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A Study on Effectiveness of Direct Selling Companies

von Jahana Sherin O (Autor) Akhil Ch (Autor)

Projektarbeit 2017 60 Seiten

BWL - Marketing, Unternehmenskommunikation, CRM, Marktforschung, Social Media

Leseprobe

LIST OF CONTENTS

Chapter 1 Introduction and design of the study

Chapter 2 Review of literature and theoretical framework of the study

Chapter 3 Industry and company profile

Chapter 4 Analysis and interpretation

Chapter 5 Summary, findings, suggestions and conclusion.

Bibliography

Appendix

CHAPTER 1 INTRODUCTION AND DESIGN OF THE STUDY

1.1 INTRODUCTION

Multi level marketing is a business form that originated in the United States during 1950's. From there onwards, network marketing companies have gained exceeding ground and have become widely spread and recognized, especially during the past ten years. Companies such as Tahitian Noni International, Herbal life, Ori flame, RCM, Mary Kay, Tupperware and Forever Living Products are all examples of well known network marketing companies. Today 58 million people are involved in network marketing throughout the world and in 2006 the worldwide sales accounted for an estimated USD 109 billion. Multi level marketing companies in many aspects are similar to any other type of company, they have customers, employees and sell goods or services and market their products. What makes network marketing companies unique is that their main asset is their distributors 'Independent Business Owners' (IBOs). The IBOs use the product, share it to their network of friends , relatives etc. and continuously recruit new persons as IBO to join the company and without this recruitment there can be no network, without network it turns in undercut of the entire business form. Network marketing is a new and vibrant business culture developing today. Nowadays the economics of customer relationships are changing in fundamental ways, and companies are facing the need to implement new solutions and strategies that address these changes. The concepts of mass production and mass marketing, first created during the Industrial Revolution, are being supplanted by new ideas in which customer relationships are the central business issue.

1.2 STATEMENT OF THE PROBLEM

Now a day most of the problems in any business organization are arising due to human resources. The current scenario in the global business world has a lot of problems which are mainly associated with marketing management and ultimately the sales force i.e. marketing people and distribution-network (wholesaler, dealers, distributors and retailers). In case of Amway the sales people are IBOs i.e. Independent Business Owners. The satisfied marketing team will certainly lead organizations, societies, countries and finally the world to the vertex of the pyramid of success. Most of the research work on direct selling or multi level marketing area focuses on the customer’s satisfaction, customer’s feedback, customer relationship management and after sale services. No study was undertaken to highlight the development of distributors in the area of direct selling. In order to fill up this gap this topic has been selected for the study. Apart from having the practical experience of assigned project, the findings of this report can be also beneficial for the organization. This report is an attempt to go through the details about the satisfaction level of IBOs, their personal development and market position of organization and to provide strategy to the organization for gaining the market share. As per my study and knowledge a very less study, research is conducted in this area and hence there is vast scope for the study.

1.3 OBJECTIVES OF THE STUDY

- To identify the factors influencing to join as an IBO in Amway.
- To evaluate the satisfaction level of Independent Business Owners (IBO) with Amway.
- To analyze the role of Amway India enterprises in development of Independent Business Owners (IBOs)

1.4 SIGNIFICANCE OF THE STUDY

The need of the project arouse to study the determinants of development of IBOs and their status, economical and social position of Independent Business Owners (IBOs) i.e. distributors of the organization and suggest some method or ways to Increase the sales and whether IBOs is satisfied with the product and services i.e., quality, price, taste, home delivery etc. for Amway India Enterprises. The beauty of this multilevel marketing method is one can do his present job, business, assignments and give some spare time which he have on daily basis for this business. Therefore, people can earn some extra income besides their present earning from other sources. Amway suggest that this is a family business and can be established with the help of spouse, children and friends. Consume the product and recommend the product is success mantra of this business. Once people use the product, they come to know the quality of the product and they share this thought to the people to join as IBO in chain. Bonus is generated through the downlink member proliferation while a commission is provided on sale of goods/ products. With the economic reforms and liberalization, marketing will promote India’s economic development at an accelerated pace. Most well known multinational companies are already here to generate a strong competition. So direct selling has a great impact in the global development of the country like India

1.5 METHODOLOGY OF THE STUDY

Research methodology is a way to systematically solve research problem. The research methodology adopted for carried out the study is mainly designed as an empirical work based on both primary and secondary data.

1.5.1 SECONDARY DATA

To get insight into the research area and to develop the theoretical framework and hypothesis, the information was collected from various books, journals, research projects, websites etc. The sources are used to avail secondary data in the study are:

- Books
- Journals
- Websites

1.5.2 PRIMARY DATA

The primary data are those which are collected for first time hence which are fresh and thus, happen to be original in nature. Primary data has been collected by personally visiting to the 60 IBOs in Malappuram area. The work of data collection for the purpose of this research was done with the help of questionnaire by conducting personal face to face interviews of the respondents. The necessary care has been taken to keep all the information confidential to the extent it is required.

1.5.3 SAMPLE DESIGN WITH AREA OF STUDY

Sampling design is a definite plan for obtaining a sample from a given population. Thus the samples were designed to collect from IBOs of Malappuram area.

1.5.4 SAMPLING METHOD

Non random sampling is used to collect data from 60 respondents according to the convenience.

1.5.5 TOOLS FOR DATA COLLECTION & PRESENTATION

- Tables
- Diagrams
- Charts

1.5.6 TOOLS USED FOR DATA ANALYSIS

- Percentage analysis
- Weighted average method
- Henry Garrett Ranking method
- Correlation analysis
- Chi-square test

1.5.7 PERIOD OF THE STUDY

The primary data for this study has been collected through survey during the period from 22nd December to 11th January 2017.

1.6 LIMITATIONS OF THE STUDY

1. The analysis is purely based on the primary data collected and secondary data available, these data will have its own limitations.
2. Due to time constraints, the study is limited to the IBOs of Malappuram area only; therefore the findings of the study cannot be extended to other areas
3. Respondents may not have expressed their strong feelings, Therefore collection of data was a tedious process.
4. Only 60 respondents were included in the study, so it may affect the accuracy of result
5. The study was announced lack of adequate literature .

CHAPTER 2

PART 1 - REVIEW OF LITERATURE

PART 2 - THEORETICAL FRAMEWORK OF THE STUDY

PART 1 REVIEW OF LITERATURE

Dr. A Hamil and ED Priyadharshini (2016)1, made a study on “Buyers preference on Amway products in Thirunelveli”. The main objective of the study was to find out the factors influencing customer preference towards Amway products and to measure the level of opinion toward Amway. For this purpose data were collected from 70 respondents by using structured questionnaire. The study concluded that the consumer preference towards the Amway products. They are mainly motivated by the quality of the products.

Muhammed Juman.BK and Dr. J Christopher (2015)2, conducted a study on “Direct selling business (Amway India ltd) in Kerala: A case study of Calicut district of Kerala”. The main objective of the study was to study the present and upcoming marketing trends. For this purpose 50 direct sellers are choose for interview using stratified sampling. The study concluded that the direct sales have become so popular in our country because it offers everyone the chance of becoming a successful self employed with the freedom to win.

Rajendra W. Bhadale and Sachin A. Bargave (2012)3, Conducted a study on “An analytical study of independent business owner’s involvement in multilevel marketing business: A case of Amway India in Pune”. The main objective of the study was to analyze the perceptions of IBOs towards multi level marketing and to access growth of IBOs. The primary data for the study were collected from 542 independent business owners who are actively or inactively doing business and are registered with Amway India. The study concluded that the multi level marketing business is commission and incentive earning oriented which can be expanded in the group by exploiting the social networks of the people.

Mr. Rajendra Wamanrao Bhadale (2012)4, made a study on “Comparative study of development of independent business owners (IBOs) with special reference to role of Amway India enterprises in Pune and Pimpri-chinchwad area”. The objectives of the study was to study the determinants of development of Independent Business Owners with respect to Amway India Enterprises and to examine comparative opinion of IBOs from Pune and Pimpri- Chinchwad area on different parameters of development of IBOs. Abdul assis koroth (2011)5, explains on his research paper “Relevance of multi level marketing in Kerala” about how the concept of multilevel marketing system is perceived by distributors and assess the influence of demographic variables such as gender, age, marital status, monthly income, education level, and employment status of respondents on their perception level towards multilevel marketing system. He also examined examine the involvement of distributors in MLM practices, and how the involvement is adding value to their business. The study concluded that there is a positive relation between met expectations and job satisfaction in MLM business. The study shows that the expectations of many MLM distributors still remain as a dream and hence they were not satisfied with their present distributorship

P. Sreekumar (2007)6, made A Study of “Multi-Level Marketing (MLM), as a Potential Tool for Socio-Economic Development‟ in International Marketing Conference on Marketing and Society. A depth study of the MLM concept is conducted using literature survey and interview with company personnel. Data on the business plan with respect to incentives or total earnings is analyzed in comparison with a traditional entrepreneurship business. He concluded that a MLM member who is actively participated and involved in the business will get opportunities to attend weekly meetings, share his success stories with other members, and get reward for performance.

Robert A Peterson and Gerald Albaum (2007)7, focused on ethicality of internal consumption in MLM in his study “On the Ethicality of Internal Consumption in Multilevel Marketing‟. Internal consumption means when IBOs in MLM organization purchase and consume the products and services of their organization. The research paper emphases on internal consumption are common, everywhere in any organization and such criticism of this aspect of multilevel marketing as being unethical and fraudulent are misplaced. The study concludes that there does not seem to be anything inherently unethical about IBOs purchasing products and services from MLM organization or any other organization at discounted rate.

John R. Sparks and Joseph A.Schenk (2006)8, made a study on T”he Socialization Communication, Organizational Citizenship Behaviors and Sales in a Multilevel Marketing organization”.Sparks and Schenk describe MLMs as network of member distributors whose earning come both from selling products and recruiting new members. According to Peterson and Wotruba MLMs fall under the more general category of direct selling organization means any face to face selling activity away from a fixed retail location. Data was collected from medium sized MLM corporate producer. Using its national membership database, the MLM corporate producer randomly selected respondents for this study which includes sponsoring and recruiting members. Corporate producers provided with 2,221 members‟ name, consisting of 1,883 recruits and 338 sponsors. Sponsors received a questionnaire for each of their recruits and were asked to evaluate their recruits‟ organizational citizenship behavior

REFERENCES

1. Dr. A Hamil and ED Priyadharshini (2016), A study on buyers preference on Amway products in Thirunelveli, International journal of research Granthaalayah, 4 (6), ISSN 2394-3629

2. Muhammed Juman.BK and Dr. J Christopher (2015), A study on direct selling business (Amway India ltd) in Kerala: A case study of Calicut district of Kerala, International Journal of Engineering and Technology (IRJET), 2(08), ISSN 2395-0072

3. Rajendra W. Bhadale and Sachin A. Borgave (2012), An analytical study of Independent Business Owner’s involvement in Multi Level Marketing business: A case study of Amway India in Pune, ETHOS-A journal of research articles in management science and allied areas, 5(2).

4. Mr. Rajendra Wamanrao Bhadale (2012), Comparative study of development of independent business owners (IBOs) with special reference to role of Amway India enterprises in Pune and Pimpri-chinchwad area, PhD thesis, Tilak Maharashtra vidyapeeth, Pune.

5. Abdul assis koroth (2011), Relevance of multi level marketing in Kerala, PhD thesis, University of Calicut.

6. P. Sreekumar (2007), A Study of Multi-Level Marketing (MLM), as a Potential Tool for Socio-Economic Development in International Marketing Conference on Marketing and Society, IIMK.

7. Robert A Peterson and Gerald Albaum (2007), Ethicality of Internal Consumption in Multilevel Marketing, Journal of Personal Selling and Sales Management, 26 (4), pp 317-323.

8. John R. Sparks and Joseph A.Schenk (2006), The Socialization Communication, Organizational Citizenship Behaviors and Sales in a Multilevel Marketing organization, The journal of Personal Selling and Sales Management, 14(2), pp.161-180.

PART 2 THEORETICAL FRAMEWORK OF THE STUDY

2.1 DIRECT SELLING

Definition

According to Philip Kotler, Direct Selling is the marketing of products and services directly to consumers in a person-to-person manner, generally in their homes or the homes of others or other places away from permanent retail locations.

Meaning

Now-a-days this form of selling is more popular in the market because marketer gets direct response from the consumer and there is no mediator in this form. So consumer gets product and services directly from manufacturer. Direct sales typically occur through explanation or demonstration by salespersons normally referred to as Direct Sellers . Before introduction of internet, the direct selling companies making their presentation to the customer with the help of sales people who give the direct demonstration of the product to customer and make presentation face to face.

2.2 ADVANTAGES OF DIRECT SELLING

1. Face to face interaction
2. Product testing, handling, realizing
3. Immediate feedback possible
4. Query, difficulty can be sort out on the spot
5. Reduction of intermediaries so cost minimization is possible
6. Improving communication and presentation skills
7. Meeting a lot of energetic, enthusiastic and ambitious people.
8. Developing a very positive mental attitude.
9. Overall personality development.

This is golden way to understand the product and services in a better way to realize the appearance, taste, smell and personal touch to the product. So the marketer as well as consumer both will benefit of this type of direct selling rather than traditional selling. And product will also delivered to the end consumer in time at reasonable rate.

2.3 DIRECT SELLING IN INDIA

As per Indian Direct Selling Association (IDSA), there are more than 200 direct selling firms operating in India and most of them are small and regional players. The firms account for over 60% of all goods sold through direct selling route in India. The direct selling firms are predominantly unorganized and the information on the approvals taken by such firms is not available. The IDSA is a self-regulating industry association that mandates its members to operate within the strict provisions of a code of ethics prescribed by the World Federation of Direct Selling Association. The code of ethics sets out fair and ethical principles that induce a congenial and healthy environment for the direct selling industry. Consumers are protected against illegal or unethical practices through the enforcement of the code. The present study was made to know the relevance of multilevel marketing in Kerala one of the sub sects of direct selling

Today, the direct selling market in India is estimated to be around INR72 billion. Our interactions with industry stakeholders suggest that the industry has also created a positive impact on several other social and economic parameters:

a. Additional Income Opportunities:

Direct selling provides additional income opportunities to a large number of people and promotes micro-entrepreneurship. Currently, over 5 million direct sellers are estimated to be engaged with the industry, and are projected to grow further with the growth of the industry. In addition to providing income opportunities, direct selling also imparts transferable skills in sales and management, which can be used outside the direct selling industry, as well.

b. Women Empowerment:

Direct selling offers self-employment opportunities to a large number of people, especially women. Direct selling gives women the flexibility to manage their time and balance their work and personal lives. The industry in Financial Year 2013 is estimated to have provided self-employment to 3.4 million female distributors.

c. Development Of The SME (Small Medium Enterprises) Sector:

Many direct selling companies rely on SMEs for manufacturing their products. In a lot of cases, the direct selling companies impart the manufacturing know-how, technology and processes to enable the SMEs to produce excellent products. Many direct selling companies also invest in providing the right equipment and machines to the SMEs for production.

d. Employment Generation:

Besides providing additional income opportunities to direct sellers, the industry also generates a large number of jobs. Majority of the direct selling companies outsource production, packaging and distribution of their products, thus generating direct employment across the value chain.

e. Contribution To The Government Exchequer:

The operating model for direct selling generates tax contributions to the government across its value chain. Total tax contribution by the direct selling industry to the government in FY13 alone is estimated to be INR10 billion. This includes direct and indirect tax contributions through corporate income taxes, import duties and VAT.

2.4 CHALLENGES IN DIRECT SELLING

Similar to the traditional consumer industries, the direct selling industry faces challenges in setting-up manufacturing facilities, dealing with import duties, etc. A daunting challenge for the direct selling industry in India is lack of regulatory, clarity. Due to this, often direct selling companies are mistaken for fraudulent pyramid schemes. States like; Andhra Pradesh, Kerala, Sikkim and union territories like Chandigarh, have on several occasions mistook legitimate direct selling companies with fraudulent players because of absence of required regulatory clarification.

Such uncertainty is likely impeding the growth and reputation of direct selling companies in India. In many cases, due to absence of clarity, representatives of the direct selling companies have been harassed by the local police and state governments. Such incidences tend to hinder the growth of the industry and can have an adverse effect on consumer confidence.

2.5 METHODS OF COMPENSATION IN DIRECT SELLING

The compensation/profit share plans adopted by direct selling companies mainly falls into two categories.

- Single level:

Under this plan, the salespersons earn a commission on sales made by him only. There is a direct connection between sales made and earnings.

- Multi level:

In this system, salespersons derive compensation both from the sales effected by them personally and sales made by persons recruited by them personally or from the sales of the group or "network" recruited by their personal recruits where the network may go several levels deep. The system offers an opportunity to build one's own individual business by selling goods and services to consumers and by developing and training a network of direct sellers to do the same. There are no required levels of education, experience, financial resources or physical condition. People of all ages and from all backgrounds have succeeded in direct selling.

2.6 MULTILEVEL MARKETING (MLM)

MLM is any marketing program in which participants purchase the right to recruit additional participants, sell products or services, and be compensated for the sales by people they recruit as well as for their own sales.

Definition

- FTC (Federal Trade Commission), USA -Any marketing program in which participants pay money to the program promoter in return for which the participants obtain the right to

(1) recruit additional participants, or to have additional participants placed by the promoter or any other person into the program participant’s down line, tree, cooperative, income centre, or other similar program grouping;
(2) sell goods or services; and
(3) receive payment or other compensation;

and provided that the payments received by each program participant are derived primarily from retail sales of goods or services, and not from recruiting additional participants nor having additional participants placed into the program participant’s down line, tree, cooperative, income centre, or other similar program grouping, and the marketing program has instituted and enforces rules to ensure that it is not a plan in which participants earn profits primarily by the recruiting of additional participants rather than retail sales.

Meaning

The origin of this type of company got started in United States in the late 1800s. After that by time to time different format come into existent in the market like travelling sales people, peddlers and hawkers. Then different companies like Amway, Tupperware, and Mary Kay started selling their products in this direct selling

One of the important alternatives to the present marketing system is Multilevel Marketing system. It is also known by other names such as Network marketing System, person-to person marketing or referral marketing. This is one of the fastest growing markets around the world. Network marketing is very popular in countries like USA, Canada, Germany, Japan and Taiwan. The concept of Network Marketing or referral marketing is a method of product distribution. The products are moved through independent distributors. A key difference with present marketing is that, in network marketing the distributors primarily markets the products through word of mouth promotion. The distributors are given an opportunity to introduce other distributors to the business. Instead of incurring massive media advertising and sales promotion cost, the savings are passed on to distributor consumers. Distributors share the large revenue that normally goes to the middleman. At the same time products are available to consumers at wholesale prices

CHAPTER III INDUSTRY AND COMPANY PROFILE

3.1 HISTORY AND EVOLUTION OF DIRECT SELLING INDUSTRIES

The modern direct selling industry can be considered to have pioneered in the USA, with the establishment of Avon in 1886. With the success of this model, involving lower sales, and distributions costs and greater direct interaction with the consumer, the portfolio of products swelled to include cosmetics, personal care, household goods, accessories and other products, over time. The movement was supported by the engagement of women as direct sellers, who considered this opportunity as a means of empowerment and self-reliance. The introduction of the multi-level marketing compensation plans (MLM plans) opened another chapter in the evolution of direct selling. Introduced in the mid-twentieth century, the plan for the first time enabled consumers to benefit from the success by providing them the option to become a direct selling partner of the business. MLM plans became widely accepted and a large number of companies adopted the same including global majors like; Avon, Tupperware and Amway.

3.2 THE COMPANY PROFILE

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3.3 ABOUT THE COMPANY GLOBALLY:

Amway (short for American Way) is an American company that uses a multi-level marketing model 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, in U.S.A and is the world’s largest Direct Selling company with an revenue of an whooping “11.8 billion US dollar” in 2013 being its eight consecutive year of growth for the company. The company has more than 6000 acres of organic farm and state of art manufacturing technology compared with the technology used by Nasa for the production of their products. The company has also over 1000 granted patents to their name. It’s product lines include home care products, personal care products, jewelry, electronics, Nutrilite dietary supplements, water purifiers, air purifiers, insurance and Cosmetics. The company’s every product has a 100% money back guarantee. Amway conducts business through a number of affiliated companies in more than hundred countries and territories in the world. Amway was ranked No. 26 among the largest private companies in the United states by Forbes in 2012. Although Amway has been frequently subject to investigation as having a pyramid like structure, the Federal Trade Commission has ruled the company's sales and marketing plan as not to be an illegal pyramid scheme.

3.4 THE PRODUCT RANGE OF AMWAY

Currently the company has 115 products in various categories. Amway operates in the following categories:

- Home care products
- Personal care products
- Nutrition and wellness-Health care products
- Agriculture
- General Category Products
- Cosmetics

3.5 AMWAY INDIA ENTERPRISES .LTD

In India Company established in the year 1995, but started commercially in 1998. The company headquartered in New Delhi to control the business in India. The company generated employment with help of logistics, delivery peoples, office staff and others. The company appointed more than four lakh sales representatives to sales their products in India with handsome commission. It appointed as brand ambassador of bollywood actress Diya Mirza. It has a presence in 80 cities across 10,000 postal codes, 145 offices and 65 warehouses in India.

In India Amway manufactured its products with help of different third party contractors which is mainly based in Hyderabad and Daman. For that company has invested lot of funds including manufacturing cost, up gradation of the contractor’s manufacturing facility and logistics. Amway planned to capture the India market and its presence in India and also focused on distribution network. For that company has to open different offices in different towns. They also planned to export to other countries to explore Amway business. The fifteen percent growth Amway India is achieving in turnover which is the good sign for the distributors as well as consumers. Basically company is focusing on personal care, home care, nutritional and cosmetics products and its sales are also doubling time to time. The Amway India is a subsidiary of Amway corporation and announced to launch the artistry brand of tonners, moisturizes, and cleaners in skin care segments.

3.6 IBO (INDEPENDENT BUSINESS OWNERS) IN AMWAY

The model of direct selling of Amway is a role model for the direct selling industry. The company is engaged in selling product to the consumers directly with help of distributors which is known as Independent Business Owners (IBO). This method depends on multilevel marketing or network marketing model.

In other words, in company’s portfolio there are number of products which tested in research and development department of the company regularly. All these products were sales by train salespeople of the company which is known as Independent Business Owners of the Amway. This Independent Business Owners develop a network of people by recruiting others under them and expand a huge network. The IBO earns commission on the products sold. Further, the ABO also gets commission for the sales done by other IBOs recruited by him.

3.7 CODE OF ETHICS FOR AMWAY DISTRIBUTOR

The following ethical guidelines have been issued for the Amway distributors while doing Amway business.

- Every distributor will make an effort, that they will treat others as other treats them. Everybody has to respect and follow the code of ethics and rules of conduct.
- Everybody will present company’s product and company’s marketing plan to all potential distributors in an ethical manner. Everybody has to courteous for the handling of any issues and will follow the company’s prescribed procedure.
- Everybody has to accept and carry out the responsibility as an Amway distributor. For selling Amway products everybody will use Amway authorized publications.

3.8 CORPORATE SOCIAL RESPONSIBILITY

The term corporate social responsibility means company has to do something for the society from where company earned profit from the society only. For managing all this activity the company formed Amway Opportunity Foundation and registered nonprofit organization. The distributors of Amway are also the members of this organization and they have enthusiastically participated in all the program of the Amway Opportunity Foundation.

CHAPTER- IV ANALYSIS AND INTERPRETATION

SOCIO-ECONOMIC BACKGROUND OF THE STUDY

1) GENDER OF RESPONDENTS

TABLE NO: 4.1

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(Source: Primary data)

INTERPRATATION

The above table 4.1 shows the gender of respondents. According to the table 80% of IBOs are male and 20% of them are female

CHART NO: 4.1

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2) AGE OF RESPONDENTS

TABLE NO: 4.2

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INTERPRATATION

The above table 4.2 shows the age groups of respondents. According to this table most of the IBOs belongs to the age group 30-40 (45%) whereas the least respondents belongs to the age group below 20 (5%).

CHART NO: 4.2

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3) MARITAL STATUS OF RESPONDENTS

TABLE NO: 4.3

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(Source: Primary data)

INTERPRATATION

The above table 4.3 indicates the marital status of IBOs. The table shows that 77% of respondents are married, where as 23% are belongs to unmarried categories.

CHART NO: 4.3

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4) EDUCATIONAL QUALIFICATION OF THE RESPONDENTS

TABLE NO: 4.4

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(Source: Primary data)

INTERPRATATION

The above table 4.4 shows the educational qualifications of IBOs. According to the table regarding the educational qualification level, most of IBOs are plus2/ pre degree holders (37%), at the same time 35% are graduate. only 5% of them are qualified M. Phil/ PhD.

CHART NO: 4.4

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5) MONTHLY INCOME OF RESPONDENTS

TABLE NO: 4.5

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(Source: Primary data)

INTERPRATATION

The table 4.5 shows the income level of IBOs. According to the table most of the IBOs are belong to the income group of 20000-40000 (53%) per month as well as only 4% of them are receiving income more than 80000 monthly.

CHART NO: 4.5

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INFORMATION ABOUT THE PROFESSION OF IBOs

OTHER THAN AMWAY

TABLE NO: 4.6

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(Source: Primary data)

INTERPRATATION

The table 4.6 indicates the information about the profession of IBOs other than Amway business. According to the table 93% of IBOs have other profession than Amway, at the same time 7% of respondents didn’t have any other profession than Amway.

CHART NO: 4.6

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EMPLOYMENT STATUS OF IBOs

TABLE NO: 4.7

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(Source: Primary data)

INTERPRATATION

The above table 4.7 represents about the employment status of IBOs. According to the table most of the IBOs are private employee (29%). At the same time 25% are occupied as govt. employees and 23% belongs to other profession. Only 8% of them are doing business as well as 15% belongs to other categories.

CHART NO: 4.7

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DISTRIBUTION OF IBOs ACCORDING TO TIME PERIOD IN AMWAY BUSINESS

TABLE NO: 4.8

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(Source: Primary data)

INTERPRATATION

The above table 4.8 represents the how long the IBOs are with Amway business. On the basis of the table 25% of IBOs are there within 1-2 years. 22% of them belong to 3-4 years, whereas 18% are 2-3 years. Only 8% are below 1 year in Amway.

CHART NO: 4.8

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INFORMATION ABOUT THE FACTORS INSPIRED BY IBOs TO JOIN IN AMWAY BUSINESS

TABLE NO: 4.9

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(Source: Primary data)

INTERPRATATION

The above table 4.9 shows various factors inspired by IBOs to join into Amway business. The most inspired factor is additional income (Rank 1). The second ranked factor inspired by IBOs is quality products at reasonable rate. Whereas the least ranked factor is pressure from existing distributors.

INFORMATION ABOUT SELLING AREA OF IBOs

TABLE NO: 4.10

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(Source: Primary data)

INTERPRATATION

The above table 4.10 shows the selling area of distributors. Most of the IBOs are marked their selling area as at home (53%), at the same time 28% of them are selling at work place. 19% of IBOs are selling products at temporary place.

CHART NO: 4.9

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PRODUCTS DISTRIBUTED BY IBOs THROUGH AMWAY BUSINESS

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(Source: Primary data)

INTERPRATATION

The above table 4.11 shows the information about various products distributed by IBOs. The most distributed products are personal care products (37%) and home care products (35%). The least distributed products are agricultural products and cookware products (5%).

CHART NO: 4.10 Abbildung in dieser Leseprobe nicht enthalten

SATISFACTION LEVEL OF IBOs TOWARDS AMWAY

TABLE NO: 4.12

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(5-Highly satisfied, 4- Satisfied, 3-Neutral, 2-Dissatisfied, 1- Highly dissatisfied)

(Source: Primary data)

INTERPRATATION

The above table 4.12 shows the satisfaction level of IBOs towards various factors. According to the table quality of Amway products are the most satisfied factor that got first rank. The least satisfied factors are price and availability of products.

CONTRIBUTION OF AMWAY TOWARDS PERSONALITY AND BUSINESS DEVELOPMENT OF IBOs

TABLE NO: 4.13

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(Source: Primary data)

INTERPRATATION

The above table 4.13 shows the contribution of Amway towards the development of IBOs. The table indicates that 90% of IBOs have felt personality and business development through Amway, whereas 10% doesn’t have any developments.

CHART NO: 4.11

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ANALYSIS OF PARAMETERS OF BUSINESS AND PERSONALITY DEVELOPMENT OF IBOs

a) PARAMETERS OF BUSINESS DEVELOPMENT

TABLE NO: 4.14

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(Source: Primary data)

INTERPRATATION

The above table 4.14 observes various parameters of business development contributed by Amway. According to the table the first ranked parameter is increases in sales volume and the least ranked parameter is quick grievance redressal by Amway.

b) PARAMETERS OF PERSONALITY DEVELOPMENT

TABLE NO: 4.15

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(5- Strongly agree, 4- Agree, 3- Somewhat agree, 2- Disagree, 1- Strongly disagree)

(Source: Primary data)

INTERPRATATION

The above table 4.15 observes various parameters of personality development contributed by Amway. According to the table the first ranked parameter is positive attitude and the least ranked parameter is communication

INFORMATION ABOUT CHALLENGES FACED BY IBOs

TABLE NO: 4.16

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(Source: Primary data)

INTERPRATATION

The above table 4.16 shows the information about the challenge faced by IBOs while doing Amway business. According to the table 47% of IBOs did not face any difficulties, whereas 22% of them facing difficulties while doing Amway business.

CHART NO: 4.12

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INFORMATION ABOUT SUCCESS OF IBOs

FROM AMWAY BUSINESS

TABLE NO: 4.17

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(Source: Primary data)

INTERPRATATION

The above table 4.17 shows about the success of IBOs from Amway business. According to the table 48% of respondents have success from Amway, at the same time 20% have no success and 32% have neutral.

CHART NO: 4.13

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OVERALL SATISFACTION LEVEL OF IBOs TOWARDS AMWAY BUSINESS

TABLE NO: 4.18

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(Source: Primary data)

INTERPRATATION

The above table 4.18 shows the overall satisfaction level of IBOs towards Amway business. According to the table most of (32%) IBOs are satisfied with Amway, at the same time 22% of them are highly satisfied and 20% neutrally satisfied. Whereas 15% of IBOs are dissatisfied with Amway and 11% of them are highly dissatisfied.

CHART NO: 4.14

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ANALYSIS OF RELATIONSHIP BETWEEN OVERALL SATISFACTION LEVEL AND MARITAL STATUS

Here the relationship between overall satisfaction level (Highly satisfied, Satisfied, Neutral, Dissatisfied, Highly dissatisfied) and marital status of IBOs are studied by using Karl Pearson’s coefficient of correlation. Married respondents are considered as X and unmarried as Y.

TABLE NO: 4.19

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INTERPRATATION

Since r = 0.978, there is a high degree of positive correlation between married and unmarried IBOs towards the overall satisfaction level. Thus it can be conclude that the overall satisfaction level of IBOs towards Amway business and their marital status are positively correlated.

ANALYSIS OF ASSOCIATION BETWEEN SUCCESS FROM AMWAY BUSINESS AND GENDER LEVEL

TABLE NO: 4.20

The association between success from Amway business and gender level can be studied by using Chi-square test.

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H0 : The success from Amway business between male and female are independent.

H1 : The success from Amway business between male and female are dependent.

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Chi-square Table

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INTERPRATATION

Since the calculated value of Chi-square is less than table value, we can accept the null hypothesis that the success from Amway business between male and female are independent. It means there is no association between success from Amway business and gender level.

CHAPTER – V SUMMARY, FINDINGS, SUGGESTIONS AND CONCLUSION

5.1 SUMMARY

This chapter is designed to present the main findings and conclusions evolved from the research and provide recommendations on ways to make direct selling business more accessible to people who is desirous of searching a source of income by doing the legitimate business. These findings are the result of the detailed analysis of the data collected from sample respondents. It also gives a brief summary of the all chapters:

- CHAPTER 1

The chapter 1 has begun with the background of the research topic and has explained the rationale for selecting the topics for the study. Thus this chapter can provide a basic idea about the topic. The main contents include in this chapter are Introduction, Statement of the problem, Objectives of the study, Methodology of the study and Limitations of the study

- CHAPTER 2

The second chapter involves 2 parts, part1 belongs to various review of literatures related with the topic. The second part consists of theoretical framework of the study. Under this part includes the knowledge about direct selling, its advantages and challenges, multilevel marketing, regulatory authorities etc.

- CHAPTER 3

The third chapter includes industry and company profile related with the study. Thus the chapter begins with direct selling industries and follows the company profile of Amway India enterprises. Ltd, It also includes the history, evolution, competitors etc of Amway.

- CHAPTER 4

The chapter 4, analysis and interpretation of data are the heart of this project. The chapter analysis and evaluate various factors influencing IBOs development, inspiration, satisfaction etc.

5.2 FINDINGS

The findings obtained from the analysis of data are given below:

Demographic Variables:

-Out of 60 respondents 80% are male IBOs, whereas 20% of respondents are female IBOs
-On the basis of data collected, most of the IBOs belongs to the age group 30-40 (45%) whereas the least respondents belongs to the age group below 20 (5%).
-It is also observed that 77% of respondents are married, whereas 23% are belongs to unmarried categories.
-Regarding the educational qualification level, most of IBOs are plus2/ pre degree holders (37%), at the same time 35% are graduate. only 5% of them are qualified M. Phil/ PhD.
-Most of the IBOs are belong to the income group of 20000-40000 (53%) per month as well as only 4% of them are receiving income more than 80000 monthly.
-Most of the IBOs are private employee (29%). At the same time 25% are occupied as govt. employees and 23% belongs to other profession. Only 8% of them are doing business as well as 15% belongs to other categories.

Specific findings:

-93 % of IBOs have any other profession than Amway business, at the same time 7% IBOs doesn’t have any profession other than Amway.
-On the basis of the data collected 25% of IBOs are there within 1-2 years in Amway. 22% of them started Amway business within 3-4 years, whereas 18% are within 2-3 years. Only 8% are joined below 1 year in Amway.
-The IBOs most inspired factor to join into Amway business is to earn additional income (Garrett Rank 1). The second inspired factor inspired by IBOs is quality products at reasonable rate. Whereas the least inspired factor is pressure from existing distributors.
-Most of the IBOs selling Amway products at home (53%), at the same time 28% of IBOs are selling at work place and 19% of IBOs are selling products at temporary place.
-The most distributed products by IBOs are personal care products (37%) and home care products (35%). The least distributed products are agricultural products and cookware products (5%).
-The quality of Amway products is the most satisfied factor to IBOs.
-The price and availability of Amway products are the most dissatisfied factor to IBOs towards Amway.
-Amway positively contributes towards the personality and business development of IBOs. 90% of IBOs got development from Amway business.
-The most influenced parameter of the development of business of IBOs is the increases in their sales volume.
-The least influenced factor for the business development of IBOs is the satisfactory availability of products.
-The most influenced parameter of IBOs towards their personality development are positive attitude and standard of living.
-The least influenced factor for the personal development of IBOs is the communication skill and social status.
-Most of the IBOs didn’t face any difficulties while doing Amway business. At the same time a sum of 22% IBOs are facing some challenges while doing Amway business.
-Most of IBOs (48%) have success from Amway business.
-22% of the IBOs are overall highly satisfied with the Amway business, whereas, majority of 32% are satisfied with Amway. 20% of IBOs satisfaction level is neutral.
-15% IBOs are dissatisfied with Amway business and 11% are highly dissatisfied.
-Overall satisfaction level of IBOs towards Amway business and their marital status are positively correlated.

5.3 SUGGESTIONS

Based on the findings of the study, I would like to give the following suggestions to strengthen the Amway business and to avoid its present pitfalls. For this purpose conducted causal talk with many of the former distributors before listing out these suggestions.

- Females are not much attracted to the multilevel marketing system. In Kerala, female population exceeds male population. However, they are under privileged, majority of them are unemployed and exploited in many ways due to their financial insecurity. Therefore MLM business like Amway can be a good source of income to them if it is properly designed and implemented.
- At present multilevel marketing is penetrating into the middle age group of population. Thus Amway should take some steps to attract young people to this business especially in the context of wide spread unemployment among the youth.
- Many of the distributors had attained only minimum level of education. The concept is not perceived well by this group. Proper training and awareness program must be chalked out so as to equip them to face the real challenges in this field.
- Effective human resource development and training programs should be arranged by the MLM companies themselves. The duration of the training programs should also be extended.
- Major Amway products purchased by distributors were personal care products and home care products. Therefore Amway marketing strategies can concentrate in this line of products.
- In addition to word of mouth marketing, Amway companies should arrange for other forms of advertisement in order to appeal customers.
- Majority of respondents joined in MLM to earn additional income. Some people also join with the intention to use good quality products. Commission paid by the company for selling its products to the new distributors is not enough to compensate their efforts. Therefore additional income for the involvement in the real commercial activity should be guaranteed.
- The government can impose strict regulations on direct sellers, including an upfront investment and a security deposit to protect consumers.
- Government should take sufficient steps to watch the activities of MLM companies. For this purpose regional nodal offices can be set up which should be headed by nodal officers
- Amway have to take strong and confident steps to improve the offers on the products so that overall sales shall increase and it will lead to increase the level of satisfaction among the IBOs.
- The Amway product quality is very rich. However, the prices of Amway products are very high and therefore it is difficult to maintain the customers’ base regularly. Amway has to focus on their pricing policy of the products which seems too high as responded by IBOs. Company should come with revised price policy for their product, so that sales volume can be generated and it will help the IBOs as well as consumers. This is very important in the context of designing effective retention policy of IBOs and consumers for any organization.
- Amway has to allow its products to be sold in retail stores so as the product will be available anywhere anytime.
- Basically Amway products are meant for higher and wealthy classes of the society so Amway should think about Bottom of Pyramid.

5.4 CONCLUSION

Every industry is undergoing dramatic changes and this is affecting the future of every country. Technology is driving the lives of mankind as they struggles to live with accelerated rate of change. Just has it happened between the agricultural and industrial revolutions, in the new information revolution, there seems to be a massive social dislocation with rich getting richer and poor become poorer. Direct sales have become so popular because it offers everyone the chance of becoming a successful self employed opportunity with the freedom to win and little lose.

The present study reveals the effectiveness of direct selling business, a case study of Amway. The study indentified that Amway contributes a major role in the development of business and personality IBOs. The IBOs are mainly motivated by the quality of the products. Overall, it can be concluded that IBOs are satisfied with the quality of products but they expect more on reasonable price.

BIBLIOGRAPHY

- Books

- Dr. OR Krishnaswamy and M. Ranganathan, Methodology of research in social science.
- Kotler Keller, Marketing management
- L.R Potti, Quantitative techniques for business.
- C.R. Kothari, Research Methodology, Methods & Techniques, Second Edition 2004, New Age International (P) Limited, New Delhi.

- Journals

- Dr. A Hamil and ED Priyadharshini (2016), “A study on buyers preference on Amway products in Thirunelveli, International journal of research granthaalayah”, 4(6), 2394 - 3629
- Dr. P Parimaladevi and M. Anu Priya (2016), “A study on customer satisfaction towards Amway products in Erode city”, International journal in management and social science, 4(3), 2321- 1784
- Muhammed Juman.BK and Dr. J Christopher (2015), “A study on direct selling business (Amway India ltd) in Kerala: A case study of Calicut district of Kerala”, International Journal of Engineering and Technology (IRJET),
- Rajendra W. Bhadale and Sachin A. Borgave (2012), “An analytical study of Independent Business Owner’s involvement in Multi Level Marketing business: A case study of Amway India in Pune”, ETHOS-A journal of research articles in management science and allied areas.

- Websites

- http://www.ijoart.org/docs/A-study-on-direct-selling-through-multi-level-marketing.pdf
- http://www.jimsjournal.org/26chenMeiLiang.pdf
- www.amway.in
- www.idsa.com
- https://en.m.wikipedia.org/wiki/Amway
- http://www.keralaindustry.org/docs

APPENDIX

QUESTIONNAIRE

Dear Sir,

We AKHIL CH and JAHANA SHERIN O doing project work titled “A STUDY ON EFFECTIVENESS OF DIRECT SELLING COMPANIES: WITH SPECIAL REFERENCE TO AMWAY INDIA ENTREPRISES AT MALAPPURAM AREA”. I would be very obliged if you spend 2 minutes to filling up this questionnaire. Please read all questions carefully before answering. I assures that the information provided by you will be kept confidential and use only for the purpose of the study.

1. Name:

2. Gender:

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3. Age:

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4. Marital status:

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5. Educational Qualifications:

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6. Monthly Income:

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7. Do you have any other profession other than Amway business?

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8. Please mention you employment status:

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9. How many years you are in Amway business?

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10. What inspired you join in Amway business?

(Rank them where 1 is most inspired)

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11. Please mention your selling area:

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12. What are the products you regularly buy and distribute through Amway?

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13. State your satisfaction level towards the following factor:

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14. Did you think Amway contribute any role in your personality and business developments?

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15. Please tick the most appropriate answer towards the parameters of your development:

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16. Did you face any challenges while doing Amway business?

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17. Did you feel success from Amway business?

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18. Please mention your overall satisfaction level towards Amway business?

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19. Make your valuable suggestions:

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Details

Seiten
60
Jahr
2017
ISBN (Buch)
9783668919020
Sprache
Englisch
Katalognummer
v463945
Institution / Hochschule
Dr. Gafoor Memorial MES Mampad College – University of Calicut
Note
A

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Titel: A Study on Effectiveness of Direct Selling Companies