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Brand Management
Company Introduction 2 Basic facts about Amazon ,[object Object]
 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,[object Object]
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 ,[object Object]
  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 ,[object Object]
  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,[object Object]
  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 ,[object Object]
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 ,[object Object]
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 ,[object Object]
 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 ,[object Object],Jeff Bezos (CEO Amazon). ,[object Object]
  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 customersAmazon 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 ,[object Object]
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 policiesEasy Return of goods (no questions asked) ,[object Object]
Can return gift items
Sell online after return date
Fast refunds and replacements,[object Object]
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 ,[object Object]
Amazon Fresh
Amazon.com
Diapers.com

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Brand Management Study of Amazon

  • 2.
  • 3. Headquartered in Seattle, Washington, it is the world's largest online retailer.
  • 4. Jeff Bezos founded Amazon.com, Inc. in 1994 and the site went online in 1995.
  • 5. The name Amazon.com was chosen because the Amazon River is one of the largest rivers in the world.
  • 6. 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.
  • 7. Amazon.com listed with the tagline, ‘Earth’s biggest bookstore’.
  • 8. Posted a net revenue of $34.2 billion and net income of $1.15 billion in 2010.
  • 9. Amazon boasts of a customer base of 137 million which is more than twice that of GROUPON
  • 10. In 15 years (1995 - 2011) Amazon went from 1 category to 16 categories
  • 11.
  • 12. 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
  • 13. 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
  • 15.
  • 16.
  • 17. 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
  • 18. Tech Savvy users and Early technology adopters. Separately designed products like Amazon mp3, Amazon kindle, Amazon Appstore for them.
  • 19. Those who yearn on convenience shopping
  • 20. Seller customers. Amazon’s primary objective is to bring maximum number of reliable sellers under it.
  • 21.
  • 22. 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
  • 23.
  • 24. 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
  • 25.
  • 26. It allows Amazon to increase selection and grow faster
  • 27. It also helps push down prices on Amazon as Third Parties fight for buyers
  • 28. Another key driver of growth is Amazon Prime - Amazon's program that gives annual free two-day shipping for a $79 subscription
  • 29. The graph shows that Prime is driving significant growth internationally (primarily Europe)11
  • 30.
  • 31. This could mean that more users might register for Amazon Prime
  • 32. The e-commerce market is growing at 14% and every Amazon segment is growing faster
  • 33. 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
  • 34. 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.
  • 35. 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
  • 36.
  • 37. Following a bottom-up approach, every decision at Amazon is driven by the customer's needs.
  • 38. Every employee, even the CEO, spends two days every two years on the service desk to answer calls and help customersAmazon introduced many of the current ubiquitous best-practices to e-commerce industry. Below are a list of innovations bought by them
  • 39. Increasing seller & customer base 16 Basic Strategy
  • 40.
  • 41. Provides an easy interface for customers to register their complaints
  • 42. All queries and complaints are addressed immediately
  • 43. Customer feedback on products and packaging
  • 44.
  • 46. Sell online after return date
  • 47.
  • 48. 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
  • 49. Layering of the Brand 20
  • 50. 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
  • 51.
  • 55.
  • 58.
  • 59. Alexa
  • 61.
  • 63. Pets.comLOW LOW HIGH Relative Market Share
  • 64. 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
  • 65. Emerging Trends 24 Internet Retailing Performance and Growth prospects by Category 2010-15 Source: Euromonitor
  • 66.
  • 67. It follows a mix of product, source and endorsing brand architecture
  • 68. It is also a result of unplanned portfolio growth
  • 69.
  • 70. With the Kindle effect, the e-book sales of Amazon surpassed paper book sales for the first time in last quarter of 2010.
  • 71.
  • 72.
  • 73. The Amazon and Kindle brands are most certainly registered trademarks.
  • 74. 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.
  • 75. 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.
  • 76. Amazon.com’s Internet-Based Customer Referral System:It is patented on the process of allowing other websites market their books for a commission.
  • 77. 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.
  • 78. 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
  • 79. 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
  • 80. 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
  • 81.
  • 82. Customers see seller’s product ads on amazon.com
  • 83. Customers click to product pages on seller’s website
  • 84. Seller’s are charged a cost-per-click
  • 85. Customers purchase products from seller’s website 31
  • 86. Brand Asset Valuator Model 32 Measuring Brand value
  • 88. 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.
  • 89. Target Group 35 Market Segmentation
  • 90. Brand Identity (1/2) 36 Aaker’s Brand Identity Planning Model
  • 91.
  • 92. Established separate websites in different countries
  • 95. Started as an online bookstore
  • 96. Sells a wide range of products now
  • 97.
  • 101.
  • 102. Buy everything at the click of a button
  • 103. Easy shopping in less time37
  • 104.
  • 105. Jimmy Wright as its Chief Logistics OfficerThey 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.
  • 106. 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.
  • 108. 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
  • 109. 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
  • 110. 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
  • 111. 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.
  • 113. 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
  • 114. 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
  • 115. 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
  • 116. Marketing Plan Evaluation 49 INVOLVED ACTIVE PASSIVE IMMERSED
  • 117.
  • 121. Source of Ad Awareness
  • 122.
  • 124.
  • 125. Amazon’s sales composition was 100% media sales in the first 3 years. By 2011 media just forms 43% of their total sales
  • 126. 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
  • 127. More focus given to digital goods recently as digital goods give better operating marginMedia includes books music video/ DVD
  • 128. 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.