Amway in India - A Different Approach

Details

Case Code : CLMM002
Publication date : 2005
Subject : Marketing Management
Industry : Direct Marketing
Length : 05 Pages
Price : Rs. 100

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Key words:

Multi-level marketing (MLM), Self-Consumption, Distributors, Attrition Rate, Customer Service, Direct Marketing Networks, Usage Cost, Product Focus, Strategic Business Units, Centralized Marketing, Central Warehouse, Cost and Freight Agents (C&FAs), Unemployed Youth, Localized Strategies, Value-For-Money, 'Indianization', 'Operation Gaadi', 'Operation Ghar', Electronic Kiosks

Note

1: This caselet is intended for use only in class discussions.
2: More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.

 

Abstract:

In the late 1990s, the global direct selling giant Amway had to contend with increasing doubts regarding its survival in India. Media reports were quick to point out Amway's failure to sell the basic concept of direct selling to the Indians. The caselet explores the problems faced by Amway. It discusses the corrective steps taken by Amway - change in product strategy, strengthening distribution network and Indianization, to revive its sales.

Issues:    » Direct marketing industry in India    » Distribution strategies of direct marketers    » Importance of understanding local markets for global companies Introduction In the late 1990s, the global direct selling giant Amway had to contend with increasing doubts regarding its survival in India. The company that had become synonymous with network marketing or multi-level marketing (MLM) the world over was beset with problems.

Media reports were quick to point out Amway's failure to sell the basic concept of direct selling to the Indians. Though the company managed to rope in a substantial number of distributors, the attrition rate was at an alarming high of 60-65%...

Questions for Discussion:

1. Comment on the concept of network or multilevel marketing. Do you think the model would be successful in India? Also, compare and contrast the MLM model with the traditional distribution system, bringing out the merits and demerits of both.

2. Critically examine the corrective measures adopted by Amway to make the MLM model a success in India.

3. What further measures can the company take in order to tackle the competition from FMCG majors like HLL and P&G?