urban and urban homes in diverse

areas of insurance, home tech, home care, personal care, cosmetics and

wellness.

Goal of Amway

The development of new business opportunities.

To increase the company's role in relations to social responsibility.

To provide excellent customer service.

Community Services

Amway, its Independent Business Owners and employees are involved in

improving the communities in which they do business. Amway are committed to

serve their customers to fulfill their needs by focusing efforts on discovering and

thereby meeting stated and unstated requirements. Amway promote a culture of

openness and mutual trust by interacting objectively and without underlying

personal interests. Amway are committed to honor, encourage and support

individuals and teams who contribute, through their behavior and actions, to the

success of the organization.

Social responsibilities performed by AMWAY

One by One Campaign for Children

Amway Opportunity Foundation (AOF)

National Project for the Blind

THE HISTORY OF AMWAY

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 offer over 3 million Business Owners the

inspiration to grow those businesses, and to work hard to provide new and better

ways for them to achieve their life goals.

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 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.

Amway continued to expand, reaching past the borders of the US to offer

the same opportunities in other countries:

- Australia - 1971

- Europe and parts of Asia - 1974

- Japan - 1979

- Latin America - 1985

- China - 1995

- Africa - 1997

- India - 1998

- Russia - 2005

- Vietnam -- 2008

Awards

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

AMWAY INDIA

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.

 

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

Corporation, Ada, Michigan, USA. 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).

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.

Amway Opportunity Foundation (AOF)  

Amway Opportunity Foundation (AOF) a registered non-profit organization 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 organized 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.

TERMS USED IN AMWAY

IBO/ABO/AIE-Independent Business Owner/Amway Business

Owner/Amway Independent Entrepreneur is a business partner of Amway who

is authorized to market and distribute products and services available from

Amway. Different names are used in different markets.

Distributor - an older term for IBO.

PV — Point Value is a value assigned to each product or service sold by Amway.

An IBOs monthly performance bonus bracket depends on total PV in a month.

BV — Business Volume is typically the wholesale cost of the product or service

sold by Amway. Performance bonuses are multiplied by the group’s total BV.

Performance bonus is the monthly bonus paid by Amway to IBO's. The higher

the PV, the greater the percentage earned. In North America the Performance

bonus ranges from 3% to 25%. In other markets it ranges from 3% to 21%. In

India it ranges from 6%-21%.

Retail Profit is the markup earned by an IBO when they sell a product to a

consumer, either personally or through an Amway website. Recommended retail

markup ranges from 20%-35%.

Sponsor is an IBO who refers (sponsors) a new IBO to Amway, although IBO's

do not get paid to sponsor.

Upline is the term used to refer all the IBOs up in the line of sponsorship of an

IBO.

Downline is the term used to refer all the IBOs down in the line of sponsorship of

an IBO. They are collectively also known as group.

Leg refers to a personally sponsored IBO and all of their downline.

Silver Producer is an IBO who has reached the maximum bonus level for one

month.

Gold Producer is an IBO who has reached the maximum bonus level for three

months.

Platinum or direct is an IBO who has reached the maximum bonus level for six

months. In North America Platinum is generating a minimum of approximately

$30,000 in sales volume per month.

Emerald a distributor with at least three legs generating Silver Producer volume

for at least 6 months of a year.

Diamond a distributor with at least six legs generating Silver Producer volume for

at least 6 months of a year.

Q-12 is a Platinum or higher IBO that qualifies every month for 12 months of a

year.

Independent Business Owner (IBO)

An IBO is, literally, an Independent Business Owner: an individual or

individuals who own and operate their own business, which is powered by Amway

North America, formerly Quixtar. IBOs are the CEOs of their own businesses,

and they make many of the same daily business decisions other business

executives make. As independent business men and women, IBOs decide how

active to be in their business, what products to sell and at what prices, who to

sponsor, what hours to keep, and other important decisions. IBOs are independent

contractors; they are not employees of Amway North America or Amway

Corporation. As independent business owners, IBOs are free to make decisions

many others in business are not free to make.

Independent Business Owners Association International (IBOAI)

The IBOAI (IBOA International or Independent Business Owners

Association International) is a trade association representing Independent Business

Owners affiliated with Amway North America, formerly Quixtar. It is the primary

advocacy organization for IBOs in North America. A trade association is an

organization of business people who share common interests or concerns, and who

educate and represent their members. The IBOAI (or IBOA International) is one

example.

Role of the IBOAI Board

The IBOAI Board is the representative body of the Association acting on

behalf of all IBOs. With IBO input, support, and participation, the IBOAI Board

listens to ideas, proposes improvements, and advises Amway on the best way to

move the business forward. Working closely with corporate staff, the Board

advises Amway on every facet of the business, from products and promotions to

operations and business guidelines, as it has for 50 years. Together, they bring

positive change to this business, to keep it moving forward and make certain the

business is better for every generation.

PESTLE ANALYSIS

Political

Political factors are how and to what degree a government intervenes in the

economy. Specifically, political factors include areas such as tax policy, labour

law, environmental law, trade restrictions, tariffs, and political stability.

Furthermore, governments have great influence on the health, education, and

infrastructure of a nation.

With the flow of Liberalization in India many foreign companies

have invested in India.

Production base in India help Amway for Government allowances.

Supportive for India’s entry into WTO.

Economical

Economical factors include economic growth, interest rates, exchange rates and

the inflation rate. These factors have major impacts on how businesses operate and

make decisions.

Localization of production and raw materials.

Own production plant in India.

50% of raw materials acquired itself from India.

Localization of employees

More than 2000 employees were Indians.

Social

Social factors include the cultural aspects and include health consciousness,

population growth rate, age distribution, career attitudes and emphasis on safety.

Trends in social factors affect the demand for a company's products and how that

company operates.

Active involvement of community

Financial and human support in areas of human services education, art, culture,

etc.

Invested $ 4 million for this purpose

Technological

Technological factors include technological aspects such as R&D activity,

automation, technology incentives and the rate of technological change. They can

determine barriers to entry, minimum efficient production level and influence

outsourcing decisions.

Setup R&D department

Invested $ 1.5 million

Developed new and tailored products like whitening make up for Indian

women.

Legal

Legal factors include discrimination law, consumer law, antitrust law, employment

law, and health and safety law. These factors can affect how a company operates,

its costs, and the demand for its products.

Environmental

Environmental factors include ecological and environmental aspects such as

weather, climate, and climate change, which may especially affect industries.

Furthermore, growing awareness of the potential impacts of climate change is

affecting how companies operate and the products they offer.

Amway products are 100% natural products, so they not affect our

Environment.

Amway recycle its waste bottles & containers

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 (from which 105 products are offered in India). 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.

Nutrition and Wellness

Nutrilite® is the world’s leading brand of vitamin, mineral, and dietary

supplements, grown harvested and processed on its own certified organic farms.

Cosmetics

Our skin is the outward appearance of who or what we are , or what we would like

to be. But it is more than a simple cover. It is the largest organ of our body - a

complex and dynamic system that is vital to our health and reflects it as well.

Artistry®

Artistry® is one of the world’s top five largest-selling prestige brands of facial

skin care and colour cosmetics.

Attitude®

All products of Attitude contain Skin Vitalizing Complex that synergistically

combine to cleanse, Replenish & Moisturize the skin making it soft & supple.

Home Care

Amway’s Home Care Brands provide complete cleaning systems that fit with

everyone’s needs. Their versatile, effective product systems offer the features and

benefits consumers want. No matter what your lifestyle, Amway’s Home Care

products make light work of your cleaning chores.

SA8®

SA8 Gelzyme is India's only 3-in-1 laundry detergent which pretreats, cleans and

softens.

LOC®

LOC High Suds is a multipurpose household liquid cleaner.

Dish Drops®

Dish Drops is a concentrated hand dishwashing liquid with a powerful "Triadic

Detergency System".

Personal Care

Amway Personal Care products have built global reputation based on their world-

class research and development. These products are designed to deliver the

ultimate grooming experience and the confidence that lasts long.

Glister®

Glister Toothpaste is a revolutionary Multi-Action Toothpaste with Sylodent that

offers seven benefits.

Persona®

Persona Premium 3 in 1 Soap is a complete soap for the entire family promises

refreshing confidence.

Satinique®

Satinique Advanced Range with unique Ceramide Infusion System uses nature's

own renewing technology to rejuvenate, strengthen and protect your hair.

Dynamite®

Dynamite's range of male grooming products, formulated internationally is

designed to deliver the ultimate grooming experience.

G&H®

G&H Range enriched with the goodness of Glycerine and Honey, deeply

nourishes and hydrates the skin for a healthy glow.

Apart from this Amway also deals in Air purifiers and Water purifiers, Jewellery,

Electronics, & Insurance products.

Manufacturing Strategy

Almost all Amway India products are manufactured in the country through

third party contract manufacturers. 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.

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.

 

SALES AND MARKETING PLAN

The Amway is private co operative organization. The Amway Sales and

Marketing Plan put you in control, allowing you the flexibility to work where and

when you want, giving you time for family and friends as well as the opportunity

to earn a good income. It adapts easily to your needs and ambitions, and grows

with them, offering you all the personal support and assistance you require to

become the Business Owner you want to be. With Amway you are Connected to

the global leader in multilevel marketing, with over 40 years of experience,

Supported by great products and people who will help you succeed, and finally In

Control of your life.

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.

Marketing strategy

A strategy is a plan of action designed to achieve the goals of the

organisation. In creating a marketing strategy for the Super Concentrated Cleaning

System, Amway needed to set out the key objectives it wanted to achieve. The

following objectives for the brand were set:

To increase distribute or profitability and productivity by providing a new

and exciting business opportunity

To optimize consumer convenience and value through enhanced product

differentiation with this exclusive and revolutionary cleaning system

To provide innovative and unique products to enhance the image of Amway Home

Care.

A New Strategy of Amway

Agreement with the government and company

Resumed Operations

Goods will be sold in retail outlets and through

Sales Representatives

Income of sales distributors will be based on direct selling done by them

Same Distribution centers served as retail outlets for the company

Localization of employees

Localization of production and Raw Material

Localization of research and development

Transparency and Credibility of company’s management

SWOT ANALYSIS OF AMWAY

STRENGTH

Based on direct selling operations. Hence it can be A home based business.

Every can participate in business. It’s easy to get admission in Amway with

easy rout like intent.

Training to staff.

Functions are performed by IBOs.

Organize meetings and events time to time.

Have good customer service system.

Backed by a 100% Customer Product Refund Policy produce faith and reselling

attitude in customers.

Quality Products that Inspire Confidence. Almost no risk of money as world class

quality Minimal start up costs gives strong base to the initiation of business. So

everyone can participate in business. The person who wants do something can be

make profit with investment of low cost.

Products are easy to sell.

A business with national and international scope gives more opportunity to the

costumers.

The possibility of financial security and freedom of time to enjoy life.

WEAKNESS

More power to IBOs gives critical structure to organization.

Initially high entry cost leads to somewhat restrictions for business development.

Rumors for direct selling operations.

Focus shifted from selling products to recruiting.

OPPURTUNITIES

Setup a manufacturing plant in all countries leads to better platform for

company.

Population of INDIA gives better opportunity to company to receive more profit.

As the company name itself gives reliance and faith for the customer and buyer

produce greater opportunity for marketing which leads to decrease in total

expenditure of company.

THREATS

Too much freedom to IBOs.

Change in government policy may affect to the profit and freedom of company.

Competitors like AVON, MARY KAY; SUNRIDER creates lot of competition in

market which leads to strong marketing competition in market.

USE OF MLM IN AMWAY

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 others they recruit, creating a downline of distributors and a hierarchy of

multiple levels of compensation. Other terms for MLM include network

marketing, direct selling, and referral marketing.

Although the products and company are supposed to be marketed directly

to consumers and potential business partners by means of relationship referrals and

word of mouth marketing,http://en.wikipedia.org/wiki/Multi-level_marketing - cite_note-12

critics have charged that most MLMs are pyramid schemes.

MLM companies have been a frequent subject of criticism as well as the

target of lawsuits. Criticism has focused on their similarity to illegal pyramid

schemes, price-fixing of products, high initial start-up costs, emphasis on

recruitment of lower-tiered salespeople over actual sales, encouraging if not

requiring salespeople to purchase and use the company's products, potential

exploitation of personal relationships which are used as new sales and recruiting

targets, complex and sometimes exaggerated compensation schemes, and cult-like

techniques which some groups use to enhance their members' enthusiasm and

devotion. Not all MLM companies operate the same way, and MLM groups have

persistently denied that their techniques are anything but legitimate business

practices.

Amway use direct Selling model to sell its products & services. For this

Amway offer membership to their potential customers. These members also act as

agents for Amway & sell their products entirely on their wish. Amway provide

points on each product sell to their IBO which further get converted into monetary

terms. Also, these points have worldwide acceptance.

To start the Amway Business one needs to buy the Amway Business Kit

and be sponsored in the business by an already existing Amway Business Owner.

Despite what you may have heard, starting an Amway business doesn't involve

handing over large amounts of cash. With your efforts and our knowledge, the

Amway opportunity can become everything from a means of earning a little extra

cash to building an international business. Where do you want to go?

Business Kit--Priced at Rs995 only

CONTROVERSY

Pyramid Scheme Accusations

Amway has several times been accused of being a pyramid scheme. A 1979

FTC investigation in the United States (see below), a 1997 Belgian court and a

2008 court judgment in the United Kingdom all dismissed these claims.

FTC Investigation

In a 1979 ruling, the Federal Trade Commission found that Amway does

not qualify as a pyramid scheme since Amway compensation system is based on

retail sales to consumers, not payments for recruiting.

It did, however, order Amway to stop retail price fixing and allocating

customers among distributors and prohibited the company from misrepresenting

the amount of profit, earnings or sales its distributors are likely to achieve with the

business. Amway was ordered to accompany any such statements with the actual

averages per distributor, pointing out that more than half of the distributors do not

make any money, with the average distributor making less than $100 per month.

The order was violated with a 1986 ad campaign, resulting in a $100,000 fine.

Amway Andhra Pradesh (India)

In September 2006, following a public complaint, Andhra Pradesh state

police (CID) initiated raids and seizures against Amway distributors in the state,

and submitted a petition against them, claiming the company violated the Prize

Chits and Money Circulation Schemes (banning) Act. They shut down all offices

of firm Amway, and Arijit Saha writes that "with it the fate of 80,000 distributors

of the company has been indefinitely sealed". The enforcement said that the

business model of the company is illegal. The Reserve Bank of India (RBI) had

notified the police that Amway in India may be violating certain laws regarding a

"money circulation scheme" and the IB Times article writes that "some say ...

Amway is really more about making money from recruiting people to become

distributors, as opposed to selling products."The complaint was initiated following

a dowry dispute between a local man and his wife, an Amway distributor.

Following a petition by Amway, the state High Court issued an injunction against

the CID and stated the Act did not prima facie apply, however after Amway

requested the CID petition be dismissed the High Court declared that if police

allegations were true, Amway's Indian subsidiary would be in violation of the act

and the investigation should continue. On August 14, 2007 the Supreme Court of

India ordered the state police to complete the investigation against Amway in 6

months. In 2008, citing the High Court decision, the Andhra 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.

Class Action Settlement

On November 3, 2010, Amway announced that it had agreed to pay $56

million - $34 million in cash and $22 million in products - to settle a class action

that had been filed in Federal District Court in California in 2007. The class

action, which had been brought against Quixtar and several of its top-level

distributors, alleged fraud, racketeering, and that the defendants operated as an

illegal pyramid scheme. While noting that the settlement is not an admission of

wrongdoing or liability, Amway acknowledged that it had made changes to its

business operations as a result of the lawsuit. The settlement is subject to approval

by the court, which is expected in early 2011. The economic value of the

settlement, including the changes Amway made to its business model, totals $100

million.

Canadian Tax Case

In 1983, Amway pleaded guilty to criminal tax evasion and customs fraud

in Canada, resulting in a fine of $25 million CAD, the largest fine ever imposed in

Canada at the time. In 1989 the company settled the outstanding customs duties

for $45 million CAD. In a 1994 interview, Amway co-founder Rich DeVos stated

that this incident had been his greatest "moral or spiritual challenge", first in "soul

searching as to whether they had done anything wrong" and then for pleading

guilty for technical reasons, despite believing they were innocent of the charges.

DeVos stated he believed that the case had been motivated by "political

reasons".http://en.wikipedia.org/wiki/Amway - cite_note-77

RIAA Lawsuit

The Recording Industry Association of America (RIAA), as part of its anti-

piracy efforts, sued Amway and several distributors in 1996, alleging that

copyrighted music was used on "highly profitable" training

videotapes.http://en.wikipedia.org/wiki/Amway - cite_note-78 Amway denied

wrongdoing, blaming the case on a misunderstanding by distributors, and settled

the case out of court for $9 million. In a related lawsuit initiated by the distributors

involved, the Court established that Mahaleel Lee Luster, who had been contracted

to make the videotapes, had violated copyright without the knowledge of three of

the five of those distributors.

Procter & Gamble

Some Amway distributors were involved with an urban legend that the

(old) Procter & Gamble service mark was in fact a Satanic symbol or that the CEO

of P&G is himself a practicing Satanist. (In some variants of the urban legend, it is

also claimed that the CEO of Procter & Gamble donated "satanic tithes" to the

Church of Satan.) Procter & Gamble alleged that several Amway distributors were

behind a resurgence of the urban legend in the 1990s and sued several independent

Amway distributors and the company for defamation and slander. The distributors

had used Amway's Amvox voice messaging service to send the rumor to their

downline distributors in April 1995. After more than a decade of lawsuits in

multiple states, by 2003 all allegations against Amway and Amway distributors

had been dismissed. In October 2005 a Utah appeals court reversed part of the

decision dismissing the case against the four Amway distributors, and remanded it

to the lower court for further proceedings.http://en.wikipedia.org/wiki/Amway -

cite_note-83 On 20 March 2007, Procter & Gamble was awarded $19.25M by a

U.S. District Court jury in Salt Lake City, in the lawsuit against the four former

Amway distributors. On November 24, 2008 the case was officially settled.

Amway UK

In May 2007, the UK Department of Trade and Industry (DTI) accused

Amway and distributor organizations Britt WorldWide and Network TwentyOne

UK of "objectionable practices" and petitioned to wind up the companies. The

case against Amway was dismissed in 2008 on the condition that a full earnings

disclosure is published publicly, no registration or renewal fees are charged and

that the sale of business support materials are prohibited. The case against

Network 21 was dismissed in 2009.

Welcome to Life (Poland)

In 1997, Amway Poland and Network TwentyOne separately sued the

makers of a Polish film Welcome to Life for defamation and copyright violations.

The film was banned while the suit proceeded, the first banning of a film in Poland

since the fall of Communism. In 2001 Network 21 won their case and the

producers were ordered to remove the violating material. In 2003 the producers

were convicted of libel, order to pay a fine to a children's charity and publish a

public apology.

Other Issues

A Dateline NBC report from 2004 picked up the criticism against some

Amway distributor groups. Amway subsequently published a website with a

response to the Dateline report.

Some Amway distributor groups have been accused of using cult-like

tactics to attract new distributors and keep them involved and committed.

Allegations include resemblance to a Big Brother organization with paranoid

attitude to insiders critical of the organization, seminars and rallies resembling

religious meetings and enormous involvement of distributors despite minimal

incomes. An examination of the 1979–1980 tax records in the state of Wisconsin

showed that the Direct Distributors, comprising less than 1% of all distributors,

reported a net loss of $918 on average.

Sociologist David G. Bromley calls Amway a quasi-religious corporation

having sectarian characteristics. Bromley and Shupe view Amway as preaching

the Gospel of Prosperity. Economists Bhattacharya and Mehta propose an

alternative economic explanation to negative claims, concluding that distributors'

continued involvement despite minimal economic return results from social

satisfaction compensating for less economic satisfaction.

CONCLUSION

Amway is one of the largest direct selling company in the world. The main

objectives of Amway are to profit there distributers by eliminating the middlemen

and provide the products to the distributers in cheaper price. The products of

Amway are world class product quality. They are made up of natural a thing that’s

why they are good for health and environment.

Amway covers a wide range of products from beauty care. Health care, to

clothing, and daily use products etc. the products are costly as compared to other

branded products available in market but if we compare the quantity while using

the products require less amount and thus can be used for longer time. Successful

business today depends upon a company's ability to quickly adapt to changes in

the marketplace.

At Amway, they pride it selves on knowledge of the dynamic networking

market that is quickly becoming central to modern business. This knowledge, and

its willingness to act upon it, has enabled us to become one of the industry's

technological leaders. Through they continued pursuit of new product ideas, and

by consistently refining our existing product line, they have become one of the top

providers of cutting-edge networking products in the global market. If you're

looking for high quality products and solid customer support at rock-bottom

prices, then choosing Amway really does make sense.

SUGGESTIONS

Trial packs should be used because customer must have to introduce the

product. Once customer gets idea about product he comes to know

advantages of products.

The products should be cheap the home delivery system takes at least two days to

deliver the products so the delivery should be instant.

There must be multiple options for purchasing the products for distributers like

online, tale and instant purchasing.

In every city, the Amway office should be situated in such a location so that it is in

reach of all distributers.