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AMAZON-CASE STUDY

MARKETING MIX

AMAZON-CASE STUDY

1  sur  45
Distribution Strategy of
By Group 2
Introduction
Vision
Founders’ view
Marketing mix-
Product
Price
Place
Promotion
Conclusion
OVERVIEW OF PRESENTATION
INTRODUCTION [Amazon.com Inc]
• Founded- JULY1994, Seattle, Washington
• Active in - July 1995
• CEO- Jeff Bezos, chairman, and chief executive officer
• Founded by- Jeffrey P. Bezos
• Headquarters- Seattle, WA.
• Motive- Become the largest online retailer in the world to offer Earth’s Biggest
Selection in less than two decades.
• Four principles: 1-Customer obsession rather than competitor focus,
2-Passion for invention, 3-Commitment to operational excellence and
4-Long-term thinking.
• Presence-across world, in India (Bangalore, Hyderabad, Chennai)
• Opened as- Virtual book store.
MEANING OF LOGO
The smile that goes from A to Z tells that the company is
willing to deliver any product, anywhere in the world
and also represents the smile that customers would
experience by shopping on the Amazon.com Web site (the
arrow becomes a smile).
• Number of Indian customers who were using internet on a
regular basis to get information were increasing rapidly in 2012
• Flipkart, an Indian e-commerce company had started off as an
online book seller
• Amazon, the worldwide leader in e-commerce launched
Junglee.com
• In early June 2013, Amazon launched their Amazon India
marketplace without any marketing campaigns
Introduction
“THE THING THAT DERIVES EVERITHING IS CREATING
GENUINE VALUE OF CUSTOMERS,NOTHING HAPPENS
WITHOUT THAT”
“CUSTOMER COME FIRST. IF YOU FOCUS ON WHAT
CUSTOMER WANT AND BUILD A RELATIONSHIP, THEY
WILL ALOW YOU TO MAKE MONEY.”
“THE CUSTOMER EXPERIENCE REALLY MATTERS, WE
HAVE FOCUSED ON JUST HAVING A BETTER STORE
WHERE IT IS EASER TO SHOP WHERE YOU CAN
LEARN MORE ABOUT PRODUCT, YOU HAVE BIGGER
SELECTION AND THE LOWEST PRICES.”
FOUNDER’S VIEWS

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AMAZON-CASE STUDY

  • 3. INTRODUCTION [Amazon.com Inc] • Founded- JULY1994, Seattle, Washington • Active in - July 1995 • CEO- Jeff Bezos, chairman, and chief executive officer • Founded by- Jeffrey P. Bezos • Headquarters- Seattle, WA. • Motive- Become the largest online retailer in the world to offer Earth’s Biggest Selection in less than two decades. • Four principles: 1-Customer obsession rather than competitor focus, 2-Passion for invention, 3-Commitment to operational excellence and 4-Long-term thinking. • Presence-across world, in India (Bangalore, Hyderabad, Chennai) • Opened as- Virtual book store.
  • 4. MEANING OF LOGO The smile that goes from A to Z tells that the company is willing to deliver any product, anywhere in the world and also represents the smile that customers would experience by shopping on the Amazon.com Web site (the arrow becomes a smile).
  • 5. • Number of Indian customers who were using internet on a regular basis to get information were increasing rapidly in 2012 • Flipkart, an Indian e-commerce company had started off as an online book seller • Amazon, the worldwide leader in e-commerce launched Junglee.com • In early June 2013, Amazon launched their Amazon India marketplace without any marketing campaigns Introduction
  • 6. “THE THING THAT DERIVES EVERITHING IS CREATING GENUINE VALUE OF CUSTOMERS,NOTHING HAPPENS WITHOUT THAT” “CUSTOMER COME FIRST. IF YOU FOCUS ON WHAT CUSTOMER WANT AND BUILD A RELATIONSHIP, THEY WILL ALOW YOU TO MAKE MONEY.” “THE CUSTOMER EXPERIENCE REALLY MATTERS, WE HAVE FOCUSED ON JUST HAVING A BETTER STORE WHERE IT IS EASER TO SHOP WHERE YOU CAN LEARN MORE ABOUT PRODUCT, YOU HAVE BIGGER SELECTION AND THE LOWEST PRICES.” FOUNDER’S VIEWS
  • 7. MARKETING MIX  PRODUCT  PRICE  PLACE  PROMOTION
  • 8. Amazon India started with offerings in two categories, that is, books, movies & TV shows in June 2013.  In September 2013, Amazon.in opened four new stores, namely, toys & games, baby products, personal care appliances, and health care devices. This brought the total number of categories offered to eleven, including over nine million books, more than 70,000 products covering several brands, and over 1.7 million eBooks.  By the end of June 2014, Amazon India had included 15 million products across 28 categories as a part of its offerings. Overtaking other Indian based e-commerce portals. Flipkart offers about 4 million products, while Snapdeal offers 4 million products to its customers. PRODUCT
  • 9. • Amazon Device Accessories • Baby Products (excluding apparel) • Books • Cameras, Camcorders, Telescopes • Cell Phones • Consumer Electronics • Electronics Accessories • Home Appliances • Music CDs, Cassettes, Vinyl, and other sound recordings • Musical Instruments • Office Accessories • Office Products Supplies, Furniture, Printers, Calculators • Personal Computers • Software & Computer Games • Tools & Home Improvement • Toys & Games • Video Games & Video Game Consoles PRODUCT TYPES OF PRODUCTS
  • 10. • Publishing services to the business and individuals. Amazon’s AWS services, which provides web hosting services for customers and clients • Grocery items are also being delivered to consumers by Amazon through its services like Amazon Prime Pantry and Amazon Fresh. • Providing a host of web services like cloud storage, • All types of Businesses can sell products and services on Amazon and it is one of the fastest ways to start selling online • Businesses can access a new sales channel • It helps in Building brand recognition • The platform provided by amazon is trusted and secured • Amazon’s digital services like on demand music, video and e-books is also one of the major contributor in its sales SERVICES OFFERED BY AMAZON
  • 11. •Amazon has helped the business enterprises to sell online globally. •Reaching Prime customers available on Amazon. •Amazon Offers fast and free shipping to customers. •Trusted customer service and after sales return. •Amazon India continues to expand the number of products and services it offers to its customers. PRODUCT CONTIN….
  • 12. •The company’s culture is such that it always tests new ideas. •Amazon’s CEO Jeff Bezos believes, “If you double the number of experiments you do per year, you’re going to double your inventiveness.” • Thus, experimentation has contributed largely to the vast selection of products and services offered by Amazon in India. PRODUCT CONTIN….
  • 13. PRICE The Price component of the 4 ‘Ps’ of marketing is important for Amazon India as it works on a third-party model. The major source of its revenues is the fee charged to sellers. Each of the three services offered by Amazon, namely Sell on Amazon, Fulfilment by Amazon, and Product Ads, have their own rate cards for sellers, as specified on Amazon India’s website. To sell on the Amazon Marketplace, the seller bears a monthly subscription fee. Amazon also provides value added services like Prime where users pay subscription charges for one-day delivery and early access to the deals. It adjusts the prices frequently based on the category of product, time of the day and season
  • 14. PRICE Amazon India significantly reduces the price of its products through several deals offered to customers online . Amazon has to bear a major portion of its delivery expenses as 90% of the goods ordered online in India are moved by air, pushing up delivery costs by around half. Road and rail transport are used rarely as shipping options as they remain underdeveloped. Amazon offers the lowest of prices and this is made possible by the efficiency of its operations and also its web-based business model.
  • 15. PLACE  Amazon is a global brand and has its presence all across the world.  Once a customer places the order the distribution channel of Amazon comes into picture where the products are procured and stored at Amazon’s fulfilment centers.  Amazon Logistics, has developed and used a number of mediums for fast and accurate delivery of products.
  • 16. PLACE  External partners--Other than Amazon’s own logistics staff, the organization works closely with external courier partners, including, Blue Dart, FedEx, and Gati. Amazon India recently partnered with India Post to reach about 19,000 pin codes in the remote areas of the country.  Fulfillment centers--Amazon India has two fulfilment centers, one in Mumbai and the other in Bangalore, each measuring about 15,000 sq. feet. These centers have the capacity to store millions of products across several categories from sellers. These facilities have allowed Amazon India to meet the growing customer demand, 60% of which is eligible for next-day shipping of products.
  • 17. PLACE  M-commerce-- In October, 2013, Amazon.in made its catalogue available for Android users on the Amazon Mobile App. This mobile application allows users to search, browse, compare offers, read reviews, and make purchases on their mobile devices through Amazon.in. The application also gives users access to some of Amazon’s international websites.  Pick-up points-- ‘Amazon pickups’ are being experimented in Delhi and Mumbai. Through this move, Amazon is using a hybrid model, wherein an online store can leverage corner shops to minimize failed deliveries. Amazon India has also introduced pick-up services where customers can pick up their purchases from In & Out stores located at BPCL petrol stations. This has accelerated delivery of goods to customers to some extent.
  • 18. PLACE  Scheduled deliveries --Amazon.in not only promises one-day delivery of products, but is also the first e-commerce portal in India to offer scheduled deliveries for large appliances, such as TVs. On ordering a TV set from Amazon.in, customers can choose the time slot for its delivery at their home. Currently, this service is available in Mumbai.  Local manufacturers -- Amazon India establish partnership with local manufacturers to source products not carried by other sellers in the marketplace. Indian consumers would have a wider choice of products at low prices. Amazon India has said it signed a Memorandum of Understanding (MoU) with the Telangana Department of Handloom and Textiles, to educate, train and enable weavers and artisans to directly sell their products to Amazon customers across the country.
  • 20. PLACE  Return policy --Under Amazon India’s ‘A-to-z guarantee protection’ policy, a customer has the right to file a return claim for the product purchased, within a particular time period. The website allows the customer to replace the product with another of the same value, or credits the customer’s account with the value of the product. This gives consumers a lot of confidence while purchasing from Amazon.in.  Accurate delivery --Amazon India ensures that the delivery of a product is made to the right customer by verifying a digital signature taken from the customer at the time of delivery.
  • 21. Online Channel: Significant cost benefit over other traditional distribution channels • Kindle • AmazonMP3 & Cloud Player • Amazon Cloud drive Physical Channel: Half million square feet storage capacity in distribution centres • Amazon’s Next-Day and Same-Day Guaranteed delivery services • 34 fulfilment centres with more than 61 million cubic feet of storage capacity CHANNALES OF DISTRIBUTION
  • 22. Amazon's goal is to collaborate with suppliers to increase efficiencies and improve inventory turnover
  • 25. • E-Books-Kindle reader • AmazonMP3 & Cloud Player • Instant Video • AppStore for android • Amazon Cloud drive • Amazon Game Studios & Softwares “On-line channel has significant cost benefit” DIGITAL CHANNAL
  • 27. • Centralized distribution centers • Faster response time • Lower transportation cost • Use a hybrid approach in stocking and pricing • Pricing varies for delivery options PHYCICAL CHANNALS
  • 28. Large quantity of small parcels and packages are involved in e-commerce related merchandise Variety of delivery options, including overnight and various international shipping options WHOLESALER CUSTOMER INFORMATION INFORMATION PRODUCT PRODUCT
  • 32. • The whole distribution channel works on the system of commission and credit policy. • Credit policy depends on the distributor and their geographical area. • Distributors will get commission not only for delivering customers but also for other retailers. • Credit policy of distributors depends on the type of good sale. CREDIT POLICY & ROI
  • 33. PROMOTIONS Amazon India uses a variety of media to promote its website despite its already existing brand name Social media - Amazon India makes use of social networking sites, such as Facebook and Twitter to connect instantly with consumers.  The Facebook page of Amazon India is updated regularly with deals for the day, offers, and any news connected to the organization. It also gives consumers the option to connect directly to Amazon.in.  Amazon.in also has its own blog that helps connect and interact with consumers.  The blog contains articles on several products and occasions. For example, close to Father’s Day, an article was published on Amazon India’s blog on various ideas for gifts on the occasion, wherein many of Amazon. In's products were discussed. The comments and queries by readers on this blog are answered promptly.
  • 34. PROMOTIONS Use of celebrities -  Amazon India also uses celebrities for promotional purposes.  They recently interviewed Bollywood celebrities, Alia Bhatt and Arjun Kapoor, asking them about their choice of footwear in professional and personal lives.  Through the interview, Amazon was able to bring to the viewers’ interest the variety of footwear available on the website.  Amazon India also conducts interviews of many authors and thus highlights the number of books by such authors available on Amazon.in. Testimonials  The website of Amazon India has a section for testimonials from users and consumers of products.  These testimonials give new customers a certain level of confidence while shopping from Amazon.in
  • 35. Affiliate program- By building Amazon affiliate links or banners on their websites to earn money. One can add Amazon links or banners to his/her webpage. the website owner can earn up to 10% of all purchases made via these links as an incentive. Amazon also provides a ‘Banners Tool’, helping websites create banners that can connect to categories and promotions on Amazon.in. Emails – Amazon.in uses emails extensively as a way of promotion, using the huge database of Amazon consumers. The emails inform existing as well as potential customers of the deals for the day and other special offers on products. Promotions
  • 36. PROMOTIONS TV commercials  The marketing team of Amazon India has successfully created many innovative advertisements for TV.  The ads used by Amazon are usually such that catch the attention of the viewers.  The very popular advertisement of Amazon.in features is Aur Dikhao Aur Dikhao,  Keeping in mind the interest of the season and festivals they advertise – THE GREAT INDIAN SUMMER SALES, THE GREAT INDIAN FESTIVEAL SALE ,DIVALI DHAMAKAA and so on.
  • 37. • Sponsored search • Associates program • Email marketing campaigns • Portal advertising • Other initiatives include outdoor, radio and TV advertising • View free shipping offers as effective worldwide marketing tools i.e. amazon prime offers. How Amazon attracts customers
  • 38. Cat fight between Flipkart vs Snapdeal vs Amazon
  • 39. Cat fight between Flipkart vs Snapdeal vs Amazon Snapdeal sensed an opportunity to take a dig at Flipkart and here is what they came up with The hoardings came into action as well and it was a huge trolling of Flipkart by Snapdeal
  • 40. Cat fight between Flipkart vs Snapdeal vs Amazon And as the age old proverb says, in the fight between the two cats, it’s the monkey who took the cake, it was Amazon India which won in the end!
  • 42. Strengths  Brand well known along with a strong customer base in many parts of the world.  Diverse product offerings  Free home delivery above a minimum purchase  Working with minimum profit and gaining from economies of scale  Strong business relationships with publishing houses, major electronic companies etc.  Experience of almost a decade in online shopping industry Weakness  Operates at very low margin  Criticism for its working conditions  ‘KINDLE’ is not up to the mark of its competitors Opportunity  Acquiring more small business enterprises, enabling them to expand  Opening physical stores so as to give the customers a feel of touch and experience  Indian retail industry is estimated to be $450 Billion  Expand into more product segments  Tie ups with major players of untapped market Threats  Online security threats  Regional low-cost retailers  Strong online presence of Indian competitors like Flipkart and Myntra  Flexible rules against FDI enabling other major players like Wal-Mart etc. to enter
  • 43. Amazon India’s decision to build a fully grown in house logistic arm in two years Plans to dramatically multiply its headcount in logistics and conveyance space in seven months The case study on Amazon India with respect to the 4 ‘Ps’ of marketing indicates that each of these components is important for the company’s strategy. Amazon India has emphasized the ‘Place’ component of the marketing mix as focus lies on one-day delivery and beating incumbents such as Flipkart and Snapdeal. The company has also laid stress on the ‘Product’ component of the marketing tool as it strives to increase the number of categories offered to customers . Conclusion
  • 44. Amazon India, however, has been facing obstacles in implementing its marketing strategy in the country.  The company is facing the problem of offloading by commercial airlines, which frequently remove parcels of e- commerce portals to make more room for passengers. This costs Amazon.in and other online retail stores dearly as each company is trying to win customers with their quick delivery of products. In order to overcome the problem of offloading, Amazon India has set up regional warehouses in the country to be able to reduce air shipments.  The company is also piloting pick-up delivery points at grocery stores and petrol stations. Amazon has also tied up with the Indian Postal Service to reach remote areas in India. Conclusion

Notes de l'éditeur

  1. They have an holding inventory of 15days and an inventory turnover of 26…..
  2. When everything is E exploit the D
  3. On-line channel has significant cost benefit if books are downloadable Many e-books are available for kindle reader and other e book readers-amazon states that e-book sales has surpassed hardcover sales Allows for Buffering and downloading of music from the records of EMI/warnerbros/sony&universal Provides softwares and apps for apple products Provides cloud services for small businesses Various games and softwares are also there for download through……
  4. -Tdy amzn is the world’s largest online retailer it delivers to millions of customers each day around the world with accuracy and efficiency
  5. Covering different geographical areas This have a competitive edge as they need not pay the taxes of the other serving state as they do not have their physical presence…. They provide for standard and expedited shipping costs and also on delivery urgency…… Amazon established several warehouses, where the inventory is procured using a push strategy, orders are shipped using a pull strategy May still use a pure pull strategy for slower items
  6. Exercises …for some b2b and international shipping  transfers customer orders and shipment details to either the manufacturer or a wholesaler, who then ships the goods directly to the customer
  7. Sellers ship their inventory directly to amazon. They can hve a direct access upon the status of their inventory using SELLERS CENTAL Vendor Managed Inventory