CHAPTER 1: INTRODUCTION

1.1 GENERAL INTRODUCTION ABOUT FMCG SECTOR The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.1 billion. It has a strong MNC presence and is characterized by a well-established distribution network, intense competition between the organized and unorganized segments and low operational cost. Availability of key raw materials, cheaper labour costs and presence across the entire value chain gives India a competitive advantage. The FMCG market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015. Penetration level as well as per capita consumption in most product categories like jams, toothpaste, skin care, hair wash etc in India is low indicating the untapped market potential. Burgeoning Indian population, particularly the middle class and the rural segments, presents an opportunity to makers of branded products to convert consumers to branded products. Growth is also likely to come from consumer 'upgrading' in the matured product categories. With 200 million people expected to shift to processed and packaged food by 2010, India needs around US$ 28 billion of investment in the food-processing industry. Automatic investment approval (including foreign technology agreements within specified norms), up to 100 per cent foreign equity or 100 per cent for NRI and Overseas Corporate Bodies (OCBs) investment, is allowed for most of the food processing sector. About Direct Selling Marketing:-. Direct Selling, or Direct Marketing as it is sometimes called, simply means grass roots, face-to-face distribution of products. It used often to refer to door-to-door selling. "Network Marketing" and "Multi-level Marketing" are generally considered to be synonyms, and a subset of direct selling. While "direct selling" and "network marketing" refer primarily to the distribution

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system, the term "multi-level marketing" emphasizes the compensation plan more. Other terms that are sometimes used to describe multi-level marketing include "wordof-mouth marketing", "interactive distribution", and "relationship marketing". Critics have argued that the use of different terms and "buzzwords" is an effort to distinguish multi-level marketing from illegal Ponzi scheme, chain letters and consumer fraud scams. Some sources classify multi-level marketing as a form of direct selling rather than being direct selling. The Direct selling association, an American industry body, reported that in 1990 twenty-five percent of members used MLM, growing to 77.3 percent in 1999. Companies such as Avon, Electrolux, Tupperware, and Kirby all originally used single level marketing to sell their goods and later introduced multi-level compensation plans. By 2009, 94.2% of members were using MLM, accounting for 99.6% of sellers, and 97.1% of sales. The DSA has approximately 200 members while it is estimated there are over 1000 firms using multi-level marketing in the US alone.

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1.2 INDUSTRY PROFILE a. Origin and development of the industry Fast moving consumer goods companies need to rationalise costs, invest in brand building and offer more value-added products. That is the recipe for success in the competitive domestic FMCG industry. For those who might not know this....It was Dabur, which kick-started in India what's today known as the fast moving consumer goods (FMCG) industry. It was some 115 years ago, much before Hindustan Lever (HLL) materialized on the scene. That Dabur could achieve neither the reach nor the product depth of HLL is a different story altogether. Small wonder, our curiosity refuses to go beyond HLL. How has the FMCG industry metamorphosed in India? The fifties and beyond Though multinational companies (MNC') were allowed to operate in India, only HLL had manufacturing base at the time of India's independence. For other global MNC's, the domestic market was too small to bother about. Colgate and Nestle were there, but they were mainly into trading. Though the 60s saw many MNCs setting up their manufacturing base in the country, it was not a clear go for FMCG majors. Cut to 1978. That was when the new government earmarked several product categories for the small-scale sector. The MNCs then were asked to choose between slashing their

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equity stake to 40 per cent, or forget India. IBM and Coca-Cola opted for the latter and quit India. Only Unilever stayed put with HLL around. Unilever managed to retain a 51 per cent foreign stake by complying with the government conditions of minimum 10 per cent export and 60 per cent turnover from priority sectors. It got into the business of fertilizer and chemicals to meet the conditions for staying on in India. HLL stayed on.

The dramatic nineties Things however began to change post-reforms during the nineties. The floodgates were opened. And MNCs with saturating home-markets who were hungrily looking for markets elsewhere rushed in. Categories within categories were created in products such as hair-oil and skincare, and many new product categories were also created. Untouched facets of the Indian consumer were explored. The FMCG players had in front of them not only a vast untapped market but also a market that was fast growing. Income-levels were rising. A new class of upwardly mobile was emerging. Television and, satellite and cable television were helping the market to grow further in rural areas by changing aspirations and lifestyles. The canvas did widen for the FMCG players, but so did the challenges. Rules of the game changed. Strategies, in their true sense, came to the fore. Quite unlike in the past, companies began looking for ways to expand their product-portfolios and distribution reach. Acquisition of brands became the order of the day as it gave the players easy options of attaining growth in the FMCG sector. b. Growth and present status of the industry

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With the presence of 12.2% of the world population in the villages of India, the Indian rural FMCG market is something no one can overlook. Increased focus on farm sector will boost rural incomes, hence providing better growth prospects to the FMCG companies. Better infrastructure facilities will improve their supply chain. FMCG sector is also likely to benefit from growing demand in the market. Because of the low per capita consumption for almost all the products in the country, FMCG companies have immense possibilities for growth. And if the companies are able to change the mindset of the consumers, i.e. if they are able to take the consumers to branded products and offer new generation products, they would be able to generate higher growth in the near future. It is expected that the rural income will rise in 2007, boosting purchasing power in the countryside. However, the demand in urban areas would be the key growth driver over the long term. Also, increase in the urban population, along with increase in income levels and the availability of new categories, would help the urban areas maintain their position in terms of consumption. At present, urban India accounts for 66% of total FMCG consumption, with rural India accounting for the remaining 34%. However, rural India accounts for more than 40% consumption in major FMCG categories such as personal care, fabric care, and hot beverages. In urban areas, home and personal care category, including skin care, household care and feminine hygiene, will keep growing at Relatively attractive rates. Within the foods segment, it is estimated that processed foods, bakery, and dairy are long-term growth categories in both rural and urban areas. Indian Competitiveness and Comparison with the World Markets:The following factors make India a competitive player in FMCG sector: Availability of raw materials:Because of the diverse agro-climatic conditions in India, there is a large raw material base suitable for food processing industries. India is the largest producer of livestock, milk, sugarcane, coconut, spices and cashew and is the second largest producer of rice, wheat and fruits &vegetables. India also produces caustic soda and soda ash,

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which are required for the production of soaps and detergents. The availability of these raw materials gives India the location advantage. Labor cost comparison:- Chart Shows the Labor Cost Comparison

Low cost labor gives India a competitive advantage. India's labor cost is amongst the lowest in the world, after China & Indonesia. Low labor costs give the advantage of low cost of production. Many MNC's have established their plants in India to outsource for domestic and export market. Present status of the industry: - FMCG industry provides a wide range of consumables and accordingly the amount of money circulated against FMCG products is also very high. The competition among FMCG manufacturers is also growing and as a result of this, investment in FMCG industry is also increasing, specifically in India, where FMCG industry is regarded as the fourth largest sector

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with total market size of US$13.1 billion. FMCG Sector in India is estimated to grow 60% by 2010. FMCG industry is regarded as the largest sector in New Zealand which accounts for 5% of Gross Domestic Product (GDP). c. Future of the Industry Fast moving consumer goods will become a Rs 400,000-crore industry by 2020. A Booz & Company study finds out the trends that will shape its future Consider this. The anti-ageing skincare category grew five times between 2007 and 2008. Its today the fastest-growing segment in the skincare market. Olay, Procter & Gambles premium anti-ageing skincare brand, captured 20 per cent of the market within a year of its launch in 2007 and today dominates it with 37 per cent share. Who could have thought of ready acceptance for anti-ageing creams and lotions some ten years ago? For that matter, who could have thought Indian consumers would take oral hygiene so seriously? Mouth-rinsing seems to be picking up as a habit mouthwash penetration is growing at 35 per cent a year. More so, who could have thought rural consumers would fall for shampoos? Rural penetration of shampoos increased to 46 per cent last year, way up from 16 per cent in 2001. Consumption patterns have evolved rapidly in the last five to ten years. The consumer is trading up to experience the new or what he hasnt. Hes looking for products with better functionality, quality, value, and so on. What he needs is fast getting replaced with what he wants. A new report by Booz & Company for the Confederation of Indian Industry (CII), called FMCG Roadmap to 2020: The Game Changers, spells out the key growth drivers for the Indian fast moving consumer goods (FMCG) industry in the past ten years and identifies the big trends and factors that will impact its future. The report estimates the FMCG sector witnessed robust year-on-year growth of approximately 11 per cent in the last decade, almost tripling in size from Rs 47,000 crore in 2000-01 to Rs 130,000 crore now (it accounts for 2.2 per cent of the

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countrys GDP). Growth was even faster in the past five years almost 17 per cent annually since 2005. It identifies robust GDP growth, opening up of rural markets, increased income in rural areas, growing urbanization along with evolving consumer lifestyles and buying behaviors as the key drivers of this growth. The report further estimates that the FMCG industry will grow at least 12 per cent annually to become Rs 400,000 crore in size by 2020. Additionally, if some of the factors play out favorably, say, GDP grows a little faster, the government removes bottlenecks such as the goods and services tax (GST), infrastructure investments pick up, there is more efficient spending on government subsidy and so on, growth can be significantly higher. It could be as high as 17 per cent, leading to an overall industry size of Rs 620,000 crore by 2020.

CHAPTER 2: PROFILE OF THE AMWAY 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,

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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. 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. Awards and Recognition:Presented the Millennium Outstanding Service Award 2000, by the Confederation for the Blind (AICB), in recognition for work carried out for the visually challenged.

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The Indian Red Cross Society, Orissa awarded AOF a memento & certificate for conducting a mega-Blood Donation camp of 816 units on 4th May, 2003. The Surat Raktdaan Kendra felicitated Amway India at their annual function on 5th Oct, 2003, for the largest number of donors at a Blood Donation Camp (BDC) held by any financial and commercial institution and industry. The Mayor of Surat Snehlata Chouhan - presented a trophy and a certificate of appreciation.

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2.1 ORIGIN OF THE AMWAY What does the word Amway mean? Amway is an abbreviation for "American Way". Great companies start with great ideas, and Amway is no exception. The idea came when two Nutralite salesmen, Rich DeVos and Jay Van Andel were at the very top of a very successful MLM at the time; Nutralite was sold door to door. This was the 1950s, Nutralite was a single entity company, and by the end of the decade, Jay and Rich had built a respectable business of their own - approximately five thousand distributors were in their Both Mr. DeVos and Mr. Van Andel knew how to move product - build on relationships. But what was needed was a way to expand. A way that would allow them to multiply the efforts of what they alone could accomplish. In 1959, the American Way Association was formed. This would be the chance to grow and set the direction of a new entity. Rich and Jay immediately set out to find an initial product to add to the line. They purchased the rights to Frisk, a household cleaner (which was later renamed Liquid Organic Concentrate or L.O.C.). In 1960, the American Way Association, now Amway, bought a controlling share in the manufacturing facility in Michigan where LOC was made. What this meant is that there were 3 companies all using the Amway name. The Amway Sales handled product and distribution, Amway Services did business related tasks (like insurance for distributors) and Amway manufacturing, which produced LOC. By 1964, the three arms of Amway were all merged into a single entity - Amway Corporation. The idea was by handling the manufacturing and distribution of a product line, and then allowing a network of IBOs. This seemed like the only way to offer what Jay and Rich originally envisioned - a solid opportunity where anyone with motivation could excel, regardless of their background and status. This is a main part of Amway's business philosophy. Not just products and not just sales, but a way to a better life. Amway continued to grow under the co-ownership of Van Andel and Devos. In 1972, the pair purchased Nutralite outright - they now owned the company they had started as employees with.

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Amway continued to expand, reaching past the borders of the US to offer the same opportunities in other countries: Australia Europe and parts of Asia Japan Latin America China Africa India Russia Vietnam 1971 1974 1979 1985 1995 1997 1998 2005 2008

Critics argued that the model wasn't sustainable and that growth was mathematically limited. They cried, "Pyramid scheme!" Fifty years of steady growth has shown this criticism has no basis in fact. In 2008, Amway (now technically, Amway Global) reported sales of 8 billion. The company is in 58 markets worldwide and manufactures more than 450 products. Amway Global does business in more than 98 countries. Rich DeVos is still alive, although he has passed the Presidency of Amway to his son Dick. DeVos was named one of the richest men in America by Forbes magazine, with an estimated 4.2 billion dollars in personal wealth (2009). DeVos owns the Orlando Magic basketball team among other assets.Jay Van Andel passed away at age 80 in 2004. Mr. Andel's place at Amway Global is now held by his son Steve. At his death, Van Andel's net worth was estimated to be 2.4 billion dollars. The company is still thriving and still offers opportunity to individuals who have the desire to build their own business. MLM is a proven business model that produces massive success for individuals.

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2.2 GROWTH AND DEVELOPMENT OF THE AMWAY 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. Jay Van Andel and Richard DeVos, founders of Amway

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. We have long had a tradition of opportunity and success. Today, Amway is a multibillion-dollar international business representing freedom and opportunity to millions of people in more than 80 countries and territories around the world. We offer over 3 million Business Owners the inspiration to grow those

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businesses, and we work hard to provide new and better ways for them to achieve their life goals. 1950s

A Solid Foundation Jay Van Andel and Rich DeVos began their business in the 1950s using direct selling to market NUTRILITE Dietary Supplements. What they discovered more than 40 years ago still remains true todaythat people and relationships are at the core of any successful business. Always searching for new opportunities, in 1959 Rich, Jay and their associates looked for new product ideas to expand their business. They realized they wanted products that everyone needs, all of the timeproducts whose features and benefits anyone could understand and communicate easily. "The products we want must be ones that just about anyone is familiar with and can sell. The examples that come to mind are laundry and cleaning products." Jay Van Andel The result of their search was Amway's first product, which today is called L.O.C. Multi-Purpose Cleaner. It was an instant sales success story, opening up a whole new world of opportunity. With a strong belief in the power of initiative and free enterprise, Jay Van Andel and Rich DeVos created the Amway Sales and Marketing Plan. They knew that anyone who was willing to work hard could succeed using the same business methods. This simple idea quickly gained popularity throughout the US, and

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then Canada, as more and more people discovered what a real opportunity the Amway business offered. 1960s The Early Years As Amway's annual sales rapidly expanded, exceeding US$500,000 for the first time, the company soon outgrew its basement office in Jay Van Andel's home. During this time, Amway moved to a larger facility and began developing new products, including SA8 Laundry Detergent, which was launched in 1961. These Home Care products became big sellers for distributors and led to incredible growth for the company. Within a few short years, the company had more than 700 employees, over 200 exclusive products and more than 100,000 Distributors. Rich and Jay knew that the best way to interest people in the Amway business was to bring the opportunity to them. So, in 1963, the famous "Showcase Bus" began touring many cities throughout the US. Stocked with products and literature, it helped distributors introduce Amway's growing product line and unique opportunities to people all over the country. In the 1960s, the achievement and enterprise of successful Distributors was recognized with the introduction of Direct Distributor status. It became a model for reward and recognition programs that continue to be developed in Amway markets around the world. In the midst of all this success and growth, however, tragedy struck as Amway's aerosol factory was completely destroyed by fire in 1969. 1970s A Decade of Growth

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After the fire, Jay Van Andel vowed to reconstruct the aerosol factory and to salvage the business. The factory was rebuilt and sales reached an estimated retail figure of US$100 million. The Amway product line was also greatly expanded with NUTRILITE Dietary Supplements becoming a best-selling line, and the PERSONAL SHOPPERS catalogs continued this growth and diversification. By the mid '70s Amway trucks travelled more than 3.25 million miles (approx 5.23 million kilometres) shipping products to millions of Distributors. At the same time, the company expanded overseas, opening markets in eight countries on three continents. Amway launched its second international affiliate half a world away in Australia, swiftly followed by the UK, Hong Kong and Malaysia. Amway Japan Limited (AJL), founded in Tokyo in 1979, quickly became one of Amway's largest markets in terms of product sales. As challenging as it was to enter new marketsfaced with everything from different languages and laws to difficult distribution channelsAmway continued to grow globally. At home, in Ada, Michigan, the Amway World Headquarters complex grew rapidly to keep up with the exploding business. Amway's manufacturing facility grew to more than a mile long, and really became a self-contained city, with its own power generator, water treatment plant, recycling facility, shuttle bus service and fire department.

1980s The Billion-Dollar Decade Estimated annual retail sales exceeded $1 billion for the first time. Pressed by the demands of increased growth, Amway expanded its US headquarters in Ada, Michigan and built a new cosmetic plant where ARTISTRY products are developed and manufactured. It also pioneered an entirely new product category, water treatment systems, with very successful results. In fact, Amway's water treatment

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product line, under the eSpring brand name, continues to hold a top position in the marketplace today. In the meantime, the Distributor incentive program was enhanced to provide more rewards to those Distributors who put greater efforts into growing their Amway businesses. Always concerned with the environment, Amway was recognized as a corporate environmental leader and promoter of environmental education when it won the prestigious United Nations Environmental Programme Achievement Award in 1989. 1990s The Next Generation Following in their fathers' footsteps, Steve Van Andel and Dick DeVos succeeded Jay and Rich as Chairman and President of Amway. At the same time, a new generation of leaders also began to emerge within Distributor families, building upon and continuing the successes of their parents. The 1990s saw continued expansion with estimated retail sales volumes reaching US$5 billion. In California, Nutrilite's research into the links between diet and health was given a public face with the inauguration of the Rehnborg Center for Nutrition and Wellness, which gained world renown and was later renamed the Nutrilite Health Institute. Amway's growing role in Asia led Amway Japan to sponsor the 1995 Nagano Winter Olympic Games in Japan. Around the world, Amway's regional and country affiliates continued to support their Distributors with the launch of ecommerce sites that extend the Amway opportunity into cyberspace. This remarkable decade culminated in the 40th anniversary of the organization in 1999. 2000s New Horizons

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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 multilevel marketing industry. Its fundamental principlesfreedom, family, hope and rewardhold as true today as they did in the very beginning. Product Mix 1950s and 1960s 1959:L.O.C Liquid Organic Cleaner becomes first Amway product 1961:SA8 Laundry Detergent introduced AMWAY Shoe Spray and Car Care introduced 1963:DISH DROPS Liquid Detergent introduced AMWAY QUEEN Cookware introduced

1965:First of the SATINIQUE product range introduced

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 1968:SWEET SHOT Breath Freshener introduced ARTISTRY cosmetic products introduced Alticor and Amway Sales Growth: 1960 to 2008: Diagram shown the Sales growth of Alticor and Amway

Amway global sales were reported at estimated retail until 2000 when the holding company of Alticor was formed. This means theyre valued assuming that they were all sold at the full retail price, not at the price they were sold to distributors/IBOs. Alticor reports actual revenue sales at the base IBO price Ive converted the figures so they can be properly compared. Its important to be aware of this as many critics of the business (including some former Diamonds who you would think know about this) have in the past conveniently ignored the change in

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reporting standards and tried to claim Amways sales peaked in 1998. Note however that Alticor sales includes revenues from other sources such Access Business Group and Amway Grand Plaza. In 2007 this was reported as around $100 million, so by far the majority of the sales are through the Amway business opportunity. Amway Sales Data: Table shown the Sales of Amway Data Year Estimated Retail Sales Year Estimated Retail Sales Year Estimated Retail Sales Year Estimated Retail Sales

1960 $0.5 million 1961 ? 1962 ? 1963 $21 million 1964 $25 million 1965 $38 million 1966 $40 million 1967 $50 million 1968 $65 million 1969 $85 million

1970 $120 million 1971 $165 million 1972 $180 million 1973 $210 million 1974 $230 million 1975 $250 million 1976 $300 million 1977 $375 million 1978 $500 million 1979 $800 million

1980 $1.1 billion 1981 $1.4 billion 1982 $1.5 billion 1983 $1.13 billion 1984 $1.2 billion 1985 $1.2 billion 1986 $1.3 billion 1987 $1.5 billion 1988 $1.8 billion 1989 $1.9 billion

1990 $2.2 billion 1991 $3.0 billion 1992 $3.9 billion 1993 $4.5 billion 1994 $5.3 billion 1995 $6.3 billion 1996 $6.8 billion 1997 $7.0 billion 1998 $5.7 billion 1999 $5.0 billion

Amway has grown fairly quickly since its inception. Its historic sales data at estimated retail prices is provided below from 1959 to 2000 (in 2000 Amway switch over to Alticor. At its peak in 1997 Amway estimated retail sales worldwide at 7

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Billion USD. With the founding of Alticor, the report methodology was changed and the actual sales to distributors instead of estimated retail sales (ERS) have been reported since 2001. Taking the sales data published in 2001 report into account, the ERS values are about 32% higher than sales to distributors. The actual sales to distributors are marked with Until 1999 sales were reported at Estimated Retail. This is approximately 32% higher than actual sales revenues from sales made to Amway distributors. Amway posts a billion dollars sales in a month Grand Rapids press has reported that last month Amway had its first ever billion dollar month. Wow. To put that in perspective, according to Direct Selling News theres only 11 other direct selling companies in the world that do over a billion dollars in a year. In 2010 Amway did US$9.2billion for the year, trailing only Avon, who reported sales of $10.9 billion, which includes from their retail outlets. Is 2011 going to be the year Amway takes the crown as the worlds biggest direct sales company? Its going to be tough, with Avon also reporting first quarter sales up 7% over the same period last year. The report also noted Amway North American sales continue to grow, which is great news for Amways oldest market, which has had some struggles in the past few years.

2.3 PRESENT STATUS OF THE AMWAY

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Amway is one of the largest direct selling company. From 1st September 2009 to 31st August 2010 the total turnover of that fiscal year was 1728 crore and total turnover of current fiscal year till July 2011 is 1800 crore. The current growth rate is 17.5% in this business. Security status of Amway is AAAAA+. The rank of Amway is 18th in Fortune 500 companies because from one to seventeen companies are dealing some in petroleum and some in liquor but amway is not dealing in both the brands therefore rank of Amway is 18th in that record book. Amway is the only one company which has no debt on the company.

2.4 FUNCTIONAL DEPARTMENT OF THE AMWAY Following are the main departments of Amway: 1. Finance and accounts. 2. Marketing and Sales. 3. Human resource and administration.

2.5 ORGANIZATION STRUCTURE AND ORGANIZATION CHART

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Organizational structure of Amway:-

Organization structure of Administration System in AMWAY

CEO
PRESIDENT

AVALIBILITY & SALES PRODUCTION TRANSPORTATION TEAM TEAM {Having a staff of approx 20 to 50 people in each organization.}

EVENT MANAGMENT

Organization structure of Sales organization structure in AMWAY

SALES TEAM IBOS

IBO IBO IBO 2.6 PRODUCT AND SERVICE OF THE ORGANIZATION/COMPETITORS

Amway: A World of Product

IBO

IBO

IBO

Amway offers a range of exclusive, competitive brands that meet proven customer needs around the world. From nutritional supplements to water treatment, cosmetics

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to cleaning products, these brands are the solid foundation for a successful, independent retail business. Amway and Direct Selling Amway products are sold directly to consumers by Independent Business Owners (IBOs) or sales representatives through one-on-one, in-person selling or via the internet NUTRILITE Products

NUTRILITE is the world's leading brand of vitamin, mineral and dietary supplements (based on 2006 sales). Nutrilite is the only global vitamin and mineral brand to grow, harvest and process plants on their own certified organic farms. Nutrilite has made supplement products using natural plants and plant concentrates since 1934.The same high quality products produced by Nutrilite brand name. In India it stands 9th time best quality health product and no. onw sales. The survey is conducted by Reader digest Maginze by the help of Eurometer.

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Nutrilite Health Institute The Nutrilite Health Institute (NHI) is a worldwide collaboration of scientists dedicated to helping people achieve optimal health - through research, education, and practical, personalized solutions. Center for Optimal Health

The Center for Optimal Health is a world class teaching and training facility within the Nutrilite Health Institute. Science, nutrition, fitness, research and people are brought together for a one-of-a-kind experience focused on optimal health and the NUTRILITE brand. There are products for kids also, at the early age of a person (childhood) needs some proteins and vitamins for a proper growth. ARTISTRY Products

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Since its launch in 1968, the ARTISTRY brand has become a global leader in prestige beauty. ARTISTRY sets standards in skin science and research and is committed to the synergy of health and beauty. ARTISTRY and Direct Selling ARTISTRY is the only direct-sell brand classified in the prestige category, with over US $1 billion in annual sales. ARTISTRY Science ARTISTRY has researched, acquired and developed the most advanced technology and tools to evaluate skin and the performance of the brand products. ARTISTRY skin science and research is conducted in 89 Research and Development facilities around the world, representing over 4,500 collective years of research and development experience. ARTISTRY Brand Worldwide With more than 250 unique products sold in over 50 markets around the world, the ARTISTRY brand has attained an international following of loyal users. Superb quality and devotion to excellence have earned the ARTISTRY brand a reputation as one of the most admired companies in the skin care and cosmetics industry.

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SATINIQUE Products

The SATINIQUE hair care system is the first and only salon quality system with nature's exclusive renewing technology, the Ceramide Infusion System, giving men and women healthy, attractive-looking hair in just one use. SATINIQUE Hair Care System SATINIQUE products solve hair problems by working on both the health of the scalp and hair, making hair smoother, shinier and more resilient. Salon quality SATINIQUE products repair, strengthen and protect in one use. SATINIQUE Expert Voice, John Gillespie SATINIQUE products are endorsed by internationally renowned hair stylist, John Gillespie. The Scottish salon owner has been in business for nearly 20 years and is well-known on the world stage for his hair styling presentations. His refreshing approach and philosophy make him the ideal spokesperson for the SATINQUE brand. Home Care Products

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Everyone loves clean. Clean says you are in control of your life and your surroundings. 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 with the SA8, LOC and Dish Drops brands. (II) Artistry products ARTISTRY Research and Development

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The ARTISTRY research laboratories in Ada, Michigan, USA, have made important discoveries in skin care and beauty science. The product development work there has led to more than 180 patents granted or pending in the world marketplace. ARTISTRY science is truly global in its emphasis on cultural and regional skin care and beauty needs. The research and development work enables the ARTISTRY brand to develop specific skin care products for different regions and global markets, and the ARTISTRY brand is acknowledged as a leader in Asian skin research. ARTISTRY Products The ARTISTRY brand employs some of the most advanced technology in the skin care and colour world. ARTISTRY TIME DEFIANCE Products TIME DEFIANCE products stop aging where it starts. This premier skin care offering provides leading edge technology to repair and prevent the signs of premature aging. Cremes/Lotions TIME DEFIANCE Daytime Protection Creme, TIME DEFIANCE Nighttime Renewal Creme, TIME DEFIANCE Nighttime Renewal Lotion Speciality Repair Products TIME DEFIANCE Vitamin C + Wild Yam, TIME DEFIANCE Intensive Repair Serum TIME DEFIANCE Defiance Vitamin C + Wild Yam TIME DEFIANCE Defiance Vitamin C + Wild Yam this intensive wrinkle treatment is clinically proven to reduce the appearance of wrinkles by 58% around the eyes. As the first stable vitamin C and wild yam treatment on the market, it contains 5% Nutrilite-approved L-ascorbic vitamin C and 15% exclusive wild yam. The two-part system ensures ultimate freshness of ingredients for optimum results. TIME DEFIANCE Intensive Repair Serum cosmetics industry bringing you products that deliver clinicallyproven results and meet genuine customer needs in markets around the

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TIME DEFIANCE Intensive Repair Serum this highly concentrated treatment program is clinically proven to reverse the visible signs of aging in just 14 nights. Its exclusive patent-pending formula boosts skin's natural ability to repair past damage with the breakthrough Deep Night Action Complex, with four key ingredients that both repair and protect the skin. The results are revolutionary:261% improvement in skin clarity, 99% improvement in the appearance of fine lines, and 83% improvement in smoothness of the skin. Recommended for use four times a year to revitalize the skin due to seasonal stresses. Artistry Color Cosmetic Products The ARTISTRY brand offers a complete line of background and color cosmetic products to meet the diverse needs of women around the world. The range includes a comprehensive collection of chic, wearable shaded products for face, brows, eyes, cheeks, lips and nails. Inspired by contemporary color trends, these products feature the latest technologies in texture, finish and color. Products in the ARTISTRY Color Cosmetics range represent a quality and value equal to any upper-tier department store brand.

RY Pure White Products

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Pure White the ARTISTRY holistic approach to daily skin clarification, lightening and brightening is the result of some of the most advanced research and technology in the field of skin health. The range is specially formulated to help improve skin darkness, gently lighten and clarify the skin and help protect it from further discoloration. The products create a more even color and tone, and restore the skin to its natural radiant health. Products include: Pure White Foaming Cleanser A gentle cleansing powder that foams when mixed with water. Ideal for cleansing impurities and refreshing skin. Contains vitamin C in a unique powdered delivery system, known for skin lightening effects, with licorice extract and allantoin to soothe and calm the skin. Pure White Toner contains willowbark extract, a mild exfoliant; bioecolia, known to promote the beneficial flora of the skin, and the patented ARTISTRY whitening complex. Pure White Essence gives enhanced clarity and brightness to the complexion. Contains the patented whitening/brightening complex to help maintain a lighter, clearer, more radiant skin tone, and bitter orange peel, a patented antioxidant known to counter free radicals.

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Pure White Moisturizer restores and preserves the softness and clarity of the skin. Specially formulated to protect the skin from exposure to the sun, provide antioxidant protection from the environment and increase moisture content. Pure White Spot Treatment this intensive but gentle formula is applied directly to existing spots and freckles to quickly diminish their appearance and lighten discolourations. Pure White Mask Recommended for use twice a week to exfoliate and clarify skin. The ARTISTRY Range of Cosmetics Over the last 31 years Amway has invested heavily in the development of the Artistry range of Skin Care and Cosmetics. The range comprises approximately 3,257 individual lines which are sold in over 30 countries throughout the world. Based upon a recent Euromonitor study of global sales data: Artistry is among the world's ten largest brands of facial skin and colour cosmetics Artistry is the largest direct sales brand of facial skin care and colour cosmetics in the world. Amways competitors: 1) Direct competitors: AVON MARY KAY SUNRIDER 2) Indirect competitors: Local INDIAN companies.

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Changing Political & Economic Atmosphere Products used as samples to persuade relatives and friends to join Amway Focus shifted from selling products to recruiting.

2.7 MARKET PROFILE OF THE AMWAY JAIPUR: Direct selling FMCG company, Amway India, plans to add new products to further strengthen its cosmetics and nutrition & wellness portfolios to maintain dominance in the direct selling FMCG market. The company, with an annual turnover of around Rs 1800 crore, enjoys over 40% market share in direct selling. Companies like Oriflame, Avon and Tupperware are the other prominent players in this business space. Amway vice president (north) Bhuvan Kapur told ET that the company would add 8 more products in these product categories in this fiscal year. Our core competency lies in beauty in health segment which contribute 50% in the total turnover. We will be launching four new products each in cosmetics and nutrition and wellness segments in 2011-12. With this reinforcement, we expect these two segments to contribute 65-70% in the total targeted revenue of Rs 2500 crore in this fiscal, he said. The company currently offers 127 products with 29 products in nutrition and wellness segment and 41 products in cosmetics segment. The company is also planning to set up a new manufacturing facility in the country. It already has seven third-party contract manufacturers in the country. Our existing facilities will not be able to cater to the growing demand and our projected targets for coming years. This time we may go for a company owned facility as we already have spent 13 years in the country with a robust top line growth of over 30%. However, final decision will be taken after the feasibility study which is under process, he said. India is the seventh biggest market for Amway with China leading the table. It contributes $ 0.4 billion of the global revenue of $ 9.2 billion.

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We expect to enter the top 5 bracket in next two years. We are growing in India at 35% per annum as against the market growth rate of 22%, Kapur said. The company has invested more than Rs 151 crore in India with 135 offices and 55 city warehouses across the country. With an aim to meet the market demand, Amway India Enterprises Pvt Ltd, a major direct selling FMCG Company in the country, is planning to triple its production capacity by the end of the current calendar year 2009, at an investment of Rs. 55 crore. The company has said it will expand the production capacity at its contract manufacturing facility in Baddi (Himachal Pradesh). The company has just inked an agreement with its Baddibased leading vendor Sarvotham Care Ltd for the purpose. Amway India is a wholly owned Indian subsidiary of the US $ 8.2 billion Amway Corporation, Michigan, USA, one of the largest Direct Selling Companies in the world. The company manufactures its production through seven third-party contract Manufacturers in the country, with Baddibased Sarvotham Care being Amway Indias largest vendor (contract manufacturer). Around 85percentAmway products sold in India are being manufactured by its vendor Sarvotham Care. With an aim to meet the market demand, we are planning to triple the production capacities by December 2009. We are adding four new manufacturing lines at our contract manufacturing facility in Baddi in Himachal Pradesh. The work is expected to start around midMay and to be completed by the end of the current calendar year 2009. An investment for expansion is estimated to cost at Rs. 55 crore, said William S Pinckney, Managing Director & CEO, Amway India Enterprises Pvt Ltd, at a press conference during the Baddi plant visit for select media reporters. Stating that the direct selling (DS) industry has good potential in the country, he said, Direct selling industry in the country is estimated at Rs. 3,500 crore. Amway Indias has market share of 30 per cent in the country. Amway India grew by 40 per cent in recessionhit 2008 touching Rs. 1,128 crores (from Rs. 800 crore in 2007). We are expecting to achieve 25 per cent growth for the next twothree years and the

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sales turn over target of Rs. 2,500 crore by 2012. Baddi facility is spread over 1.60 sq ft area and presently has five manufacturing lines. Amway India currently offers 110 products in five categories of Personal Care, Home Care, Nutrition & Wellness, Cosmetics and Gift catalogue. country, The company over has 130 offices and 4,000 55 city warehouses across the covering cities and towns

through its home delivery network.

CHAPTER 3: DISCUSSION ON TRAINING

3.1 KEY LEARNING 1. For every organization to run we need people and if it is salary based then it will increase expenditure but in network business self motivation plays vital role. Therefore if the people are self motivated then they can easily achieve their Dreams and Goal. 2. No one can forcefully or dominantly make the other person to work. Amway business only considers self motivation and it is known that only through self motivation people works. 3. If it is quality product then its cost will be obviously high, so for the starter selling cost can be the basic hurdle but in long term people will realize that good quality cannot cheaper or cheaper goods cannot be of good quality. Therefore the moral is to for the best quality. 4. Learn to create a team and had known that self motivation result in greater work. Moral is to create good relationship and helping nature to your subordinate. 5. Amway neither takes of credit not gives goods in credit and this theory is what taught by IBO. Moral is to if we do business in cash terms the risk will be lesser

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6. Always be positive. 7. Do not do a business of those product that consumer may purchase in once or twice in a life. Why the Amway business is in growing nature because the products are qualitative and FMCG (fast moving consumer goods). By FMCG the repeteted users and orders would be given to the IBOs.(Independent Busibess Owner).

3.2 SWOT ANALYSIS OF THE AMWAY SWOT analysis of Amway: STRENGTH: Based on direct selling operations. Hence it can be A home based business. Every can participate in business. Its 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

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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 0profit. 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.

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Competitors like AVON, MARY KAY; SUNRIDER creates lot of competition in market which leads to strong marketing competition in market.

CONCLUSION: Amway is which is one of the largest direct selling company in the world. The main objectives of Amway are to Provide profit to there IBOs (known as distributors also) by eliminating the middlemen and provide the products to the distributers in market price with discounted rates. The middle mens profit is distributed to IBOs in the form of commissions. The products of Amway are world class product quality. They are made up of natural a thing thats why they are good for health and environment. Amway covers a wide range of products from Beauty care. Health care, Home care and Personal care, and daily use products etc. the products are costly as

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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. At Amway, they provide knowledge of the dynamic networking market that is 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.

Bibliography:
1) www.worthwilemag.com
2) http://www.amway.in/

3) http://www.amway.in/Articles/Article. 4) http://en.wikipedia.org/wiki/Amway 5) http://www.authorstream.com/

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6) http://www.nutrilite.com/ 7) http://en.wikipedia.org/wiki/Organisation 8) http://en.wikipedia.org/wiki/Business 9) http://www.businessballs.com 10) http://en.wikipedia.org/wiki/Administration 11) http://www.business-standard.com 12) http://www.scribd.com 13) http://www.mouthshut.com 14) http://www.mouthshut.com
15)http://wiki.answers.com 16)http://dictionary.reference.com

17) http://www.thetruthaboutamway.com/ 18) http://articles.bplans.com.

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