Brand Management Study of Amazon
Upcoming SlideShare
Loading in...5
×
 

Brand Management Study of Amazon

on

  • 35,508 views

Contains different aspects of Amazon's brand management and brand development strategy.

Contains different aspects of Amazon's brand management and brand development strategy.

Statistics

Views

Total Views
35,508
Views on SlideShare
35,445
Embed Views
63

Actions

Likes
20
Downloads
1,520
Comments
2

3 Embeds 63

http://www.matthieu-tranvan.fr 61
http://www.linkedin.com 1
https://twitter.com 1

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
  • i found the material very useful. greatful thanks.
    Are you sure you want to
    Your message goes here
    Processing…
  • Hi Everyone!

    Need help in Brand Management, Product Sourcing, and Product Reviews? Sign up here for free! http://www.amazon-simple.com/product-reviews.html and we'll make things easy for you! :)
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Brand Management Study of Amazon Brand Management Study of Amazon Presentation Transcript

  • Brand Management
  • Company Introduction
    2
    Basic facts about Amazon
    • Amazon.com is a US based multinational electronic commerce company.
    • Headquartered in Seattle, Washington, it is the world's largest online retailer.
    • Jeff Bezos founded Amazon.com, Inc. in 1994 and the site went online in 1995.
    • The name Amazon.com was chosen because the Amazon River is one of the largest rivers in the world.
    • Amazon.com started as an online bookstore but soon diversified into selling DVDs, CDs, MP3 downloads, computer software, video games, electronics, apparel, furniture, food, and toys.
    • Amazon.com listed with the tagline, ‘Earth’s biggest bookstore’.
    • Posted a net revenue of $34.2 billion and net income of $1.15 billion in 2010.
    • Amazon boasts of a customer base of 137 million which is more than twice that of GROUPON
    • In 15 years (1995 - 2011) Amazon went from 1 category to 16 categories
    • By introducing two new product categories every year for almost a decade, Amazon’s market share represents one third of U.S. e-commerce sales
  • Did you know?
    3
    all these companies belong to Amazon…
  • Other Amazon Initiatives
    4
    Companies with Mother brand name
    AmazonBasicsAmazon-branded electronic products
    Amazon Studios
    online social movie studio
    Amazon Kindle
    E- book reader
    AmazonFresh
    sells and delivers groceries in Seattle
    Amazon Warehouse Deals
    offers discounts on refurbished products
    Amazon prime
    Prime membership program
  • Other Amazon Initiatives
    5
    Companies with Mother brand name
    Amazon Cloud drive
    Cloud computing
    Amazon Instant Video
    Video on Demand Service
    Amazon Web Services
    Collection of web services giving cloud computing platform
    Amazon Appstore
    Interactive venue for developers and buyers
    Amazon Cloud Player
     lets you sync music and playlists across computers 
    Amazon mp3
    Online music store
  • 6
    BRAND DIAGNOSTICS
  • Target Group
    7
    Basic Outlook on TG
    • 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
  • Competitors
    8
    Classification
    Competitors of Amazon can be classified into
    • 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
    • Here we are considering only the online retailing/retailing division of Amazon.com and have classified the competitors accordingly
  • Competitors
    9
    Amazon Vs Ebay
    Even though the business models of Amazon.com and EBay.com are different EBay is one of the major competitor for Amazon.
    Normal retailing model of business
    Faster search and transaction speed
    More trusted brand by customers
    Products are on an average cheaper than any other site
    Late in global entry and not fully utilized global distribution
    Best in the industry in customer service
    Simplicity due to one listing per product
    More repeat purchase
    Auction model of retailing
    More number of sellers and buyers
    Lesser inventory cost
    Better reach and global presence (Amazon still doesn’t have a specialized unit in India where as ebay.in is doing well)
    Good customer service and very less error rate
    Multiple listing per product.
    Better margins for sellers
  • Competitors
    10
    Amazon Vs Walmart
    As Wal-Mart has entered into online retailing it poses as a major threat to Amazon.com. The increasing presence of amazon in web space was the reason which made Wal-mart jump into online retailing at the first place. Amazon is supposed to overtake Wal-Mart in total revenues by 2025
    Largest online retailer
    No store presence
    Online sales of 34 billion in 2010
    40% growth in 2010
    Better prices than walmart !!! (cheaper by almost 19 %)
    Diversified portfolio with futuristic outlook
    Customer base of 137 million
    Subsidiaries in 7 countries
    Customer service ranking is 1
    28 acquisitions till date
    Largest retailer
    Online sales of 4 billion in 2010
    Store sales around 400 billion in 2010
    Better brand value due to store presence
    17% growth in 2010
    Low profit margin
    Customer base of 200 million
    Subsidiaries in 14 countries
    Customer service ranking is 10
    14 acquisitions till date
  • Key Drivers of Growth (1/2)
    Third Party Unit Growth and Prime/Free Shipping
    • 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)
    11
  • Key Drivers of Growth (2/2)
    Third Party Unit Growth and Prime/Free Shipping
    • Shipping costs have increased over the years and in 2Q 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
    *Media US – Media (books, music, video games, kindle ebooks) in US
    *Media Intl – Media International
    *EGM US – Electronics and General Merchandize in US
    *EGM Intl – Electronics and General Merchandize International
    12
  • Consumer Insights (1/2)
    13
    Insights that shaped Amazon.com
    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.
  • Consumer Insights (2/2)
    14
    Insights that shaped Amazon.com
    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 dpreviewwhich is the leading review site on digital camera and shelfarifor book community
  • Customer Care
    15
    Services that increase brand loyalty
    • “If you make customers unhappy on the Internet, they can each tell 6,000 friends”
    Jeff Bezos (CEO Amazon).
    • Amazon’s customer service was ranked No 1 in 2009 and 2011 by American Customer Satisfaction Index
    • Following a bottom-up approach, every decision at Amazon is driven by the customer's needs.
    • Every employee, even the CEO, spends two days every two years on the service desk to answer calls and help customers
    Amazon introduced many of the current ubiquitous best-practices to e-commerce industry. Below are a list of innovations bought by them
  • Increasing seller & customer base
    16
    Basic Strategy
  • Handling Complaints
    17
    • Heavy focus on customer service
    • Provides an easy interface for customers to register their complaints
    • All queries and complaints are addressed immediately
    • Customer feedback on products and packaging
    • Liberal return and replacement policies
    Easy Return of goods (no questions asked)
    • Can return own purchases
    • Can return gift items
    • Sell online after return date
    • Fast refunds and replacements
  • Customer Retention
    18
    Strategies followed to retain the current customers
    Amazon benefits from a loyal customer base: 2/3 of the sales comes from returning customers
    In 2007 Amazon launched Amazon Payments to directly compete with PayPal. This also introduced barriers to entry for new players as they will have to adjust to current payment methods. The new payment system worked as an add-on customer service
    Introduced Amazon gift cards for inducing trial and repeat purchase.
  • Customer Retention
    19
    Strategies followed to retain the current customers
    Vertical Integration
    Kindle became another reason for customers to come back to Amazon.
    Huge seller base
    A customer base of 137 millions makes it impossible for any seller to neglect Amazon and they joins in which in turn increases customer base due to large collection of items
    Lock in
    Amazon made it difficult for customers to switch platforms for reading their e-book through their proprietary format
    Special Offers everyday
    Plays with various offers in Amazon instant video, the video on demand service.
    Personalized store
    Personalized pages tracking past purchase behavior and using modern algorithms to give recommendations. Also the look and feel of the page keeps on changing to give a modern outlook
    Amazon Prime
    Annual subscription saving schemes for loyal customers
  • Layering of the Brand
    20
  • Kano’s Model
    21
    Model for product development and Customer Satisfaction
    Excitement Attributes
    Everyday GOLD BOX deals
    Customer reviews
    Content search
    Kindle e-book reader
    Sensible recommendations
    Performance Attributes
    Minimal Time to delivery
    Easy navigation through site
    Free shipping
    Wide collection
    One click service
    Threshold or Basic Attributes
    Online shopping
    Product comparison
    Low prices
    Reliable and hassle free payment
  • Brand Portfolio Analysis
    22
    BCG Matrix
    STARS
    • Amazon Kindle
    • Amazon Fresh
    • Amazon.com
    • Diapers.com
    • Instant Video
    QUESTION MARK
    • Pinzon- Private Label
    • Amazon Web Services
    • Zappos.com
    • Lovefilm.com
    HIGH
    ?
    Market Growth Rate
    CASH COW
    • IMDB
    • Alexa
    • Audible.com
    • Createspace
    DOGS
    • Amazon mp3
    • Amzon Cloud
    • Pets.com
    LOW
    LOW
    HIGH
    Relative Market Share
  • Brand Life Cycle
    23
    Amazon web services, publishing
    Acquisitions :
    Joyo, IMDB . MobiPocket etc.
    MAC downloads, MP3s, International expansion
    Online bookstore
    Largest catalogue, home delivery of books
    Diversification:
    Electronics, apparel, CD, DVD etc.
    Spinoffs: A9, Lab126, endless.com etc.
    Introduction
    Innovation
    Innovation
    Maturity
    Growth
    Decline
    Growth
  • Emerging Trends
    24
    Internet Retailing Performance and Growth prospects by Category 2010-15
    Source: Euromonitor
  • Brand Architecture
    25
    • 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
  • Amazon Kindle
    26
    Brand Architecture and Other details
    • 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
  • Customer Profiling
    27
    WALKING WOUNDED
    Some of the current users who are dissatisfied about shipping delays
    Customers who faced technical glitch and their cash got locked in
    CHAMPION
    Repeat purchasers
    Customers who give reviews and ratings to different services
    Early adopters of technology
    Those who enrolled for prime membership program
    MISSING IN ACTION
    Registered inactive users
    Loyal customers of other competitors
    Customers who are doubtful towards online payment modes
    TERRORIST
    Dissatisfied customers spreading their opinion through social media sites
    Hard core I pad fans creating disruptive blogs against kindle
  • Intellectual Property
    Patents and Trademarks
    • The actual technology that allows a Kindle to operate probably relies on several if not dozens of patented apparatuses and processes that Amazon either holds the patent to or licenses from the patent holder.
    • The Amazon and Kindle brands are most certainly registered trademarks.
    • Most of the books that are downloaded for Kindle are copyrighted, and Amazon has a deal with the publisher/author to distribute the content electronically.
    • Amazon.com’s 1-Click Ordering: Storing a customer's billing information so that they do not have to enter it every time they make a purchase is also patented. It is also commonly referred to as 1-Click Checkout.
    • Amazon.com’s Internet-Based Customer Referral System:It is patented on the process of allowing other websites market their books for a commission.
    • Amazon.com has also been awarded patent for an automated system called “gift conversion” wizard that would allow users to return Amazon-derived gifts even before the order was shipped.
    • Amazon.com has also filed a patent for mini-airbags like protection for cellphones. There will be an airbag deployable from the side of the cellphone when it senses that will inflate when it senses that the cellphone will hit the ground.
    28
  • Brand Personality
    29
    Aaker’s Model for Brand Personality
    The Green filled cells are the associated characters for Amazon as a person
    Even though Amazon is functioning in an online market, due to its low price strategy it has avoided to bring a sophisticated image to itself
  • Pricing Strategy
    30
    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
  • Advertising, Sales and Promotion Strategies
    Attractive Advertising and Selling Plans available on Amazon.com
    • Upload product catalog and set budget
    • Customers see seller’s product ads on amazon.com
    • Customers click to product pages on seller’s website
    • Seller’s are charged a cost-per-click
    • Customers purchase products from seller’s website
    31
  • Brand Asset Valuator Model
    32
    Measuring Brand value
  • 33
    BRAND PLAN
  • Vision and Mission
    34
    "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.“
    All the activities including promotions, marketing campaigns, acquisitions etc. are aligned towards this common vision of the company.
  • Target Group
    35
    Market Segmentation
  • Brand Identity (1/2)
    36
    Aaker’s Brand Identity Planning Model
  • Brand Identity (2/2)
    The Brand identity prism
    • World's largest online retailer
    • Established separate websites in different countries
    • Acquired multiple organizations and websites
    • Internet-based
    • Started as an online bookstore
    • Sells a wide range of products now
    • Attractive Prices
    Personality
    Physique
    • Punctual
    • Environment-friendly
    • Accessible
    • Customer centric
    • Exclusive products
    Self-Image
    Culture
    Online Shopping Giant
    Reflection
    Relationship
    • Offers international shipping to certain countries for some products
    • Buy everything at the click of a button
    • Easy shopping in less time
    37
  • Distribution Strategy
    38
    Digitally driven distribution network
    Amazon understood that sustainable massive growth can be obtained only through developing distribution network. They poached 2 of Wal-Mart's critical employees.
    • Richard Dalzell as its Chief Information Officer
    • Jimmy Wright as its Chief Logistics Officer
    They were responsible for Wal-Mart's computerized supply chain and impressive supply-and-distribution network . Wal-Mart filed a suit in 1998 which was settled outside the court.
  • Distribution Strategy
    39
    Digitally driven distribution network
    Started in-sourcing the value chain to have more control over distribution
    Ex. Acquired book surge (now createspace) which was a print on demand company. This helped Amazon to reduce their dependence on suppliers and also inventory level.
    With the help of Richard and Jimmy Amazon started its process of developing a world class distribution network and circumvent other distributors
    They massively used IT for developing their supply chain and logistics. This was copied after seeing the success of Wal-mart.
    In 2000 70% of Amazon’s software development concerned about distribution centers.
    As a part of completely controlling its distribution, Amazon Fresh implemented its own delivery network
    Now entered digital distribution through kindle, Amazon mp3, instavideo etc. This means every book/song is available in 60 seconds.
  • Capturing New trends
    40
  • SWOT Analysis
    41
    For Amazon.com in Retailing industry
    America's largest online retailer
    Robust brand image enhances bargaining power
    Diversified into product lines other than books to strengthen customer reach
    Kindle builds strong presence in the eBooks 
    Free shipping offers would be a challenge in the long run
    Patent infringement issues erode stakeholder confidence
    Late in entering emerging markets like China and India
    STRENGTHS
    WEAKNESSES
    Acquisitions extend product line and strengthen technical platform
    Increase in online retail sales in the US
    Poor publicity with publishers due to the pricing model
    Launch of Apple's iPad intensifies competition
    Foreign exchange fluctuation
    OPPURTUNITIES
    THREATS
  • Porter’s 5 Forces
    42
    Analysis of Online Retailing Industry
    Low barriers to entry
    New technologies can be disruptive
    Less brand loyalty towards online shops
    High probability of new entrants
    Can utilize economies of scale
    Can come up with better range of products
    Comparison sites gives price variations in different sites
    Buyer has complete information
    Wide buying options available
    Lot of product review sites
    With social media, word of mouth becomes an important feedback point.
    Large number of suppliers
    Global distribution networks intensifying competition
    High bargaining power of big shot retailers
    Less differentiation in product
    Focus on low prices lead to low customer loyalty
    More choices in online stores and cheaper prices
    lack the touch and feel factor
    Large presence of physical retailers and shops
    Online shopping becoming increasingly widespread
  • Brand Extension opportunities
    43
    AmazonMovies– The strong industry knowledge with IMDB and CDNow can be leveraged to create an online movie rental business in the lines of Blockbuster.
    AmazonWallet– A common and secure payment gateway along the lines of PayPal, which can be leveraged by other e-commerce sites.
    AmazonWorld – A social commerce platform which enables users to discuss, review and recommend products and services with their friends and acquaintances, linked with amazon.com user base.
    AmazonScholar – Range learning equipments such as Scientific and Financial calculators. The brand already has created an association with electronics with Kindle.
    AmazonGlobal – A facility which simplifies purchase, shipping and taking care of other formalities for items purchased from any Global location
  • Marketing Strategies of Amazon
    44
    Amazon.com bases its marketing strategy on six pillars.
    It freely proffers products and services.
    It uses a customer-friendly interface.
    It scales easily from small to large.
    It exploits its affiliate’s products and resources.
    It uses existing communication systems.
    It utilizes universal behaviours and mentalities.
    Much of its marketing is subliminal or indirect – it does not run $1 million dollar ads during Super Bowls nor post flyers in mall marketplaces (unlike Groupon). Amazon.com relies on wily online ploys, strong partner relations and a constant declaration of quality to market itself to the masses.
  • Marketing Objective
    45
  • Marketing Plan (1/2)
    46
    Online marketing
    Amazon Mainly concentrate on Online marketing through adsense, affiliate marketing and online community building. Compared to their online spend, their offline spend is meager.
    PAY PER CLICK ADVERTISING
    Purchases PPC ads on Google to direct browsing customers to their websites.
    Buys space on the left side of Google’s search listing results, and pays a fee for each visitor to Amazon.com who clicks on their sponsored link
    EMAIL MARKETING
    Amazon.com engages in permission marketing, where customers give the company permission to send them e-mails detailing product promotions
    AFFILIATE MARKETING
    Links to various products in Amazon.com is kept in the websites of third parties or of other retailers.
    Amazon.com pays a certain fee for each customer visit through these links.
    ONLINE ADS
    In various social networking sites such as Facebook, Orkut etc
    In various communities and discussion forums for specific products and services such as dpreview, goodreads etc
  • Marketing Plan (2/2)
    47
    Offline marketing
    Amazon’s offline spent is very less (below $10 dollar. Amazon.com’s strategy is simple: since customers shop online, online is where they will be found. )
    MEDIA
    TV – ads showing benefits of products like Kindle
    Radio – sponsoring various radio programs
    PROMOTION
    Events
    Online buying experience
    Online games
    Free delivery on special occasions
    EVENTS
    Shopping Malls: competitions like reading speed challenges
    Helps in customer experiencing the product (Kindle)
    OTHERS
    Sponsored T-shirts pens, mugs etc
  • Positioning: Online Shopping
    Marketing Plan Diagram : ______
    Product Review Information
    Convenience
    Repeat Purchases
    Order Fulfillment
    ‘1-Click Shopping’
    Product Recommendations
    Loyalty & Advocacy
    Money-back Guarantee
    Buyer
    Low Costs
    Association
    Merchant Advantage: Automatic Re-Ordering, etc
    Seller
    NetworkExternality
    Fixed Merchants
    AssociatesProgram
    Partnering
    Brand Image
    DistributedWeb Services
    Strong CRM
    Diversification
    Customer Base
    Cross-selling
    Email Marketing
  • Marketing Plan Evaluation
    49
    INVOLVED
    ACTIVE
    PASSIVE
    IMMERSED
  • Brand Dash Board
    50
    Brand Metrics Advertising Metrics Purchase Metrics
    • Brand Awareness
    • Advertising Awareness
    • e-Book Market Share
    • Brand Commitment
    • Source of Ad Awareness
    • Frequency Profile
  • Brand Dash Board Contd..
    51
    Brand Metrics Advertising Metrics Purchase Metrics
    • Brand Attributes
    • Message Association
    • Repeat Purchase
  • Risk Analysis
    52
    Risk management measures
    • Amazon manage the risk through diversification of business and adding emerging business lines to their portfolio
    • Amazon’s sales composition was 100% media sales in the first 3 years. By 2011 media just forms 43% of their total sales
    • Through Kindle, CDNow, audible.com instaVideo and AmazonMP3 they have a strong foothold in digital sales of media. They have thus reduced dependency on physical sales of media in their portfolio
    • More focus given to digital goods recently as digital goods give better operating margin
    Media includes books music video/ DVD
  • References
    53
    http://en.wikipedia.org/wiki/Amazon.com
    http://en.wikipedia.org/wiki/Walmart
    http://en.wikipedia.org/wiki/EBay
    http://www.amazon.com/
    www.slideshare.net
    http://www.brandz.com/upload/Top_25_Retail_Report.pdf
    http://www.theacsi.org/index.php
    http://360.datamonitor.com
    http://7pillarsofsellingonline.com
    http://www.onlinemba.com/walmart-vs-amazon/
    http://www.internetretailer.com/top500/list/
    http://www.marketingplan.net/amazon-com-marketing-strategies/
    Pierre Chandon, “Note on Brand Audit : How to measure Brand Awareness, Brand Image, Brand Equity and Brand Value”, Insead, 2004.
  • Thank You
    54