1. Distribution Strategy of
By Group 2

2. Introduction
Vision
Founders’ view
Marketing mix-
Product
Price
Place
Promotion
Conclusion
OVERVIEW OF PRESENTATION

3. INTRODUCTION [Amazon.com Inc]
• Founded- JULY1994, Seattle, Washington
• Active in - July 1995
• CEO- Jeff Bezos, chairman, and chief executive officer
• Founded by- Jeffrey P. Bezos
• Headquarters- Seattle, WA.
• Motive- Become the largest online retailer in the world to offer Earth’s Biggest
Selection in less than two decades.
• Four principles: 1-Customer obsession rather than competitor focus,
2-Passion for invention, 3-Commitment to operational excellence and
4-Long-term thinking.
• Presence-across world, in India (Bangalore, Hyderabad, Chennai)
• Opened as- Virtual book store.

4. MEANING OF LOGO
The smile that goes from A to Z tells that the company is
willing to deliver any product, anywhere in the world
and also represents the smile that customers would
experience by shopping on the Amazon.com Web site (the
arrow becomes a smile).

5. • Number of Indian customers who were using internet on a
regular basis to get information were increasing rapidly in 2012
• Flipkart, an Indian e-commerce company had started off as an
online book seller
• Amazon, the worldwide leader in e-commerce launched
Junglee.com
• In early June 2013, Amazon launched their Amazon India
marketplace without any marketing campaigns
Introduction

6. “THE THING THAT DERIVES EVERITHING IS CREATING
GENUINE VALUE OF CUSTOMERS,NOTHING HAPPENS
WITHOUT THAT”
“CUSTOMER COME FIRST. IF YOU FOCUS ON WHAT
CUSTOMER WANT AND BUILD A RELATIONSHIP, THEY
WILL ALOW YOU TO MAKE MONEY.”
“THE CUSTOMER EXPERIENCE REALLY MATTERS, WE
HAVE FOCUSED ON JUST HAVING A BETTER STORE
WHERE IT IS EASER TO SHOP WHERE YOU CAN
LEARN MORE ABOUT PRODUCT, YOU HAVE BIGGER
SELECTION AND THE LOWEST PRICES.”
FOUNDER’S VIEWS

7. MARKETING MIX
 PRODUCT
 PRICE
 PLACE
 PROMOTION

8. Amazon India started with offerings in two categories, that is, books, movies & TV
shows in June 2013.
 In September 2013, Amazon.in opened four new stores, namely, toys & games,
baby products, personal care appliances, and health care devices.
This brought the total number of categories offered to eleven, including over nine
million books, more than 70,000 products covering several brands, and over 1.7
million eBooks.
 By the end of June 2014, Amazon India had included 15 million products across 28
categories as a part of its offerings.
Overtaking other Indian based e-commerce portals. Flipkart offers about 4 million
products, while Snapdeal offers 4 million products to its customers.
PRODUCT

9. • Amazon Device Accessories
• Baby Products (excluding apparel)
• Books
• Cameras, Camcorders, Telescopes
• Cell Phones
• Consumer Electronics
• Electronics Accessories
• Home Appliances
• Music CDs, Cassettes, Vinyl, and
other sound recordings
• Musical Instruments
• Office Accessories
• Office Products Supplies,
Furniture, Printers, Calculators
• Personal Computers
• Software & Computer Games
• Tools & Home Improvement
• Toys & Games
• Video Games & Video Game
Consoles
PRODUCT
TYPES OF PRODUCTS

10. • Publishing services to the business and individuals. Amazon’s AWS services, which
provides web hosting services for customers and clients
• Grocery items are also being delivered to consumers by Amazon through its
services like Amazon Prime Pantry and Amazon Fresh.
• Providing a host of web services like cloud storage,
• All types of Businesses can sell products and services on Amazon and it is one of
the fastest ways to start selling online
• Businesses can access a new sales channel
• It helps in Building brand recognition
• The platform provided by amazon is trusted and secured
• Amazon’s digital services like on demand music, video and e-books is also one of
the major contributor in its sales
SERVICES OFFERED BY
AMAZON

11. •Amazon has helped the business enterprises to sell online
globally.
•Reaching Prime customers available on Amazon.
•Amazon Offers fast and free shipping to customers.
•Trusted customer service and after sales return.
•Amazon India continues to expand the number of
products and services it offers to its customers.
PRODUCT CONTIN….

12. •The company’s culture is such that it always tests new
ideas.
•Amazon’s CEO Jeff Bezos believes, “If you double the
number of experiments you do per year, you’re going to
double your inventiveness.”
• Thus, experimentation has contributed largely to the vast
selection of products and services offered by Amazon in
India.
PRODUCT CONTIN….

13. PRICE
The Price component of the 4 ‘Ps’ of marketing is important for Amazon
India as it works on a third-party model.
The major source of its revenues is the fee charged to sellers.
Each of the three services offered by Amazon, namely Sell on Amazon,
Fulfilment by Amazon, and Product Ads, have their own rate cards for sellers,
as specified on Amazon India’s website.
To sell on the Amazon Marketplace, the seller bears a monthly subscription
fee.
Amazon also provides value added services like Prime where users pay
subscription charges for one-day delivery and early access to the deals.
It adjusts the prices frequently based on the category of product, time of the
day and season

14. PRICE
Amazon India significantly reduces the price of its products through
several deals offered to customers online .
Amazon has to bear a major portion of its delivery expenses as 90% of
the goods ordered online in India are moved by air, pushing up delivery
costs by around half.
Road and rail transport are used rarely as shipping options as they
remain underdeveloped.
Amazon offers the lowest of prices and this is made possible by the
efficiency of its operations and also its web-based business model.

15. PLACE
 Amazon is a global brand and has its presence all
across the world.
 Once a customer places the order the
distribution channel of Amazon comes into
picture where the products are procured and
stored at Amazon’s fulfilment centers.
 Amazon Logistics, has developed and used a
number of mediums for fast and accurate
delivery of products.

16. PLACE
 External partners--Other than Amazon’s own logistics staff, the organization
works closely with external courier partners, including, Blue Dart, FedEx, and
Gati. Amazon India recently partnered with India Post to reach about 19,000
pin codes in the remote areas of the country.
 Fulfillment centers--Amazon India has two fulfilment centers, one in Mumbai
and the other in Bangalore, each measuring about 15,000 sq. feet. These
centers have the capacity to store millions of products across several
categories from sellers. These facilities have allowed Amazon India to meet the
growing customer demand, 60% of which is eligible for next-day shipping of
products.

17. PLACE
 M-commerce-- In October, 2013, Amazon.in made its catalogue available for
Android users on the Amazon Mobile App. This mobile application allows users
to search, browse, compare offers, read reviews, and make purchases on their
mobile devices through Amazon.in. The application also gives users access to
some of Amazon’s international websites.
 Pick-up points-- ‘Amazon pickups’ are being experimented in Delhi and
Mumbai. Through this move, Amazon is using a hybrid model, wherein an
online store can leverage corner shops to minimize failed deliveries. Amazon
India has also introduced pick-up services where customers can pick up their
purchases from In & Out stores located at BPCL petrol stations. This has
accelerated delivery of goods to customers to some extent.

18. PLACE
 Scheduled deliveries --Amazon.in not only promises one-day delivery of
products, but is also the first e-commerce portal in India to offer scheduled
deliveries for large appliances, such as TVs. On ordering a TV set from
Amazon.in, customers can choose the time slot for its delivery at their home.
Currently, this service is available in Mumbai.
 Local manufacturers -- Amazon India establish partnership with local
manufacturers to source products not carried by other sellers in the
marketplace. Indian consumers would have a wider choice of products at low
prices. Amazon India has said it signed a Memorandum of Understanding
(MoU) with the Telangana Department of Handloom and Textiles, to educate,
train and enable weavers and artisans to directly sell their products to Amazon
customers across the country.

19. Companies Owned by Amazon

20. PLACE
 Return policy --Under Amazon India’s ‘A-to-z guarantee protection’ policy, a
customer has the right to file a return claim for the product purchased, within
a particular time period. The website allows the customer to replace the
product with another of the same value, or credits the customer’s account
with the value of the product. This gives consumers a lot of confidence while
purchasing from Amazon.in.
 Accurate delivery --Amazon India ensures that the delivery of a product is
made to the right customer by verifying a digital signature taken from the
customer at the time of delivery.

21. Online Channel: Significant cost
benefit over other traditional
distribution channels
• Kindle
• AmazonMP3 & Cloud Player
• Amazon Cloud drive
Physical Channel: Half million
square feet storage capacity in
distribution centres
• Amazon’s Next-Day and
Same-Day Guaranteed
delivery services
• 34 fulfilment centres with
more than 61 million cubic
feet of storage capacity
CHANNALES OF DISTRIBUTION

22. Amazon's goal is to
collaborate with
suppliers to
increase
efficiencies and
improve inventory
turnover

23. CHANNEL ANALISYS OF AMAZON

24. Distribution Channel-Digital
Distribution Channel-Digital

25. • E-Books-Kindle reader
• AmazonMP3 & Cloud Player
• Instant Video
• AppStore for android
• Amazon Cloud drive
• Amazon Game Studios & Softwares
“On-line channel has significant cost benefit”
DIGITAL CHANNAL

26. Distribution Channel-Physical

27. • Centralized distribution centers
• Faster response time
• Lower transportation cost
• Use a hybrid approach in stocking and pricing
• Pricing varies for delivery options
PHYCICAL CHANNALS

28. Large quantity of small
parcels and packages are
involved in e-commerce
related merchandise
Variety of delivery
options, including
overnight and various
international shipping
options
WHOLESALER
CUSTOMER
INFORMATION
INFORMATION PRODUCT
PRODUCT

29. Direct Purchases
WHOLESALER
CUSTOMER
INFORMATION
INFORMATION
PRODUCT
PRODUCT
PUBLISHER/
SUPPLIER
INFORMATION

30. Distributer/
manufacturer
CUSTOMER
INFORMATION
INFORMATION
PRODUCT

31. SELLERS
CENTAL
WHOLESALER
CUSTOMER
INFORMATION
INFORMATION
PRODUCT
PRODUCT
PUBLISHER/
SUPPLIER
INFORMATION
Other Sellers
INFORMATION

32. • The whole distribution channel works on the system of
commission and credit policy.
• Credit policy depends on the distributor and their
geographical area.
• Distributors will get commission not only for delivering
customers but also for other retailers.
• Credit policy of distributors depends on the type of
good sale.
CREDIT POLICY & ROI

33. PROMOTIONS
Amazon India uses a variety of media to promote its website despite its
already existing brand name
Social media -
Amazon India makes use of social networking sites, such as Facebook and Twitter to
connect instantly with consumers.
 The Facebook page of Amazon India is updated regularly with deals for the day, offers,
and any news connected to the organization. It also gives consumers the option to
connect directly to Amazon.in.
 Amazon.in also has its own blog that helps connect and interact with consumers.
 The blog contains articles on several products and occasions. For example, close to
Father’s Day, an article was published on Amazon India’s blog on various ideas for gifts
on the occasion, wherein many of Amazon. In's products were discussed. The
comments and queries by readers on this blog are answered promptly.

34. PROMOTIONS
Use of celebrities -
 Amazon India also uses celebrities for promotional purposes.
 They recently interviewed Bollywood celebrities, Alia Bhatt and Arjun Kapoor, asking
them about their choice of footwear in professional and personal lives.
 Through the interview, Amazon was able to bring to the viewers’ interest the variety of
footwear available on the website.
 Amazon India also conducts interviews of many authors and thus highlights the
number of books by such authors available on Amazon.in.
Testimonials
 The website of Amazon India has a section for testimonials from users and consumers
of products.
 These testimonials give new customers a certain level of confidence while shopping
from Amazon.in

35. Affiliate program-
By building Amazon affiliate links or banners on their websites to earn money. One can add
Amazon links or banners to his/her webpage.
the website owner can earn up to 10% of all purchases made via these links as an incentive.
Amazon also provides a ‘Banners Tool’, helping websites create banners that can connect to
categories and promotions on Amazon.in.
Emails –
Amazon.in uses emails extensively as a way of promotion, using the huge database of
Amazon consumers.
The emails inform existing as well as potential customers of the deals for the day and other
special offers on products.
Promotions

36. PROMOTIONS
TV commercials
 The marketing team of Amazon India has successfully created many innovative
advertisements for TV.
 The ads used by Amazon are usually such that catch the attention of the viewers.
 The very popular advertisement of Amazon.in features is Aur Dikhao Aur Dikhao,
 Keeping in mind the interest of the season and festivals they advertise – THE GREAT
INDIAN SUMMER SALES, THE GREAT INDIAN FESTIVEAL SALE ,DIVALI DHAMAKAA and
so on.

37. • Sponsored search
• Associates program
• Email marketing campaigns
• Portal advertising
• Other initiatives include outdoor, radio and TV
advertising
• View free shipping offers as effective worldwide
marketing tools i.e. amazon prime offers.
How Amazon attracts customers

38. Cat fight between
Flipkart vs Snapdeal vs Amazon

39. Cat fight between
Flipkart vs Snapdeal vs Amazon
Snapdeal sensed an opportunity to take a dig at
Flipkart and here is what they came up with
The hoardings came into action as well and it
was a huge trolling of Flipkart by Snapdeal

40. Cat fight between
Flipkart vs Snapdeal vs Amazon
And as the age old proverb says, in the fight between the two
cats, it’s the monkey who took the cake, it was Amazon India
which won in the end!

41. Evaluation and Conclusion

42. Strengths
 Brand well known along with a strong customer base in many
parts of the world.
 Diverse product offerings
 Free home delivery above a minimum purchase
 Working with minimum profit and gaining from economies
of scale
 Strong business relationships with publishing houses, major
electronic companies etc.
 Experience of almost a decade in online shopping industry
Weakness
 Operates at very low margin
 Criticism for its working conditions
 ‘KINDLE’ is not up to the mark of its
competitors
Opportunity
 Acquiring more small business enterprises, enabling
them to expand
 Opening physical stores so as to give the customers a
feel of touch and experience
 Indian retail industry is estimated to be $450 Billion
 Expand into more product segments
 Tie ups with major players of untapped market
Threats
 Online security threats
 Regional low-cost retailers
 Strong online presence of Indian
competitors like Flipkart and Myntra
 Flexible rules against FDI enabling other
major players like Wal-Mart etc. to enter

43. Amazon India’s decision to build a fully grown in house logistic arm in two
years
Plans to dramatically multiply its headcount in logistics and conveyance
space in seven months
The case study on Amazon India with respect to the 4 ‘Ps’ of marketing
indicates that each of these components is important for the company’s
strategy.
Amazon India has emphasized the ‘Place’ component of the marketing mix
as focus lies on one-day delivery and beating incumbents such as Flipkart
and Snapdeal.
The company has also laid stress on the ‘Product’ component of the
marketing tool as it strives to increase the number of categories offered to
customers .
Conclusion

44. Amazon India, however, has been facing obstacles in implementing its marketing
strategy in the country.
 The company is facing the problem of offloading by commercial airlines, which
frequently remove parcels of e- commerce portals to make more room for passengers.
This costs Amazon.in and other online retail stores dearly as each company is trying to
win customers with their quick delivery of products.
In order to overcome the problem of offloading, Amazon India has set up regional
warehouses in the country to be able to reduce air shipments.
 The company is also piloting pick-up delivery points at grocery stores and petrol
stations.
Amazon has also tied up with the Indian Postal Service to reach remote areas in India.
Conclusion