Amway Design Advertising Marketing Essay

Amway Design Advertising Marketing EssayIntroductionAmway was founded in 1959 by twain entrepreneurs Jay Van AndelandRichard DeVos. Amway is a require merchandising connection based in Ada, Michigan, United States. It is the world largest direct change high society and manufacturer that uses net tap marketing personal line of credit sit down. The company is selling a snip of products, mainly in fast moving consumer goods (FMCG) and also a range of other products. Its products lines include home care products, personal care products, jewellery, electronics, Nutrilite dietary supplements, irrigate purifiers, air purifiers, insurance and cosmetics.Figure 1 Logo of Amway Source Amway.comFigure 2 Jay Van Andel Richard DeVos seed Amway.comFigure 3 Multi level marketing source stock imageAlthough Amway adapts its clientele model slightly various from market to market however the main marketing strategy still involve the crew ofdirect sellingwith amulti-level marketingstrategy. Direct selling defined by Belch as the direct personal presentation, demonstration, and sale of products and services to consumers, mainly in their homes or at their jobs (Belch 2006). Besides multi-level marketing also called in different ways by different scholars network marketing (Pratt, Rosa, Jos 2003) (Cahn, 2006), direct selling (Merilee, 1999), referral marketing (Higgs Smith, 2007). The distributors under the company as an agent allow get rewards for selling products and for sponsoring others who do the aforementi nonpareild(prenominal). The bigger of the agent care grows allow have the same affect on the rewards.According to the official website of Amway, it conducts telephone circuit through a number of affiliated companies in more than ninety countries and territories around the world (Amway UK 2009).It is bedded byForbes online source business, financial currents and analysis as one of the largest private companies in the United States in the year of 2008 (Forbe s 2008)and byDeloitte Touche Tohmatsu as one of the largest retailers in the world.The vision of Amway Company is we work each and every day to help people live better lives. We achieve our vision by assist people everywhere discover their potential and achieve their goals by offering better products and opportunities for the future, and by sharing generously with the global community (Amway 2009). Amway business model is based on the Amway Business Owner Compensation Plan provoke be descript as a low-risk, low-cost business chance that is open to everyone (Amway 2009). pursuance paragraphs will mensurate the constitute strategic factors that have generated victor for this business and also creation a successful entrepreneurial venture. The concept of entrepreneurship can be divided in to five divisions begin with entrepreneur traits, creativity, innovation, business planning andgrowth management (Davison, 2006). These five concepts are the characteristics of an entrepreneur and the business. Key strategic success factors is the combination from all division of the business, different areas of Amway will be discussed on how it is a successful business.Key strategy success factorsThere are differences to let out and displayed by entrepreneurs. According to Cunningham and Lischeron (1991) characteristics of an entrepreneur can be divided in to six schools of thought. The founders of Amway Jay Van AndelandRichard DeVos portray as the psychological characteristics school. The Psychological Characteristics School of entrepreneurship views entrepreneurs as individuals with erratic values, beliefs, attitudes and needs which drive them and differentiate them from non-entrepreneurs (Cunningham and Lischeron, 1991). Two founders of Amway started the business by involve themselves in a similar multilevel marketing organisation Nutrilite Products corp as the distributors. Further on with the blind drunk human network that they have and formedThe American Way As sociation business to able them to expend their business and also look for additional products to market. When the business growths stronger there take over different companies and also have their own manufacturers. The business keeps on growing with the multilevel marketing system in different countries. They believe in the values that the business can bring to them and have the attitudes that driven them to become successful entrepreneurs.The world power of creativity and innovation will become an advantages for entrepreneur in differentiate their business with others. Schumpeter (1934) mention that entrepreneurship is the realisation of new factor combinations also can be understood as innovation in business. He point out that it is about new products, new services, new raw material sources, new slaying methods, new markets, new forms of organization. Amway committed themselves into innovation and research. The company has produced more than 800 patents granted and more than 600 patents pending. Throughout the year Amway company has been recognized in their business performance that includes manufacturing excellence, environmental concern, and commitment to safety and health (Amway global, 2010).Figure 4 Basic design school model, Mintzberg 2000Figure 5 Products rangeFigure 6 Amways fork up ChainBusiness plan is the first stage for a business basic design school model (Mintzberg 2000) is a great model to evaluate a business plan. In the initial stage of the model by looking into the external appraisal this is to examine the external elements turns the entrepreneurs strategy option. There is a huge demand on the FMCG, commodities and also dietary supplements market that with the customer multitudes from all levels and ages. Although there are lot of big players in this sector, but with the unique multilevel marketing approach it became a strong competitive company.Threats and opportunities in the environmentis one of the important element is the Bas ic design school model. The threats and opportunities of Amway will be explained as an entrepreneurial point of view. Begin by presenting the first opportunity of the business from a lager scope China and India are the two countries that with a large scale of market serving. From a larger scale the opportunity that the company gains as China remains the core opportunity with the huge market. In the year 1998 Amway was one of the direct selling company that banned by government of China to operate in the country. However in celestial latitude 2006 Amway was one of the first companies to receive a license to resume direct sales by chinas ministry of commerce. The rules and regulation that keep on changing by different countries will bring both threats and opportunities quantify by time. Second from a smaller scale based on recent economic recession has presented Amway with an opportunity to increase their income as its Independent Business Operators (IBOs) through their Amway sales at the same time it also offer up an opportunity for individual to recruit new IBOs to join the business to be the same in this economic situation.Besides opportunities there are also threats to be considered as an entrepreneur. In a tender economic with soaring unemployment there will be an increase in the recruitment in the new IBOs however this is still subject to weak retail sales. Somehow the IBOs may turn away from Amway when they are unable to generate sufficient revenue. The big players in the FMCG market such as PG and LOreal consolidated share by acquisition over the review period, and the competitive environment for Amway became more aggressive. Besides With recent consolidation among standard distributed VDS brands. Amway is facing increasing competition from non-direct sellers (Euromonitor International, 2009).The key success factors in the marketing of Amway that act as the most important method to generate the rapid grow of the company. In most of the countries wit h the Amway business, the company will provide support for it IBOs. Because of the nature of MLM, the number of IBOs of Amway will be multiplied in a short period of time. Through the support from the company, it will provide training and educating system about Amway business. The purpose is to persuade them to follow the philosophy regards to the method of performing in the business. Besides, there are also materials to support the business for example information in CD, books and events to promote the business and also as a motivation factor.The first point is about Amway have a group of loyalty consumer that are the group of distributors. IBOs of the company with the concept of building up their business and intend to buy and use the products themselves. The group of IBOs will be influenced to a great extent by the community as well as they are constantly encouraged to try the product in advance, before selling it with a better understanding and knowledge of the new products (Wot ruba, 1990).Second point a strong word of mouth created around the Amway community and this will influence friends and relative of the consumer, the IBOs expected to have the similar influences of sharing tastes and interests (Chen et al 1998). The recommendations from the opinion leader would be trusted and acceptable. Following with the judgments of the product, the quality of the product has been acknowledges to be with high standard. Specific support and training from the supplier and products manual builds positive perception and confident of the products. The price of the products is consider expensive, however the high prices are justified on the basis of quality and the usage which involves lower cost compare with products from other company with the similar function ability.Aggressive on New products launch and promotions from time to time by the company has generated increase in sales for the company. The promotion will give the IBOs to push the products out to the market to gain the benefits from it. A new launch of products will provide the IBOs with new opportunity to introduce it to their customers.One of the big different between the conventional business like PG compare with Amway is, Amway did non need to spend huge among of money to invest in the distribution channels and the mass publicizing. These give the company an advantage in the spread of advertising and marketing cost over the volume, this result in a lower unit cost and more competitive prices.The strength of the company came from a strong presence in the emerging markets, notably China, Russia and India, Amway is well positioned to benefit from the strong growth anticipated in these markets over the 2008- 2013 period. (Euromonitor International, 2009)On the other hand, the weakness of the company is because direct sales has a poor image in Western markets. Amway has been accused in the past of failing to support its IBOs. While the company has defended itself against these claims, ruin has been done to its reputation.Figure 7 Logo of OneBYOne campaignFigure 8 Logo of unicefAmway practices a strong social responsibility and it recognise as being a good corporate citizen. Amway has a global campaign to help children named OneBYOne. The campaign illustrates the idea of making a difference in childrens lives one smell at a time and it is part of an umbrella cause to improve the wellbeing of children worldwide (The Time 100, 2010).In the European part Amway Europe has work together with the United Nations Childrens Fund (UNICEF), to support the global champion for childrens right. It recognises the importance of building good working relationships with UNICEFs National Committees in each market in order to rollout fundraising programmes to Amways IBOs and their customers. (The Time 100, 2010)Figure 9 Economies of scale spreading costs in advertisingFigure 10 Growth Stages Churchill and Lewis (1992)Entrepreneurs business growth can be explained into five stag es of existence, survival, success, takeoff, and maturity (Churchill and Lewis, 1992). As a whole the Amway business is in a maturity stage, with the long history of the cooperation and also business worldwide. However because of the unique business approach, business will repeat the process of business growth in newly opened market. The consistency performance of the Amway business will lead the company to maintain in the business stability in the maturity stage.ConclusionAfter discussion, explanation and evaluation about the direct selling company from different perspectives in entrepreneurial, business, marketing and social responsibility. All these elements have sum up and became the key strategic factors that have generated success for the Amway Company. Entrepreneurship is a process that keeps on developing,x different challenges will come a head in the future and the entrepreneur will need to be prepared to count the challenges.