Amway

MKT229: Principles of Marketing 2

Assignment 1: Amway (PEST & 4Ps)

Session: May 09

Class: 5K1

Names: HU YUN FENG

ID: I08001535

Lecturer: Ms. Wong Choon Fah

Content

Introduction 2

PEST analysis 2

Political and legal 2

Economic environment 2

Social & Cultural 3

Technology 3

4Ps analysis 3

Product 3

Price 4

Place 4

Promotion 4

References 5

Appendix 6

Introduction

Amway Malaysia is the leading direct selling company in Malaysia with a core distributor force of 195,000 from all corners of the country and a sales turnover of RM654,458 million in 2008, making Amway a household name in Malaysia.

PEST analysis

Political and legal

There are many restrictions on food products, cosmetics and nutritional supplements in Malaysia, as a result companies find themselves navigating a dizzying array of governmental bodies that oversee and enforce regulations: the Ministry of Health, the Ministry of Information, the Ministry of Domestic Trade and Consumer Affairs and many subdivisions under these organizations. All cosmetic products must be registered with the Pharmaceutical Services Division of the Ministry of Health. Malaysia has a unique requirement that you cannot mix vitamins with herbal products in the same tablet. In addition, in Malaysia only locally produced products are available.

There are some specific financial requirements as well: Single-level marketing companies must have RM500,000 Malaysian; multilevel marketing companies have to have RM1.5 million; and all foreign-owned companies, regardless of compensation structure, must have RM5 million.

Economic environment

Malaysia is the 10th largest direct selling market in the world and the third largest in the Asia-Pacific region. Despite some adverse circumstances such as the fluctuation in oil price and sharp increase on food prices, direct selling market grew by 21.2 percent in 2007, had $2.06 billion in sales for 2006 and attracted 4 million salespeople. The...