Amway Japan
Amway Japan Limited
Executive Summary In 1996 Amway Japan Limited (AJL) was the leader in direct selling market, and the most successful company within the entire Amway group. In the first half of 1997, AJL experienced a net sales decline of 11.6% and net income to 27.6% from the first half of the previous year. The Japanese economy and declining value of the Yen relative to the U.S. Dollar has decreased AJL’s sales volume and profit margin. The Japanese government recently passed laws that confused AJL’s distributors and discouraged potential consumers from buying certain product lines. Furthermore, AJL suffers from a negative public image with over 70% of their customer base having either a neutral or negative opinion of the company. In order to rebuild growth in the second half of 1997 and achieve AJL’s long-term sales goal of ¥300 billion by FY2000, the following strategies must be implemented. AJL must strengthen the overall Amway brand image in Japan by promoting high quality products with a competitively fair price. In addition, AJL needs to target their public-relations campaigns to specific groups by promoting individual products and product lines to build upon their brand equity. AJL will undertake a focused extensive distributor training program which emphasizes distributor ethics, techniques on building correspondent down-line relations, and a greater understanding of Japan’s door-to-door sales laws and regulations. AJL will improve the internal marketing strategy by extending target-marketing initiatives toward specific demographic distributor groups to add upon their success with the Artistry cosmetic brands. AJL will successfully capture their momentum to reach their target revenue goals by implementing the solutions offered above. AJL can improve profit margins at a favorable exchange rate by renegotiating the contract with Amway. Establishing partnerships with regional vendors will adjust focus
Executive Summary In 1996 Amway Japan Limited (AJL) was the leader in direct selling market, and the most successful company within the entire Amway group. In the first half of 1997, AJL experienced a net sales decline of 11.6% and net income to 27.6% from the first half of the previous year. The Japanese economy and declining value of the Yen relative to the U.S. Dollar has decreased AJL’s sales volume and profit margin. The Japanese government recently passed laws that confused AJL’s distributors and discouraged potential consumers from buying certain product lines. Furthermore, AJL suffers from a negative public image with over 70% of their customer base having either a neutral or negative opinion of the company. In order to rebuild growth in the second half of 1997 and achieve AJL’s long-term sales goal of ¥300 billion by FY2000, the following strategies must be implemented. AJL must strengthen the overall Amway brand image in Japan by promoting high quality products with a competitively fair price. In addition, AJL needs to target their public-relations campaigns to specific groups by promoting individual products and product lines to build upon their brand equity. AJL will undertake a focused extensive distributor training program which emphasizes distributor ethics, techniques on building correspondent down-line relations, and a greater understanding of Japan’s door-to-door sales laws and regulations. AJL will improve the internal marketing strategy by extending target-marketing initiatives toward specific demographic distributor groups to add upon their success with the Artistry cosmetic brands. AJL will successfully capture their momentum to reach their target revenue goals by implementing the solutions offered above. AJL can improve profit margins at a favorable exchange rate by renegotiating the contract with Amway. Establishing partnerships with regional vendors will adjust focus