Critical Success Factors in Network Marketing A Case Study of Amway

Abstract

newline In spite of being more than a hundred year old industry, Network Marketing has not been able to establish itself as a mainstream business due to the dismal success rate of the people (commonly known as distributors) who venture into it. The study aims to identify, evaluate and establish the critical success factors of the said industry. For this, a longitudinal case study was done taking Amway distributors of the North Indian state of Himachal Pradesh as the sample respondents. These distributors belonged to Britt World Wide, which is the biggest education system supporting Amway business around the world. A study was conducted wherein the activities done by the distributors, which were propagated by the system as core steps were measured and finally analyzed in order to check their relationship with success in the business. newlineThe nine core steps considered for the study were Being 100% user of the products, Retailing, Showing the plan, Listening to CDs, Reading books, Attending meetings, Accountability, Teachability and Communication. The study analyzed distributors performance of these activities primarily with respect to the income they generate from the business. It was also studied whether or not these core steps resulted in some other factors which might help a distributor in the development of skill-set required for succeeding financially in Amway. The study resulted in an alignment between the activities that the distributors perceived to be most impactful and those that actually showed highest impact on their income. It was Being 100% User, Accountability, Meetings, Retailing and Show the Plan which returned highest impact on the income and were declared critical towards success in Amway business. CDs and Books along with already selected Meetings showed highest impact on the skill-set development while Teachability and Communication failed to make the cut on any parameter. However, a new core step Measurement was discovered in the process and rendered critical towards the cause. So, six core steps including a new one qualified to be the critical success factors in Amway business. newlineKey words: Network Marketing, Multilevel Marketing, Amway, Direct Selling, Disintermediation, Critical Success factors, Britt World Wide, Networking Loop.