CONSUMERS BEHAVIOR ABOUT AMWAY MARKETING
Amway is a networking and direct selling distributors, a U.S. based company in Ada, Michigan that serves ideally consumer products, health and household items including electronics and jewelries. Founded in 1959 by Jay Van Andel and Richard De Vos, this company has penetrated the international territories by merging different local and foreign affiliates to distribute their products around the globe and made a number of business successful individual by sole distribution partnership and direct selling to network marketing.
Even an ordinary household individual can contribute to their business success simply by following their business plan. Their marketing plan just like direct selling companies like Sarah Lee and Avon, although they sometimes cater to a wider product range depending on the country they represent, they have been operating in 80 countries worldwide as of 2011. Amway has been ranked as one of the most successful direct selling company by Forbes Magazine last 2010.
Amway has been involved in many controversies because of their marketing strategies including U.S. Canada and other part of the world, their legality and product performance has created a worldwide intrigue in many phases. During 1995 when they have just launched their product in China they have gathered a massive volume of customers and individual distributorship and while on its way to success the marketing plan has been involved in yet another controversy of pyramiding scheme which the government has deemed illegal in their country so they prevented their operation temporarily for a legal settlement but their customers and distributors has gone wild to protest and rally about their business and their earnings that is why it created a kiosk and fraudulent in the eyes of their customers for they have worried about their earnings in the company.
The network marketing and so called pyramiding scheme of direct individual resellers has been delayed while Amway still continue to sell their products through independent distributorship. Until later in 2005 the Chinese government have initiated a new direct selling law that will allow their company to operate in a different marketing strategy that stated that they will never be allowed t to recruit people to gain commission on distributorship moreover individuals and professionals are not allowed to become a direct sales agent.
On consumers perspective worldwide their products has been effective including their detergent, laundry soap, dishwashing cleaner and toilet cleaner however their items are sold in almost double the price of a regular items in the department store and market place. Authority claimed that this pricing strategy has been the cause of pyramiding scheme that gives the company a part of a commission of the product plus the commission of the individual distributors and their recruits and therefore the hidden overpricing strategy has been legally instill in the mind of their consumers. U.S. Federal Trade Commission has also accused Amway of Tax Evasion but proven them not guilty in pyramiding but merely distributors and direct selling company
Amway have also been involved in several lawsuit cases that worsen their position even more in the eyes of the customers just like in India where most of their offices has been shut down due to the so called illegal activities and marketing strategy that attract the consumers in an indefinite or unclear distributorship involvement, while some says that Amway is just using their marketing strategy to gain money and not really to help people.
Amway even created a worldwide controversy with Canadian illegal tax case that reaches to 70 million U.S. dollars from 1983 to 1989 finding the guilty of the crime. The Recording Industry Association of America sued Amway for Amway’s piracy and copyright infringement using their videotapes without the knowledge of the distributors that caused them to settle a 9 million U.S. dollar court settlement as of 1996.
Despite these controversies customers still find their products powerful enough to use but their system are very questionable to other people that the integrity of the company has been questioned many times for profiteering rather than legal practice, some says that Amway is the master of deception. While some claims that these people who are against Amway are just playing negative and they have proven that if you just put your effort and stick with the Amway’s marketing strategies one can never go wrong and they will reap the reward or their hard work.
In a survey of a certain website (programcritique.com) consumer review still shows that Amway can still penetrate the market because of their customers support while it also shows they can lose at least 20 to 30 percent of their customers in most countries if they will not renew their marketing plan.
Credit:ivythesis.typepad.com
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