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amway products online

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									Amway printed from The Times100 website www.tt100.biz


Amway
Combining an offline and online business
Summary

Concepts:
Business, Independent Business Owners, Internet, Amway, consumer, launch, customers,
technologies, e-commerce, sales, competitors, online, market, distribution, selling.

Summary:
Ordinary citizens may not suffer too much from failing to keep track of new technologies the
moment that they appear, but it can be disastrous for a business not to notice what is taking
place.

In more recent times, the Internet has once again forced businesses to rethink how they operate.

Some businesses carried out insufficient research regarding what the internet had to offer them.
Others seriously underestimated the hazards of going online, to their own great cost.

If organisations do not accumulate 'know-how' and if they fail to monitor, trial and introduce
new technologies as they develop products and processes for their consumers, they may find that
their alert, progressive competitors have given themselves a competitive advantage.

This case study looks at how Amway has developed a strategy for taking full advantage of the
opportunities that the Internet offers for e-commerce within the UK and the rest of Europe.

Amway is not just a consumer goods business, it is also one of the world's largest direct sales
companies with over 3.3 million Independent Business Owners in more than 80 countries and
territories in Asia, Africa, Europe and the Americas.

The main benefit of this form of selling is that it allows the Independent Business Owner to
focus upon individual customers and their needs, with the Independent Business Owner sourcing
the consumer rather than the consumer having to visit a shop.

Because it focuses upon direct selling, Amway is different from more traditional distribution
channels.


The channel of distribution describes the stages of ownership that take place as a product moves
from a manufacturer to a consumer.




THE TIMES 100 edition 8
Amway printed from The Times100 website www.tt100.biz


With high levels of Internet use within the UK and Europe, market research showed that
Independent Business Owners were Internet-ready, and that the time was right for Amway to
develop e-commerce opportunities that would offer the 24-hour service its customers were
wanting.

Rather than go for a full launch, marketers within Amway decided to opt for a soft launch.

Introduction
These days, we are surrounded by 'high-tech' developments. Ordinary citizens may not suffer too
much from failing to keep track of new technologies the moment that they appear, but it can be
disastrous for a business not to notice what is taking place. One key challenge for any business is
to see how new technologies can be harnessed to develop the business and keep it ahead of the
competition.

In a previous era, it was the invention of the telephone that gave progressive companies an
opportunity to rethink how they might make use of a new medium of communication to:

*      enhance their existing business

*      improve their service to existing customers

*      make contact with new potential customers

*      widen awareness of themselves and their products.

In more recent times, the Internet has once again forced businesses to rethink how they operate.
The Internet is potentially exciting but is also a real challenge. In deciding 'What's in it for us?'
businesses have to look very closely at what the Internet can offer and then decide how well it
meets their own needs and the needs of their customers.

Some businesses carried out insufficient research regarding what the Internet had to offer them.
Others seriously underestimated the hazards of going online, to their own great cost.

In the business environment, any decision-taking has to be done with regard to the technology
available. If organisations do not accumulate 'know-how' and if they fail to monitor, trial and
introduce new technologies as they develop products and processes for their consumers, they
may find that their alert, progressive competitors have given themselves a competitive
advantage.

The Internet began life as a network for researchers and military personnel in the USA, and has
been around for more than 30 years. However, in the last 10 years it has become increasingly
prominent. Today, the Internet is an inexpensive, sophisticated way of communicating
instantaneously with people around the world, and it is transforming global communications.




THE TIMES 100 edition 8
Amway printed from The Times100 website www.tt100.biz


This case study looks at how Amway has developed a strategy for taking full advantage of the
opportunities that the Internet offers for e-commerce within the UK and the rest of Europe.

Amway
Founded in the USA in 1959, Amway is a global business employing more than 6,000 people
worldwide. Amway is not just a consumer goods business, it is also one of the world's largest
direct sales companies with over 3.3 million Independent Business Owners in more than 80
countries and territories in Asia, Africa, Europe and the Americas. The critical relationship
between Amway and the seller or Independent Business Owner is at the heart of Amway's
approach to direct selling. The main benefit of this form of selling is that it allows the
Independent Business Owner to focus upon individual customers and their needs, with the
Independent Business Owner sourcing the consumer rather than the consumer having to visit a
shop.

Because it focuses upon direct selling, Amway is different from more traditional distribution
channels. Its Independent Business Owners own their own business, with the flexibility to deal
directly with their own clients and to build up personal relationships. These Independent
Business Owners also have the ability to deliver Amway's products to their customers' homes.
Independent Business Owners sell to people they know or meet. The personal contact and care
they provide is an important element in direct selling. They are also self-employed and can
introduce others to the business to form their own sales group of Independent Business Owners.

The channel of distribution describes the stages of ownership that take place as a product moves
from a manufacturer to a consumer. The increasing use of the Internet by consumers has created
a real potential for developing different types of business models and for new approaches to
reaching users directly and quickly in their homes.

Many businesses were quick to respond to the potential uses of the Internet. Some were too
quick, and only a few of the dot.coms have been successful in selling directly over the Internet to
consumers.

For the greater part, Amway's customers are not final consumers. Rather they are the
Independent Business Owners with whom Amway works. Most of these Independent Business
Owners operate from home and many of them have other careers and want a flexible working
relationship with Amway. They want to work at a time that is most convenient for them. This
can be at any hour of the day or night.

With high levels of Internet use within the UK and Europe, market research showed that
Independent Business Owners were Internet-ready, and that the time was right for Amway to
develop e-commerce opportunities that would offer the 24-hour service its customers were
wanting.

Amway had already developed e-commerce opportunities with its Independent Business Owners
in the USA. This experience was there to be drawn on; within a large organisation, it is important
to share knowledge so that best practice can be followed from successful situations.


THE TIMES 100 edition 8
Amway printed from The Times100 website www.tt100.biz



Creating the online presence
The project's starting point was to create a brand name for the site that was truly pan-European
and which would be acceptable across a range of European markets. Developing a brand
involves compiling for products with a range of features that identify them as a group e.g. name,
logo and other distinctive elements. Marketers at Amway had to take into account the way in
which the brand they developed would be pronounced, written and interpreted.

For Internet trading, a new brand would also require a unique domain name that would not
infringe any existing copyright. The development of the name involved considerable research. It
had to be available and sound appealing. The name chosen was Amivo. Amivo comprises the
notion of 'Ami', which implies a sense of 'friendship' or being 'friendly' and 'Vivo' meaning 'life'.

Combining offline and online
Developing a new process like Amway's European online business takes place in distinct stages.
The first phase was to construct a business analysis report that focused upon how the
Independent Business Owners were likely to respond to the development of e-commerce
opportunities.

The market research involved running focus groups with Independent Business Owners in Italy,
Germany, Spain and the UK. These groups enabled marketers to find out about the functions
desired from an e commerce site as well as giving an insight into many other e-commerce
opportunities.

The research created a layout, design and technological brief for Amway. The Internet team then
had to turn this brief into a site that was technologically feasible, functional, user-friendly and
flexible enough to adapt to any future shift in consumer needs. The project also had to be
completed within budget.

The analysis and research identified the requirements for the site. These were then converted into
a site map, from which story boards were drawn up to show the design and layout of each page.
These story boards illustrated the functions of each page and showed how they linked to each
other. Web-designers were then commissioned to construct the site, and tests took place to
establish the stability of the pages to ensure that the processes worked efficiently.

Launching the website
The purpose of the Amivo site was to provide e-commerce support for Independent Business
Owners that would help them manage their businesses. Available 24 hours a day and 7 days a
week, the site was developed to help users to find products, place orders, repeat previous orders
and check all of the information about their businesses. All users needed was an Internet-ready
computer and access to the Internet.




THE TIMES 100 edition 8
Amway printed from The Times100 website www.tt100.biz


The day when a website is launched is also the day when it comes under the critical scrutiny of
others, including competitors, so it has to be in good shape from the outset. That implies a large
amount of testing and fine-tuning at the development stage. The challenge then is to stay on
schedule.

The site was first launched within the UK, mainly because of the UK's high level of Internet use
and market readiness.

Rather than go for a full launch, marketers within Amway decided to opt for a soft launch. There
is a natural hierarchy of Independent Business Owners. The higher level, leading Independent
Business Owners were given the opportunity to use the site first. This helped to provide valuable
feedback about the site, which was then used to influence further development. These trial
periods helped the designers to iron out some of the issues associated with the site and also
prepare it for a full launch.

The full launch of the site involved password allocations, log-on details, navigation details, and
direct mailings to Independent Business Owners as well as training and support for users.
Amway's 'Amagram' magazine helped the Independent Business Owners to understand more
about the ways in which the e-commerce process could help provide their individual business
needs.

In order to bring customers on board, it is usual to provide some incentive or added value to
influence their patterns of behaviour. This is an aspect of sales promotion. The Independent
Business Owners were offered a number of small launch promotions as well as a range of
additional bonuses designed to encourage them to come online.

Online gains
The web development provided Amway's Independent Business Owners with an alternative,
enhanced way of managing their businesses. It gave them the chance to use technology to
communicate in a different way with Amway. Within a short period of time, the website
attracted a significant number of Independent Business Owners who wanted to try the online
service. Promotions helped to encourage repeat use of the site by demonstrating the unique
benefits that it offers.

Using the site allowed the UK Independent Business Owners to monitor their bonus and sales in
real time. It also helped them to see which areas of sales were worth targeting as they developed
their businesses.

Trading on the Internet has also helped Amway to refocus its business by flexibly engineering it
to meet the needs of its Independent Business Owners. At the same time, there are clear cost
savings for Amway in being able to communicate with its customers through the Internet, rather
than by using postal or telephone services.

Conclusion



THE TIMES 100 edition 8
Amway printed from The Times100 website www.tt100.biz


The success of a new process depends largely upon how well the technological and marketing
systems have been developed. There have been many changes to product distribution in recent
years and organisations like Amway, which support a large number of Independent Business
Owners, cannot stand still if they want to retain their competitive advantage.

Many dot.coms have found it difficult to succeed in a threatening and rapidly changing market
place, but there are success stories too, as this case study illustrates. It shows how technology can
conveniently provide essential data that help users, in this case Independent Business Owners, to
trade more efficiently.




THE TIMES 100 edition 8

								
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