Amazon - Brand Management

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AMAZON.COM, INC.
BRAND MANAGEMENT
A Project Report
Submitted by:
HET MAVANI
12BSPHH010385
09-Sep-13
Submitted under the guidance of Prof. Sriram Rajann, IBS Hyderabad.

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Contents
1 Introduction ..........................................................................................................................................1
1.1 Origin and Genesis of Amazon.com..............................................................................................3
1.2 Timeline of events related to Amazon.com..................................................................................5
2 Organizational Structure.....................................................................................................................14
2.1 Structure of Amazon.com...........................................................................................................14
2.2 Corporate Management Team of Amazon.com .........................................................................16
2.3 Marketing Managers and Brand Managers at Amazon.com......................................................17
3 Brand Portfolio....................................................................................................................................18
3.1 Amazon Kindle ............................................................................................................................19
3.2 Amazon Web Services.................................................................................................................23
3.3 Digital Brand Portfolio.................................................................................................................27
3.4 STP Analysis.................................................................................................................................27
4 Strategic Brand Campaigns.................................................................................................................29
4.1 Advertising Agencies...................................................................................................................29
4.2 Campaigns...................................................................................................................................30
5 Marketing Environment......................................................................................................................39
5.1 E-Commerce Industry .................................................................................................................39
5.2 Sector Analysis ............................................................................................................................41
5.3 Key Drivers of Growth for Amazon.............................................................................................44
6 Marketing Strategies...........................................................................................................................46
6.1 BCG Matrix..................................................................................................................................46
6.2 Porter’s Five Forces.....................................................................................................................47
6.3 Strategic Position ........................................................................................................................50
7 Pricing Strategies.................................................................................................................................58
7.1 Cost Leadership...........................................................................................................................58
7.2 Cost Minimization Strategies......................................................................................................59
8 Consumer Behavior Elements.............................................................................................................61
8.1 Consumer Decision-Making Process...........................................................................................61
8.2 Consumer Insights.......................................................................................................................62

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8.3 Customer Loyalty ........................................................................................................................64
9 Brand Positioning................................................................................................................................66
9.1 Layering of the Brand..................................................................................................................66
9.2 Brand Architecture......................................................................................................................67
9.3 Brand Personality........................................................................................................................68
9.4 Measuring Brand Value...............................................................................................................68
9.5 Brand Identity .............................................................................................................................69
10 Competitor Analysis........................................................................................................................70
10.1 Classification of Competitors......................................................................................................71
10.2 Amazon vs. ebay .........................................................................................................................72
10.3 Amazon vs. Wal-Mart..................................................................................................................73
10.4 SWOT Analysis.............................................................................................................................74
11 Recommendations for Amazon.com ..............................................................................................75
11.1 Recommended Strategies...........................................................................................................75
12 Future of the Brand.........................................................................................................................76
12.1 Short-term Goals.........................................................................................................................76
12.2 Target Company for Acquisition .................................................................................................79
13 References ......................................................................................................................................80

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1 Introduction
Amazon.com, which is branded as ―Earth’s Most Customer-Centric Company‖ and world’s
largest online retailer, is an e-commerce multinational company based in Seattle, Washington,
USA. Started as an online bookstore, Amazon.com diversified quickly, selling DVDs, VHSs,
CDs, software, electronics, video games, apparel, furniture, and many other products. The
company also produces consumer electronics—notably the Amazon Kindle e-book reader and
the Kindle Fire tablet computer—and is a major provider of cloud computing services.
In July 1994, Jeff Bezos, founder and CEO, incorporated the company (as Cadabra) and in 1995,
the site went online as Amazon.com. The company was renamed after the Amazon River located
in South America, which is one of the largest rivers in the world.
Amazon has separate retail websites for various countries including United States, Canada,
United Kingdom, France, Germany, India, Italy, Spain, Brazil, Japan, and China, with
international shipping to certain other countries for some of its products and maintains dozens of
fulfillment centers around the world which encompass more than 26 million square feet.

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Table 1-1 Range of Amazon Products
Unlimited Instant
Videos
Appstore for Android Electronics &
Computers
Toys, Kids and Baby
MP3s and Cloud
Player
Digital Games and
Software
Home, Garden &
Tools
Clothing, Shoes and
Jewelry
Amazon Cloud Drive Movies, Music &
Games
Grocery, Health and
Beauty
Sports and Outdoors
Kindle E-readers Kindle Fire Tablets Books & Audible Automotive and
Industrial
Table 1-2 Amazon Companies
Company Offerings Website
6pm Score deals on fashion brands http://www.6pm.com/
AbeBooks Rare Books & Text Books http://www.abebooks.com/
AfterSchool.com Kids’ Sports, Outdoor and Dance Gear http://www.afterschool.com/
AmazonFresh Groceries and More Right to Your Door http://fresh.amazon.com/
Amazon Local Great Local Deals in Your City http://local.amazon.com/
AmazonSupply Business, Industrial and Scientific
Supplies
http://www.amazonsupply.com/
AmazonWebServices Scalable Cloud Services http://aws.amazon.com/
Askville Community Answers http://askville.amazon.com/
Audible Download Audio Books http://www.audible.com/
BeautyBar.com Prestige Beauty Delivered http://www.beautybar.com/
Book Depository Books With Free Delivery Worldwide http://www.bookdepository.com/
Bookworm.com Books For Children Of All Ages http://www.bookworm.com/
Casa.com Kitchen, Storage & Everything Home http://www.casa.com/
CreateSpace Indie Print Publishing Made Easy https://www.createspace.com/
Diapers.com Everything But The Baby http://www.diapers.com/
DPReview Digital Photography http://www.dpreview.com/
Fabric Sewing, Quilting & Knitting http://www.fabric.com/
IMDb Movies, TV and Celebrities http://www.imdb.com/
Junglee.com Shop Online in India http://www.junglee.com/
Kindle Direct
Publishing
Indie Digital Publishing Made Easy https://kdp.amazon.com/
Look.com Kids’ Clothing and Shoes http://www.look.com/
MYHABIT Private Fashion Designer Sales http://www.myhabit.com/
Shopbop Designer Fashion Brands http://www.shopbop.com/
Soap.com Health, Beauty and Home Essentials http://www.soap.com/
Vine.com Everything to Live Life Green http://www.vine.com/
Wag.com Everything For Your Pet http://www.wag.com/
Woot Never Gonna Give You Up http://www.woot.com/
Yoyo.com A Happy Place To Shop For Toys http://www.yoyo.com/
Zappos Shoes & Clothing http://www.zappos.com/

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1.1 Origin and Genesis of Amazon.com
In May 1994, Jeff Bezos, a 30-year old employee of a major
Wal Street firm D.E. Shaw, was sitting at the computer in
his39th
flooroffice in midtown Manhattan,and hefound a site
that purported to measure Netusage while exploring the still
immature Internet.To his surprise, the Internetwas growing
at a rate of 2,300% a year.
The Net had been, until 1994, alargely commerce-freezone,
since it was createdby the Defense Department to keep
anetwork of computers communicating in case of nuclear
attack. This system then evolvedinto a network over which
university and government researchers could exchange
messages and data across most computer platforms.The
government decided to get out of the Internet business and
allow private companies to step in and develop it.
Bezos felt that he could have a first-mover advantage in e-commerce. Hence, he researchedmail-
ordercompanies, thinking that things thatsold well by mail would do well on the internet. He
analyzed the top 20 mail-order products and searched for products where he could create value
for customers. This ultimately led to the idea of books. A good catalog of books would contain
thousands or even millions of listings, which would make it as big as a phone book, which were
too expensive to mail. This was perfect for the Internet, which is the ideal platform for such a
huge amount of information. So, Bezos finally decided that his new business would sell books
online, catering the large world-wide demand for literature and exploiting the low price points
for books with huge availability.
Table 1-3 - CEO's Current Status
Jeff Bezos – CEO, Amazon.com
Net Worth $ 25.2 billion (as of March 2013)
Age 49
Source of Wealth Amazon.com, self-made
Residence Seattle, WA
Country of Citizenship United States
Education Bachelor of Arts / Science, Princeton University
Marital Status Married
Children 4
Forbes Billionaire Rank 2013 #19
(Source: http://www.forbes.com/profile/jeff-bezos/)
1-1 Amazon Founder Jeff Bezos

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Amazonwas originally founded in the garage of a modest two-bedroom home rented by Bezos in
Bellevue, a Seattle suburb in Washington. The company began as an online bookstore and
opened its website on July 16, 1995. In the initial days of business, without any press, Amazon
sold to all 50 states and over 45 countries. Its sales were up to $20,000/week within two months.
While the largest brick and mortar bookstores and mail order catalogs might offer over 200,000
titles, an online bookstore could offer much more, since they had an almost unlimited virtual (not
actual) warehouse: those of the actual product makers and suppliers. Bezos wanted a name for
his company that began with "A‖, which would make it appear early in an alphabetically
arranged directory. He began looking through the dictionary and selected "Amazon" because it
was a place that was "exotic and different" just as he planned for his store to be. He also planned
to make his store the biggest in the world, just like the river Amazon.
In May 1996, Amazon was on the front page of the Wall Street Journal, which resulted in two
things: it introduced Amazon to a whole new stream of customers, and it captured the attention
of rivals like Barnes & Noble and Borders Group, which were yet to move online.
Barnesandnoble.com appeared a year later just before Amazon's IPO (Initial Public Offering),
which went off at a modest $18 a share. The celebrated venture capital firm Kleiner Perkins
Caufield & Byers was its biggest institutional investor before the IPO. Some of the Wall Street
companies were afraid of the threat posed by the giant Barnes & Noble, which looked unbeatable
with a national network of bookstores. But Barnesandnoble.com did nothing to stall Amazon's
amazing sales.
Since 2000, Amazon's logo has been featured as a curved arrow (shaped like a smile) leading
from A to Z, indicating that they carry every product from A to Z, and they intend to serve with a
smile.

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1.2 Timeline of events related to Amazon.com
1994 July Company Incorporated
1995 July 16th
The website was put online.
July Amazon.com Sells First Book, "Fluid Concepts & Creative Analogies:
Computer Models of the Fundamental Mechanisms of Thought"
1996 July Launches Amazon.com Associates Program
1997 May Announces IPO, Begins Trading on NASDAQ Under "AMZN"
September Introduces 1-Click™ Shopping
November Opens Fulfillment Center in New Castle, Delaware
1998 February Launches Amazon.com Advantage Program
April Acquires Internet Movie Database
June Opens Music Store
October Launches First International Sites - Amazon.co.uk (UK) and
Amazon.de (Germany)
November Opens DVD/Video Store
1999 January Opens Fulfillment Center in Fernley, Nevada
March Launches Amazon.com Auctions
April Opens Fulfillment Center in Coffeyville, Kansas
May Opens Fulfillment Centers in Campbellsville and Lexington, Kentucky
June Acquires Alexa Internet
July Opens Consumer Electronics, and Toys & Games Stores
September Launches zShops
October Opens Customer Service Center in Tacoma, Washington
Acquires Tool Crib of the North's Online and Catalog Sales Division
November Opens Home Improvement, Software, Video Games and Gift Ideas
Stores
December Jeff Bezos Named Time Magazine "Person Of The Year"
2000 January Opens Customer Service Center in Huntington, West Virginia
May Opens Kitchen Store
August Announces Toys "R" Us Alliance
Launches Amazon.fr (France)
October Opens Camera & Photo Store
November Launches Amazon.co.jp (Japan)
Launches Marketplace
Introduces First Free Super Saver Shipping Offer (Orders Over $100)
2001 April Announces Borders Group Alliance
August Introduces In-Store Pick Up
September Announces Target Stores Alliance
October Introduces Look Inside The Book™
2002 June Launches Amazon.ca (Canada)
July Launches Amazon Web Services
August Lowers Free Super Saver Shipping Threshold to $25

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September Opens Office Products Store
November Opens Apparel & Accessories Store
2003 April Announces National Basketball Association Alliance
June Launches Amazon Services, Inc. Subsidiary
September Opens Sports & Outdoor Store
October Introduces Search Inside The Book™
Launches A9.com, Inc. Subsidiary
November Opens Gourmet Food Store
December Opens Health & Personal Care Store
2004 January Introduces Presidential Candidates Feature
April Opens Jewelry Store
May Announces The Bombay Company Alliance
June Opens Software Development Center in Scotland
September Acquires Joyo.com Limited
Launches Paris Hilton Jewelry Line Exclusively on Amazon.com
Subsidiary A9.com Launches New Web Site and A9 Toolbar
October Amazon Web Services Offerings Give Developers Unprecedented
Access to Amazon Product Data and Technology, and First-Ever
Access to Data Compiled by Alexa Internet
Launches Beauty Store
November A9.com Introduces Toolbar for MozillaFirefox
Launches Amazon Theater
December Announces Opportunity to Contribute to American Red Cross Tsunami
Disaster Relief Efforts on Amazon.com
Reports Busiest Holiday Season Ever
2005 January Announces Diane Von Furstenberg Alliance
A9.com Launches Yellow Pages
February Introduces Amazon Prime
Announces Nonprofit Innovation Award
April Acquires BookSurge LLC
May Introduces Amazon Wedding
June Celebrates 10th Anniversary with Employee Event Featuring
Performances by Bob Dylan, Norah Jones and Bill Maher
Announces Second Short-Film Competition
July Launches Special Deliveries with Select Celebrities and UPS
Acquires CustomFlix Labs, Inc.
August A9.com Launches Maps
Launches Amazon Shorts
Launches the First The O.C. –Branded Women's Fashion Collection
September Launches The Hollywood Prescription
Opens Customer Service Center in Kennewick, Washington
October Alexa Web Information Service Launches on Amazon Web Services
Web Site

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Announces Fulfillment Agreement with Drugstore.com
November Launches New Gifting Experience
Announces Record-Breaking Watch Sales
Amazon.com Subsidiary Joyo.com Honored with Customer Care
Award
Announces Partnership with Celebrities to Raise Money for Hurricane
Victims During Holiday Shopping Season
December Announces Customers Ordered over 108 Million Items Worldwide
During 11th Holiday Season
2006 January Joyo.com Announces it is the Largest Chinese Bookstore in the World
Announces Alexa Top Sites Web Service for Developers
Announces Amazon Fishbowl with Bill Maher
February Launches Amazon Connect
Announces Jewelry Sales Up More Than 100 Percent in Fourth Quarter
2005
Acquires Shopbop.com
March Launches Amazon Simple Storage Service (S3)
April Announces Partnership Between Timex and Amazon Services
Announces Partnership Between Benefit Cosmetics and Amazon
Services
Announces Partnership Between CustomFlix for DVD Distribution
Launches the Media Gateway Program with CustomFlix
May Announces Jewelry and Watch Sales Up More Than 100 Percent in
First Quarter 2006
June Amazon Fishbowl with Bill Maher Premieres on Amazon.com
Gateway
Launches Emergency Preparedness Store to Offer Preparation and
Recovery Products for Hurricane Season
Unveils Exclusive The Devil Wears Prada Boutique in Apparel &
Accessories Store
Launches New Toy and Baby Stores with Largest Selection Ever
July Launches Grocery Store Amazon Enterprise Solutions Extend E-
Commerce Agreement with Target Corporation to 2010
Announces 22% Sales Growth Fueled by Lower Prices, Free Shipping
Amazon Web Services Announces "Alexa Site Thumbnail" Now
Available for Developers
Announces Library Processing for Public and Academic Libraries
Across the United States
September Launches Amazon UnboxTM, a Digital Video Download Service with
DVD-Quality Picture
CustomFlix and Amazon.com Launch CD on Demand Service
Launches WebStore and Fulfillment by Amazon for Small and
Medium-Sized Businesses
October Amazon.com Jewelry and Watches Sales up More Than 100% in Third

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Quarter 2006
November Voted #1 in Customer Service According to National Retail Survey
Consumer Electronics Store
Announces New Interest-Free Financing, Click-to-Call and Premium
Delivery on Select Electronics
Amazon.com Lets "Customers Vote" for Extraordinary Holiday Deals
December CustomFlix Announces Support for Amazon Unbox
Announces 12th Holiday Season is Best Ever
2007 January Launches Endless.com, a shoe and handbag website that offers over
15,000 styles and free overnight shipping on all products
February Announces Fourth Quarter Sales up 34%; Media Grows 25%;
Electronics and Other General Merchandise Grows 55%
Announces Jewelry and Watches Sales up More Than 100% in Fourth
Quarter 2006
March "Amazon Unbox on TiVo" Available, Offering Over 1.5 Million
Broadband-Ready TiVo Subscribers Access to Thousands of Movies
and TV Shows
Launches Classical Music Blowout Store
April Launches "Go Indie" Music Store
Announces First Quarter Sales Surpass $3 Billion, up 32% Year over
Year -- Operating Profit Grows 38% -- Raises Financial Guidance
May Announces Jewelry and Watch Sales Are Up More Than 100 Percent in
First Quarter 2007
June Joyo.com becomes ―Joyo/Amazon‖ with a New Look and New
Features
July TiVo Subscribers Can Now Browse, Purchase and Rent Amazon
Unbox Videos Directly From Their TiVo Box
Announces Falls Church, Va., as the ''Harry-est Town'' in America
Announces Second Quarter Sales up 35% Year over Year
Thousands of National Archives Films to be Made Available Through
CustomFlix Labs
August Launches Jewelry & Watches Stores Internationally
Announces Tuition & Textbooks Sweepstakes Grand Prize -- One Year
of Tuition
September Launches Public Beta of Amazon MP3
October Announces Plans to Open New Fulfillment Center in Munster, Indiana
Announces Third Quarter Sales up 41% Year over Year
November Amazon Web Services Offers European Storage for Amazon S3
Launches New Customer Video Reviews
Launches The Holiday Toy List
Amazon Web Services Offers European Storage for Amazon S3
Announces Amazon Customers Vote returns
Launches Amazon Kindle
Launches Askville.com

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December Enhances Payment Options with Bill Me Later
Amazon.com purchases J.K. Rowling's "The Tales of Beedle the Bard"
Announces Its 13th Holiday Season is Best Ever
2008 January Amazon.com Announces Fourth Quarter Sales up 42% to $5.7 Billion
Announces LOVEFiLM will Acquire Amazon's UK and German DVD
Rental Business
February Amazon.com Board of Directors Authorizes Debt and Stock
Repurchase Programs
Amazon.com Jewelry Store Retail Diamond Sales up More Than 100%
in Fourth Quarter 2007
Amazon.com Launches Amazon Currency Converter
March Amazon Launches New Applications on Facebook(R) Platform--
''Amazon Giver'' and ''Amazon Grapevine''
Amazon.com Completes Acquisition of Audible
Amazon Web Services Launches ''Elastic IPs''
April Amazon.com Launches "Amazon TextBuyIt"
Amazon.com Announces First Quarter Sales up 37% to $4.1 Billion
May Announces Jewelry Store Retail Diamond Sales up More Than 100% in
First Quarter 2008
Announces Rhiannon D. as the Winner of the ''Amazon Beedle the
Bard Ballad Writing Contest''
June Announces New Fulfillment Center in Goodyear, AZ
Launches Office Supplies Store
Amazon.com Acquires Fabric.com
July Announces Second Quarter Sales up 41% to $4.06 Billion
August Amazon.com Acquires AbeBooks
Exclusively Offers Collector's Edition of "The Tales of Beedle the
Bard"
Amazon Web Services Launches Amazon Elastic Block Store for
Amazon EC2
September Launches Election 2008 Store
Launches Motorcycle & ATV Store
Opens New TV Show Stores
October Announces Third Quarter Sales up 31% to $4.26 Billion
Amazon Web Services Launches Amazon EC2 for Windows
November Announces Beginning of Multi-Year Frustration-Free Packaging
Initiative
Unveils 2008 Holiday Toy List Powered by Amazon Windowshop
Announces Daily Deal Text Alerts
Amazon Web Services Launches Amazon CloudFront
Announces First-Ever Holiday Customer Review Team
Internet Movie Database launches the German speaking IMDB.de
December Amazon Web Services Launches "Public Data Sets on AWS"
Announces 14th Holiday Season Is Best Ever

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2009 January Announces Fourth Quarter Sales up 18% to $6.70 Billion
Launches Inauguration Store
February Introduces Amazon Kindle 2
March Introduces Kindle Application for iPhone and iPod Touch
April Launches Xbox LIVE Store
May Introduces Kindle DX
Introduces AmazonEncore
June Introduces Tom Douglas by Pinzon
Amazon.com acquires Zappos.com
Introduces AmazonWireless
Launches Outdoor Recreation Store
August Launches new free shopping application for Android
September Introduces AmazonBasics
Announces Kindle is for sale in more than 100 countries
Announces Amazon Wish List's 10th Anniversary
Launches Local Express Delivery
Introduces Kindle for PC
November Announces expansion of Amazon Web Services into Asia
Launches Frustration-Free Packaging Certification Program
Announces Kindle is available to customers in Canada
Announces Susan Boyle's "I Dreamed a Dream" is largest global CD
pre-order
Announces Kindle breaks record for sales in a single month during
November
December Announces Textbooks Trade-In Program
Announces Kindle breaks monthly sales record
Announces Kindle is the most gifted item ever
Launches the Bestsellers Archive
2010 January Introduces Kindle DX with global wireless
Announces Fourth Quarter Sales up 42% to $9.5 Billion
February Announces Kindle for BlackBerry
March Introduces Kindle for Mac
April Announces Kindle App for iPad
Announces First Quarter Sales up 46% to $7.13 Billion
May Announces Shopping App for iPad
Introduces Kindle for Android
Launches Amazon WebStore
June Launches Wheels Store
Announces IMDB Everywhere initiative
July Announces Second Quarter Sales up $41% to $6.57 Billion
Announces new generation Kindle

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August Announces "Your Kindle Commercial Contest"
September Introduces Amazon Mom Program
Launches Kindle for the Web
Acquires BuyVIP.com
Introduces Heidi Klum for New Balance Collection
Endless.com Launches Jewelry Category
November Launches Amazon Studios
Introduces Price Check by Amazon
Launches Amazon.it (Italy)
December Announces $175 Million Investment in LivingSocial
Announces Kindle for the Web
Announces Amazon Deals App
Acquires LOVEFiLM International Limited
February Amazon.com Announces Prime Instant Videos, a New Benefit for
Prime Members
Amazon Web Services Introduces AWS CloudFormation
March Introduces Amazon Appstore for Android
Introduces Amazon Cloud Drive, Amazon Cloud Player for Web and
Amazon Cloud Player for Android
April
May Announces MYHABIT.COM
Amazon.com Now Selling More Kindle Books Than Print Books
June Launches AmazonLocal
John Locke Becomes First Independently Published Author to Join the
"Kindle Million Club"
Endless.com Announces International Shipping to over 50 Countries
Worldwide
AT&T to Sponsor Kindle 3G
August Amazon Web Services Announces Global Rollout of Amazon Virtual
Private Cloud (Amazon VPC)
Introduces Kindle Cloud Reader
September Introduces Amazon Silk
Introduces Kindle Fire, Kindle Touch and Kindle Touch 3G Kindle
Books Available at Thousands of Local Libraries
November Introduces The Kindle Owners’ Lending Library
December Amazon Web Services Launches Brazil Datacenters for Its Cloud
Computing Platform
Introduces KDP Select
Amazon Publishing to Acquire Marshall Cavendish US Children’s
Books Titles

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Amazon Web Services Launches Amazon DynamoDB
February Launches Sports Collectibles Store
March Acquires Kiva Systems, Inc.
April Announces First Quarter Sales up 34% to $13.18 Billion
Introduces AmazonSupply
Amazon Web Services Introduces AWS Marketplace
Introduces eBooks Kindle en Español
May Amazon Studios to Develop Original Comedy and Children’s Series
for Amazon Instant Video
Amazon Web Services Launches Dynamic Content Support in Amazon
CloudFront
Amazon Web Services Announces First Global Customer and Partner
Conference: AWS re: Invent
June Opens Portal for International Mobile App Distribution
Amazon Publishing Acquires Avalon Books
Amazon Web Services Introduces New Amazon EC2 High I/O
Instance Type
Introduces GameCircle
Introduces Game Connect
August Amazon Web Services Announces Amazon Glacier
Launches Textbook Rental
September Amazon Web Services Launches Reserved Instance Marketplace
Introduces ―X-Ray for Movies‖
Amazon Publishing Introduces Kindle Serials
Introduces the New Kindle Fire HD Family
Introduces the New Kindle Paperwhite
Introduces ―Kindle for Windows 8‖
Announces Whispercast for Kindle
Amazon Studios Options First Novel
November Amazon Web Services Announces Amazon Redshift
Announces Worldwide Kindle Device Sales More Than Double Last
Year’s Record Over Holiday Shopping Weekend
Launches Video Gift Cards
Introduces Amazon Wine
December Announces For the Eighth Consecutive Year, Amazon Ranks #1 in
Customer Satisfaction During the Holiday Shopping Season
Amazon Web Services Introduces New Amazon EC2 High Storage
Instance Family
Prime Instant Video Greenlights Six Original Series Pilots for
Production
Announces Kindle Available From Livrariada Vila And

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Pontofrio.com.br
Announces Fulfillment Center in DuPont
Launches Friends & Family Gifting
Introduces ―Kindle FreeTime Unlimited‖
AWS Marketplace Announces Support for Software Running on
Microsoft Windows®
2013 January Announces Three Fulfillment Centers in Texas
Announces Fourth Quarter Sales up 22% to $21.27 Billion
Announces Acquisition of IVONA Software
Announces its Third Fulfillment Center in California
Amazon MP3 Store Makes 22-Million Song Catalog Available to
iPhone and iPod touch Users for the First Time
Introduces ―Amazon AutoRip‖
Opens Fulfillment Center in Robbinsville
February Introduces Amazon Coins
Amazon Cloud Player Available in Ford SYNC Applink-equipped
Vehicles
March  Announces Entertainment Collectibles Store

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2 Organizational Structure
Amazon consists of a divisional organizational structure due to a large number of products and
services under it. A divisional structure consists of different departments for different products
and services, which allow the department heads to appropriately focus their resources and
results, and also monitor the organization’s performance. Such a structure is best for such a large
organization because it is the most flexible.
2.1 Structure of Amazon.com
Amazon's organizational structure consists of CEO and founder Jeffery Bezos and an eight-
member board of directors, wherein the CEO oversees the Chief Financial Officer (CFO), the
Chief Technology Officer and the following 8 departments:
Business Development,
eCommerce Platform,
International Retail,
North America Retail,
Web Services,
Digital Media,
Legal & Secretary, and
Kindle.
The CFO oversees the Real Estate and Control department. International Retail oversees three
separate departments of the company: China, Europe and India. North America Retail oversees
the following five departments:
Seller Services,
Operations,
Toys,
Sports & Home Improvement,
Amazon Publishing and
Music & Video.
The Web Services department oversees Amazon S3 and Database Services.
Other departments include:
Product Development & Studios,
Europe Operations,
Global Advertising Sales,
Computing Services, and
Global Customer Fulfillment.

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CEO, President, Chairman
of the Board
(Jeffrey Bezos)
CFO
(Thomas Szkutak)
Global Public Policy
(VP)
Real Estate (VP)
Contro (VP)lCTO
Business
Development (SVP)
Consumer Business
(SVP)
Seller Services (SVP)
Hardlines (VP)
eCommerce Platform
(SVP)
International
Consumer Business
(SVP)
China (Country
Manager)
Europe Consumer
Business (VP)
India (VP)
Web Services (SVP)
Database Services
(VP)
Worldwide Digital
Media (SVP)
Mobile (VP)
Special Project
(Director)
General Councel &
Secretary (VP)
Kindle (VP) Kindle (VP)
Director
(Tom Alberg)
Director
(John Brown)
Director
(William Gordon)
Director
(Jamie Gorelick)
Director
(Alain Monie)
Director
(Jonathan
Rubinstein)
Director
(Thomas Ryder)
Director
(Patricia Stonesifer)

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2.2 Corporate Management Team of Amazon.com
 Jeff Bezos – Chairman, President & CEO
Jeffrey Blackburn – SVP, Business Development
 Sam Wheeler – Director, Advertising & Partnerships
 Russell Baker – Director, Worldwide Business Development for Kindle
Tom Skzutak – SVP and Chief Financial Officer (CFO)
 Mark Peek – VP and Chief Accounting Officer
 Tim Stone – VP Kindle Finance
Jeffrey Wilke – Senior Vice President of North America Retail
Steven Kessell – SVP, Worldwide Digital Media
 Neil Roseman – VP Engineering
Brent Wood – Area VP, Consumer Media
Ian Freed – VP, Digital/Kindle
o Gregg Zehr – President & CEO, Lab 126
David Limp – VP Kindle
 Bill Carr – VP Digital Media
Marc Onetto – SVP, Worldwide Operations and Customer Service
 Tom Weiland – VP, World-Wide Customer Service
ShiviShankaran – Director Worldwide Customer Returns
o Greg Walsh – GM of Warehouse Facility
Mike Gathright – Director Customer Service
Mark Honeycutt – Director Global Customer Service Outsourcing
 Dave Clark – VP of North America Operations
Mike Roth – VP North America Supply Chain and Transportation
Operations
o Tim Collins – Regional Director of Operations
o AkashChauhan – Regional Director of Operations
o Michael Passales – Regional Director, North American
Fulfillment
 GirishLakshman – Worldwide Strategy and Technology
 Nadia Shouraboura – Technology VP, WW Operations (Packaging)
Doug Herrington – VP of Consumables (Packaging)
Andrew Jassy – SVP, Web Services
Werner Vogels – VP & Chief Technology Officer (CTO)

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2.3 Marketing Managers and Brand Managers at Amazon.com
Neil Lindsay
•Vice President, Marketing
•Amazon.com, Seattle (USA)
Keith Robertshaw
•Senior Marketing Manager (Kindle)
•Amazon.co.uk, Guildford (UK)
Ryan Murkins
•Senior Manager, Marketing - Kindle Fire
•Amazon.com, Seattle (USA)
Shipla Taneja
•Marketing Manager - Digital
•Amazon, New Delhi (India)
Tara Kriese
•Product Marketing, Digital Products
•Amazon, Seattle (USA)
Leigh K.
•Senior Marketing Manager
•Alexa Internet, San Fransico (USA)
Tristan Leach
•New Business and Brand Manager
Calum R.
•Partner Marketing Manager
•Amazon Web Services, New York (USA)
Manisha Rana
•Senior Online Marketing Manager - Kindle
•Amazon, Bengaluru (India)
Matthew T
•Senior Vertical Product Manager - Advertising Analytics
Jason I.
•Head of Marketing, Prime Instant Video

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3 Brand Portfolio

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3.1 Amazon Kindle
The Amazon Kindle is a series of e-book
readers designed and marketed by
Amazon.com. Amazon Kindle devices
enable users to shop for, download, browse,
and read e-books, newspapers, magazines,
blogs, and other digital media via wireless networking. The hardware platform, developed by
Amazon.com subsidiary Lab126, began as a single device and now comprises a range of devices
– most using an E-Ink electronic paper display capable of rendering 16 tones to simulate reading
on paper while minimizing power consumption.
Kindle hardware has evolved from the original Kindle introduced in 2007 and a Kindle DX line
(with a larger screen) introduced in 2009. Announced in September 2011, the range now includes
devices with keyboards (Kindle Keyboard), devices with touch sensitive screens (Kindle Touch),
a tablet computer with a reader app and a color display (Kindle Fire) and a low-priced model
with an on-screen keyboard (Kindle).
Amazon has also introduced Kindle software for use on various devices and platforms, including
Microsoft Windows, iOS, BlackBerry, Mac OS X (10.5 or later, Intel processor only), Android,
webOS, and Windows Phone (not available in many parts of Europe). Amazon also has a
"cloud" reader to allow users to read, and purchase, Kindle books from a web browser.
Content for the Kindle can be purchased online and downloaded wirelessly in some countries,
using either standard Wi-Fi or Amazon's 3G "Whispernet" network. Whispernet is accessible
without any monthly fee or wireless subscription, although fees can be incurred for the delivery
of periodicals and other content when roaming internationally beyond the customer's home
country. Through a service called "Whispersync," customers can synchronize reading progress,
bookmarks and other information across Kindle hardware devices and other mobile devices.

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Generation Model Release Date Price (USD)
First Generation Kindle 19th
November 2007 399
Second Generation
Kindle 2 23rd
February 2009 259-359
Kindle 2 (International) 19th
October 2009 189-279
Kindle DX 10th
June 2009
Kindle DX (International) 19th
January 2010
Kindle DX Graphite 1st
July 2010 379-489
Third Generation
Kindle Keyboard (Wi-Fi) 27th
August 2010 99-139
Kindle Keyboard (3G/Wi-Fi) 139-189
Fourth Generation
Kindle 4 28th
September 2011 79-109
Kindle Touch (Wi-Fi) 28th
Kindle Touch (3G/Wi-Fi) 28th
Fifth Generation
Kindle 5 1st
October 2012 69-89
Kindle Paperwhite (Wi-Fi) 1st
October 2012 119-139
Kindle Paperwhite (3G/Wi-Fi) 1st
October 2012 179-199
Sixth Generation Kindle Paperwhite – Next Gen 3rd
Android Devices
Kindle Fire 28th
Kindle Fire HD 7‖ 14th
Kindle Fire HD 8.9‖ 20th
November 2012 269-314
Kindle Fire HD 8.9‖ 4G LTE 399-514
Kindle (First Generation) Kindle 2 (Second Generation)

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Kindle 2 and Kindle DX (Second Generation)
Kindle DX Graphite (Second Generation) Kindle Keyboard (Third Generation)

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Kindle 4 (Fourth Generation) Kindle Touch (Fourth Generation)
Kindle 5 (Fifth Generation) Kindle Paperwhite (Fifth Generation)

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3.2 Amazon Web Services
Amazon Web Services (AWS) is a collection of
remote computing services (also called web services)
that together make up a cloud computing platform,
offered over the Internet by Amazon.com. The most
central and well-known of these services are Amazon
EC2 and Amazon S3. The service is advertised as providing a large computing capacity
(potentially many servers) much faster and cheaper than building a physical server farm.
Architecture
AWS is located in 9 geographical 'Regions': US East (Northern Virginia), US West (Northern
California), US West (Oregon), AWS GovCloud (US) Region, São Paulo (Brazil), Ireland,
Singapore, Tokyo and Sydney. There is also a "GovCloud" in the USA provided for US
Government customers. Each Region is wholly contained within a single country and all of its
data and services stay within the designated Region.
Each Region has multiple 'Availability Zones', which are distinct data centers providing AWS
services. Availability Zones are isolated from each other to prevent outages from spreading
between Zones. Several services operate across Availability Zones (e.g. S3, DynamoDB) while
others can be configured to replicate across Zones to spread demand and avoid downtime from
failures.
AWS Products
Compute
Amazon Elastic Compute Cloud (EC2) Provides scalable virtual private servers using
Xen.
Amazon Elastic MapReduce (EMR) Allows businesses, researchers, data analysts,
and developers to easily and cheaply process
vast amounts of data. It uses a hosted Hadoop
framework running on the web-scale
infrastructure of EC2 and Amazon S3.
Networking
Amazon Route 53 Provides a highly available and scalable
Domain Name System (DNS) web service.
Amazon Virtual Private Cloud (VPC) Creates a logically isolated set of Amazon EC2
instances which can be connected to an
existing network using a VPN connection.
AWS Direct Connect Provides dedicated network connections into
AWS data centers, providing faster and
cheaper data throughput.

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Storage & Content Delivery
Amazon CloudFront A content delivery network (CDN) for
distributing objects to so-called "edge
locations" near the requester.
Amazon Simple Storage Service (S3) Provides Web Service based storage.
Amazon Glacier Provides a very low cost long-term storage
option (when compared to its S3 service). High
redundancy and availability, but low-frequent
access times. Ideal for archiving data.
AWS Storage Gateway An iSCSI block storage virtual appliance with
cloud-based backup.
Amazon Elastic Block Store (EBS) Provides persistent block-level storage
volumes for EC2.
AWS Import/Export Accelerates moving large amounts of data into
and out of AWS using portable storage devices
for transport.
Database
Amazon DynamoDB Provides a scalable, low-latency NoSQL online
Database Service backed by SSDs.
Amazon ElastiCache Provides in-memory caching for web
applications. This is Amazon's implementation
of Memcached.
Amazon Relational Database Service
(RDS)
Provides a scalable database server with
MySQL, Informix, Oracle, and SQL Server
support.
Amazon Redshift Provides petabyte-scale data warehousing with
column-based storage and multi-node compute.
Amazon SimpleDB Allows developers to run queries on structured
data. It operates in concert with EC2 and S3 to
provide "the core functionality of a database.
AWS Data Pipeline Provides reliable service for data transfer
between different AWS compute and storage
services (e.g. Amazon S3, Amazon RDS,
Amazon DynamoDB, Amazon EMR.). In other
words this service is simply a data-driven
workload management system, which provides
a simple management APIs to managing and
monitoring of data-driven workloads in cloud
applications.

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Deployment
Amazon CloudFormation Provides a file based interface for provisioning
other AWS resources.
AWS Elastic Beanstalk Provides quick deployment and management
of applications in the cloud.
AWS OpsWorks For configuration of EC2 services using Chef.
Management
Amazon Identity and Access
Management (IAM)
An implicit service, the authentication
infrastructure used to authenticate access to the
various services.
Amazon CloudWatch Provides monitoring for AWS cloud resources
and applications, starting with EC2.
AWS Management Console (AWS
Console)
A web-based point and click interface to
manage and monitor the Amazon infrastructure
suite including (but not limited to) EC2, EBS,
S3, SQS, Amazon Elastic MapReduce, and
Amazon CloudFront. Amazon also makes
available a mobile application for the Android
which has support for some of the management
features from the console.
App Services
Amazon CloudSearch Provides basic full text search and indexing of
textual content.
Amazon DevPay Currently in limited beta version, it is a billing
and account management system for
applications that developers have built atop
Amazon Web Services.
Amazon Elastic Transcoder (ETS) Provides video transcoding of S3 hosted
videos, marketed primarily as a way to convert
source files into mobile-ready versions.
Amazon Flexible Payments Service
(FPS)
Provides an interface for micropayments.
Amazon Simple Email Service (SES) Provides bulk and transactional email sending.
Amazon Simple Queue Service (SQS) Provides a hosted message queue for web
applications.
Amazon Simple Notification Service
(SNS)
Provides a hosted multiprotocol "push"
messaging for applications.
Amazon Simple Workflow (SWF) It is a workflow service for building scalable,
resilient applications.

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Miscellaneous
Amazon Fulfillment Web Service Provides a programmatic web service for
sellers to ship items to and from Amazon using
Fulfillment by Amazon. This service will no
longer be supported by Amazon. All of the
functionality of this service is now transferred
to Amazon marketplace Web service.
Amazon Historical Pricing Provides access to Amazon's historical sales
data from its affiliates. (It appears that this
service has been discontinued.)
Amazon Mechanical Turk (Mturk) Manages small units of work distributed
among many persons.
Amazon Product Advertising API Formerly known as Amazon Associates Web
Service (A2S) and Amazon E-Commerce
Service (ECS), it provides access to Amazon's
product data and electronic commerce
functionality.
Amazon Gift Code on Demand
(AGCOD) for Corporate Customers
Enables companies to distribute Amazon gift
cards (gift codes) instantly in any
denomination, integrating Amazon's gift-card
technology into customer loyalty, employee
incentive and payment disbursement platforms.
AWS Partner Network (APN Provides technology partners and consulting
partners with the technical information and
sales and marketing support to increase
business opportunities through AWS and with
businesses using AWS. Launched in April
2012, the APN is made up of Technology
Partners including Independent Software
Vendors (ISVs), tools providers, platform
providers, and others. Consulting Partners
include System Integrators (SIs), agencies,
consultancies, Managed Service Providers
(MSPs), and others. Potential Technology and
Consulting Partners must meet technical and
non-technical training requirements set by
AWS.

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3.3 Digital Brand Portfolio
3.4 STP Analysis
Market Segmentation
Demographic segmentation
1. For those who have access to internet
2. When income increases, so does the number
of online purchases (E&Y Study).
3. 41 percent of online shoppers between the
ages of 35 and 49. 55 percent male and 49
percent female internet users prefer
Amazon.com for online purchases
4. Recently increased focus to younger class (20-
30 year old)
Geographic segmentation
1. Appeals to customers all over the world
2. Sell digital products where their merchandise
sales are difficult (e books)
3. US still main revenue generator.
4. Has seven international websites for Japan,
China, Canada, UK, Germany, France and US
5. Have not started direct sales in India. Uses
sending which adds extra charges to
customers
Psychographic segmentation
1. Focuses on personalization and customer
loyalty
2. Keep a modern and dynamic image by
renovating site design frequently.
3. Quality customer service department to build
long term relationships with customers
4. Helps customers find and recommend things
they enjoy, rather than push products
Situation segmentation
1. Most online purchases done for convenience
2. Keeps on adding categories for catching every
customer and every situation
3. Sale inducing gold box deals everyday
4. Attractive offers with video on demand
5. Low pricing also an encouraging factor for
online purchases

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Targeting
The major target groups of Amazon include:
Internet users – Primarily those who are comfortable with e-commerce
All internet users. Almost all internet users are in one way or other a paid or non paid
customer of Amazon. For different customer segments different products have been
launched. Ex. IMDB, Alexa, A9, fabric, Zappos, instavideo etc
Both male and female, mostly in the age group 35 – 49. More importance to females as
they are the predominant customers for Amazon. Amazon’s acquisition of Zappos was
also for getting detailed insights about young woman as an online customer
From all over the world. Amazon is a global company and looks for customers all
around the world. They have got tie-ups with third party sellers for international
coverage.
Tech Savvy users and early technology adopters. Separately designed products like
Amazon mp3, Amazon kindle, Amazon Appstore for them.
Those who yearn on convenience shopping
Seller customers. Amazon’s primary objective is to bring maximum number of reliable
sellers under it.
App developers. New TG. Started targeting through Amazon Appstore.
Positioning
When Amazon.com started, it sold only books and its positioning statement was:
―To people who like to read, Amazon.com is the online bookstore that is the best place to
purchase books because of its selection”
But with huge diversification, the current vision statement of Amazon is:
“Our vision is to be earth's most customer centric company; to build a place where people can
come to find and discover anything they might want to buy online.”
Positioning itself as the most
customer-centric company,
Amazon differentiates itself
and claims to cater to the
customer’s needs rather than
the suppliers’ needs. Amazon
claims to provide the best
customer service at the
lowest price with high
margin.

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4 Strategic Brand Campaigns
4.1 Advertising Agencies
Wong, Doody, Crandall, Wiener (WDCW,
formerly WONGDOODY) is a full-service
marketing-ideas agency with offices in Los
Angeles and Seattle. WDCW builds cultural
capital and provides strategic, creative and
analytic services for such clients as Alaska Airlines, Epson, ESPN, Hitachi, Holland America
Line, Microsoft, T-Mobile and VIZIO. Founded in 1993, they provide fully integrated
capabilities for traditional, digital and social-media communications.
Eyeball is a creative strategic design agency that
shapes brands through powerful storytelling, stunning
design and insightful problem solving. By embracing
client collaboration, the award-winning collective of
thinkers, writers, artists and musicians efficiently
translate brand ethos into engaging narratives and
meaningful consumer dialogue, consistently generating
quantifiable and powerful results. With 20 years of
broadcast and ad agency experience, eyeball executes
across a media spectrum that includes live action,
design, animation, audio and experiential production,
and has recently expanded from New York City to
Chicago, Los Angeles and Seattle.

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4.2 Campaigns
Kindle Campaign by WDCW: WDCW TV campaign for Amazon was the first true
branding effort in the advertising agency's history.
o Spot No. 1, "Reinventors," tells of technological advances so large that they have
fundamentally changed how we live our lives. Amazon has reinvented "normal."
The campaign launched with a high-profile network buy and ran globally in seven
countries across North America, Europe and Asia.
o Spot No. 2,
"Human Eye,"
shows consumers
that the
technological
differences between
an iPad and a
Kindle Fire HD
can, in some
instances, be hard
to see. But the
difference in price tag is not. Advanced technology at an affordable price is the
new normal.
o Subsequent work for Amazon includes new product launches for the new Kindle
Fire HD (Spot No. 3) and Kindle Paperwhite e-reader (Spot No. 4).

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Kindle Launch Campaign by Eyeball
o Since the debut of
Kindle Fire, Eyeball has
supported Amazon on
the launch of every new
Kindle product at all
stages, from online to
print to primetime TV
ads. The launch of
Kindle Fire required a
starkly different message
from its competition.
While similar devices
were focusing largely on
features, usability and
heralding the arrival of a
new era, they borrowed
a strategy from the
original Kindle: there's nothing new about storytelling. Kindle Fire naturally
became a story container, filled not only with books but all media. To create the
cinematic launch spot, they incorporated live action elements into CG on a
journey from the pen to the printing press and finally to moving image.
o To launch Kindle Paperwhite, their
series of short films revealed the
human aspects at the core of each
device, from Kindle owners to Kindle
makers. For the avid readers, Eyeball
created an environment where they
could express their appreciation for the
role Kindle plays in their lives. For the
product design team, their goal was to
convey the intricacy of the process
instead of the complexity of the
technology. These videos broaden the
stories surrounding the Kindle, making clear how the users' love for the device
mirrors the ambition with which it was built. They reflect the belief that brand
identity derives its substance from the passion of those who sustain it.
o Eyeball’s Role: Everything.

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Kindle Kids Campaign by Eyeball
o Cultivating a love of reading and having
access to books are both critical aspects of
children's growth and development. After
working on Amazon Kindle advertising for
the past few years, Eyeball saw an
opportunity to evolve the brand and tell
their story in a new way. To communicate
the power of the Kindle in kids' lives, they
gathered a diverse group of children and
spent time getting to know them. They
asked about their favorite books and their
thoughts on reading while capturing every
moment on camera.
o The result was a documentary style of storytelling that focuses on real moments
and conversations, creating a relatable yet emotional spot. They presented the idea
to the Amazon team who fell in love with the interviews as much as they had, so
much that many of the kids from the original test shoot made it into the final spot
on air. They are currently working on extending the documentary storytelling
style into further Kindle campaigns. In addition to the TV ad, they created a
digital campaign extension. The banners shown here wrapped Hulu content with a
media buy aimed at programming for kids and moms.
o Eyeball’s Role: Strategy, Live Action Direction, Editorial, Digital

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Kindle Lifestyle Campaign by Eyeball
o When Kindle dropped the price
down to $139, the value
concept of "it's so affordable,
you don't need to be precious
with it" was born. Eyeball took
that idea a step further,
demonstrating the way Kindle
seamlessly fits into your
lifestyle. The high energy,
infectious ―Kindle Zest‖
quickly became the highest
performing Kindle spot ever.
Consumers related to the
diversity of the cast, realism of
the scenarios, and the energy
of the music. The defining
voice for Kindle was established and each new ad showcased a different way to
bring your library with you, wherever you go.
o Kindle's early foray into
television advertising centered
on passion for reading and the
emotional sense of escape that
comes with a great book.
Eyeball’s goal was to make the
technology all but disappear
and become secondary to
getting lost in the story. They
developed this one-shot
concept as a way to move past
the product and capture that
special moment of reading. As
the camera cranes out from the
device, they were able to establish a relaxed environment that inherently
illustrates just how easy and uncomplicated your life becomes with Kindle.
o Eyeball’s Role: Strategy, Design, Live Action Direction, Editorial, Animation,
Music Supervision

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Kindle Stories Campaign by Eyeball
o Eyeball began with a
simple idea: Kindle e-
ink works perfectly in
direct sunlight and is so
affordable that it costs
less than a pair of
designer sunglasses.
Their first spot, "Pool,"
received 1M hits after
only a few days on air
and became one of the
week's top performing
viral videos. Building on
its success and
continued memorability
in consumer research,
they've created several follow-up spots highlighting differentiating factors of the
Kindle. When the Kindle Paperwhite launched, they produced "Husbands," which
casually features a gay couple. The spot was lauded by the Human Rights
Campaign as an example of inclusive advertising.
o With growing
competition in the
marketplace, Kindle
needed a series of
commercials focusing
on differentiation,
functionality and ease
of use. Keeping true to
the realistic scenarios
that have been a proven
success for the brand,
the "Friends" campaign
unfolds as a series of
real life conversations
which could happen
anywhere. The
chemistry between the
actors was critical,

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especially when keeping the location abstract. This campaign performed well in
the memorability and brand linkage tests conducted and it was expanded for use
in the UK market where they had the opportunity to shoot a separate campaign
and cast unique British actors for these roles.
o While experimenting with its brand voice, Kindle had them test a strategy that
was less about the functionality of the product and instead promoted reading.
Their team created "Grandma," a spot that aimed to illustrate the powerful
emotional impact of giving the gift of reading. While tugging at the heartstrings,
the relevant message and affordable price point struck a cord with consumers. The
national media buy ran during the holidays and the spot remains one of the top
performing Kindle ads of all time.

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Amazon Studios Campaign by Eyeball
o Changing the way TV shows are brought to life, Amazon Studios asked Eyeball
to develop an integrated campaign for the launch of their pilot season. As part of
the overall branding strategy, Eyeball drove the creative development and audio
branding for Amazon Original Series and Amazon Studios logos. These logos will
play on every original TV show or theatrical release produced through them. They
also created online marketing banners in support of the original comedies and kids
programs. To further promote the original kid programs, they conceptualized,
filmed, edited and fully finished 7 promotional videos for use in both the US and
UK markets.

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Amazon Mobile App Campaign by Eyeball
o Building on Eyeball’s proven success with the Kindle campaigns; Amazon tasked
them with creating their first brand commercial in over ten years. Their goal was
to showcase a new way to shop anytime, anywhere. They quickly identified the
simple connection for the audience: instant gratification for simpler living. By
creating real world scenarios that demonstrated how the technology comfortably
fits into their lives, they delivered the message loud and clear. The successful
commercial ran only in select regional markets, where it increased app downloads
and generated traffic and spiked sales.
o Eyeball’s Role: Strategy, Design, Live Action Direction, Editorial, Animation

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Amazon Endless Campaign by Eyeball
o For Amazon’s designer clearance store Endless.com, they matched the premium
aesthetic of the brands they sell with a high-end fashion sensibility. They focused
on enticing consumers’ excitement for accessible trends by capturing the pulsing
energy of a runway show and glossy style of a fashion magazine. Planning for the
store’s inventory fluctuations was crucial to the success of the campaign concept.
To keep ongoing production flowing smoothly, Eyeball even developed a system
that allowed for late product swaps and last minute promotions.
o Eyeball’s Role: Strategy, Design, Live Action Direction, Editorial, Animation.

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5 Marketing Environment
5.1 E-Commerce Industry
The e-Commerce Industry is comprised of companies
that produce and sell software to businesses and
corporations of all sizes. The wide range of products
and services offered work to improve and expand
customers’ information technology (IT) capabilities, by
enhancing such internal tasks as inventory
management, tracking purchases, and operations
management.
Thanks to convenience and increasing internet
penetration, consumers are readily turning to online shopping, which has been fuelling the retail
market in developed countries. The world B2C e-commerce industry generated between $400
billion and $600 billion in 2010, according to yStats.com, which estimates the market will
generate somewhere from $700 billion and $950 billion in 2015.
There were over 2 billion internet users worldwide in 2011, and it is forecast this number will
exceed 3 billion by 2015. Profit from B2C e-commerce represents less than 10% of overall retail
revenue in established markets like the UK and France, which are expected to rise above the
10% mark in coming years. This figure falls to under 3% in less well-established B2C e-
commerce markets. This vast base of Internet users encourages businesses to innovate in order to
offer an ever-evolving array of online services. Sectors that are growing very rapidly online
include the sale of entertainment, event tickets, apparel, travel, and consumer electronics. The
most powerful trends on the Internet include access via wireless devices, migration of
entertainment to the web and cloud-based software as a service.
Social media continues to fuel the B2B e-commerce market, which aims to boost electronic
business process efficiency, reports T Systems. E-commerce is being considered as a separate,
profitable field of business, and intermediary actors are updating their B2B business models,
while embracing aspects of social media.
Today, as a result of the recent recession, consumers are more focused than ever on finding the
best prices. Consequently, e-commerce firms that offer high value at low prices are well
positioned to prosper. The standout winner in e-commerce continues to be Amazon, where sales
have soared thanks to aggressive discount pricing, free shipping for its ―Prime‖ members and an
ever-growing variety of merchandise categories. Amazon’s revenues rose by 27% in 2012 to
$61.0 billion. Books, movies, music and other media now account for the minority of Amazon’s
sales, while electronics and general merchandise bring in the largest share by far. Amazon’s sales
outside of North America are booming as well. Clearly, there is growing adoption of online
consumer purchases throughout the world’s major economies, and the soaring number of
broadband users is paving the way.
Analysts at eMarketer reported American e-commerce sales in 2012 of an estimated $343
billion. This figure includes online retail sales, travel sales ($119 billion) and digital downloads,

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but not sales of tickets to events or online gambling. Global Internet retail sales exceeded $1
trillion for the first time in 2012, up 21.1% from 2011. For 2013, the Asia-Pacific region is
expected to see 30% growth in online sales, reaching $433 billion. China alone is expected to be
the second largest e-commerce market in the world with $181 billion (up 65% from 2012)
behind the U.S., which should hit $384 billion in 2013. Plunkett Research estimates global travel
sales online at $320 billion for 2012.
Online advertising in 2012 in the U.S. reached $37.3 billion, according to eMarketer, accounting
for 24% of all advertising spending in America. Online advertising leader Google’s recent results
are a good indicator of the strong growth in online advertising. The firm saw revenues soar
21.3% in fiscal 2012, to $46.0 billion (not including its acquisition of Motorola’s mobile
division).
Growth in broadband subscriptions worldwide continues at a strong pace. The number of
American homes and businesses with broadband access capabilities topped 90 million by the end
of 2012, thanks in part to modest monthly fees at Internet service providers. This number does
not include mobile broadband users, estimated at another 180 million.
A significant evolution is taking place in the world of business, as more and more
telecommunications move to the Internet. VOIP continues to grow in popularity. Meanwhile, the
concept of ―unified communications‖ threatens to completely revolutionize business
communications by combining all communications into one screen on the desktop, including
phone, fax, e-mail, instant messaging, voice mail and teleconferencing. Voice communications
will be digitized and archived, just as e-mail is today. A user’s communications tools will move
seamlessly from the desktop to the mobile device.

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5.2 Sector Analysis
Introduction
The expansion of globalization has led to the emergence of the digital economy. New concepts
have emerged, such as electronic business (e-Business) or electronic commerce (e-Commerce),
as the electronic alternative to the traditional way of doing business or trade. Operating in a
highly competitive economy based on information technologies and telecommunication, required
firms to adopt new business models. Under these conditions, e-commerce became a reality in
today's business world and the prerogative of obtaining success in the market for any company.
E-commerce has known during the last decades a significant growth, becoming more and more
important for the companies worldwide. Nowadays due to globalization, technology is evolving
at a very fast speed, forcing all the companies to adopt new technologies. E-commerce plays and
it will play a key role in the economy in the future, and more and more companies will have to
change their business strategies.
The e-commerce industry contains important retailers, e.g. Amazon.com and eBay, information
service companies, e.g. Google and Yahoo, online versions of traditional brick-and-mortar
stores. In 2004 Amazon was on top in what online service meant with: 6 website servers, 32
million customers in 150 different countries, 900,000 associate programs linked with Amazon or
having contents of Amazon. Because of his tremendous importance in the e-commerce industry,
Amazon has the power to influence the entire industry, but it can also be influenced.
PESTEL Analysis
Cheaper access to internet, a growing number of internet users, faster and better internet, rapid
expansion into new markets through acquisitions, all of them represent the political and legal
factors that may, or may not influence Amazon’s organization. Hence, Amazon.com is
expanding more and more abroad, and that is why they have to pay attention to domestic and
international legislation. Once they entered on a foreign market, they have to accept and the
respect the legislation of that country.
From an economic point of view, because of the crisis severity companies like Amazon.com
were forced to lay-off employees and more than that even to downsize. As a reaction to all that,
the unemployment rate increased, which lead to a reduction in consumer spending. Moreover,
during and after the crisis companies like Amazon.com had problems with the shipping costs
because of the oil price increased. For companies like Amazon.com or eBay the shipping costs
are vital, given the fact that they cannot avoid dealing with them.
The social factors also put their mark on companies from the e-commerce industry. Figure 1
underlines that the population that uses internet has grown at a very fast speed in recent years.
Clearly the population will continue to increase, and that means that more and more people will

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use internet, which will lead to an increased chance for online shopping. This exponential
population growth is good for all the industry, hence the bigger markets.
Figure 2 shows the number of internet users, Asia being on top with 922, 3 million users. United
States of America is on 3rd place with 272, 1 million users, and it is also the region where people
are likely to trust more e-commerce. The problem of confidence in online shopping is one of the
most severe, consumers having doubts about the security of their activities online.

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As we can see, the number of Internet users increased, mostly because customers started to use it
on their mobile devices.
Technology is one of the most important factors in e-commerce industry, and has and it will
change and improve in the future. As we can see, the number of Internet users increased and will
increase furthermore, because customers started to use it on their mobile devices.
Environmental factors are concerned with the ―green world‖. More and more companies have
started to have a personal signature, like ―Please consider the environment before printing‖ when
sending emails. Another example of environmental factors is the diminishing car use, because
while they shop online they do not need to use their cars anymore.

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5.3 Key Drivers of Growth for Amazon
Third party or seller business is a key driver of growth for Amazon. It allows Amazon to
increase selection and grow faster. It also helps push down prices on Amazon as third parties
fight for buyers.
Another key driver of growth is Amazon Prime - Amazon's program that gives annual free
two-day shipping for a $79 subscription. The graph shows that Prime is driving significant
growth internationally (primarily Europe).

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Shipping costs have increased over the years and in Q2 of 2011, the shipping cost was 4.9%.
This could mean that more users might register for Amazon Prime.
The e-commerce market is growing at 14% and every Amazon segment is growing faster.
Electronics and General Merchandise market in US is growing five times the US
e-commerce market.

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6 Marketing Strategies
6.1 BCG Matrix
Stars
Amazon Kindle, Amazon Fresh, Amazon.com, Diapers.com, Instant Video are high-growth,
high-share businesses. These businesses need heavy investments to finance their rapid growth.
Cash Cows
IMDb, Alexa, Audible.com, Createspace are low-growth, high-share businesses. These
established and successful SBUs need less investment to hold their market share. Thus they
produce a lot of cash that the company uses to support other SBUs that need investment.
Question Marks
Zappos.com, Lovefilm.com, Amazon Web Services are low-share business units in high-growth
markets. They require a lot of cash to hold their share and increase it. Amazon Web Services is
likely to turn into Star within a few years.
Dogs
Amazon mp3, Amazon Cloud, Pets.com are low-growth, low-share businesses. They generate
enough cash to maintain them but do not promise to be large sources of cash.

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6.2 Porter’s Five Forces
Buyer Power
1. Comparison sites gives price variations in
different sites
2. Buyer has complete information
3. Wide buying options available
4. Lot of product review sites
5. With social media, word of mouth becomes an
important feedback point.
Threat of New Entrants
1. Low barriers to entry
2. New technologies can be disruptive
3. Less brand loyalty towards online shops
4. High probability of new entrants
5. Can utilize economies of scale
6. Can come up with better range of products
Threat of Substitutes
1. More choices in online stores and cheaper
prices
2. Lack the touch and feel factor
3. Large presence of physical retailers and shops
4. Online shopping becoming increasingly
widespread
Supplier Power
1. Large number of suppliers
2. Global distribution networks intensifying
competition
3. High bargaining power of big shot retailers
4. Less differentiation in product
5. Focus on low prices lead to low customer
loyalty
Industry
Rivalry -
High
Threat of
New
Entrants -
High
Supplier
Power -
Low
Threat of
Substitutes-
Moderate
Buyer
Power -
High

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Amazon.com delivers various products and services ranging from accessories, shoes, health and
personal care, from electronics to books; under new, refurbished and used items categories.
There are greater number of distributors, publishers and manufacturers that supply Amazon,
hence Amazon has more supply options and choices; and this gives the company more control
over its suppliers.
Bargaining power of supplier
Amazon’s purchases from its suppliers represent a good part of the suppliers’ offer, which means
that the company has more power and influence on costs and influence on improving the features
of the products. Moreover, because of the highly trained experts in the departments of
development, market research and marketing, Amazon is well informed about the suppliers
market. Therefore, Amazon has more power over the suppliers. Nevertheless, there is always a
possibility that Amazon’s key providers might individually or as an allied enter into the business
and sell directly to Amazon’s customers, becoming thereby a direct player.
Buyer Power
Amazon.com has enough customers around the world, and the lost of one customer does not
affect the smooth running of the company. Amazon stands as one of the biggest concentration of
goods and services where customers can buy anything they want online and at a reasonable
price. The company tends to decrease the power surplus of the purchasers in investing more
effort when negotiating for a lower price or to enrich product features. Hence, if Amazon’s
customers are satisfied with the services they receive, they will less probably switch to other
products. Nevertheless, it is possible that the major buyers could integrate backward in the
supply chain, and purchase one of the growing competitors in the e-commerce industry and this
could constitute a threat to Amazon.
Threat of new entrant
The threat of new entrants has interesting twist in the e-commerce business. There are a lot of
firms that are trying to enter the industry; but in a fast technologically driven industry, the
company with best technology gets the lion’s share. Amazon’s strategy is focused on customer
service innovation which is designed to improve the convenience of online shopping experience.
Amazon invests heavily on the best technology in order to keep on climbing on the ladder of
success within e-commerce industry. Moreover, trademark is fundamental when competing
within any industry. Amazon has built a high level of brand standard, and because of that a
greater percentage of its customers are loyal to them. Even if, new competitors enter into the
business with similar and identical products, they will face a tremendous contest to win over
Amazon’s loyal customers.

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Threat of product substitute
One of the major substitutes to the goods and services provided by Amazon will be bookshops,
electronic shops, accessories shops, health and personal care shops that are physically located in
different cities. Online shopping offers among other things: 24/7 services, one click and
trustworthy delivery and most of the case at lower prices at a high qualitative level, therefore the
threat of substitute is insignificant.
Competition is the bottom of the free enterprise structure, and within the e-commerce industry,
there is greater number of players and this makes the competition more intense for Amazon.
With firm like eBay, Amazon.com tries to remain a pioneer in the e-commerce industry. Amazon
will not face serious challenge in the nearest future, since the industry is not stagnant or
declining, but it is possible that the growth rate of competitors may exceed that of the company.
Industry rivalry
As the result of huge and wide presence of competitors for the book business, Amazon.com faces
high industry rivalry in their online book business. Established bookstores have the advantage of
a larger and well established customer base, brand recognition, awareness and a wider selection
of books. The entry of established bookstore into the online arena has further increase industry
rivalry in this sector.
Amazon.com also faces intense rivalry from their online music sector. For example, Amazon's
entry into the online music market has caused CD-Now to take steps in reduce Amazon's threat
in the sector. CD-Now has more advantage because they are well established and has more brand
recognition in comparison to Amazon.com.

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6.3 McKinsey 7S
The model is based on the theory that, for an organization to perform well, these seven elements
need to be aligned and mutually reinforcing. So, the model can be used to help identify what
needs to be realigned to improve performance, or to maintain alignment (and performance)
during other types of change.
Strategy: the plan devised to maintain and build competitive advantage over the
competition.
Structure: the way the organization is structured and who reports to whom.
Systems: the daily activities and procedures that staff members engage in to get the job
done.
Shared Values: called "super ordinate goals" when the model is first developed, these
are the core values of the company that are evidenced in the corporate culture and the
general work ethic.
Style: the style of leadership adopted.
Staff: the employees and their general capabilities.
Skills: the actual skills and competencies of the employees working for the company.
Placing Shared Values in the middle of the model emphasizes that these values are central to the
development of all the other critical elements. The company's structure, strategy, systems, style,
staff and skills all stem from why the organization was originally created, and what it stands for.
The original vision of the company was formed from the values of the creators. As the values
change, so do all the other elements.

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Strategy
To be built to transform requires the courage to focus on delivering value for the customer first.
Identifying value begins by thinking of an important unserved or underserved job that customers
want done and then coming up with a well-defined value proposition to address that job,
however foreign to your current offerings that may be. "If you want to continuously revitalize the
service that you offer to your customers, you cannot stop at what you are good at," says CEO
Jeff Bezos. "You have to ask what your customers need and want, and then, no matter how hard
it is, you better get good at those things." With a well-defined customer value proposition serving
a focused, well-articulated job, business leaders and project teams can work together to design
the appropriate profit formulas, key resources, and key processes the company needs to thrive.
Defending Amazon’s profit-pinching strategy in the 2013 annual letter to shareholders, Bezos
wrote – ―Our business approach is to sell premium hardware at roughly breakeven prices. We
want to make money when people use our devices – not when people buy our devices. We think
this aligns us better with customers. For example, we don’t need our customers to be on the
upgrade treadmill. We can be very happy to see people still using four-year-old Kindles!‖
Amazon’s strategy focuses on capturing all the fronts of the retail sector to minimize the costs
and give the customer, the best price in the world.

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Amazon has a divisional organizational structure due to a large number of products and services
under it. A divisional structure consists of different departments for different products and
services, which allow the department heads to appropriately focus their resources and results,
and also monitor the organization’s performance. Such a structure is best for such a large
organization because it is the most flexible.
Amazon's organizational structure consists of CEO and founder Jeffery Bezos and an eight-
member board of directors, wherein the CEO oversees the Chief Financial Officer (CFO), the
Chief Technology Officer and the following 8 departments:
Business Development,
eCommerce Platform,
International Retail,
North America Retail,
Web Services,
Digital Media,
Legal & Secretary, and
Kindle.
These departments have individual Senior Vice Presidents and Vice Presidents who are
responsible for the functioning of the individual departments.
Moreover, these departments also integrate to give Amazon strategic advantages over its
competitors. Amazon.com integrates with Amazon Web Services to provide the best possible
solutions to the customers by improving the user interface and backend capabilities. Use of
technological products of AWS also helps in optimizing logistics and operations of
Amazon.com.
Amazon Kindle uses software made specifically for it by Amazon’s technological unit. Such
integration minimizes costs and increases profit margins.

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Systems
Amazon uses a centralized human resources
system by retaining a tight hold within the
company’s nation of origin and relies on
high-level headquarters staff to supervise
local managers. The headquarters managers
are responsible for the HQ staff and local
managers supervise local staff. Both, local
and HQ teams, report to the global executive.
The benefit of this system is that maintains
strict brand control. Amazon does not yet
have stores, yet also adheres to this one-
company, one-system method of global
operations. No matter where in the world you
open an Amazon page, it will have the look
and organization that Amazon has made its
trademark.
A mandate issued by Jeff Bezos in around 2002 about internal rules and processes of the teams:
All teams will henceforth expose their data and functionality through service interfaces.
Teams must communicate with each other through these interfaces.
There will be no other form of inter-process communication allowed: no direct linking,
no direct reads of another team’s data store, no shared-memory model, and no back-doors
whatsoever. The only communication allowed is via service interface calls over the
network.
It doesn’t matter what technology they use.
All service interfaces, without exception, must be designed from the ground up to be
externalizable. That is to say, the team must plan and design to be able to expose the
interface to developers in the outside world. No exceptions.
The mandate closed with: Anyone who doesn’t do this will be fired. Thank you; have a nice
day!
Over the next couple of years, Amazon transformed itself internally into a service-oriented
architecture (SOA), learning a tremendous amount along the way. Every team within Amazon
had to interact with each other using web services. If you were human resources and you needed
some numbers from marketing, you had to get them using an API. He was asking every team to
decouple, define what resources they had, and make them available through an API. Every team
within your company essential becomes a partner of the other.

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Shared Values
David Risher, a marketing executive with Microsoft was interviewed by Jeff Bezos, founder of
Amazon, in 1996. At the time, Amazon was only one year old and losing money. They were
renting space in ―an old brick building on Seattle’s skid row, a dismal block with a needle
exchange, a defunct pawnshop, a grocery store with barren shelves, and an outreach service for
troubled youths.
Bezos was very frugal, refusing to spend money on
things that simply were not important. His desk was a
wood door from Home Depot with two-by-fours for
the legs. Despite the glamour-less looks of Amazon’s
headquarters, Bezos had assembled a team of 30
employees. They were just like Bezos – incredibly
smart, frugal, risk-takers, and information analyzers.
Bezos told Risher, “I’d rather interview fifty
people and not hire anyone than hire the wrong
person.”
Risher accepted a position at Amazon, which stunned his Microsoft colleagues. The two top
executives, Bill Gates and Steve Ballmer, tried to convince him to stay. And when he didn’t, they
told Risher he was, ―the stupidest guy they ever met‖. Amazon made revenues of $16 million in
1996, which ballooned to $1.6 billion three years later, and reached $8 billion by its 10th
anniversary.
But as Amazon grew, the company culture stayed the same. Even ten years into its life, with
12,000 employees, you could still find people with desks made out of doors and employees with
extraordinary analytical minds.
Customer focus is a cultural issue that distinguishes Amazon from other companies, whose
chiefs craft strategy in competitive terms. "When they're in the shower in the morning, they're
thinking about how they're going to get ahead of one of their top competitors," Bezos says. "Here
in the shower, we're thinking about how we are going to invent something on behalf of a
customer."

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Style
According to industry analysts, the growth and success
of Amazon.com could be attributed to the leadership
style of Jeffrey Bezos, the CEO of Amazon.com. In the
late 2000s, Bezos devised a unique strategy for the
company which allowed other sellers to put up their
products for sale on the Amazon.com site. However,
since this move inflicted a risk on the company, of
losing its customers to its competitors, most analysts
viewed this as a reflection of poor strategy on the part
of Bezos. Bezos, however, defended his position by
saying that his strategy was aimed at giving the
customer a better buying experience. According to
him, the customer was more important than the
competitor. While some industry experts felt that this
was one of Bezos' winning customer-centric strategies,
others pointed fingers towards Amazon.com's
declining income and questioned the sustainability of Bezos' leadership style.
Staff & Skills
Amazon.com is currently boosting staff in 17 U.S. warehouses, adding more than 5,000 full-time
jobs to meet brisk demand for products sold by the world’s biggest Web retailer.
The new hires will join more than 20,000 employees working at Amazon’s more than three
dozen U.S. fulfillment centers. Amazon is also hiring 2,000 customer-service staff, including
part-time and seasonal workers.
The retailer plans to open five more
facilities this year, after adding 20 last year.
Warehouse expenses have more than
doubled during the past three years, as
Chief Executive Officer Jeff Bezos opens
centers full of products closer to consumers
in order to reduce shipping costs and speed
up delivery. Higher spending contributed to
Amazon’s surprise net loss for the second
quarter as the online seller continues to fuel
revenue growth at the expense of profits.

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6.4 Strategic Position
Amazon has been able to maintain sustainable competitive advantage based on three operational
strategies. These are low cost-leadership, customer differentiation and focus strategies.
Low cost-leadership is pursued by Amazon by differentiating itself primarily on the
basis of price. They believe that offering low prices to their customers is fundamental to
their future success. They seek to partially mitigate the costs of lowering prices over time
through achieving higher sales volumes, negotiating better terms with their suppliers, and
achieving better operating efficiencies. Amazon makes sure that it offers the same quality
products as other companies at a considerably cheaper price.
With their customer differentiation strategy, Amazon provides current and prospective
customers with differentiation through design, quality or convenience by selecting a
strategy that is different among the competitors.
The focus strategy takes one of the two other strategies and applies it to a niche within
the market. Based on this, Amazon focuses on outstanding customer service as a niche
but not the whole market because each niche has its own demand and requirement.

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7 Pricing Strategies
7.1 Cost Leadership
New Opportunities:
Revenue opportunities through bundling or products.
Amazon prime: Next day shipping > Customer switch from other sites.
Average of 5-6% of revenue comes from shipping
Strategy
• Consistently Lower prices
• Maximizing long-term profits by
increasing market share
• Lowered costs through economies of
scale
Features
• Pre-Order Price Guarantee - For
items to be launched recently.
• No Post order price match.
• No price match with other retailers.
• 14 day post order price match for
TVs.
• Most recent price for items in
shopping cart.
• Displayed price is the full retail price
(excluding shipping)

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7.2 Cost Minimization Strategies
Sharing Cost Centers
Insourcing the Value Chain

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Circumventing Distributors
In 2012, Amazon has installed metal lockers in grocery, convenience and drugstore outlets that
can accept packages for customers for a later pickup.
Amazon wants to eliminate the uncertainty of home delivery with its new locker service.
Amazon sends you an email with a pickup code, which you enter on a touch screen to open the
door of the locker containing your package. By combining same-day delivery and delivery
lockers, Amazon is steadily chipping away at reasons to walk into a store at all.

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8 Consumer Behavior Elements
Marketing managers need to understand consumers behavior and their decision making process
in order to create a suitable marketing mix in a competitive market environment.
8.1 Consumer Decision-Making Process
When buying goods and services consumers usually follow the consumer decision-making
process; this is a five step process that encompasses, need recognition, information search,
evaluation of alternatives, purchase and post-purchase behavior.
Need Recognition
The first element in the process is need recognition. In order to recognize need, marketing
managers must get consumers to recognize an imbalance between their present status and their
preferred state through the stimulus of advertising and promotion. By advertising the
convenience of online shopping, Amazon's consumers embrace this form of shopping as their
preferred way of making purchases in the market place because it satisfies the need for
convenience.
Information Search
The second element is the search for information. Amazon.com makes it very easy for
consumers to research information for products they are interested in through search for a
specific item, browsing items by category, and reading reviews from other consumers.
Evaluation of Alternatives
Third is the evaluation of alternatives, this is where the consumers have to decided whether to
buy or not to buy, how to pay for it, where to buy the product from and when to make the
purchase. At Amazon.com, the probability of making a purchase is favorable because of the
many advantages of making online purchases.
Purchase
The fourth element is making the purchase, more and more consumers are making their
purchases online, and Amazon.com is the leading online retailer and growing. According to
www.internetretailer.com Amazon.com lead in online sales. "In 2010, all major merchant
categories, including web-only merchants, chain retailers, consumer brand manufacturers and
catalog/call center companies, increased sales, but it was the web-only merchants that grew the
fastest. Driven by Amazon.com, No. 1 in the Internet Retailer Top 500 Guide, the combined sales
of all Top 500 web-only merchants grew 30.6% to about $56.89 billion last year from $43.55
billion in 2009".

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Post-Purchase Behavior
The final element in the decision making process is post-purchase behavior. This is where the
consumers determine whether their purchases have met their expectations. They have the option
to keep or return their purchases after their analysis. Amazon.com has a generous 30-day return
policy which gives consumers ample time to make their decision whether to keep their purchases
or return.
Though not all consumers follow the five-step process in the decision making process, Amazon's
customers have made decisions that have pushed Amazon.com to the top of the e-commerce
business.
8.2 Consumer Insights
Some of the consumer insights that shaped Amazon.com include:
Building Trust: When Amazon started they found out that their main issue was the
doubtfulness inside the customers towards e-commerce and amazon.com. From this
insight Amazon came up with the idea of customer reviews. When people see other
people’s review they feel more confident to do the purchase.
Increasing Sales: Amazon found out from their database that there is a relation between
the next purchase and current purchase. Based on this they developed a recommendation
module which suggested a set of customized products to the customer.
Faster Process: It was found out that the customers who come to an online shop are there
basically because of the ease of shopping. They like the reduced hassle and no-queue
process. Based on this insight Amazon developed a process called one-click ordering
and patented it.
Prime Customers: From the insight that many customers feel that delivery charges are
non value adding
items and felt looted
for paying that
Amazon came up
with the idea of
Amazon prime. For
a subscription price
the subscriber gets
one year free
delivery. This also
induced brand
loyalty.

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SEO: Soon after Google became a leader in online search Amazon identified that many
of the potential customers search in Google for landing into a page for online purchase.
Amazon strengthened its search engine optimization (SEO). Amazon has 248,000,000
pages stored in Google's index. Each of these pages has the opportunity to rank for any
number of keywords in search engines.
Affiliate Marketing: Amazon found out that when there is more involvement with the
brand, the consumer himself will act as a brand ambassador. Amazon thus started
affiliate marketing. People loved to recommend the books they love to others and get an
income out of it.
Acquisitions: Amazon found out lately that its customers mostly belong to age group of
30-50. So they wanted to get to know more about young customers. Rather than changing
the current image they acquired company’s which were targeting youth such as Zappos
and Woot. Also they found that customers to digital camera and books go to specified
sites and communities to discuss and search products. With this insight they acquired
DPReview which is the leading review site on digital camera and Shelfari for book
community.

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8.3 Customer Loyalty
Three Main Approaches
Recurring Usage
Why are sellers still using Amazon?
Nonsense to ignore Amazon’s 137 m customers
Profit from a reliable and optimized technology
It takes time to develop as trusted a brand as Amazon’s (Amazon is the leading retail
brand, before Walmart)
How is Amazon increasing recurring usage?
Creating ecosystems (Kindle and tablet)
Storing users’ media library (Instant Video, Kindle)
Special offers every day (Amazon Video on Demand)
Ever-changing personalized store

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Seamless Integration
How does Amazon integrate sellers?
Monitor seller ratings posted by customers
Expel sellers with bad ratings to ensure quality and protect the Amazon brand
Offer its Fulfillment by Amazon program to further improve the customer experience
How the user experience is vertically integrated?
From the customer point-of-view, sellers are fairly invisible and commoditized
On most products, customers can profit from Amazon Prime and Free Super Saver
Shipping
Lock-in
How are sellers locked in?
As Amazon puts it, their customers are in fact Amazon’s customers.
Third party sellers do not own the customer accounts. Thus their position is very risky.
The more business they generate through the Amazon marketplace, the more complicated
it will become to ensure the same level of customer experience (building infrastructure,
customer service…).
How are customers locked in?
Digital content: Kindle ebooks proprietary format
Amazon Prime program: annual subscription to get free 2- day shipping.

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9 Brand Positioning
When Amazon introduced its Kindle Fire, it positioned it as a direct competition to Apple’s
expensive iPad. In a letter published in its landing page, Mr. Bezos drew a clear distinction
between Apple’s pricing strategy and Amazon’s pricing strategy. Apple was not explicitly
named in the letter, but not hard for all to see who Mr. Bezos was talking about.
9.1 Layering of the Brand
Purpose
Self Expression
Emotional
Functional
• Quality products at affordable
prices
• Tech savvy image
• Next generation outlook
• Reliability and trust
• Secure transactions
• Lowest prices
• Ease of purchase and delivery

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9.2 Brand Architecture
Amazon follows a hybrid structure while developing new brands. It follows a mix of product,
source and endorsing brand architecture. It is also a result of unplanned portfolio growth. They
used product brand architecture whenever they acquired other internet based firms whose
offerings where different from the core offering provided by Amazon.
The Amazon Kindle is an e-book reader developed by
Amazon.com subsidiary Lab126, which uses wireless
connectivity to enable users to shop for, download, browse, and
read e-books, newspapers, magazines, blogs, and other digital
media. With the Kindle effect, the e-book sales of Amazon
surpassed paper book sales for the first time in last quarter of
2010. Due to its technological nature and short life span, Kindle
follows a umbrella brand architecture model.
Umbrella Brand
Architecture
Amazon
Kindle
Kindle 2
Kindle DX
Kindle DX
Graphite
Kindle 3

68 | P a g e
9.3 Brand Personality
Aaker’s Model for Brand Personality
9.4 Measuring Brand Value
Brand Asset Valuator Model
Brand Vitality Brand Structure
Differentiation
• Measures the
uniqueness of
the brand
• Lowest prices
consistently
• Easy to use
interface
• Unique shipping
offerings
Relevance
• Highly diversified
product portfolio
• Highly relevant
products for
majority of the target
segment
• Reduction in savings
and shipping options
appeals to majority
of customers
Esteem
• Always
keeping
promise
• High quality
of service
• Most popular
online retailer
Knowledge
• High penetration of
brand due to large
portfolio
• Strong brand identity
• Investments in brand
building has increased
the awareness levels
among target market

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9.5 Brand Identity
Aaker’s Brand Identity Planning Model
The Brand Identity Prism

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10 Competitor Analysis
Amazon Inc, being a multinational e-commerce company and due to its presence over various e-
commerce categories have a lot of competitors in various categories. For example,
rottentomatoes.com is a competitor for IMDB.com and Google App Engine is a competitor for
Amazon Web Services. These two in actual becomes competitor for Amazon Inc but not
amazon.com.
Amazon performs exceptionally efficiently measured against revenue per visitor, which is one of
the key measures for any commercial website, whether it’s a media site, search engine, social
network or a transactional retailer or offers travel or financial services. Of course profit per user
would be quite different due to the significantly lower costs of other .coms like Facebook and
Google.
Note: SEC is the Securities and Exchange Commission (SEC) which is a government agency for
which companies have to submit an open evaluation of their business models and marketplace
conditions.

Amazon - Brand Management

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