Alticor, the holding company that owns both brands, established Quixtar in 1999 as a North American online complement to Amway’s direct-sales strategy (though Amway continued to hold multilevel-marketing court in the rest of the world). This allowed Alticor to create a fresh new identity that was specific to the US and Canada, with a business model that enabled consumers to order their health and beauty products online instead of through the person-to-person interaction that is the hallmark of Amway sales.
“Quixtar was the first market within our broader global business to offer a fully supported website for Independent Business Owners' business functions and customer ordering,” says Steve Lieberman, managing director for Quixtar North America/Amway Global.
It also, said critics, freed Quixtar to operate independently of the Amway brand, which was constantly combating accusations of being nothing more than a pyramid scheme. Detractors claimed that those at the top of the money chain benefited from the often-complex sales blueprint, while new recruits who ordered the kits and products would often drop out before they even recouped their initial investment, never attaining the direct-sale cash carrot that was dangled in front of them when they signed up.
Amway was cleared of any illegal activities by the FTC in 1979, and the company takes great pains to address these issues on its website. It tries to boost its credibility by illustrating its brands’ sales success: Internet Retailer’s Top 500 guide to the web ranked Quixtar first in the Health and Beauty category for the fifth year in a row, and the brand reported fiscal 2007 sales of US$ 1.072 billion (despite actions the company claimed it had to take against a few IBOs who “refused to change unacceptable practices”).
But it has still been difficult for Amway to break free of its reputation, which is why many were surprised when the rebranding effort to phase out the Quixtar brand and go back to Amway was announced last year. Lieberman explains, “The company decided in 2007 to resume the use of the Amway brand in North America, creating a consistent brand presence across all 80 markets.”
Indeed, an internal memo from Steve Van Andel and Doug DeVos, chairman and president of Amway, respectively, and sons of Amway’s co-founders, cited this need to “fly one flag…[and] to put significant resources behind establishing one opportunity brand wherever we do business.”
They also stated that the name change was not for nostalgia-driven reasons, but for solid business ones: research had shown, according to the memo, that “the Quixtar name is weaker and less known in the U.S. and Canada than we ever expected…[while] even eight years after leaving North America, the Amway name is stronger and better known than we realized.”
Lieberman concurs. “The brand change is to leverage the global Amway success story, as well as the very high awareness of the Amway name in North America,” he says. “Historically, Amway in North America, and then Quixtar in this decade, did very little advertising. The thinking was that our Independent Business Owners were our consumer voice for both our brands and our business opportunity. While that's still true, and most consumers still learn about our products through the IBOs who represent our brands, in a more crowded marketplace we realized the value of a well-established brand and the need to create greater familiarity with our company and its brands. The decision
to rebrand to Amway was heavily influenced by high awareness of that name compared to relative anonymity for Quixtar.”
A Gradual Revamp
The brand switch is designed to be a gradual one that will take place in stages, culminating with Amway’s 50th anniversary in 2009. The logo transition illustrates this slow-but-steady transformation: the logo in use through September 2008 features “Quixtar North America” dominating a smaller “Amway global logo” from September 2008 (which will also mark the kickoff of marketing initiatives for Amway’s 50th anniversary) through May 2009, the Quixtar brand will be reduced and placed underneath the Amway Global logo; and in May 2009, the brand logo will fully transition to Amway Global, eliminating any reference to Quixtar.
To help get the message out, Amway does direct-response marketing for its Nutrilite and Artistry lines and has launched a national ad campaign with the tagline "Now You Know.” “[This campaign introduces] consumers to the Amway Global brand, along with facts and figures that represent what the brand stands for today, including global leadership in vitamin and mineral supplement sales, online leadership in health and beauty sales, and other aspects of a nearly 50-year-old industry leader,” says Lieberman.
Amway has also brought some star power into the loop: soccer star Ronaldinho was recruited earlier this year to endorse the Nutrilite line, joining fellow athlete Gabrielle Reece (who has served as the Simply Nutrilite spokesperson) and actress Sandra Bullock (the face of Artistry’s Creme LX, the new addition to its skin-care line).
The company is also taking its new message and brand repositioning on the road with what it’s calling a “mobile brand experience”: Two customized buses will travel to 20 cities around the US this fall, raising awareness for the Nutrilite and Artistry brands. The coaches will feature lounges for sampling Artistry and Nutrilite products, a spa station, health assessments for consumers interested in Nutrilite vitamins and interactive educational presentations.
The bus tour will take place in conjunction with the Amway Global Presents Tina Turner Live in Concert Tour, which will begin its run in Kansas City on October 1; the buses will accompany Turner to the 20 US cities on her tour itinerary. As a presenting sponsor of the concert series, the Amway Global name will appear on tickets, ads and signage at all the North American concert venues. Amway is hoping this high-profile sponsorship and others—including another recent announcement that it will be teaming up with the YMCA of the USA to build healthier communities across America and will be sponsoring track-and-field events across the country—will help restore consumer confidence as it once more tries to take the direct-market world by storm.
The company’s confidence level is high, in part due to already gauged consumer reaction. According to the memo sent out by DeVos and Van Andel, a TV ad campaign conducted two years ago in Michigan showed that potential constituents were willing to remain open-minded about the Amway brand. Survey research held after the campaign showed that “The ‘I Am Amway’ ads helped…improve key aspects of [the brand’s] reputation in Michigan by 15 to 30 percent.”
Whether North America accepts the new-and-improved Amway remains to be seen. And if it does, it may take some time to assess whether it’s a “devil you know” scenario or a wholehearted embrace of a brand that honestly assessed its mistakes and perception challenges and underwent a complete brand makeover in its quest for public legitimacy.