Maintaining the Competitiveness of a Global Brand

The ARTISTRY* development of new formulae using Standardising elements of the marketing The product life-cycle Injecting new life
range of cosmetics state-of-the-art manufacturing tech- mix is key to operating successfully into the Artistry life-cycle
niques. This case study focuses upon in the global marketplace. As a result, Markets are in a constant state of
INTRODUCTION Over the last 31 years Amway has how Amway has recently injected life common needs and wants are identi- change. Over a period of time, tastes
To prolong the life-cycle of a brand
THE AMWAY CORPORATION invested heavily in the development of into the product life-cycle for its fied across countries. At the same time, and fashions alter and the technology
or product range, an organisation
Founded in Ada, Michigan in 1959, Amway has become one the Artistry range of Skin Care and Artistry range to maintain this proac- parts of the marketing mix requiring used to produce goods and services
must inject new life into the growth
of the largest Direct Selling companies in the world with moves on. As a result, there will
Cosmetics. The range comprises tive position and keep ahead of its adaptation are identified so that it can period through readjusting the ingre-
nearly three million Independent Distributors. Direct selling always be a demand for new products
approximately 3,257 individual lines competitors. be developed to cater for local differ- dients of the marketing mix. In 1996,
as old ones become redundant.
involves dealing with customers face-to-face so that person- which are sold in over 30 countries ences. This requires a thorough under- to ensure the Artistry range would
al attention can be given to each of their requirements. Direct throughout the world. Global marketing standing of every market in which According to the product life-cycle stay in line with evolving market
selling differs from traditional retailing as it often involves Amway operates. concept, all products move through trends and tastes, Amway set about
Based upon a recent Euromonitor
selling to consumers on a one-to-one basis, usually in the Amway is a global organisation which four life-cycle phases. During the upgrading its brand with the additional
study of global sales data: Many advantages arise from competing
comfort of their own homes. The industry has grown rapidly markets products in international introductory phase growth is slow
objective of increasing its global
in a global marketplace, including:
over recent years and is currently estimated to be worth 40 Artistry is among the worlds ten market places. Planning for global and volume is low because of limited
competitiveness.
billion a year world wide. This case study examines this largest brands of facial skin and markets is a much more complex economies of scale - over a larger awareness of the products existence.
growth which has helped Amway to become one of the colour cosmetics process than for domestic markets. It output, costs per unit are decreased Sales rise during the growth phase and Amway engaged in world wide market
industrys market-leaders influenced by changing presents many more risks than operat- to provide the supplier with a com- profit per unit sold reaches a maxi- research to gain a comprehensive
Artistry is the largest direct sales mum. As products reach maturity, understanding of the needs and wants
lifestyles, demographics and economic recession. ing in a domestic market where goods petitive advantage. Amway is able
brand of facial skin care and colour growth in sales starts to level off. of target markets.
are sold in only one local area. Global to spread its research, develop-
cosmetics in the world. Organisations have to invest heavily to
marketing involves recognising that ment, technology and distribution Market research is the systematic
extend the life-cycle while competition
people from all over the world have costs so that it can maximise its gathering, recording and analysing of
Direct selling for Amway Amway has developed becomes stronger. When sales start to
into a global corporation
Product development different needs, i.e. values; customs; production efficiency data about positives and negatives
is undertaken by its own fall a product is said to be in decline.
languages; rules and currencies. relating to the marketing of goods and
independent distributors. manufacturing over 450 the development of new business
Research and development play a In a global environment, managing and services.
Their own income is based products and employing Though it is said that consumer opportunities - in numerous coun-
vital commercial role creating better maintaining the market share for fash-
on the goods they sell, more than 12,000 people needs around the world are converging, tries, markets are growing faster Through acquiring a substantial know-
products through improving opera- ion products is particularly demanding.
bonuses paid by Amway in over 80 countries and there are commonly accepted needs than in Europe and America.
tional processes and helping the whole Cosmetic manufacturers are constantly ledge of each marketplace, the mar-
and the volume of sales territories around the and wants that go beyond national Overseas markets offer the oppor-
business focus upon its customers. challenged by different changes in the keters could identify elements of the
generated through their world. To supply a global barriers. The marketing mix consists tunity to compete in different mar-
Artistry products are the result of years fashion industry. If these changes are marketing mix which could be stan-
own distributor network. base of customers, Amway
of a complex set of variables which ketplaces and extend the life-cycle not properly managed, products could dardised, in addition to elements
These distributors sell to manufactures products of research, development and testing,
an organisation combines together of products quickly move into decline. requiring change.
people they know or meet. ranging from household supported by modern manufacturing
in order to ensure that both global
Amway distributors oper- cleaners to cosmetics, food principles. Amways research is to meet the tastes of consumers
and local corporate objec- Introduction Growth Maturity Decline
ate as their own indepen- supplements to house- proactive, taking the lead in a from different nations - over
wares. It also markets tives are achieved.
dent businesses. market by researching the recent years there has been a

Amway is a long-standing
member of the Direct
Selling Association (DSA)
in the UK and Republic of
Ireland. The DSA regu-
lates the industry by pro-
viding a Code of Conduct
Sales
products on behalf of other newest ingredients in the convergence of tastes resulting in a
leading manufacturers, industry for continuing more global marketplace.
such as Kenwood, Aiwa Time
and Philips. Product life-cycle
Introduction Growth Maturity

Sales
endorsed by the Office of
Fair Trading (OFT).
Time
Injecting new life into the product life-cycle

* Trademark, Amway Corp. Ada, MI. USA

THE TIMES 100 Edition 5
 The needs of in the USA Artistry users prefer deleted making room for the introduc- (c) Global promotional material was produced using this
targeted markets scientific and clinical images tion of 1,261 more fashionable shades. campaign with regional signature model in six different styles
The new range of 3,257 top shades image requirements communicating different moods and
in Australia a moderate image
Market segmentation is the process now acts as a database from which images. From this portfolio, Product
of pampering was found to be
of breaking a market into sections
appealing.
Amway Merchandising departments in One of the biggest challenges for Merchandisers of each region could EXERCISES
which match consumer needs. Where each country can draw the mix of prod- global businesses is designing choose the advert containing the best
segments are identified as having Finding the right marketing mix would ucts and shades appropriate to the promotional and advertising materials images for each marketplace.
requirements that can be met by an require finding the common ground
between the geographic differences
needs of its target market, thereby
ensuring the product and shade
that go beyond national and cultural 1 Using an example, explain
what is meant by direct
6 Outline three difficulties of
marketing a product range
organisation, they can then be targeted. boundaries. The revision of Artistry
and preferences highlighted by the requirements of all markets are met. was backed up with a promotional Conclusion - increasing selling. Compare direct globally. How might an organ-
Research of international markets com- the competitiveness selling to one other form isation attempt to overcome
research. The solution came about campaign designed to:
missioned by Amway aimed to gain a of the brand of distribution. these disadvantages?
through:
broader understanding of the Artistry (b) Universal packaging build brand awareness
user. It indicated that the overall profile (a) developing a product range suit-
of the Artistry user was consistent able for all markets Packaging is particularly important as increase sales of the Artistry range The revision injected life into the 2 List four differences between
global marketing and
7 The benefits from marketing
globally more than make up
part of the product surround in the Artistry brand to extend its life-
across all geographic regions. The maintain a consistent global image marketing domestically. for the increasing number
(b) developing universal packaging cycle across its global markets. The
Artistry woman: cosmetics industry. The functions it to meet specific market needs. of business risks in overseas
(c) undertaking a global promotional serves include: manipulation of the marketing mix for
markets. Discuss why
leads a busy lifestyle campaign that met with regional
The challenge was how to advertise the Artistry products enabled the business 3 Describe what is meant by
the following: organisations decide to
protecting the product which it brand with images that would be to benefit from economies of scale in
appreciates quality cosmetics image requirements. enter overseas markets.
contains appealing and meaningful across a production, packaging and promotion
global marketing
rates skin care as highly important acting as a communication tool - range of nationalities. A model was of the Artistry range while at the same

transforms herself when wearing

(a) A product range
conveying messages about the chosen as the face of Artistry world- time fulfilling the specific needs of product life-cycle 8 This case study reflects the
activities of a unique and
for all markets wide. A portfolio of promotional regional markets around the world.
cosmetics image and ingredients of the prod- marketing mix differentiated organisation.
uct and the manufacturer From reading the case study,
values a natural appearance The Artistry line comprised of a total target market.
locate where Amways
of 3,257 shades, the maximum number creating brand identity between competitive advantages lie.
desires a variety of shades so she
can create any look she wishes.
that could be produced at any one time. the numerous components. 4 Identify two other products
which are marketed in the
How is Amway better
In order to introduce new Artistry placed than many other
Packaging for Artistry products is one global marketplace. Examine
However, the Artistry woman is shades reflecting current fashions, organisations?
element of the marketing mix that is the various elements of the
attracted to images which are regional shades that were under-performing
globally standardised. More than marketing mix for each then
or country specific. For example: would have to be deleted. This was
$2.5 million was invested by describe how these products
complicated by the nature of the mar- are marketed to meet the
in Thailand the Artistry woman is Amway in high quality pack-
ketplace, as shades that might be requirements of the global
attracted to a classic or traditional aging communicating one
under-performing in one region, such market.
image theme, designed to position
as Asia Pacific, may be performing
the cosmetics in the high
well in another region such as Europe.
in Taiwan the image desired is
classy and elegant
quality premium sector. 5 Using the product life-cycle
concept, identify a product at
Each region was assigned the task of Different languages and the introduction, growth,
in Germany the Artistry user is carrying out research to identify under- product information ensure maturity and decline phase.
attracted to glamorous and luxuri- performing shades which could then be that the message is communi- What sort of action might
ous images as well as scientific and deleted to make room for new shades cated to all target marketers take at each phase
clinical images and lines. As a result, 1,298 lines were markets. in the life-cycle to provide
support for a product range?
Use an example, to support
your analysis.

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