Brand Management Study of Amazon

Brand Management,[object Object]

Company Introduction,[object Object],2,[object Object],Basic facts about Amazon,[object Object],[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,[object Object],4,[object Object],Companies with Mother brand name ,[object Object],AmazonBasicsAmazon-branded electronic products,[object Object],Amazon Studios,[object Object],online social movie studio,[object Object],Amazon Kindle,[object Object],E- book reader,[object Object],AmazonFresh,[object Object],sells and delivers groceries in Seattle,[object Object],Amazon Warehouse Deals,[object Object],offers discounts on refurbished products,[object Object],Amazon prime,[object Object],Prime membership program,[object Object]

Other Amazon Initiatives,[object Object],5,[object Object],Companies with Mother brand name ,[object Object],Amazon Cloud drive,[object Object],Cloud computing ,[object Object],Amazon Instant Video,[object Object],Video on Demand Service,[object Object],Amazon Web Services,[object Object],Collection of web services giving cloud computing platform,[object Object],Amazon Appstore,[object Object],Interactive venue for developers and buyers,[object Object],Amazon Cloud Player,[object Object], lets you sync music and playlists across computers ,[object Object],Amazon mp3,[object Object],Online music store,[object Object]

6,[object Object],BRAND DIAGNOSTICS,[object Object]

Target Group,[object Object],7,[object Object],Basic Outlook on TG,[object Object],[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],[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,[object Object],10,[object Object],Amazon Vs Walmart,[object Object],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,[object Object],Largest online retailer,[object Object],No store presence,[object Object],Online sales of 34 billion in 2010,[object Object],40% growth in 2010,[object Object],Better prices than walmart !!! (cheaper by almost 19 %),[object Object],Diversified portfolio with futuristic outlook,[object Object],Customer base of 137 million,[object Object],Subsidiaries in 7 countries,[object Object],Customer service ranking is 1,[object Object],28 acquisitions till date,[object Object],Largest retailer,[object Object],Online sales of 4 billion in 2010,[object Object],Store sales around 400 billion in 2010,[object Object],Better brand value due to store presence,[object Object],17% growth in 2010,[object Object],Low profit margin,[object Object],Customer base of 200 million,[object Object],Subsidiaries in 14 countries ,[object Object],Customer service ranking is 10,[object Object],14 acquisitions till date,[object Object]

Key Drivers of Growth (1/2),[object Object],Third Party Unit Growth and Prime/Free Shipping,[object Object],[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,[object Object]

Key Drivers of Growth (2/2),[object Object],Third Party Unit Growth and Prime/Free Shipping,[object Object],[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,[object Object],*Media Intl – Media International,[object Object],*EGM US – Electronics and General Merchandize in US,[object Object],*EGM Intl – Electronics and General Merchandize International,[object Object],12,[object Object]

Consumer Insights (1/2),[object Object],13,[object Object],Insights that shaped Amazon.com,[object Object],Building Trust,[object Object],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.,[object Object],Increasing Sales,[object Object],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.,[object Object],Faster Process,[object Object],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.,[object Object],Prime Customers,[object Object],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.,[object Object]

Consumer Insights (2/2),[object Object],14,[object Object],Insights that shaped Amazon.com,[object Object],SEO,[object Object],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.,[object Object],Affiliate Marketing,[object Object],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.,[object Object],Acquisitions,[object Object],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.,[object Object],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,[object Object]

Customer Care,[object Object],15,[object Object],Services that increase brand loyalty,[object Object],[object Object],Jeff Bezos (CEO Amazon).,[object Object],[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,[object Object]

Increasing seller & customer base,[object Object],16,[object Object],Basic Strategy,[object Object]

Handling Complaints,[object Object],17,[object Object],[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],[object Object]

Fast refunds and replacements,[object Object]

Customer Retention,[object Object],19,[object Object],Strategies followed to retain the current customers,[object Object],Vertical Integration,[object Object],Kindle became another reason for customers to come back to Amazon.,[object Object],Huge seller base,[object Object],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,[object Object],Lock in,[object Object],Amazon made it difficult for customers to switch platforms for reading their e-book through their proprietary format,[object Object],Special Offers everyday,[object Object],Plays with various offers in Amazon instant video, the video on demand service. ,[object Object],Personalized store,[object Object], 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,[object Object],Amazon Prime,[object Object],Annual subscription saving schemes for loyal customers,[object Object]

Layering of the Brand,[object Object],20,[object Object]

Kano’s Model,[object Object],21,[object Object],Model for product development and Customer Satisfaction,[object Object],Excitement Attributes,[object Object],Everyday GOLD BOX deals ,[object Object],Customer reviews,[object Object],Content search,[object Object],Kindle e-book reader,[object Object],Sensible recommendations,[object Object],Performance Attributes,[object Object],Minimal Time to delivery,[object Object],Easy navigation through site,[object Object],Free shipping,[object Object],Wide collection,[object Object],One click service,[object Object],Threshold or Basic Attributes,[object Object],Online shopping,[object Object],Product comparison,[object Object],Low prices,[object Object],Reliable and hassle free payment,[object Object]

Brand Portfolio Analysis,[object Object],22,[object Object],BCG Matrix,[object Object],STARS,[object Object],[object Object]

Brand Management Study of Amazon

Brand Management Study of Amazon

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Brand Management Study of Amazon