It can be defined as a combination of elements that you will use to market your product. The elements also called the 4P’s are Price, Product, Place and Promotion The Distributors were not aware of the facts of the product and were not able to put this across to the consumer. Few of Amway’s products were concentrates and the distributors were not able to convey this to the consumer, they were not sure about the price value of the product and were unable to convince the customer to buy it.
Prior to Amway’s entry to India they knew that had to drop the prices of their products significantly to make their product more appealing to Indian consumers. Even after knowing this they only marginally cut the prices of their products but this was still 20% higher than that of their competitors. They roped in their Indian distributors through NRI’s living in the USA. This included friends and relatives of that particular NRI.
They gave these people introductory kits which included samples of the products, sales material, information on the products etc. But these kits were used by the distributors themselves rather than using them to promote it prospective consumers. Because of this volumes demanded after did not pick up. Amway didn’t focus on training their sales reps and this resulted in a lack of motivation for the sales reps. Sales personnel used hard selling methods and often forced the product on the consumer.
The products were sometimes of mediocre quality this coupled with a false premium image caused customer dissatisfaction. Lack of networked banks, toll free phone lines and online shopping was another cause for Amway not doing well. Distributor Attrition was another cause Amway weren’t directly involved with the end consumer and didn’t know the opinion of the consumer this coupled with poor customer service led to the initial downfall of Amway.
