CONSUMERS BEHAVIOR TO THE MARKETING STRATEGY OF AMWAY
Amway is one of the largest direct selling and multi-level marketing brand in the global market since they have launched their company in 1959 in Ada, Michigan founded by Richard Devos and Jay Van Andel partnership marketing their liquid organic product then the rest is history, together they have performed a strong alliance and marketing concept to develop a different strategy that is non conventional. Amway has expanded their line of products that include home care, cosmetics, dietary supplement, some electronic gadgets, jewelry and other stuff. Their marketing and distribution strategy is quiet unique they have expanded in major locations worldwide in the first few years of their operations with the help of their customers who are willing to patronize as well as promote and sell their different products.
Their first few major distribution centers include their offices in Ontario Canada that has pioneered their expansion in 1962 that reaches up to million dollar in just 5 years of operation, that they have also built an office in Sydney Australia. Since then they have expanded from other location until they have reached 80 different countries worldwide, thereafter they have reached an amount of at least 1 million distributors from various countries that reaches more than Billion dollars in sales unbelievably the expansion that they have gained is probably one of the fastest in the entire history of direct selling and distribution leveraging their customers and distributors to sell their products without the needs of using different distribution channels from stores and markets to current users but directly to distributors and customers who use their products. In their over-all operation they have been successful until finally the major controversies starts to arise.
Amway has been accused severely in their marketing strategy of pyramiding that there are numerous counts of court trials and proceedings that they have to face; in 1979 the federal trade commission have made an investigation throughout their operation that pyramiding scheme is giving opportunities to people to recruit other people without pay marketing their products and promising them exaggerated claims only to attract customers in a quick get rich scheme business. Most likely they have been prevented to this kind of marketing strategy since they have not provided such claims and only a few customers and distributors are likely to earn more than 0 dollars per month but Amway have disregarded to cease their operation and was given sanction that results in 0,000 dollar fine.
There were many other lawsuits that they need to face including the seizure in September of 2006 in India the government initiated to restraint their operation because of their marketing strategy that the company has violated prize chits and money circulation banning acts that has been compared to a dowry dispute, closing all their offices in India. Over 80,000 customers have been affected through this circumstance. They have also pleaded guilty in Canada resulting in million CAD during 1983 with the case of tax evasion and fraud. The RIAA Lawsuit case in America results in 9 million dollar settlement. In Poland and in UK they have also had many court issues because of their business practice, this definitely weakens their performance in the eyes of the public that they need to restructure their marketing plan but they have not done so and still they believed in their system.
Particularly here are some of their critiques and what they need to say about Amway; This Company is a ridiculous one they simply want to make believe that customers and distributors can earn much but most likely the company is the only one who is earning. If you do not see this company ever before looking at it in the internet is a disaster because people will discover their trade off. There are at least a hundreds of negative words that you can find giving advice to customers about the pitfalls of joining the company this can create confusion and fear to customers who are about to join the company. “Amway is a freakish business cult” www.destroyamway.blogspot.com
But there are also people who still believe in their products and in their system one of them is Laurie Kampa saying that this people should not put down the company if they do not know the system. Marius say that Amway grows every year faster than any other multi level marketing and it will remain in the industry. Pedro Sanchez claims that Amway sells the best products that help the environment. The battle and rage of Amway continues online and offline and this has been the customer’s behavior in this company. (www.thetruthaboutamway.com) (http://www.cocs.com/jhoagland/)
Credit:ivythesis.typepad.com
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