Pragati Agarwal, profile picture
Uploaded byPragati Agarwal
PPTX, PDF80,286 views

Amazon business model

Amazon's logo represents selling everything from A to Z and the smile customers experience shopping on Amazon.com. Founded in 1994, Amazon is a global e-commerce leader with over 28,000 employees and a wide range of products. The company's mission is to be the most customer-centric company and build a place for people to find anything they want to buy online.

Embed presentation

Downloaded 1,542 times
Pragati Priya Radha December 2015 Business Models
The Amazon logo was created to represent the message that it sells everything from A to Z (the arrow connects the two letters) and also represents the smile that customers would experience by shopping on theAmazon.com Web site (the arrow becomes a smile).
Company Overview Founded in 1994 in Seattle, USA 28,300 employees Global leader in e-commerce Wide range of products Worldwide network of fulfilment Mass customisation Customer experience Affiliations Stickiness
• ‘To leverage technology and the expertise of our invaluable employees to provide our customers with the best shopping experience on the Internet.’ Mission • ‘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.’ Vision • Customer Obsession • Innovation • Bias for Action • Ownership • High Hiring Bar • Frugality Values
• ‘Not to discount a small number of products for a limited period of time, but to offer low prices everyday and apply them broadly across our entire product range.’ Objective • Price • Convenience • Selection Core Value Proposition • ‘To ‘Get Big Fast’ by investing aggressively in new product categories and new businesses, by spending money on brand awareness and getting new customers.’ Strategy
of 64of 53 Did you know? all these companies belong to Amazon…
of 64of 53 Other Amazon Initiatives Companies with Mother brand name AmazonBasics Amazon-branded electronic products AmazonFresh sells and delivers groceries in Seattle Amazon Warehouse Deals offers discounts on refurbished products Amazon Studios online social movie studio Amazon Kindle E- book reader Amazon prime Prime membership program
of 64of 53 Other Amazon Initiatives Companies with Mother brand name Amazon Cloud drive Cloud computing Amazon Appstore Interactive venue for developers and buyers Amazon Instant Video Video on Demand Service Amazon Cloud Player lets you sync music and playlists across computers Amazon Web Services Collection of web services giving cloud computing platform Amazon mp3 Online music store
Q1: How did Jeffrey Bezos build the “Amazon.com” brand? • Bezos had vision of making Amazon as Earths biggest book store. • Amazon was positioned as customer centric company • Gave unique shopping experience to customers • To promote goodwill Amazon upgraded many of its order to priority shipping • Shipping at no extra cost.
Q2: What were the reasons for Amazon.com ’s early growth? • Word of mouth such as testimonials from satisfied customers and media stories. • It had top of mind awareness amongst the customer looking to buy products online. • Trusted brand • 60% of orders were from repeat customers
Q3: How did Amazon.com expand their business further? • Expanded after success of bookselling • Expanded into other product categories
• Extended Products: – CD’s – Videos – Gifts – Baby Products – Electronics – Kitchen and Housewares – Tools and hardware – Toys – Barbecues
How long do you stay @ ? Stickiness Holds customers and keeps them coming back for more! Measurement: *Time spent at a website *Number of visits per person *Number of pages viewed
2 3 4 Variety 5 Speed & Delivery 1 Easy Navigation
VALUE CHAIN ANALYSIS
VALUE PROPOSITION
Auctions & zShops eBooks/Kindle E-commerce Platform/ Web Services Marketplace OnLine Book Retailing Partherships & Logistic Services Business Model Evolution
Business Model Canvas 9 building blocks Customer Segment (CS) Cost Structure(C$) Customer Relationship (CR) Channels (CH) Revenue Streams (R$) Key Resources (KR) Key Partnerships (KP) Key Activities (KA) Value Proposition (VP)
MARKETING TECHNOLOGY & CONTENT FULFILMENT SALES MARGINS AUTOMATED SERVICES & CO- CREATION (CUSTOMISED ONLINE PROFILES & RECOMMENDATIONS) AMAZON.COM (& OVERSEAS SITES) AFFILIATES IT INFRASTRUCTURE, SOFTWARE & EXPERTS GLOBAL FULFILMENT INFRASTRUCTURE FULFILMENT & IT INFRASTRUCTURE DEVELOPMENT AND MAINTENANCE Business Model Canvas GLOBAL MARKET (SELLERS & CONSUMERS) INTERMEDIATION SERVICES COMMISSIONS SELLERS (COMPANIES & INDIVIDUALS)AGGREGATION OF DEMAND (LONGTAIL) FULFILMENT COMPANIES (ONLINE & TRADITIONAL RETAILERS) LOGISTICS NETWORK PARTNERSHIPS & ALLIANCES DEVELOPERS MASS-CUSTOMISED WEB SERVICES APIs PORTABLE DEVICE PRODUCT DEVELOPMENT, AND PROMOTION HARDWARE MANUFACTURERS GLOBAL MARKET (CONSUMERS) LOW PRICES CONVENIENCE WIDE SELECTION CUSTOMER EXPERIENCE LOGISTIC PARTNERS AFFILIATES (PUBLISHERS, AUTHORS, BOOKSTORES…) Online RetailingAuctions & zShopsMarketplacesPartnerships and Logistic Service ProviderE-commerce Platform/Web ServiceseBooks/Kindle COMPANIES (ONLINE & TRADITIONAL RETAILERS)
eBooks/Kindle >450 000 books available for download Newspapers, magazines and blogs subscription Amazon keeps 65% of the revenue from all eBook sales for Kindle eBooks downloaded from Amazon not exclusive to Kindle Kindle eBooks add 35% to a physical book’s sale on Amazon Amazon reported 80% of eBook market "Our vision is to have every book ever printed, in any language, all available in tinder 60 seconds.“ - Jeff Bezos, Amazon.com CEO
Source: www.meettheboss.com
BRAND DIAGNOSTICS
of 64of 53 Target Group Basic Outlook on TG O Internet users – Primarily those who are comfortable with e-commerce O 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 O 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 O 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 O Tech Savvy users and Early technology adopters. Separately designed products like Amazon mp3, Amazon kindle, Amazon Appstore for them. O Those who yearn on convenience shopping O Seller customers. Amazon’s primary objective is to bring maximum number of reliable sellers under it. O App developers. New TG. Started targeting through Amazon Appstore
of 64of 53 Competitors Classification O 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 O 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 O Here we are considering only the online retailing/retailing division of Amazon.com and have classified the competitors accordingly Competitors of Amazon can be classified into Category Example 1 online mass retailers Myntra.com, ebay.com, jabong.com, flipkart.com 2 Online specialized retailers Apple.com, Dell.com. Staples.com 3 book retailers (As this is the main revenue source of amazon.cm) flipkart 4 Brick and Mortar retailers Wal-Mart, and other retailers 5 E-book readers (As kindle is a main revenue generator for Amazon.com through both its own sales and induced e-book downloads) Kobo e-reader, Apple i- pad, Barnes and Nobles Cybook 6 Social buying sites Groupon, flipkart, jabong.
of 64of 53 Consumer Insights (1/2) 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.
of 64of 53 Consumer Insights (2/2) 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 dpreview which is the leading review site on digital camera and shelfari for book community
of 64of 53 Customer Care Services that increase brand loyalty O “If you make customers unhappy on the Internet, they can each tell 6,000 friends” Jeff Bezos (CEO Amazon). O Amazon’s customer service was ranked No 1 in 2009 and 2011 by American Customer Satisfaction Index O Following a bottom-up approach, every decision at Amazon is driven by the customer's needs. O 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 Year Innovation 1995 Customer reviews 1997 Recommendations & bundles 1997 1-Click Ordering 2001 Look inside the book 2001 Where's my stuff 2002 Free Super Saver Shipping 2003 Search inside the book
of 64of 53 Increasing seller & customer base Basic Strategy
of 64of 53 Handling Complaints Customer service channels Telephonic Email Chat Easy Return of goods (no questions asked) Can return own purchases Can return gift items Sell online after return date Fast refunds and replacements •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
of 64of 53 Customer Retention 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
of 64of 53 Brand Portfolio Analysis BCG Matrix STARS •Amazon Kindle •Amazon Fresh •Amazon.com •Instant Video QUESTION MARK •Pinzon- Private Label •Amazon Web Services CASH COW •Audible.com •Createspace DOGS •Amazon mp3 •Amzon Cloud Relative Market Share MarketGrowthRate HIGH LOW LOWHIGH
of 64of 53 Brand Life Cycle Innovation Introduction Growth Maturity Decline Innovation Growth Onlinebookstore Largestcatalogue,home deliveryofbooks Diversification: Electronics,apparel,CD, DVDetc. Spinoffs:A9,Lab126, endless.cometc. Acquisitions: Joyo,IMDB.MobiPocketetc. Amazonwebservices, publishing MACdownloads,MP3s, Internationalexpansion
of 64of 53 Emerging Trends Internet Retailing Performance and Growth prospects by Category 2010-15 Source: Euromonitor 0 5 10 15 20 25 0 20,000 40,000 60,000 80,000 %CAGR2010-2015 Market Size 2010 (US$ mn, rsp excl sales tax) Beauty and Personal Care Internet Retailing Clothing and Footwear Internet Retailing Consumer Electronics Internet Retailing Consumer Healthcare Internet Retailing DIY and Gardening Internet Retailing Consumer Appliances Internet Retailing Home Care Internet Retailing Housewares and Home Furnishings Internet Retailing Media Products Internet Retailing Food and Drink Internet Retailing Note: Bubble size shows growth in absolute value terms over 2010-2015
of 64of 53 Customer Profiling WALKING WOUNDED 1. Some of the current users who are dissatisfied about shipping delays 2. Customers who faced technical glitch and their cash got locked in CHAMPION 1. Repeat purchasers 2. Customers who give reviews and ratings to different services 3. Early adopters of technology 4. Those who enrolled for prime membership program MISSING IN ACTION 1. Registered inactive users 2. Loyal customers of other competitors 3. Customers who are doubtful towards online payment modes TERRORIST 1. Dissatisfied customers spreading their opinion through social media sites 2. Hard core I pad fans creating disruptive blogs against kindle
of 64of 53 Pricing Strategy 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)
of 64of 53 Advertising, Sales and Promotion Strategies Attractive Advertising and Selling Plans available on Amazon.com O Upload product catalog and set budget O Customers see seller’s product ads on amazon.com O Customers click to product pages on seller’s website O Seller’s are charged a cost-per-click O Customers purchase products from seller’s website
of 64of 53 BRAND PLAN
of 64of 53 Vision and Mission "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.
of 64of 53 Target Group 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
of 64of 53 Brand Identity (1/2) Brand Identity Planning Model Brand as Product • Wide range • Lowest price • High service • Reliability • Value for money Brand as Organization • Innovative • Customer friendly • Global • Trustworthy Brand as Person • Honest • Reliable • Timely • Energetic • Friend Brand as symbol • Symbol for reliability • Functional appeal • Modern/With less heritage
of 64of 53 Brand Identity (2/2) The Brand identity prism Self-Image Culture Online Shopping Giant • World's largest online retailer • Established separate websites in different countries • Acquired multiple organizations and websites • Punctual • Environment- friendly • Offers international shipping to certain countries for some products • Accessible • Customer centric • Exclusive products • Internet-based • Started as an online bookstore • Sells a wide range of products now • Attractive Prices • Buy everything at the click of a button • Easy shopping in less time
of 64of 53 Distribution Strategy 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. O Richard Dalzell as its Chief Information Officer O 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.
of 64of 53 Distribution Strategy Digitally driven distribution network 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 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. Now entered digital distribution through kindle, Amazon mp3, instavideo etc. This means every book/song is available in 60 seconds.
of 64of 53 Shopping cart technology By: Amazon.com Search box Adding to cart Proceed to payment 1-click system Confirmation
of 64of 53 SWOT Analysis For Amazon.com in Retailing industry 1. largest online retailer 2. Robust brand image enhances bargaining power 3. Diversified into product lines other than books to strengthen customer reach 1. Free shipping offers would be a challenge in the long run. 1. Acquisitions extend product line and strengthen technical platform. 1. Foreign exchange fluctuation. STRENGTHS WEAKNESSES OPPURTUNITIES THREATS
of 64of 53 Marketing Strategies of Amazon Amazon.com bases its marketing strategy on six pillars. 1. It freely proffers products and services. 2. It uses a customer-friendly interface. 3. It scales easily from small to large. 4. It exploits its affiliate’s products and resources. 5. It uses existing communication systems. 6. 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.
of 64of 53 Marketing Plan (1/2) 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 1. Purchases PPC ads on Google to direct browsing customers to their websites. 2. 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 AFFILIATE MARKETING 1. Links to various products in Amazon.com is kept in the websites of third parties or of other retailers. 2. Amazon.com pays a certain fee for each customer visit through these links. EMAIL MARKETING 1. Amazon.com engages in permission marketing, where customers give the company permission to send them e-mails detailing product promotions ONLINE ADS 1. In various social networking sites such as Facebook, Orkut etc 2. In various communities and discussion forums for specific products and services such as dpreview, goodreads etc
of 64of 53 Marketing Plan (2/2) 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 1. TV – ads showing benefits of products like Kindle 2. Radio – sponsoring various radio programs EVENTS 1. Shopping Malls: competitions like reading speed challenges 2. Helps in customer experiencing the product (Kindle) PROMOTION 1. Events 2. Online buying experience 3. Online games 4. Free delivery on special occasions OTHERS 1. Sponsored T-shirts pens, mugs etc
Marketing Plan Diagram : ______ Strong CRM ‘1-Click Shopping’ Convenience Low Costs Diversification Partnering Network Externality Brand Image Product Review Information Customer Base Fixed Merchants Product Recommendations Cross-selling Distributed Web Services Money-back Guarantee Email Marketing Loyalty & Advocacy Merchant Advantage: Automatic Re-Ordering, etc Associates Program Association Repeat Purchases Positioning: Online Shopping Order Fulfillment Buyer Seller
of 64of 53 Competitors 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. 1. Normal retailing model of business 2. Faster search and transaction speed 3. More trusted brand by customers 4. Products are on an average cheaper than any other site 5. Late in global entry and not fully utilized global distribution 6. Best in the industry in customer service 7. Simplicity due to one listing per product 8. More repeat purchase 1. Auction model of retailing 2. More number of sellers and buyers 3. Lesser inventory cost 4. Better reach and global presence (Amazon still doesn’t have a specialized unit in India where as ebay.in is doing well) 5. Good customer service and very less error rate 6. Multiple listing per product. 7. Better margins for sellers
of 64of 53 Competitors 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 1. Largest online retailer 2. No store presence 3. Online sales of 34 billion in 2010 4. 40% growth in 2010 5. Better prices than walmart !!! (cheaper by almost 19 %) 6. Diversified portfolio with futuristic outlook 7. Customer base of 137 million 8. Subsidiaries in 7 countries 9. Customer service ranking is 1 10. 28 acquisitions till date 1. Largest retailer 2. Online sales of 4 billion in 2010 3. Store sales around 400 billion in 2010 4. Better brand value due to store presence 5. 17% growth in 2010 6. Low profit margin 7. Customer base of 200 million 8. Subsidiaries in 14 countries 9. Customer service ranking is 10 10. 14 acquisitions till date
Conclusion Evolution • Logical path • Resources & Channels • B2C, B2B Expansion • New markets • Strength of Brand • “Earth’s biggest selection” Attention Economy • Community & Stickiness • Trust • Customer Experience
of 64of 53 References 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/

More Related Content

PPTX
Amazon Presentation - Consumer Behavior
byAna Barrera
 
PPTX
Amazon India ppt
byIkram Vora
 
PPTX
Amazon India
byAbhay_018
 
PPT
Amazon case study
byAbdalkareem Ahmed Al-Dailami
 
PPTX
Project on amazon
byHaripriya Ramesh
 
PPTX
Amazon
byvaravindkulasekhar
 
PPTX
Amazon Industrial analysis
byJeril Peter
 
PPTX
Case amazon
byTHAO BUI
 
Amazon Presentation - Consumer Behavior
byAna Barrera
 
Amazon India ppt
byIkram Vora
 
Amazon India
byAbhay_018
 
Amazon case study
byAbdalkareem Ahmed Al-Dailami
 
Project on amazon
byHaripriya Ramesh
 
Amazon
byvaravindkulasekhar
 
Amazon Industrial analysis
byJeril Peter
 
Case amazon
byTHAO BUI
 

What's hot

PDF
Amazon Presentation
bySarathym
 
PPTX
Amazon
byIkram Khan
 
PPTX
Brand Management Study of Amazon
byNikhil Narayan
 
PPT
Amazon
byAli Kamran
 
PPTX
Case study on amazon
byAnnamalai Ram
 
PDF
Amazon presentation
byGüneş Aydoğan
 
PPT
Final Presentation
byRaghu Kasturi
 
PPTX
AMAZON-CASE STUDY
byayushigupta300
 
PDF
Amazon.com Strategic Analysis
byMax Jallifier
 
PPT
Amazon
bydiegohs
 
PDF
Strategy Presentation on Amazon
byGabbi Baker
 
PPTX
amazon
byVivek Agrawal
 
PDF
Amazon Case Study 2021
byDevAdnani
 
PDF
How amazon works.pdf
bys1160079
 
PPTX
Amazon group presentation
byPGcradles
 
PPTX
Amazon ppt
byGreenio George
 
PPTX
Amazon ppt
byaftabssm
 
PPT
Amazon business plan
byAnil Kumar
 
PPTX
Amazon Business Model
byVladimir Matovic
 
PPTX
Presentation on Amazon
byAvinandan Karmakar
 
Amazon Presentation
bySarathym
 
Amazon
byIkram Khan
 
Brand Management Study of Amazon
byNikhil Narayan
 
Amazon
byAli Kamran
 
Case study on amazon
byAnnamalai Ram
 
Amazon presentation
byGüneş Aydoğan
 
Final Presentation
byRaghu Kasturi
 
AMAZON-CASE STUDY
byayushigupta300
 
Amazon.com Strategic Analysis
byMax Jallifier
 
Amazon
bydiegohs
 
Strategy Presentation on Amazon
byGabbi Baker
 
amazon
byVivek Agrawal
 
Amazon Case Study 2021
byDevAdnani
 
How amazon works.pdf
bys1160079
 
Amazon group presentation
byPGcradles
 
Amazon ppt
byGreenio George
 
Amazon ppt
byaftabssm
 
Amazon business plan
byAnil Kumar
 
Amazon Business Model
byVladimir Matovic
 
Presentation on Amazon
byAvinandan Karmakar
 

Viewers also liked

PPTX
Amazon strategy management presentation competitor analysis
byDhaval Vasani
 
PDF
Amazon.com: the Hidden Empire - Update 2013
byFabernovel
 
PPTX
Amazon
byMahdi Al-own
 
PDF
Amazon.com Business Model
byRaveena Balani
 
PPT
Walmart value chain analysis
byArpan Ghosh
 
PPSX
Dell value chain
byved prakash tiwari
 
PPTX
Apple iPad Business Plan
byStathis Simeonidis
 
PPTX
FabIndia
byParvathiOm
 
PDF
12 Vital elements of the Subscription Business Model
byMurat @ InnovationTactics.com
 
DOCX
E-commerce assignment
bynayana gingade
 
PPTX
E commerce group assignment
bymessyboy16
 
DOC
Assignment for e commerce
byaihussain
 
Amazon strategy management presentation competitor analysis
byDhaval Vasani
 
Amazon.com: the Hidden Empire - Update 2013
byFabernovel
 
Amazon
byMahdi Al-own
 
Amazon.com Business Model
byRaveena Balani
 
Walmart value chain analysis
byArpan Ghosh
 
Dell value chain
byved prakash tiwari
 
Apple iPad Business Plan
byStathis Simeonidis
 
FabIndia
byParvathiOm
 
12 Vital elements of the Subscription Business Model
byMurat @ InnovationTactics.com
 
E-commerce assignment
bynayana gingade
 
E commerce group assignment
bymessyboy16
 
Assignment for e commerce
byaihussain
 

Similar to Amazon business model

PDF
Amazonwhitepaper 110511144038-phpapp01
byLLC NewLink
 
PDF
Amazon SWOT Analysis 2018
byOvidijus Jurevicius
 
PPTX
Amazon swot analysis 2017
byStrategic Management Insight
 
PDF
Amazon.com Companies and Facts
byKurtulus Erek
 
PDF
Amazonwhitepaper 110511144038-phpapp01
byhenryweili
 
DOC
Amazon assignment
byHamid Hussain
 
PDF
Amazonwhitepaper
byEdmund FOng
 
DOCX
MARKETING -Group Assignment
byBilal Ahmed
 
PDF
Amazon Documents
byShaheduzzaman Saju
 
PPTX
ppt on amazon and its details and importance
byMANAVSOLANKI14
 
PDF
Amazon.com: the Hidden Empire
byPhạm Quang Thắng
 
PDF
Thương mại điện tử và bài học từ Amazon
byaction.vn
 
PPT
AMAZON
byGeeta Mohta
 
PPTX
AMAZON
byThomas Cravens
 
PDF
E-commerceG1-Case3 Amazon
bynewnwan
 
PDF
Amazon - The Hidden Empire
byvndixit
 
PDF
Amazon - The Hidden Empire
byvndixit
 
PDF
Amazon: The Hidden Empire
bylynettelopes
 
PDF
Amazon - L'empire caché
byGuillon Reno
 
PDF
Amazonwhitepaper 110511144038-phpapp01
byhenryweili
 
Amazonwhitepaper 110511144038-phpapp01
byLLC NewLink
 
Amazon SWOT Analysis 2018
byOvidijus Jurevicius
 
Amazon swot analysis 2017
byStrategic Management Insight
 
Amazon.com Companies and Facts
byKurtulus Erek
 
Amazonwhitepaper 110511144038-phpapp01
byhenryweili
 
Amazon assignment
byHamid Hussain
 
Amazonwhitepaper
byEdmund FOng
 
MARKETING -Group Assignment
byBilal Ahmed
 
Amazon Documents
byShaheduzzaman Saju
 
ppt on amazon and its details and importance
byMANAVSOLANKI14
 
Amazon.com: the Hidden Empire
byPhạm Quang Thắng
 
Thương mại điện tử và bài học từ Amazon
byaction.vn
 
AMAZON
byGeeta Mohta
 
AMAZON
byThomas Cravens
 
E-commerceG1-Case3 Amazon
bynewnwan
 
Amazon - The Hidden Empire
byvndixit
 
Amazon - The Hidden Empire
byvndixit
 
Amazon: The Hidden Empire
bylynettelopes
 
Amazon - L'empire caché
byGuillon Reno
 
Amazonwhitepaper 110511144038-phpapp01
byhenryweili
 

Recently uploaded

PDF
Using-pension-savings-to-support-home-ownership.pdf
byHenry Tapper
 
PDF
Equinox Gold - January Investor Presentation.pdf
byEquinox Gold Corp.
 
PDF
Vision.pdf TPR document on trusteeship and governance
byHenry Tapper
 
DOCX
Fast Delivery of Real Buy Twitter Accounts Available in 2026.docx
byBusiness
 
DOCX
How Verified Cash App Accounts Work and How to Buy.docx
byhttps://pvaisback.com/product/buy-old-gmail-accounts/
 
PDF
How To Buy Verified Cash App Accounts - Secure Your Transactions.pdf
byhttps://pvaallit.com/product/buy-verified-apple-pay-accounts/
 
PDF
_Top 7 Mistakes to Avoid When Buying Google Ads Accounts.pdf
byhttps://pvaallit.com/product/buy-verified-apple-pay-accounts/
 
DOCX
How to Buy a Verified PayPal Account_ Step-by-Step Instructions.docx
byhttps://pvaallit.com/product/buy-verified-apple-pay-accounts/
 
PDF
Best Top 3 Sites to Buy Google Reviews (5-Star & Non-Drop).pdf
byhttps://pvaallit.com/product/buy-google-5-star-reviews/
 
PDF
_Top 7 Tips for Buying Verified PayPal Accounts.pdf
byhttps://pvaallit.com/product/buy-verified-apple-pay-accounts/
 
PDF
enterprise software is not dead and here is why
bywangbin26
 
PDF
Top 10 Sites To Buy Old Github Accounts In 2025-26.pdf
byContact Us-📞Telegram: @pvaservicesell 📞WhatsApp: +1 (330) 347-4342
 
PDF
17 Guide to Buying Verified Binance Accounts in the US.pdf
byhttps://pvaisback.com/product/buy-old-gmail-accounts/
 
PDF
Buy Proton Mail Accounts _ Secure Email Accounts In 2026.pdf
byhttps://pvaallit.com/product/buy-verified-apple-pay-accounts/
 
PDF
Nicky Oppenheimer World Economic Forum Jan 2000
byJames AH Campbell
 
PDF
Benefits Quarterly, Vol. 37, Fourth Quarter 2021.pdf
byHenry Tapper
 
PDF
RFI Responses for Govt Contracting Tips.
byiQuasar LLC
 
PDF
Camil Institutional Presentation_Dez25.pdf
byCAMILRI
 
PDF
BendelPuertoRicoCubaGuyanaVenezuelaPetroleumRefineryPetrochemicalPetroAgroInd...
byOsaJOkundayeODMDFAAO
 
PPTX
REVIEWER-3rd-quarter-exam-mathematics.pptx
bydominicdaltoncaling2
 
Using-pension-savings-to-support-home-ownership.pdf
byHenry Tapper
 
Equinox Gold - January Investor Presentation.pdf
byEquinox Gold Corp.
 
Vision.pdf TPR document on trusteeship and governance
byHenry Tapper
 
Fast Delivery of Real Buy Twitter Accounts Available in 2026.docx
byBusiness
 
How Verified Cash App Accounts Work and How to Buy.docx
byhttps://pvaisback.com/product/buy-old-gmail-accounts/
 
How To Buy Verified Cash App Accounts - Secure Your Transactions.pdf
byhttps://pvaallit.com/product/buy-verified-apple-pay-accounts/
 
_Top 7 Mistakes to Avoid When Buying Google Ads Accounts.pdf
byhttps://pvaallit.com/product/buy-verified-apple-pay-accounts/
 
How to Buy a Verified PayPal Account_ Step-by-Step Instructions.docx
byhttps://pvaallit.com/product/buy-verified-apple-pay-accounts/
 
Best Top 3 Sites to Buy Google Reviews (5-Star & Non-Drop).pdf
byhttps://pvaallit.com/product/buy-google-5-star-reviews/
 
_Top 7 Tips for Buying Verified PayPal Accounts.pdf
byhttps://pvaallit.com/product/buy-verified-apple-pay-accounts/
 
enterprise software is not dead and here is why
bywangbin26
 
Top 10 Sites To Buy Old Github Accounts In 2025-26.pdf
byContact Us-📞Telegram: @pvaservicesell 📞WhatsApp: +1 (330) 347-4342
 
17 Guide to Buying Verified Binance Accounts in the US.pdf
byhttps://pvaisback.com/product/buy-old-gmail-accounts/
 
Buy Proton Mail Accounts _ Secure Email Accounts In 2026.pdf
byhttps://pvaallit.com/product/buy-verified-apple-pay-accounts/
 
Nicky Oppenheimer World Economic Forum Jan 2000
byJames AH Campbell
 
Benefits Quarterly, Vol. 37, Fourth Quarter 2021.pdf
byHenry Tapper
 
RFI Responses for Govt Contracting Tips.
byiQuasar LLC
 
Camil Institutional Presentation_Dez25.pdf
byCAMILRI
 
BendelPuertoRicoCubaGuyanaVenezuelaPetroleumRefineryPetrochemicalPetroAgroInd...
byOsaJOkundayeODMDFAAO
 
REVIEWER-3rd-quarter-exam-mathematics.pptx
bydominicdaltoncaling2
 

Amazon business model

  • 1.
  • 2.
    The Amazon logowas created to represent the message that it sells everything from A to Z (the arrow connects the two letters) and also represents the smile that customers would experience by shopping on theAmazon.com Web site (the arrow becomes a smile).
  • 3.
    Company Overview Founded in1994 in Seattle, USA 28,300 employees Global leader in e-commerce Wide range of products Worldwide network of fulfilment Mass customisation Customer experience Affiliations Stickiness
  • 4.
    • ‘To leveragetechnology and the expertise of our invaluable employees to provide our customers with the best shopping experience on the Internet.’ Mission • ‘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.’ Vision • Customer Obsession • Innovation • Bias for Action • Ownership • High Hiring Bar • Frugality Values
  • 5.
    • ‘Not todiscount a small number of products for a limited period of time, but to offer low prices everyday and apply them broadly across our entire product range.’ Objective • Price • Convenience • Selection Core Value Proposition • ‘To ‘Get Big Fast’ by investing aggressively in new product categories and new businesses, by spending money on brand awareness and getting new customers.’ Strategy
  • 6.
    of 64of 53 Didyou know? all these companies belong to Amazon…
  • 7.
    of 64of 53 OtherAmazon Initiatives Companies with Mother brand name AmazonBasics Amazon-branded electronic products AmazonFresh sells and delivers groceries in Seattle Amazon Warehouse Deals offers discounts on refurbished products Amazon Studios online social movie studio Amazon Kindle E- book reader Amazon prime Prime membership program
  • 8.
    of 64of 53 OtherAmazon Initiatives Companies with Mother brand name Amazon Cloud drive Cloud computing Amazon Appstore Interactive venue for developers and buyers Amazon Instant Video Video on Demand Service Amazon Cloud Player lets you sync music and playlists across computers Amazon Web Services Collection of web services giving cloud computing platform Amazon mp3 Online music store
  • 9.
    Q1: How didJeffrey Bezos build the “Amazon.com” brand? • Bezos had vision of making Amazon as Earths biggest book store. • Amazon was positioned as customer centric company • Gave unique shopping experience to customers • To promote goodwill Amazon upgraded many of its order to priority shipping • Shipping at no extra cost.
  • 10.
    Q2: What werethe reasons for Amazon.com ’s early growth? • Word of mouth such as testimonials from satisfied customers and media stories. • It had top of mind awareness amongst the customer looking to buy products online. • Trusted brand • 60% of orders were from repeat customers
  • 11.
    Q3: How didAmazon.com expand their business further? • Expanded after success of bookselling • Expanded into other product categories
  • 12.
    • Extended Products: –CD’s – Videos – Gifts – Baby Products – Electronics – Kitchen and Housewares – Tools and hardware – Toys – Barbecues
  • 13.
    How long doyou stay @ ? Stickiness Holds customers and keeps them coming back for more! Measurement: *Time spent at a website *Number of visits per person *Number of pages viewed
  • 14.
  • 15.
  • 17.
  • 19.
    Auctions & zShops eBooks/Kindle E-commerce Platform/ WebServices Marketplace OnLine Book Retailing Partherships & Logistic Services Business Model Evolution
  • 20.
    Business Model Canvas 9building blocks Customer Segment (CS) Cost Structure(C$) Customer Relationship (CR) Channels (CH) Revenue Streams (R$) Key Resources (KR) Key Partnerships (KP) Key Activities (KA) Value Proposition (VP)
  • 21.
    MARKETING TECHNOLOGY & CONTENT FULFILMENT SALESMARGINS AUTOMATED SERVICES & CO- CREATION (CUSTOMISED ONLINE PROFILES & RECOMMENDATIONS) AMAZON.COM (& OVERSEAS SITES) AFFILIATES IT INFRASTRUCTURE, SOFTWARE & EXPERTS GLOBAL FULFILMENT INFRASTRUCTURE FULFILMENT & IT INFRASTRUCTURE DEVELOPMENT AND MAINTENANCE Business Model Canvas GLOBAL MARKET (SELLERS & CONSUMERS) INTERMEDIATION SERVICES COMMISSIONS SELLERS (COMPANIES & INDIVIDUALS)AGGREGATION OF DEMAND (LONGTAIL) FULFILMENT COMPANIES (ONLINE & TRADITIONAL RETAILERS) LOGISTICS NETWORK PARTNERSHIPS & ALLIANCES DEVELOPERS MASS-CUSTOMISED WEB SERVICES APIs PORTABLE DEVICE PRODUCT DEVELOPMENT, AND PROMOTION HARDWARE MANUFACTURERS GLOBAL MARKET (CONSUMERS) LOW PRICES CONVENIENCE WIDE SELECTION CUSTOMER EXPERIENCE LOGISTIC PARTNERS AFFILIATES (PUBLISHERS, AUTHORS, BOOKSTORES…) Online RetailingAuctions & zShopsMarketplacesPartnerships and Logistic Service ProviderE-commerce Platform/Web ServiceseBooks/Kindle COMPANIES (ONLINE & TRADITIONAL RETAILERS)
  • 22.
    eBooks/Kindle >450 000 books availablefor download Newspapers, magazines and blogs subscription Amazon keeps 65% of the revenue from all eBook sales for Kindle eBooks downloaded from Amazon not exclusive to Kindle Kindle eBooks add 35% to a physical book’s sale on Amazon Amazon reported 80% of eBook market "Our vision is to have every book ever printed, in any language, all available in tinder 60 seconds.“ - Jeff Bezos, Amazon.com CEO
  • 23.
  • 24.
  • 25.
    of 64of 53 TargetGroup Basic Outlook on TG O Internet users – Primarily those who are comfortable with e-commerce O 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 O 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 O 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 O Tech Savvy users and Early technology adopters. Separately designed products like Amazon mp3, Amazon kindle, Amazon Appstore for them. O Those who yearn on convenience shopping O Seller customers. Amazon’s primary objective is to bring maximum number of reliable sellers under it. O App developers. New TG. Started targeting through Amazon Appstore
  • 26.
    of 64of 53 Competitors Classification OAmazon 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 O 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 O Here we are considering only the online retailing/retailing division of Amazon.com and have classified the competitors accordingly Competitors of Amazon can be classified into Category Example 1 online mass retailers Myntra.com, ebay.com, jabong.com, flipkart.com 2 Online specialized retailers Apple.com, Dell.com. Staples.com 3 book retailers (As this is the main revenue source of amazon.cm) flipkart 4 Brick and Mortar retailers Wal-Mart, and other retailers 5 E-book readers (As kindle is a main revenue generator for Amazon.com through both its own sales and induced e-book downloads) Kobo e-reader, Apple i- pad, Barnes and Nobles Cybook 6 Social buying sites Groupon, flipkart, jabong.
  • 27.
    of 64of 53 ConsumerInsights (1/2) 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.
  • 28.
    of 64of 53 ConsumerInsights (2/2) 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 dpreview which is the leading review site on digital camera and shelfari for book community
  • 29.
    of 64of 53 CustomerCare Services that increase brand loyalty O “If you make customers unhappy on the Internet, they can each tell 6,000 friends” Jeff Bezos (CEO Amazon). O Amazon’s customer service was ranked No 1 in 2009 and 2011 by American Customer Satisfaction Index O Following a bottom-up approach, every decision at Amazon is driven by the customer's needs. O 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 Year Innovation 1995 Customer reviews 1997 Recommendations & bundles 1997 1-Click Ordering 2001 Look inside the book 2001 Where's my stuff 2002 Free Super Saver Shipping 2003 Search inside the book
  • 30.
    of 64of 53 Increasingseller & customer base Basic Strategy
  • 31.
    of 64of 53 HandlingComplaints Customer service channels Telephonic Email Chat Easy Return of goods (no questions asked) Can return own purchases Can return gift items Sell online after return date Fast refunds and replacements •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
  • 32.
    of 64of 53 CustomerRetention 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
  • 33.
    of 64of 53 BrandPortfolio Analysis BCG Matrix STARS •Amazon Kindle •Amazon Fresh •Amazon.com •Instant Video QUESTION MARK •Pinzon- Private Label •Amazon Web Services CASH COW •Audible.com •Createspace DOGS •Amazon mp3 •Amzon Cloud Relative Market Share MarketGrowthRate HIGH LOW LOWHIGH
  • 34.
    of 64of 53 BrandLife Cycle Innovation Introduction Growth Maturity Decline Innovation Growth Onlinebookstore Largestcatalogue,home deliveryofbooks Diversification: Electronics,apparel,CD, DVDetc. Spinoffs:A9,Lab126, endless.cometc. Acquisitions: Joyo,IMDB.MobiPocketetc. Amazonwebservices, publishing MACdownloads,MP3s, Internationalexpansion
  • 35.
    of 64of 53 EmergingTrends Internet Retailing Performance and Growth prospects by Category 2010-15 Source: Euromonitor 0 5 10 15 20 25 0 20,000 40,000 60,000 80,000 %CAGR2010-2015 Market Size 2010 (US$ mn, rsp excl sales tax) Beauty and Personal Care Internet Retailing Clothing and Footwear Internet Retailing Consumer Electronics Internet Retailing Consumer Healthcare Internet Retailing DIY and Gardening Internet Retailing Consumer Appliances Internet Retailing Home Care Internet Retailing Housewares and Home Furnishings Internet Retailing Media Products Internet Retailing Food and Drink Internet Retailing Note: Bubble size shows growth in absolute value terms over 2010-2015
  • 36.
    of 64of 53 CustomerProfiling WALKING WOUNDED 1. Some of the current users who are dissatisfied about shipping delays 2. Customers who faced technical glitch and their cash got locked in CHAMPION 1. Repeat purchasers 2. Customers who give reviews and ratings to different services 3. Early adopters of technology 4. Those who enrolled for prime membership program MISSING IN ACTION 1. Registered inactive users 2. Loyal customers of other competitors 3. Customers who are doubtful towards online payment modes TERRORIST 1. Dissatisfied customers spreading their opinion through social media sites 2. Hard core I pad fans creating disruptive blogs against kindle
  • 37.
    of 64of 53 PricingStrategy 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)
  • 38.
    of 64of 53 Advertising,Sales and Promotion Strategies Attractive Advertising and Selling Plans available on Amazon.com O Upload product catalog and set budget O Customers see seller’s product ads on amazon.com O Customers click to product pages on seller’s website O Seller’s are charged a cost-per-click O Customers purchase products from seller’s website
  • 39.
  • 40.
    of 64of 53 Visionand Mission "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.
  • 41.
    of 64of 53 TargetGroup 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
  • 42.
    of 64of 53 BrandIdentity (1/2) Brand Identity Planning Model Brand as Product • Wide range • Lowest price • High service • Reliability • Value for money Brand as Organization • Innovative • Customer friendly • Global • Trustworthy Brand as Person • Honest • Reliable • Timely • Energetic • Friend Brand as symbol • Symbol for reliability • Functional appeal • Modern/With less heritage
  • 43.
    of 64of 53 BrandIdentity (2/2) The Brand identity prism Self-Image Culture Online Shopping Giant • World's largest online retailer • Established separate websites in different countries • Acquired multiple organizations and websites • Punctual • Environment- friendly • Offers international shipping to certain countries for some products • Accessible • Customer centric • Exclusive products • Internet-based • Started as an online bookstore • Sells a wide range of products now • Attractive Prices • Buy everything at the click of a button • Easy shopping in less time
  • 44.
    of 64of 53 DistributionStrategy 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. O Richard Dalzell as its Chief Information Officer O 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.
  • 45.
    of 64of 53 DistributionStrategy Digitally driven distribution network 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 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. Now entered digital distribution through kindle, Amazon mp3, instavideo etc. This means every book/song is available in 60 seconds.
  • 46.
    of 64of 53 Shoppingcart technology By: Amazon.com Search box Adding to cart Proceed to payment 1-click system Confirmation
  • 47.
    of 64of 53 SWOTAnalysis For Amazon.com in Retailing industry 1. largest online retailer 2. Robust brand image enhances bargaining power 3. Diversified into product lines other than books to strengthen customer reach 1. Free shipping offers would be a challenge in the long run. 1. Acquisitions extend product line and strengthen technical platform. 1. Foreign exchange fluctuation. STRENGTHS WEAKNESSES OPPURTUNITIES THREATS
  • 48.
    of 64of 53 MarketingStrategies of Amazon Amazon.com bases its marketing strategy on six pillars. 1. It freely proffers products and services. 2. It uses a customer-friendly interface. 3. It scales easily from small to large. 4. It exploits its affiliate’s products and resources. 5. It uses existing communication systems. 6. 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.
  • 49.
    of 64of 53 MarketingPlan (1/2) 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 1. Purchases PPC ads on Google to direct browsing customers to their websites. 2. 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 AFFILIATE MARKETING 1. Links to various products in Amazon.com is kept in the websites of third parties or of other retailers. 2. Amazon.com pays a certain fee for each customer visit through these links. EMAIL MARKETING 1. Amazon.com engages in permission marketing, where customers give the company permission to send them e-mails detailing product promotions ONLINE ADS 1. In various social networking sites such as Facebook, Orkut etc 2. In various communities and discussion forums for specific products and services such as dpreview, goodreads etc
  • 50.
    of 64of 53 MarketingPlan (2/2) 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 1. TV – ads showing benefits of products like Kindle 2. Radio – sponsoring various radio programs EVENTS 1. Shopping Malls: competitions like reading speed challenges 2. Helps in customer experiencing the product (Kindle) PROMOTION 1. Events 2. Online buying experience 3. Online games 4. Free delivery on special occasions OTHERS 1. Sponsored T-shirts pens, mugs etc
  • 51.
    Marketing Plan Diagram: ______ Strong CRM ‘1-Click Shopping’ Convenience Low Costs Diversification Partnering Network Externality Brand Image Product Review Information Customer Base Fixed Merchants Product Recommendations Cross-selling Distributed Web Services Money-back Guarantee Email Marketing Loyalty & Advocacy Merchant Advantage: Automatic Re-Ordering, etc Associates Program Association Repeat Purchases Positioning: Online Shopping Order Fulfillment Buyer Seller
  • 52.
    of 64of 53 Competitors AmazonVs Ebay Even though the business models of Amazon.com and EBay.com are different EBay is one of the major competitor for Amazon. 1. Normal retailing model of business 2. Faster search and transaction speed 3. More trusted brand by customers 4. Products are on an average cheaper than any other site 5. Late in global entry and not fully utilized global distribution 6. Best in the industry in customer service 7. Simplicity due to one listing per product 8. More repeat purchase 1. Auction model of retailing 2. More number of sellers and buyers 3. Lesser inventory cost 4. Better reach and global presence (Amazon still doesn’t have a specialized unit in India where as ebay.in is doing well) 5. Good customer service and very less error rate 6. Multiple listing per product. 7. Better margins for sellers
  • 53.
    of 64of 53 Competitors AmazonVs 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 1. Largest online retailer 2. No store presence 3. Online sales of 34 billion in 2010 4. 40% growth in 2010 5. Better prices than walmart !!! (cheaper by almost 19 %) 6. Diversified portfolio with futuristic outlook 7. Customer base of 137 million 8. Subsidiaries in 7 countries 9. Customer service ranking is 1 10. 28 acquisitions till date 1. Largest retailer 2. Online sales of 4 billion in 2010 3. Store sales around 400 billion in 2010 4. Better brand value due to store presence 5. 17% growth in 2010 6. Low profit margin 7. Customer base of 200 million 8. Subsidiaries in 14 countries 9. Customer service ranking is 10 10. 14 acquisitions till date
  • 54.
    Conclusion Evolution • Logical path •Resources & Channels • B2C, B2B Expansion • New markets • Strength of Brand • “Earth’s biggest selection” Attention Economy • Community & Stickiness • Trust • Customer Experience
  • 55.

Editor's Notes

  • #22 ASK IF WE SHOULD PUT THIRD PARTY SELLERS IN AUCTION AND Zshop MODEL AND MARKETPLACES AS PARTNERS AS WELL AS CUSTOMER Discuss about Bait & Hook model for Kindle/eBooks
  • #56 Consider Amazons corporate evolution: as soon as it established itself as a leading online book seller it began leveraging the platform and infrastructure it built to move into new categories, and in a matter of years became a full-fledged online department store and the webs premiere retailer. Amazon has also leveraged its online real estate and customer base, establishing itself as a broker of transactions and leaser of web space to other retailers. These profitable initiatives have generated synergies that fortify Amazons core business selling other merchants books, for example, vastly expands Amazons catalog, making the site ever more of a one-stop shop while contributing to the overall growth of the business.