MD. AFNAN HOSSAIN
Case study: Amazon IndiaCompany , Inc. is an e-commerce company started in the United States in 1994. Amazon started its operations in India in June 2013, when it opened the Amazon Marketplace in the country. Prior to Amazon India, the company had its presence in India through , a website that informs customers of the best deals available for a number of products online.Working modelIndian laws prevent foreign e-commerce firms from starting a wholly-owned company in India which can sell products directly to customers. Amazon India, thus, works on a third party model, wherein it provides a platform to third party retailers, shop owners and publishers to sell their products to customers. This model is different from that of Flipkart’s, an established e-commerce firm in India, which has its own inventory of products.StrategyAmazon India’s strategy comprises of three main components:? A vast selection of products? Offerings to customers at low prices? Ensuring fast delivery to customersIn sync with the goal of the company, which is expansion as opposed to profitability, Amazon India’s strategy is customer-centric. The company aims to provide an enjoyable, reliable, and trustworthy online shopping experience to each customer through quick and convenient delivery mechanisms.Product:The Product component of the 4 ‘Ps’ of marketing plays a vital role in Amazon India’s strategy as the company competes rigorously with other e-commerce portals in India.Amazon India started with offerings in two categories: 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 fifteen million products across twenty eight categories. Flipkart offers about ten million products, while Snapdeal offers 4 million products to its customers. The US-based portal, eBay, offers over 1.5 million products in India. 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. Price:The Price component of the 4 ‘Ps’ of marketing is important for Amazon India as it works on a third-party model, and the major source of its revenues is the fee charged to sellers. Amazon India significantly reduces the price of its products through several deals offered to customers online. However, 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 transports are used rarely as shipping options as they remain underdeveloped. Amazon.in offers several deals for one specific day to its customers, under the category “today’s deals” on its website. Through these deals, many products are offered at discounted rates for one day in order to increase sales and reach to more customers. Place:The logistics arm of Amazon, AmazonLogistics, has developed and used a number of mediums for fast and accurate delivery of products. 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. In Bangalore, Amazon started piloting the concept of enlisting kiranas (small grocery stores) as delivery points. The staff and individual entrepreneurs at various small kiosks are trained by Amazon India for such deliveries. Similar ‘Amazon pickups’ are being experimented in Delhi and Mumbai. Amazon India has also introduced pick-up services where customers can pick up their purchases from In & Out stores located at BPCL petrol stations. 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 from Amazon.in, customers can choose the time slot for its delivery at their home. As Indian lawmakers are considering allowing global online retailers such as Amazon to sell their own products in the country, this move would allow Amazon India to partner with local manufacturers to source products not carried by other sellers in the marketplace.Promotion:Similarly, the website also offers flash deals which give consumers a certain time frame to get the discounts on specific products or categories. Amazon India uses a variety of media to promote its website despite its already existing brand name. Amazon.in uses emails extensively as a way of promotion by informing existing as well as potential customers of the deals for the day and other special offers on products. It makes use of social networking sites, such as Facebook and Twitter to connectinstantly with consumers. The Facebook page of Amazon India is updated regularly with dealsfor 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. 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. Amazon India has made its website available to customers on the go. More than 35% of Amazon India’s traffic is now through mobiles, making the website the fastest growing m-commerce site for Amazon.in. Challenges and opportunities for Amazon IndiaAmazon 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. They are in talks with the government to ease restriction by Indian lawmakers regarding banning global online retail stores from selling their own inventories. As business is becoming more and more globalized and customers are becoming more demanding, the new challenges are being posted for the marketers every day. In response to the increasing environmental pressure, new social trends and technological advancements helped open new avenues for marketers. Thereby making it easy to promote a product or brand through social media platforms. Questions:How does Amazon India consider differentiation strategy? (1 mark)Identify the micro and macro environmental elements mentioned in the case. (4 marks)Which level of product/service is mentioned in the case? Identify. (2 marks)Mention the initial and recent number of product mix they have according to the case. (1 mark)Why does Amazon India deliver goods by air and how do they compensate the pricing? What additional pricing strategy do they use? (3 marks)What are the various promotional tools Amazon India is using? (3 marks)Mention the types of distribution partners working for Amazon India. (1 marks)Student’s Name ……………………………., ID ………………........, Course code ……., Section ... ................
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