A

PROJECT REPORT
ON
DIRECT MARKETING A CASE STUDY OF
AMWAY ENTERPRISES

IN THE PARTIAL FULFILLMENT FOR THE

BACHELOR OF BUSINESS ADMINISTRATION
(Session 2015-18)

Under the Supervision of: Submitted By:

Ishleen kaur Rohit Rawat
Assistant Professor B.B.A (Marketing)
Roll No. 40724001715
TRINITY INSTITUTE OF PROFESSIONAL STUDIES
 GUIDE CERTIFICATE

I take great pleasure in certifying that project entitled DIRECT

MARKETING A CASE STUDY OF AMWAY ENTERPRISES AT

GURGAON has been completed by Rohit Rawat as partial fulfillment for

degree on MBA, under my supervision and guidance. This has not been

submitted for award of any degree or other similar title or prizes.

Project guide
(Ishleen kaur )
Lecturer
Trinity Intitute Of Management
 DECLARATION

I Rohit Rawat Roll No. of BBA (G) from Trinity Intitute Of Management

hereby declare that the project entitled DIRECT MARKETING A CASE

STUDY OF AMWAY ENTERPRISES AT GURGAON is an original work

and the same has not been submitted to any other institute for the award of any

other degree. The feasible suggestions have been duly incorporated in

consultation with the supervisor.

Signature of Supervisor Signature of Student

 ACKNOWLEDGEMENT

It is not until you undertake a project like this one that you realize how massive
efforts it really is, or how much you must rely upon the selfless efforts and
goodwill of others. I got an opportunity to learn and experience ethics and
environment of Bank.
I wish to express my deep sense of gratitude to my guide Ishleen kaur
(Lecturer in BBA Department ) in Trinity Intitute Of Management who in his
benevolent guidance has enabled me to accomplish my project .He has been a
great source of inspiration all the way. Without his keen interest, encouragement
and invaluable suggestions this report couldnt have attained its present shape
with zeal and enthusiasm.
My sincere thanks to all other faculty members of Trinity Intitute Of
Management and all the persons who are associated with this project for their
assistance. Several persons have made their valuable contribution to this work.
I would also like to express my indebt ness to my friends, whose moral
support and confidence nourished me with determination to work hard leading
to making of this project work a success.

Rohit Rawat
40724001715
 -PREFACE

Practical training is an important part of management courses. Theoretical

studies in classroom are not sufficient to understand the functioning of complex
and large size organizations, managerial climate and the real problems coming
in the way of management of Man, Material, Machines and Money.
Looking at the complexities of the situation, students are required to
work in a dissertation project, which form part of the BBA programs conducted
by most of the students of GGSIPU University during the working on project
undertake a practical universities and institute imparting management education
or theoretical project in order to analyze, interpret and report on one or more
management problem and situation.
It is helped that the activity carried out with dedication will open up new
vistas for the budding managers to broadly share the responsibilities in future.
CONTENTS

1. Introduction 9

2. Research Methodology 27

3. Data Processing, Analysis & Interpretation 37

Findings and Analysis

Conclusion

Recommendations

Bibliography

Questionnaire
 CHAPTER-1

INTRODUCTION
 TODAYS BUSINESS ENVIRONMENT

THE NEW COMPETIVTIVE BUSINESS ENVIRONMENT

Now a days business has become very much competitive. In this tough
competitive environment how right it is to say, When any company left their
one customer unsatisfied then there are more than ten competitors who want to
satisfy that particular customer with their offers. This show how much extent
of competition is there, So a company have to work hard to maintain and
increase their market.

Customer now demand not only the consistent quality or improved price
performance ratio but more customerisation and easy availability of more
information in the advertisement, instead of passively receiving uncalled inputs
from the advertiser in their efforts to attract customers. In the fast changing
competitive scenario it is more important to understand this new face of
customer. So marketing research is the most important part of business today.

But the extent of competition is much more in companies offering non durable
goods in comparison to other industries which offers other consumer durable
goods. The Comparative high extent of competition in these companies is due to
the number of companies. So in the coming future it is for granted that every
company in this field have to face tough competition from their competitors.
These are the day of Modern marketing Concept:
Now a days the profiles of consumers is changing very fast and it has become
more diversified Companies now work in the environment of rapidly changing
competitors, growing competition, technological advancement, diminishing
customers loyalty and fast changing taste and preferences of customers. So
company have to cooperate with this changing environment by changing their
offer to meet the wants of customer at particular time.

In today competitive business environment how rightly it is to say, In a long

run a organization can get success only and only through customer satisfaction.
Which is modern marketing concept.

So there are the day of Modern marketing concept, according to which first we
have to identify the needs and wants of customers, then make the product which
satisfy these needs and wants wants and then sell product.

Marketing Research is most important part of the business today:

To identify the need and want of the customers company need information
about customers. They want to know how, when and why these needs and wants
are changing and for this they have to understand consumer behaviour
thoroughly. They have to understand why consumer behave in particular
manner.

To understand the consumer behaviour they have to find out factors effecting
their needs and wants like environment factors (Culture, Sub Culture, Social
Class, Family, Reference Group etc.), Psychological factors (Perception,
Perception, Attitude Learning, Motivation etc.) and the factors effecting in
consumer decision marking process.
Information about all these factors are gathered only by consumer surveys. So
Marketing Research is very important part of business today.
DIRECT MARKETING: THE CONCEPT

The concept of direct marketing has evolved over time. It has evolved from a
tolerated second class speciality to a fashionable tool used by virtually every
type of business in the world today.

Only ten years ago direct marketing was considered as a speciality to be

employed by book publishers, record clubs, magazines seeking subscriptions,
correspondence schools and sellers of kitchen gadgets and low priced fashions.
No one then would have guessed that it was destined to destined to become a
marketing tool utilized by more than half the fortune 500 companies.

It seems primitive today and yet in those early a solid foundation was already
being laid for direct marketing as it is today.

Definition:
The direct marketing is an interactive system of marketing that uses one or more
advertising media to effect a measurable response and transaction at any
location with this activity stored on data base.
By Direct Marketing Association. Thorough understanding of definition
includes

Interactive: One on one communication between marketer and customer.

One or more Advertising Media:

Direct marketing is not restricted to any one medium. A combination of media
often is far more productive than any single medium. The variety of media
available to direct marketers is ever expanding.

Measurable response:
Measurability is hallmark of direct marketing. Every thing in the field with rare
exceptions is measurable. Direct Marketers know what they spend and they
knew what they get back.

Transaction At Any Location:

The world is direct marketing oyster. Transactions can take place by telephone,
by mail at home, at a store.

Data Base: A compilation of known data about a prospect or customer

including such data as history of purchases, sources of inquiry, credit rating and
so on.

Basics of direct Marketing:

The basic purpose of any direct marketing program is to get a measurable
response that will produce an immediate profit. To create a measurable response
there must be an offer a call to action. An offer to sell a product or service direct
to the consumer or a business is but one way to create a measurable response.
Offers that create leads for sales people get people to send for information, lead
to visits to retail stores, impel people to give to causes, are all measurable.

The ultimate objective of a successful direct marketing program is to build the

life time value of a customer. This objective applies whether direct marketing
methods are applied solely to a mail order business or to other channels of
distribution. Eitherway, the customer database is available to cultivate customer.
Direct marketers often avail themselves of rather sophisticated calculations.
However, four terms life time value (LTV) and recency, frequency, monetary
(RFM) summarize the financial dimensions of direct marketing.

Lifetime Value (LTV): The total of financial transactions with a

customer over the life of a relationship.

Recency (R): The amount of time since a person or firm last purchased.

Frequency (F): The number of time a customer buys within a season,

or a year.

Monetary (M): The amount of money a customer a spends with in a

season or a year.

Knowing the lifetime value of a customer reveals how much one can afford to
invest in a customer and still realize a satisfactory profit. Keeping tabs on
customers by recency of last purchase, by frequency of purchase within a given
period, and by amount spent enables the marketer to identify segments of the
customer base that offer the greatest profit potential.
Advantages of Direct Marketing:

The predictability of direct marketing, arising out of its measuability and the
science of statistics, is only one of the unique elements of this field, Others are

(i) Concentration
(ii) Personalization
(iii) Immediacy

Concentration: It is the ability to take promotional dollars and direct them to

the most likely prospects with great accuracy. It offers greater selectivity.

Personalization: Not only one can select very specific audiences for
concentrated promotion, but one can address them in a manner that dramatizes
ones conviction that the product or service we are offering is particularly right
for each person who gets our message.

Immediacy: The third and most vital element of direct marketing is

immediacy. Direct marketing messages in all media ask for the order now If
general advertisings objective is awareness and attitude, direct marketing is the
third A i.e. action. Immediacy is a strength of direct marketing, but it is also a
requirement.
BRIEF HISTORY OF AMWAY ENTERPRISE

1950s A friendship Forms

Rich De Vos and Jay Van Andels 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.

1960s The Early Years

Amway quickly outgrew its original facilities in the basements of Rich De VOs
and Jay Van Andels homes. In its first full year of business, Amways sales
were more than half a million dollars.

1970s 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 genuine business opportunity and not a pyramid.

1980s The Billion- Dollar decade

The 80 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.
1990s The Second Generation

As carefully planned by Rich and Jay, the second generation Van Andel
and De Vos families took the helm during the 90s. The Police Board was
formed and Steve Van Andel and Dick De Vos 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.
AMWAY AHEAD

Amway India Enterprises is the wholly-owned subsidiary of the US- based $7-
billion (Rs. 28,0000 corre) Amway Corporation. Amway stepped in to the world
of direct selling here in May 1998 and created huge waves. In a span of just one
and half year, it has managed to long for ahead of most other direct selling
organizations operating in the country. The company now has over 2.5 lakh
distributors and adding 25,000 30,000 every month to its list of distributors.
Of course, the product range is still not as comprehensive as it is for Amway
users in the rest of the world. In the beginning it started out with only four home
care and two personal care products. But at the moment, Amway India has 20
home care and personal care products of the total 450 products sold by the 40-
year old direct selling company in the rest of the world.

Amway is adding two three products every two months. And all its products are
manufactured in India using mostly local materials. All direct selling companies
have to source their materials from India and get the products manufactured in
small scale industries.

When Amway started out, the products were available only in one litre packs
and the prices were much higher than what on average consumer was used to.
Hence the company came up with 500ml packs and also sachets. Now Amway
products like Dish Drops (a concentrate dish washing Liquid) and Zoom
Concentrate (a multipurpose hard surface cleaner) are available in 500ml packs
as will. Prices for Amway products range between Rs. 5 and Rs. 450.
HOW DOES IT WORKS

This Indian subsidiary of an American MNC, manufactures or produces a line

of products. This company associates in partnership with independent
distributors who further from a network, each one of them in his/ her own
business.

The company handles all the research, development, manufacturing

procurement and quality control of the products and manages public relation,
administration and data processing.

The independent distributors have the responsibility of marketing the products.

They serve their own businesses as well as the company, in customer
acquisition, product promotion and creation of sales volume through their
network of distributors, The Company provides the support they need to market
the products, including brochures, flyers and training material, for a nominal
cost. The company also undertakes the responsibility for physical distribution of
products to distributors and consumers.

It is different from the traditional method of distribution which uses a system of

middlemen such as jobbers, wholesalers, stockiest and retailers, Since the
network of independent distributors promotes and market the products, the
company eliminates its conventional costs of advertisement and middle men,
which allows it to pay discounts, commissions, bonuses and other benefits to the
Independent distributors in the multi- level network using the companys sales
and marketing plan.
SALES AND MARKETING PLAN

What is the Amway Sales and Marketing Plan?

It is a proven Marketing system designed to reward the efforts of those who
operate their business in accordance with it.

Home does the Amway Sales and Marketing Plan Work?

1. A Profit from the sales of Products to consumers. When the consumer

purchases the product from distributor, the profit is the difference between the
price (Distributor cost or DC) and the price the consumer pays, Suggested
Maximum Retail Price MRP.

If the Distributor elect to follow always Suggested MRP, then the retail profit
will average 15% of the Distributor Cost (DC) before tax, or more depending on
the products distributor promotes

Selling Price - Cost Price = Profit

MRP - DC = Profit
e.g.920 - 800 = 15% Profit

2. Distributor receives a Performance Incentive from Amway based on a

monthly accumulation of points.

Business Volume (BV) and

Point Value (PV)
BV Business Volume is simply the total value, before of the products that the
distributor purchases every month. If in a given month distributor
purchases, Rs. 6,000 worth of products, then BV is Rs. 6,000. (BV may
change in accordance with periodic price adjustments)

PV The Point value is a numerical quantity assigned to each product. Total

Point Value each month based on the value of the products purchased by
the distributor, determines the Distributor Performance Incentive
Percentage.

DC = BV
Distributor Cost = Business Volume
Before Tax

e.g. Rs. 900 Purchase = 900 BV

Eg. LOC High Suds

DC = Rs. 187.00
BV = 187.00
PV = 6.23

Quite simply, that means that the total PV (Point Value) accumulated by the
distributor as well as their Business Group determines Performance Incentive
Percentage.
Performance Incentives:

Performance Incentives work at two levels: as discounts and commissions.

Discount: The Performance Incentive Percentage (determined by Business

Group PV) is applied to the BV of distributors own purchases for the month.

Commission: The is the difference between (a) distributors own Performance

Incentive Percentage and (b) the Incentive percentages, if any, further sponsored
distributors multiplied by the BV of the distributors Business Group.

Performance Incentive Table:

The following table indicates the minimum qualifying performance criteria in
order to earn an incentive.

If Group Monthly PV BV The Performance

incentives is

10,000 3,49,200 21%

7,000 2,44,440 18%
4,000 1,39,680 15%
2,000 69,840 12%
1,000 34,920 9%
500 17,460 6%
100 3,492 3%
RANGE OF AMWAY PRODUCTS

Till recently, the company had eleven home-care products five products in the
personal-care category and four oral care products. Amway products are
considered more expensive than similar products available through the retail
route, but still sales are forever on high because of 100 per cent concentration
which makes them last must longer than competing products. One factor which
enhances the companys is that all Amway products are environment friendly.
They also carry tamper proof seal. Amway is equipped with the most advanced
machinery and world-class technology for production and packaging.

Oral Care Products:

1. (i) Glister : Tooth paste

Features : Gently polishes teeth
Helps remove plaque with regular brushing
Helps prevent cavities
Helps remove stains
Freshens breath.

(ii) Glister Tooth Brush

(iii) Oral Rinse
(iv) Mouth Refresher Spray.
Personal Care products:

1. G & H Body Lotion

Features: Contains glycerine and natural honey. Contains allantoin; a
clinically proven moisturiser. Leaves skin feeling soft and smooth.
Pleasant fragrance.
2. G & H Body Shampoo
3. Satinique Dandruff Control Shampoo
4. Satinique Dandruff Control Conditioner
5. Satinique 2 in 1 Shampoo and Conditioner.
6. Chunky the monkey: Toy.

Home Care Products:

1. LOC High Suds: Liquid Organic Cleaner:

Features and Benefits: Strong, yet gentle. Organically based formula is

powerful, offers mild cleaning. Used for home cleaning purposed as it lifts out
tough soils. It can be custom mixed for different cleaning needs like Appliances,
Vinyl, marble and tile floors, Porcelain and ceramic tile, wood work and Painted
walls.

2. SEE SPRAY: Window Cleaner Concentrate.

Features and Benefits: A concentrated liquid window cleaner. Contains fast

acting ammonia and solvent degreasers. Used on Windows, mirrors, glasstop
tables, ceramic tiles, stainless steel and chrome. Also used in kitchen on
appliances, countertops, porcelain and ceramic dcor.
3. Zoom: Spray Cleaner Concentrate

Features and Benefits: It cuts through greasy dirt, including cooking oil,
fingerprints, crayon, lipstick, removes spots on all washable surfaces.

4. Dish Drops: Hand Dishwashing Liquid Detergent.

Features an Benefits: Highly concentrated powerful formula with Triadic

Detergency System (three uniquely specially blended surfactants), no artificial
dyes and no colourants. Mild dermatologically tested formula, Phosphate free
formula and contains biodegeadbale surfactants. Used for all dish washing
purpose, for washing silver ware, fine china and crystal.

AMWAY FINDS ITS WAY

Amway India Enterprise is spreading its wings, whose span is growing by the
day. What helped Amway is the fact that the virgin market is still being tapped.
According to estimates, India is worth Rs. 520 crore. The direct selling industry
in India registered a whopping 62 percent growth in year 1999.
OBJECTIVES OF THE STUDY

The research was more of descriptive type as the Researcher was the study the
different aspects of consumer behaviour and the various influences affection it
and which factors affect their post purchase behaviour. The research also
comprise of a distributors which reflect the main aspects of delivery system of
Amway. The main objectives of the study are:

* To find out the percentage of consumers and distributors that lies between
different income-group and age-group.

* To study the reasons why consumers use Amway products

* To study how the consumers are influenced about purchase of Amway

products whether by themselves, parents, distributors, by other customers
or by friends.

* To study what consumers perceive about the delivery system and quality
of the products.

* To study what sort of problems consumers are facing whit Amway and
whether they are satisfied after complaint.

* To study how distributors feel about the Direct Distribution method and
about Amway products.
* To study the satisfaction level of distributors in terms of co-operation of
other distributors as well as incentive scheme for distributors as given by
the company.

* To study whether distributors expect any sort of improvement in Amway

products in terms of Quality, price and availability.

* To study what success customers and distributors for see for Amway
delivery system.
 CHAPTER-2
RESEARCH METHODOLOGY
The research design of any empirical study plays a very important role for its
usefulness. A clear and understanding of the nature and gravity of the problem is
a must for the research to formulate an accurate research design for the study.

If some error creeps in the research design itself, the findings will result into
erratic ones and the purpose for the study will be forfeited. Hence, it is of
atmost importance to take every care to formulate and accurate and appropriate
research design.

Data Collection:

PRIMARY DATA
For collecting the primary data distributors and customers were personally
interviewed. For both customer survey and distributors survey the random
sampling method was adopted.

In order to collect the accurate information, 100 customers were personally

interviewed and 50 distributors were interviewed.

SECONDARY DATA
Internet, Newspaper, Magazines, etc.
Consumer Behaviour:

The relevance and importance of understanding consumer behaviour is rooted in

the modern marketing concept. Before designing the marketing mix, it is must
to know as much as possible about the buying behaviour of the customers. In
the face of all the individuality and complexity, marketers must search for the
behavioural threads that common to each market segment. It is essential to
study and analyse it is order to understand why she / he has developed towards a
particular predisposition.

Market Segmentation:

Markets can be segmented depending on geographic, demographic,

psychographic and behaviouristic variables. By making use of this concept.
Marketers approach their customers as a number of separate groups, each with
special reasons for the way in which it buys and uses a product. The strategic
choice concept of segmentation broadens the scope of marketing planning to
include the positioning of new products as well as established products.

Marketing Strategy:

Strategy is general programme of action toward the attainment of

comprehensive objectives. Marketing strategy means the game plan that the
marketer will use in attaining the objectives of the business. According to
Kotler, Marketing strategy is the basic approach that the business unit will use
to achieve its objectives and it consists of broad decisions on target markets,
market positioning and Mix, and marketing expenditure levels. For developing
marketing strategy one should have the knowledge about marketing mix.
Marketing Mix:

Marketing mix is one of the key concepts in modern marketing theory.

Marketing mix consists of 4 PsProducts, Price, Promotion and Place.

Product:
Consumer Durable Goods

These goods have a durable (ling) life and are generally brought out of savings.
The purchases of such products is influenced by:

(a) Discretionary income (disposable income minus essential expenditures on

basic necessities and other fixed obligations like debt payments,
insurance premiums etc.) level of the population.
(b) Availability of infrastructural and support facilities for the product usage
in the country (such as roads for the usage of scooters and other
vehicles)
(c) Price, credit or hire purchase facilities available and
(d) Life style of the households and the role of ego, status and prestige in it.

Packaging:

Packaging includes the activities of designing and producing the container or

wrapper for a product. The container or wrapper is called the package. A
successful marketing strategy requires balance between advertising, Promotion
and packaging and it is essential that packaging should be weighted accordingly.
Pricing:

Pricing is only element in the marketing mix that produces revenue: the other
element represent costs. Pricing is considered as very critical decision in
marketing. Appropriate pricing policy and strategies are the only tools for
achieving success in the market, particularly a market loaded with rivals. In
addition to the above factor that should be considered while taking the decision
about the price of a product.

Physical Distribution:

Physical distribution is the marketing function of physically moving finished

products from the point (s) of production to the point (s) of consumption
involving such activities as those concerned with carrying inventory, materials
handling and transportation in such a way that adequate time and place utilities
are created for achieving profit and consumer satisfaction objectives.

Channel decisions refer to the managerial decisions on the selection of best

routes or paths for moving goods from the producer to the consumer. Channels
of distribution are concerned not only with physical movement of goods but
also with their promotion, selling and marketing control. A rational decision
regarding choice of channel of distribution should ensure (a) maximum
geographical coverage of the market (b) maximum promotional efforts (c)
minimum cost.

Promotion:
Promotions the process of marketing communication involving
information. Presuation and influence. Promotion is responsible for
awakening and stimulating consumer demand for the product. The
marketing promotion mix consists of four major tools namely advertising,
sales promotion, publicity and personal selling.

Advertising:

Advertising is one of the major tool companies use to direct

persuasive communications to target buyers and public. In other word
advertising as any paid form of nonpersonal presentation and
promotion of ideas, goods, or services by an identified sponsor.
In developing an advertising program, marketing-managers must
always start by identifying the target market and buyer motives,
Advertising decision making is a fine step process consisting of
objectives setting, budget decision, message decision, media decision
and ad-effectiveness evaluation.

Sales Promotion:

Arguably sales promotion is the important marketing tool in the use today:
firstly, because promotional activities, especially price-cutting, have a direct and
considerable effect on the fortunes (literally) of most mass marketing and mass
retailing companies, secondly, because money spent on sales promotion, as far
as they can be estimated, are greater than the expenditure on any other
marketing information. This is the short term incentive to encourage purchase or
sale of a product or service.

Personal Selling:

Personal selling is more flexible and adaptable to the varying purchase

situations. The salesman act as marketing researcher also. According to
American Marketing Association, personal selling can be defined as an oral
presentation in a conversation with one or more prospective purchasers for the
purpose of making sales.

Publicity:
Publicity is still another medium of communication through which a company
appraises its target consumers of the product / idea. It has been defined as non
personal stimulations of demand for a product, service or business unit by
planting commercially significantly news about it in a published medium or
obtaining favourbale presentation of it on radio & television. Publicity as a
medium of communication is often used by companies on account of its
effectiveness in transmitting the desired message, generating sales, and
achieving other objectives.

Marketing Share:

Study of market share can be a most effective aid to management diagnosis, but
only when properly evaluated and discriminately applied.
Market share measurement plays a crucial role in revealing the success or
failure of business because it enables the management to find out how buyers
have reacted to whole complex of actions taken by all firms in an industry.

Reliable and useful results can be obtained by investigating the performance of

the firm in individual markets. In individual market the affects of and marketing
policy are likely to be more reliable and there is minimum scope for distortions.
By integrating the performance of many firms in individual markets, we can
obtain a body of knowledge from which reliable conclusions can be drawn.
Hence, by concentration on individual markets rather than or national markets
we are able to investigate the factors which lead to the success or failure of the
firms market position.

Setting Market Share Goals:

We can classify market share strategies into three rather broad groups:

1) Building strategies are based on active efforts to increase market share by

means of new product introductions, added marketing programmes
and soon.
2) Holding strategies are aimed at maintaining the existing level of market
share.
3) Harvesting strategies are designed to achieve high short them earnings
and cash flow by permitting market share to decline.
Marketing Research:

Due to intense competition prevailing in the markets, the need for marketing
research arises. It helps corporation to understand, investigate, analyse and
interpret the market conditions. Marketing research is very important in
developing marketing strategies.

Research & Strategy:

Present environments are in a situation of regular change. Major changes will

usually require some changes in both strategy and policy. Strategies and policies
should be dynamic. To achieve this a firm must consider the question of its
growth, maximum utilization of resources, stability of business operation,
catering to customer requirements and preferences etc. and must review the
product mix, if necessary.

Formulating marketing strategy requires a careful integration of all dimension

of the marketing plans. The competitive settings must be considered. Decisions
regarding marketing mix must be taken appropriately.

Forecasting Techniques:

The most common in the area of the quantitative forecasting is the time series
model. Two factors are important in a time series model. The series we want to
forecast and the period of time.
Trend Projection:

Time series analysis relating to sales represents the past pattern of effective
demand for a particular product. The most popular method of analysis of time
series is Trend Projection. Under this method forecasting may be made be three
various method, viz., graphical method, Moving Average method and Least
Square method.

Marketing Organisation and its role:

Role of the marketing function and its place in the overall organization has been
changing overtime. From a situation where marketing was treated as a selling
arm of the factory, if has come a full circle where marketing dictates what is to
produced. With the passage of time, not only has the organization of the
marketing activity undergone many changes but its growing importance has
influenced the entire concept of viewing a business. More and firms are now
adopting the marketing orientation. i.e. the customer and his needs form the
nucleus of all the activities of the firm. All the activities and tasks are organized
around the custo12mer. The firm with marketing orientation has com into being
after passing through many distinct phases.
 CHAPTER-3
DATA PROCESSING, ANALYSIS &
INTERPRETATION
Customer Survey:
While noting the responses of respondents due care has been taken to avoid the
questions which are not concerned with that particular respondent.
Area Covered: Area covered was confined only to Haryana.
Number of Customers Surveyed: 100
After the analysis of the data collected following results has been obtained.
The consumers can be classified as below according to variables as Age,
Occupation and Income group.
1) Classification According to Age

Age Group Percentage of Respondents

15-25 42%

32%

36-45 16%

Above 45 10%
 2) Classification According to Occupation

Occupation Percentage of Respondents

Students 32%

Servicemen 8%

Farmers 22%

Shopkeepers 10%

Housewives 26%
 3) Classification According to Income Group

Income Group Percentage of Respondents

Below 5,000 34%

5000-15,000 50%

15,000-25,000 10%

Above 25,000 6%
RESPONSES OF CUSTOEMRS REGARDING VARIOUS ASPECTS

1) Awareness and use Pattern

Use of Product Percentage of Respondents

Always 44%

Sometimes 56%

Never 0%

All the hundred customers surveyed are aware about AMWAY products out of
which 56 % use these products sometimes and 44 % always use these products.
 2) Source of Awareness

Source Percentage of
Respondents
Friends 28 %

Parents 09 %

Children 12 %

Distributors 46 %

Any other 05 %

According to the survey conducted the best source of awareness among

customers are distributors. The study shows that 46 % of customers are made
aware about the products by distributors, 28 % of the customers are made aware
by friends, 12 % by children, 9 % by parents and only 5 % by other sources like
internet.
 3) Quality as Compared to other Related Products

Quality Percentage of Respondents

Very superior quality 56%

Superior Quality 27%

Equally Good 17%

Below Average Quality 0%

56 % of the respondents favoured that quality of Amway products is very

superior, 27 % favoured superior quality of products and 17 % are of the view
that products are equally good as other related products. None of the
respondents are of the view that Amway products are below average.
 4) Influence on Decision of Purchase

Factors Percentage of Respondents

Parents 7%

Yourself 23%

Distributors 39%

Friends 9%

Other customers 22%

 5) Influence on Decision of Purchase

Packaging Percentage of Respondents

User friendly 7%
Not user fiendly 23%

6) Influence on Decision of Purchase

Factors Ranking Weigtage % age of weightage*

Product Quality 1 164 11 %
Brand Name 5 397 27 %
Price of product 4 348 23 %
Availability 3 315 21 %
Packaging 2 276 18 %

* The major factor responsble for purchase of Amway products is the

product quality and the second factor responsible for purchase is the
userfriendly packaging of products
* Percentage of customer favouring particular attribute.
 7) Preferable Size of Products

Size Percentage of Respondents

Pouches (very small size) 11 %

500 ml (medium size) 52 %

1 litre (large size) 37 %

Medium size of the products is mostly preferred by the customers where as very
small size is very less prefered by the customers.
 8) Problems Faced by Customers

Problems Ranking Weigtage % age of

weightage*
Very High Price 1 172 8%
Quality of Products 6 581 28%
Lesser Availability 4 358 17%
Limited Range of
Quantity 2 218 10%
Replacement services 5 492 24%
No Problem 3 279 13%
According to study major problem faced by the customer is of very high prices
of the products and the second major problem is of limited range of quantity.
Percentage of customer favouring particular attribute.

9) How often the Problem is Conveyed

Time period Percentage of
Respondents
Always 35%
Sometimes 48%
Never 17%
10) Response of Distributors And Company towards Problems

Response Percentage of
Respondents

Very satisfactory 32%

Satisfactory 45%

Neutral 17%
Unsatisfactory 6%

* The satisfaction level of customers against the solutions towards their

problems regarding products, there delivery system etc. is high i.e. the
distributors and company satisfy the customers regarding their problems
upto 77%
 11) Response Towards Marketing System of Amway

Response Percentage of
Respondents

Very Convinent 18%

Convinent 22%

Equally convinent 13%

Difficult 47%

* Most of the respondents i.e. almost 47% found marketing system of

AMWAY difficult as compared to retailing and other traditional methods
of marketing.
 12) Awareness About New Products

Response Percentage of
Respondents
Always 36%
Sometimes 43%
Never 21%
 13) Factors Effecting Repurchase Decision

Problems Ranking Weigtage % age of

weightage*
On time delivery 2 237 16%
Quality of products 1 156 10%
After sales services 4 373 25%
Time taken to close
the complaint 3 312 21%
Adequate quantity 5 422 28%

* Quality of products and on time delivery dominates in factors effecting

repurchase decision of customers. The least factor that effects repurchase
decision is of adequate quantity.
* Percentage of customer favouring particular attribute.
 14) Factors Effecting Repurchase Decision

Perception Percentage of
Respondents
Will Be successful (A) 44%
Will not be successful (B) 20%
Not sure (C) 36%

* The perception of customers about success of AMWAY delivery system is

of mixed views. 47 % are of the perception that it will be successful, 36 %
are not sure and 20 % said that it will not be successful.
FINDING AND ANALYSIS
Distributor survey:
Area Covered: Area covered was confined only to Haryana.
Area covered in Haryana: Hansi, Hisar, Fatehabad, Sirsa, Bhiwani, Gurgaon and
Rohtak.
After the analysis of the data collected following results has been
obtained.
* Most of the distributors surved are from time period of 8 months to 1
year in direct marketing business with AMWAY. The minium number of
distributors under one upline distributor are 10 and maximum are upto 50.64%
of the distributors are satisfied with he co-operation of other distributors where
as 36% of the distributors are not satisfied with the co-operation of other
distributors.
1) Perception about direct distribution method

Perception No. 2)
of Percentage of
Respondents Respondents
Very Convinent 7 14%
Convinent 14 28%
Difficult 29 58%
 2) Influence of Customers While Purchasing

Factors Ranking Weigtage % age of

weightage*
Price of product 5 221 21%
Quality of products 2 123 12%
Brand image 6 271 26%
Personal convincing
by distributor 1 85 8%
Replacement services 3 154 15%
Time taken to close
the complaint 4 196 18%
* The Percentage of distributors favouring particular factor.
* Accoridng to the study the personal convincing by the distributors and
quality of the products effects the customers while making a purchase.
3) Influence of Customers While Purchasing

Media No. of Percentage of

Respondents Respondents
Personal contact 22 44%
Public meetings 13 26%
Trade fares 4 8%
By Conducting seminars 9 18%
Exhibitions 2 4%
 4) Supply of Products by Company

Response No. of Percentage of

Respondents Respondents

Always 32 64%

Sometimes 18 36%

Never Nil Nil

 5) Source of Supply

Sources No. of Percentage of

Respondents Respondents

a) Other distributors only 27 54%

b) Personal contact with 16 32%

Headquarter

c) Mailing procedure 5 10%

d) Any other 2 4%
* The main source of supply according to the survey is through other
distributors, as 54% of respondent favoured it and 32% favoured that they
get supply from headquarters directly through personal contact Mailing
procedure is only preferred by only 10% of distributors.

6) Response Towards Supply

Response No. of Percentage of

Respondents Respondents

Very satisfactory 18 36%

Satisfactory 23 46%

Unsatisfactory 9 18%
 7) Method of Handling the Complaints

Response No. of Percentage of

Respondents Respondents

Replacement at distributor 19 38%

level (A)

Conveyance to company (B) 22 44%

Personal assurance about

quality (C) 9 18%
 8) Time Taken to Close the Complaint

Time Period No. of Percentage of

Respondents Respondents

One Week 16 32%

Fifteen days 24 48%

One month 6 12%

More than one month 4 8%

* 48% of the distributors are of the favour that complaints are closed within
fifteen days and 32% are of the favour that complaints are closed within
one week, 12% favoured one month and 8% favoured more than one
month.

9) Perception About Incentive Scheme

Response No. of Percentage of

Respondents Respondents

Very satisfactory 12 24%

Satisfactory 16 32%

Neutral 12 24%

Unsatisfactory 10 20%
* The satisfaction level of distributors regarding incentive scheme is
considered as satisfactory by most of the respondents.

10) Incentive Performance Effected by Size of Product

Response No. of Percentage of

Respondents Respondents

Toa great extent (A) 4 8%

To some extent (B) 32 64%

Not effected (C) 14 28%

 10) Expectations Regarding Financial Deal

Expectations No. of Percentage of

Respondents Respondents

Cash discount 32 64%

Credit Allowance 10 20%

Advance payments 6 12%

Any other 2 4%
 Cash discount policy is comparatively favourable to distributors as
compared to other financial policies.
12) Response about Success in Future

Expectations No. of Percentage of

Respondents Respondents

Will be successful (A) 30 60%

Will not be successful (B) 9 18%

Not sure (C) 11 22%

The result is obtained by the responses of the distributors surveyed only. Our of
50 distributors surveyed 30 respondents favoured success of AMWAY
marketing system, 11 ranked as not sure about it and only 9 respondents
mentioned that it will not be successful.

SUMMARY

The success of any organisation depends mainly how will it can forecast the
environmental changes. The growth of the company is subject to the
managements efficiency in coping with the environmental changes. The
variables operating in environment are economical, social, technological,
potitical and legal factors. These variables are not static. Instead, they are
dynamic. The variables will be changing with the passage of time. These
changes will effect the operations of the organisation. These effects, in turn, will
affect the companys growth and success. Therefore, companies should have
enough capacity to forecast, predict and mange these changes.
Actually, the changes in the environment will bring both opportunities and
threats to the organisation. Every time, both threats and opportunities will not
arrive ate once. Sometimes, threats will come, and in sometimes, opportunities
will come. Threats will directly affect the running of the organisation. But
opportunities cannot be observed directly. It depends on the companys ability
to predict opportunities, and converting them into profitable activities. Then
only, the company can grow and attain the desired objectives. Therefore, the
company should have enough innovative qualities.

Opportunities will not arose from the change in the market alone. Sometimes,
the changes in the Government policies will also bring opportunities.

Regarding the financial position of the company, it is very much safe and
backed by huge resources. The turnover of the company is increasing at a rapid
rare. It has a good credit worthiness in the money market. Thus, the company is
also maintaining a good hold on financial activities, which inturn is helping for
the progress of the company. Regarding the product, the company is offering its
product in wide range and still increasing the range with time.
CONCLUSION

The following conclusions emerged from the survey discussed in the preceding
section.

It is very clear that the sale of Amway products is very good in the
surveyed area. It is the fact that Amway brand name has good impression
on the people.

The majority of consumers and distributors lies between fifteen to twenty

five years of age group and in the most of the customers are students and
housewives.

Awareness level regarding Amway products is high and the major sources
of awareness are distributors and friends.

Perception of costumers regarding delivery system of Amway is not

satisfactory. Most of the customers find Amway delivery system as
difficult.

Quality is playing the most important role in purchasing decision. The

packaging of products is also influencing the purchasing decision to high
extent.
The prices of the Amway products are very high. Most of the customers
and distributors revealed that if the prices are decreased, there is a scope
for increase of sale of Amway products.
 The main problem with Amway products is of higher price and delivery
system.

Cash discount is preferred by the distributors in comparison to credit.

Companys delivery system is preferred by the distributors because it

facilitates replacement and easy delivery.

Most preferable size of the products is medium size which the customer
finds economical.

The problems of the customers are satisfactorly handled by the

distributors and company. Replacement at distributor level and
conveyance to company are the methods adopted by the distributors for
satisfying the customers complaints.

Most of the distributors are satisfied with the incentive scheme (i.e. cash
discount system) adopted by company.

The customers are made aware about the new products through public
meetings and by personal contact.

Majority of the customers and distributors forsee success of Amway in

future.
RECOMMENDATIONS

Advertising is one area which widely attracts audience attention. More

justified and economical use of advertising can yield substantial benefits.

The distributor customer relation play an important role. Healthy and

orderly relations with expertise in after sale service can be very

beneficial.

Lover income segment can be targeted by reducing the process to some

extent.

Sales promotion techniques such as free gifts, seasonal discounts & gift

hampers should be more frequently used as they attract potential

consumers.

The distribution network of Amway India Enterprise should be

strengthened so as to make products easily available to the customers.

The company should improve on after sales services.

A variety of products in wide range should be offered so as to cater the

needs of different income groups.

The company should adopt various size packing instead of only three

size.

Prices play an important role in purchasing decision. So prices of Amway

products should be reduced. The following are the objectives to decrease

the price.

(i) to increase the capacity

 (ii) To broaden the market

(iii) To counter the rivals.

Increased distributors margin would also prompt the sales of Amway

products.

The after sales service should be given much attention and care must be

taken to make it prompt and efficient leading to lower customer

dissatisfaction and lesser customer grievances.

Suggestion and comments of distributors and customers may also be

invited for product consideration.

Lastly, the researcher hopes that the above mentioned recommendations would

be helpful to Amway India Enterprise in capturing a Lions share.

BIBLIOGRAPHY

Anagram March April, 2005

Anagram May June. 2005

Advertising and Marketing (A&M)

Business Today

The Dream That will not Not Die

by Charles Paul Conn

Marketing Management

by Philip Kotler.

Principles of Marketing

by Philip Kotler and Amstreng.

Statistical Methods

by S.P. Gupta

Research Methodology

By Kotharia

www.Amway.Com. (Amway Website)

 QUESTIONNAIRE FOR CUSTOMERS

Name of the Respondent :

Age :

Sex :

Occupation :

Income Group :

: (i) Below 5000 (ii) 5000-15000

(iii) 15000-25000 (iv) Above 25000
Marital Status : (i) Single (ii) Married
(iii) Married having kids
Address :

Q.1 Are you aware about AMWAY products: (i) Yes (ii) No
If yes do you use these Products?
(i) Always (ii) Sometimes (iii) Never

Q.2 No advertising media are used by AMWAY, so how you came to know
about AMWAY products?
(i) Friends (ii) Parents (iii) Children
(iv) Distributors (v) Any other

Q.3 What is your response after use of AMWAY product as compared to other
related products, whether you found products.
(i) Of very Superior Quality (iii) Equally Good
(ii) of superior Quality (iv) Below average Quality
Q.4 Your final decision of purchase is infuenced by
 (i) Parents (iv) Friends
(ii) Yourself (v) Other customers
(iii) Distributors
Q.5 How do you find AMWAY product packaging?
(i) User friendly (iv) Not user friendly
Q.6 Which of the following is the main reason for your purchase of this
brand? (Please give Ranking)
(i) Product Quality (iv) Availability
(ii) Brand Name (v) Packaging
(ii) Price of Products
Q.7 What size of the products is most prefered by you while making a purchase?
(i) Pouches (very small size) (iv) I litre (Large size)
(ii) 500ml (medium size)
Q.8 What sort of problems you face with AMWAY products? (Please give
ranking)
(i) Very High Price (iv) Limited Range of Quantity
(ii) Quality of Products (v) Replacement Services
(iii) Lesser Availability (vi) No Unsatisfactory
Q.9 Have you ever tried to convey you problem to the distributors or company?
(i) Always (ii) Sometimes (iii) Never
Q.10 What is the response of distributors and company towards the problems
faced by the customers?
(i) Very Satisfactory (ii) Neutral
(iii) Satisfactory (iv) Unsatisfactory
Q11. How do you feel about the marketing system of AMWAY as compared to
retailing and other traditional methods of marketing?
(i) Very convinent (iii) Equally Convient
(ii) Convinent (iv) Difficult
Q.12 Are you frequently made aware about new launches of products by
AMWAY distributors?
(i) Always (ii) Sometimes (iii) Never
Q.13 What factor of products effects your repurchase decision?
(i) On time delivery (iv) Time taken to close the complaint
(ii) Quality of Products (v) Adequate quantity
(iii) After sales services
Q.14 What success do you for see as an AMWAY customer for delivery
system?
(i) Will Be successful (iii) Not sure
(ii) Will not successful
Q.15 If your opinion what is major draw back (if any) of AMWAY delivery
system?

Q.16 Is there any specific suggestions for the improvement of delivery system
of Amway Enterprise?

Thank You
(ROHIT RAWAT)
 QUESTIONNAIRE FOR
DISTRIBUTORS

Name of the Respondent :

Age :

Sex :

Occupation :

Income Group :

: (i) Below 5000 (ii) 5000-15000

(iii) 15000-25000 (iv) Above 25000
Marital Status : (i) Single (ii) Married
(iii) Married having kids
Address :

Q.1 For how long have in Direct Marketing business with AMWAY?
(i) Day/s
(ii) Month/s
(iii) Year/s
Q.2 How many distributors do you have under you?
(i) Upto 10 (iii) 20 to 50
(ii) 10 to 20 (iv) others
Q.3 Are you satisfied with the co-operation of other distributors?
(i) Yes (ii) No
Q.4 How do you feel about Direct Distribution method adopted by AMWAY
Enterprise?
(i) Very Convinent (iii) Difficult
(ii) Convinent
Q.5 What influences the customers more while making the purchase of
products? (Please give ranking)
(i) Price of product (iv) Personal convincing of distributor
(ii) Quality of product (v) Replacement Services
(iii) Brand image (vi) Time taken to close the complaint

Q.6 As no adverting media are used by AMWAY, So how you make your
customer aware about new products?
(i) Through personal contact (iv) By conducting seminars
(ii) Through public meetings (v) Through Exhibitions
(iii) Through trade fares
Q.7 In case of peak demand of products whether you are able to get the
product with full supply from the company?
(i) Always (ii) Sometimes (iii) Never
Q.8 As there are very few headquaters of AMWAY Enterprise still after
establishment of one and half years then how the distributors get their
supply of products?
(i) Through other distributors only
(ii) Through personal contact with the headquater
(iii) Through mailing procedure
(iv) Any other
Q.9 What is your response towards supply of products by AMWAY?
(i) Very Satisfactory (iii) Unsatisfactory
(ii) Satisfactory
Q.10 In case of any complaint by a customers how do you handle the problem?
(i) Replacement at your own level
(ii) Convey to company about complaint
(iii) Personal assurance about quality
Q11 What is the minimum time taken by you and company to close a
particular complaint?
(i) One week (ii) One month
(iii) Fifteen days (iv) More than one month
Q.12 What do you say about the incentive scheme for distributors as given by
the company?
(i) Very Satisfactory (ii) Neutral
(iii) Satisfactory (iv) Unsatisfactory
Q.13 What are your expectations from the company in financial deal?
(i) To a great extent (ii) Not effected
(iii) To some extent
Q.14 What are your expectations from the company in financial deal?
(i) Cash discount (ii) Advance payment
(iii) Credit allowances (iv) Any other
Q.15 What success do you see as AMWAY distributor for AMWAY delivery
system?
(i) Will be successful (ii) Not sure
(iii) Will not be successful
Q.16 Would you like to give some suggestions about the distribution network
of AMWAY?

Thank you
ROHIT RAWAT