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WHAT IS MARKETING?

The activities of a company associated with buying and selling a product


or service. It includes advertising, selling and delivering products to
people. People who work in marketing departments of companies try to
get the attention of target audiences by using slogans, packaging
design, celebrity endorsements and general media exposure. The four
'Ps' of marketing are product, place, price and promotion.
Many people believe that marketing is just about advertising or sales.
However, marketing is everything a company does to acquire customers
and maintain a relationship with them. Even the small tasks like writing
thank-you letters, playing golf with a prospective client, returning calls
promptly and meeting with a past client for coffee can be thought of as
marketing. The ultimate goal of marketing is to match a company's
products and services to the people who need and want them, thereby
ensure profitability
WHAT IS STRATEGY?
Strategy is a high level plan to achieve one or more goals under
conditions of uncertainty. In the sense of the "art of the general", which
included several subsets of skills including "tactics", siegecraft, logistics
etc, the term came into use in the 6th century C.E. in East Roman
terminology, and was translated into Western vernacular languages only
in the 18th century. From then until the 20th century, the word "strategy"
came to denote "a comprehensive way to try to pursue political ends,
including the threat or actual use of force, in a dialectic of wills" in a
military conflict, in which both adversaries interact.
Strategy is important because the resources available to achieve these
goals are usually limited. Strategy generally involves setting goals,
determining actions to achieve the goals, and mobilizing resources to
execute the actions. A strategy describes how the ends (goals) will be
achieved by the means (resources). The senior leadership of an
organization is generally tasked with determining strategy. Strategy can
be intended or can emerge as a pattern of activity as the organization
adapts to its environment or competes. It involves activities such
as strategic planning and strategic thinking
WHAT IS MARKETING STRATEGY?
Marketing strategy is the goal of increasing sales and achieving a
sustainable competitive advantage Marketing strategy includes all basic
and long-term activities in the field of marketing that deal with the
analysis of the strategic initial situation of a company and the
formulation, evaluation and selection of market-oriented strategies and
therefore contribute to the goals of the company and its marketing
objectives.
TYPES OF MARKETING

AFFINITY MARKETING

Also known as Partnership Marketing, this technique links
complementary brands, thereby creating strategic partnerships that
benefit both companies. While one adds value to existing customers by
generating more income, the other builds new customer relationships.

ALLIANCE MARKETING

Here two or more entities come together to pool in their resources to
promote and sell a product or service, which will not only benefit their
stakeholders, but also have a greater impact on the market.

AMBUSH MARKETING

This strategy is used by advertisers to capitalize on and associated
themselves with a specific event without the payment of any sponsorship
fee, thereby bringing down the value of sponsorship. It has sub-
categories like direct or predatory ambushing or indirect ambushing by
association, to name a few.

CALL TO ACTION (CTA) MARKETING

CTA is a part of inbound marketing used on websites in the form of a
banner, text or graphic, where it is meant to prompt a person to click it
and move into the conversion funnel, that is, from searching to
navigating an online store to converting to a sale.




CLOSE RANGE MARKETING (CRM)

Also known as Proximity Marketing, CRM uses bluetooth technology or
Wifi to promote their products and services to their customers at close
proximity.

CLOUD MARKETING

This refers to the type of marketing that takes place on the internet,
where all the marketing resources and assets are transferred online so
that the respective parties can develop, modify, utilise and share them.

COMMUNITY MARKETING

This technique caters to the needs and requirements of the existing
customers, as opposed to using resources to gather new consumers.
This promotes loyalty and product satisfaction and also gives rise to
word of mouth marketing among the community.

CONTENT MARKETING

In this case, content is created and published on various platforms to
give information about a certain product or service to potential
customers and to influence them, without making a direct sales pitch.

CROSS-MEDIA MARKETING

As the name suggests, multiple channels like emails, letters, web pages
etc are used to give information about products and services to
customers in the form of cross promotion.

DATABASE MARKETING

This utilizes and information from database of customers or potential
consumers to create customised communication strategies through any
media in order to promote products and services.

DIGITAL MARKETING

This strategy uses various digital devices like smartphones, computers,
tablets or digital billboards to inform customers and business partners
about its products. Internet Marketing is a key element in Digital
Marketing.

DIRECT MARKETING

This is a wide term which refers to the technique where organizations
communicate directly WITH the consumer through mail, email, texts,
fliers and various promotional materials.

DIVERSITY MARKETING

The aim of this strategy is to take into account the different diversities in
a culture in terms of beliefs, expectations, tastes and needs and then
create a customized marketing plan to target those consumers
effectively.

EVANGELISM MARKETING

It is similar to word-of-mouth marketing, where a company develops
customers who become voluntary advocates of a product and who
promote its features and benefits on behalf of the company.

FREEBIE MARKETING

Here a particular item is sold at low rates, or is given away free, to boost
the sales of another complimentary item or service.

FREE SAMPLE MARKETING

Unlike Freebie Marketing, this is not dependent on complimentary
marketing, but rather consists of giving away a free sample of the
product to influence the consumer to make the purchase.

GUERRILLA MARKETING

Unconventional and inexpensive techniques with imagination, big
crowds and a surprise element are used for marketing something, a
popular example being flash mobs.
By keeping in mind the distinctive features of the product, the
demographics of the target consumer and their spending power, and the
current strategies of existing companies, an effective marketing strategy
may be successfully created.

AMAZON.COM HISTORY
Jeff Bozos, Amazon.com founder and CEO, dreamed about books. In
1994, he created Amazon.com, Inc., which he labelled as Earths
Biggest Bookstore. The ecommerce company went online in 1995 and
soon expanded into other media, including DVDs, VHS, CDs, MP3s, and
eventually a wide range of other products, including toys, electronics,
furniture and apparel. As such, the tagline soon changed to Earths
Largest Selection. But books were only the beginning of Bozos up-and-
coming enterprise.
Amazon.com went public in 1997. In the first shareholder letter, Bozos
penned the fundamental foundation for Amazon.coms success: Start
with customers and work backwards Listen to customers, but dont
just listen to customers also invent on their behalf Obsess over
customers. This policy was backed by a startling business philosophy
Bozos planned on operating at a loss for 4-5 years. It was not until 2001
that Amazon.com posted a net profit at a minuscule one-cent per share.
Yet, despite its bizarre business strategy, Amazon.com claimed over 1.4
million customers after only two years of being online.
Now, 45 million satisfied customers shop at Amazon.com for everything
from books (most popular) to fashion apparel to fine jewellery to
Christmas toys. It has one of the most recognized brand names in the
world and garners an estimated 50% of its sales from overseas
consumers. Surviving the dot-com bust of the late 1990s and early
2000s, Amazon weathered the e-storms and now thrives in the retail
marketplace, challenging vending giants like Wal-Mart and Target.
Focused on technological innovation and cantered on customer
fulfilment, Amazon.com proceeds into the next decade with a profit firmly
in one hand, and the capacity to blow it out of the water in the other
hand.


AMAZON.COMS BUSINESS PHILOSOPHY
Amazon.coms self-proclaimed mission statement is: We seek to be
Earths most customer-centric company for three primary customer sets:
consumer customers, seller customers and developer customers. In a
special for the Miami Herald, journalist Jack Hardy declares: Customer
obsession; innovation; bias for action; ownership; high hiring bar and
frugality. These six core values focus Amazon.coms operational
strategies. It is committed to long-term growth based on consumer
satisfaction.
One of things that is kind of fascinating about Amazon is everybody, the
average person, thinks about Amazon selling books and now music and
Kindles and things like that. But one of the things that they have been
doing on the side, which I think is actually kind of one of the big hidden
stories of Amazon, is Jeff Bozos believes that Amazon should become a
public utility. We dont have power generators in our backyard, we just
plug in to get electricity. We dont have to dig our own wells. We have
water that comes in.
Jeffs philosophy is if you want to start a website, if you want to start a
company, if you need storage and bandwidth, he wants Amazon to be a
public utility. You just plug-in and all the storage, all the servers, all the
bandwidth that you need is right there, basically accessible without you
having to then get a rack, and install the equipment, and buy the
hardware, and not knowing whether you need 40 machines or five
machines.
I think that this is actually part of the new world where everything is
sorted infinitely stretchable and expandable in real time. The ability now
to create a company is so much more efficient because you dont have
to guess in advance what youre going to be able to do with it. Other
companies like EMC that provide huge amounts of storage and analytic
software are doing the same thing; they're giving people tools so they
dont have to build these tools for themselves.
A gentleman was telling me recently that theres so much demand now
for storages that theyre actually moving - there are actually FedEx'ing
hard drives from San Francisco to New York. It's actually faster to
actually move the physical hard drives than is to have the stuff streaming
from one side of the country to the other. The other thing is that nobody
throws anything away anymore, like every medical record, every scan,
every x-ray, everything thats being now digital and stored in the cloud.
Juan Enriquez, who wrote one of the essays in my book, was talking
about the fact that he thinks that we're on the verge of a big data crisis
already. That were running out of room; were running out of bandwidth
and space to store all of this. That there has to be another sort of huge
leap forward in a way of compressing this data and making it both
accessible but also smaller physically in terms of the storage. I think a
lot of us read recently about the environmental impact of some of these
data centers. They're trying to put data centers in cold environments
because theyre actually generating so much heat now; theyre using up
so much electricity.
So I think all of us tend to think of all this as being free; its the Internet,
its free. We're getting to a point where its not to be free anymore, that
we're going to have to find another sort of financial model to benefit from
this sort of infinite, infinitely and ever-expanding pool of data and
storage.
SWOT ANALYSIS
STRENGHTS
1. America's largest online retailer
2. Robust brand image enhances bargaining power
3. Diversified into product lines other than books to strengthen
customer reach
4. Kindle builds strong presence in the eBooks
OPPURTUNITIES
1. Acquisitions extend product line and strengthen technical platform
2. Increase in online retail sales in the US
WEAKNESSES
1. Free shipping offers would be a challenge in the long run
2. Patent infringement issues erode stakeholder confidence
3. Late in entering emerging markets like China and India
THREATS
1. Poor publicity with publishers due to the pricing model
2. Launch of Apple's iPad intensifies competition
3. Foreign exchange fluctuation
MARKETING OBJECTIVES OF AMAZON
CORPORATE
Build Brand equity and grow the company
MARKETING
Increase market share
Enhance brand awareness and top of mind recall
DISTRIBUTION
Increase the reach internationally and increase the product
assortments
PROMOTIONAL
Communicate brand promises of Amazon
Leverage parent brand name for new businesses
PRICING
To be cheaper than the competitors





CONSUMER INSIGHTS
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 peoples 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.
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.
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 companys 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.

TARGET GROUP
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)
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
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
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
MARKETING STRATEGIES OF AMAZON.COM
Our marketing strategy is designed to increase customer traffic to
our websites, drive awareness of products and services we offer,
promote repeat purchases, develop incremental product and service
revenue opportunities, and strengthen and broaden the Amazon.com
brand name. We believe our most effective marketing efforts result from
our focus on continuously improving the customer experience, which
drives word-of-mouth promotion and repeat customer visits. We also
deliver personalized Web pages and services and employ a variety of
media, business development activities, and promotional methods. We
employ various means of advertising, which consist primarily of online
advertising, including through our Associates and Syndicated Stores
programs, sponsored search, portal advertising, e-mail campaigns, and
other initiatives. We also participate in cooperative advertising
arrangements with certain of our vendors and other third parties. Our
Associates program directs customers to our websites by enabling
independent websites to make millions of products available to their
audiences with fulfilment performed by us or third parties. We pay
commissions to hundreds of thousands of participants in our Associates
program when their customer referrals result in product sales.

We offer everyday free shipping options worldwide and in the U.S.
also offer Amazon Prime, a membership program in which members
receive free two-day shipping and discounted overnight shipping.
Although marketing expenses do not include the costs of our free
shipping or promotional offers, we view such offers as effective
marketing tools.

Amazon.com is obsessed with a fervour to serve consumer and
shareholder alike. Since its inception over fifteen years ago,
Amazon.com has steadily grown from a burgeoning dot-com
corporation into a multinational monster, a king in the domain of internet
retail. It targets two goals: the satisfaction of a customer and efficient
corporate growth. Its marketing strategies are near-legendary, and
budding business should take a page or several chapters from
Amazon.coms proven marketing manual.

Amazon.com bases its marketing stratagem 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 affiliates products and resources.
5. It uses existing communication systems.
6. It utilizes universal behaviors 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.
Amazon.com relies on wily online ploys, strong partner relations and a
constant declaration of quality to market itself to the masses.
1. PAY PER CLICK ADVERTISING
Independent Pay Per Click (PPC) advertising has been the black sheep
of Amazon.coms marketing campaign. Their first PPC campaign
attempt, spawned by their subsidiary company A9, was the mediocre
Clickriver, a middling PPC program that kept its head above water but
certainly swam no great channels. ProductAds replaced Clickriver in
August, 2008. It allows any web merchant to purchase PPC ads on
Amazon.coms website, leading some pundits to sardonically comment
about Amazon.coms possible pursuit of Googles web browsing crown.
Despite its potential interest in Googles regime, Amazon.com continues
to purchase PPC advertisements on Google to direct browsing
customers to their websites. It buys space on the left side of Googles
search listing results, and pays a fee for each visitor to Amazon.com
who clicks on their sponsored link. This is typical of Amazon.coms
marketing strategy. No big banners, loud colors, or pristine men casually
conversing about Amazon.com on Americas tube just a demure
advertisement on a web page which, incidentally, may wordlessly lead
thousands to Amazon.com
Initially Amazon.com used Clickriver as a pay per click strategy. This
was replaced by ProductAds in 2008. The program works by allowing
web merchants to buy PPC advertisements on the website of Amazon.
Aside from this, the company also buys PPC ads from Google, in order
to drive potential visitors to their websites. Its a simple strategy but
clearly an effective one in garnering prospective customers.
2. CONTINUAL WEBSITE IMPROVEMENT
In todays stop-and-go internet traffic, an engaging, simple and easy-to-
use website is a necessity. Amazon.com expends millions of dollars and
hundreds of man-hours to identify problems, develop solutions, and
further enhance the customers online experience. Rob Enderle, head
analyst at Enderle Group, states that Amazon.com has always been
very aggressive about analyzing its websites traffic to a high degree and
making modifications based on what they see. This constant pursuit of
perfection lead to Jakob Nielsons prestigious ranking of Amazon.coms
website usability. In a 2001 study of 20 ecommerce sites, Amazon.com
scored 65% higher than the average of the other nineteen sites
usability. It has a class-leading 99.9% mobile device availability, and
uploads several seconds faster than some of its competition. In one test,
Amazon.com uploaded in 2.4 seconds, while Target took nearly seven to
finish. A navigable website has consistently topped the priority charts of
Amazon.com
Occasionally, management skirts customer relations and engages in
under-the-table investigations. Following several lawsuits from aggrieved
loyal customers, who were charged several dollars more for the same
item than newcomers, Amazon.com apologized for their underhanded
differential pricing and discontinued the project. However, Amazon.com
continues to noiselessly experiment on their website, garnering new
information and augmenting their already popular website.
Amazon.com develops and improves their website continuously,
spending plenty of time and resources in analyzing user behavior and
addressing their concerns. For this reason, many find it user-friendly,
simple, and engaging. Based on a study conducted in 2001,
Amazon.com topped a list of 20 e-commerce websites in terms of
accessibility, speed, and usability.

3. OFFLINE ADVERTISING
Martin McClanan, CEO of upscale gift cataloger Red Envelope, notes
that TV and billboard ads are roughly 10 times less effective when
compared to direct or online marketing when concerning customer
acquisition costs. Amazon.com has observed McClanans advice by
reducing their offline marketing, especially during the holidays. In 1999,
Amazon.com spent a gargantuan $80 million in offline advertisements
during the fourth quarter. A year later, during the same time span, the
company splurged only fifty million. Later years brought even more
drastic cuts. According to Competitive Media Reporting, Amazon.com
frittered $36 million in offline advertising in 2008, but through August of
2009, the corporation had spent a meager $9.4 million. However, such
cuts have not negated Amazon.coms successes. It boasts the highest
sells of any online retailer during the holidays, especially during Black
Friday. Amazon.coms strategy is simple: since customers shop online,
online is where they will be found.
4. STREAMLINED ORDERING PROCESS
Easy ordering is Amazon.coms Holy Grail. It eagerly develops
technology to allow customers to better navigate and explore their online
retail mall. Jacob Lepley, in his Amazon Marketing Strategy: Report
One, notes that, When you visit amazon.com you can use [it] to find
just about any item on the market at an extremely low price.
Amazon.com has made it very simple for customers to purchase items
with a simple click of the mouse When you have everything you need,
you make just one payment and your orders are processed. This simple
system is the same whether a customer purchases directly from
amazon.com or from one of the Associates.
5. PARTNERSHIPS & WEB SERVICES
Amazon.com has shook hands and signed contracts with quite a few
partners. Not only does it operate many of its own websites, including A9
and CDNOW, but it hosts and manages retail web sites for an array of
other retailers, including Target, Sears Canada, Bebe Stores, Timex
Corporation and Marks & Spencer. It previously hosted Borders
bookstores websites, but that relationship ceased in 2008. For several
years, Amazon.com partnered with ToysRUs. Typing ToysRUs toys
and similar query terms would also list Amazon.coms Toys & Games
tab and products. As a result of litigation, however, this partnership
ended in 2006.
The simplicity that pervades Amazon.coms customer checkout extends
to its partner relations and services, of which there is no shortage.
Amazon.com hosts no less than twelve types of web services, including
ecommerce, database, payment and billing, web traffic, and computing.
These web services many of which are free create a reliable,
scalable, and inexpensive computing platform which can revolutionize a
small businesss online presence. For instance, Amazon.coms
ecommerce Fulfillment By Amazon (FBA) program allows merchants to
direct inventory to Amazons fulfilment centers, and after products are
purchased, Amazon.com will shoulder of the burden of packing and
shipping the merchants product. This frees the merchant from a
complex ordering process while allowing them control over their
inventory.
6. AFFILIATE MARKETING
Keeping in line with their fourth marketing pillar, Amazon.com sponsors
a wildly successful program called Affiliate Marketing. Using Amazon
Web Services (AWS) XML service, Associates (independent retailers)
and third-party sellers agree to place links on their websites to
Amazon.com or to specific Amazon.com products. If the third-party
Associates list their own products on Amazon.com, they may create
links to those products as well. Associates receive a fee for each visitor
to Amazon.com that is directed through their links, and receive extra
commissions if the visitor buys a product. However, at the beginning of
2009, Amazon.com decided to terminate PPC referral commissions to its
North American Associates for paid search traffic. In an email sent to all
Associates, Amazon.com said, After careful review of how we are
investing our advertising resources, we have made the decision to no
longer pay referral fees [that] send users . through keyword bidding
and paid search. Time will tell how the North America Associates
program reacts to this change, but with AWS, it is unlikely that
Amazon.com will lose many of its Associates. To offset this change, ion
August 19, 2006, Amazon.com released aStore, which enables
Associates to embed a subset of Amazon products within, or linked
from, another site.
How successful is this program? Nearly one million Associates have
joined with Amazon.com, and approximately 40% of its sales result from
its Affiliate Marketing program. At the conclusion of 2007, Amazon.com
reported over 1.3 million sellers through Amazon.coms World Wide Web
sites. It continues to expand its Affiliate program.
One of the most successful programs of Amazon.com is affiliate
marketing. Through this program, third-party sellers and independent
retailers or associates are invited to place links on their sites that direct
visitors to Amazon.com or Amazon.com websites. For every visitor that
an associate leads to Amazon.com, they are paid a specific fee. If the
visitor decides to purchase a product, the associate also receives an
extra commission. This strategy is so successful that by the end of 2007,
a total of 1.3 million sellers have joined up with the site.
7. THE CUSTOMERS OPINIONS
Amazon.com does more than pay sycophantic lip service to its
customers. Each product is available for consumer reviews, and
customers may rate products on a hierarchical scale of 1-5 stars.
Amazon.com members may also comment on other members reviews.
Some bemoan Amazon.coms consolidation of different versions of a
product (e.g. DVD, VHS, BlueRay of a video) into a single product
available for commentary. However, this simplifies commentary and use
accessibility, a preeminent concern for Amazon.com.
8. EMAIL MARKETING
For such a money-conscious company as Amazon.com, the lure of free
and accessible e-mail is one delectable temptation that is too potent to
resist. Amazon.com engages in permission marketing, where customers
give the company permission to send them e-mails detailing product
promotions. Seth Godin, Online Marketers, writes that By talking to only
volunteers, Permission Marketing guarantees that consumers pay more
attention to the marketing message. This strategy has acquired
Amazon.com an obsequious following. Melvin Ram, a satisfied
Amazon.com customer, writes on webdesigncompany.net that Looking
at the e-mails Ive received from Amazon over the last two years, I did
not find a single e-mail that was irrelevant to me. Every single one
seemed like it was hand-picked for me based on my previous
purchases.
Email marketing is another technique employed by Amazon.com.
Through their permission marketing program, customers allow the
company to send them messages about product promotions. This has
proven to be an effective approach, since customers are sent messages
that are relevant to them. Based on their previous purchases,
Amazon.com serves them up with material that they may find interesting.
9. CUSTOMER SERVICE
Jeff Bozos would argue that customer service is not an addition to a
corporate goal it is the corporate goal. He calls Amazon.com, The
most consumer-centric company. In a lecture to Massachusetts Institute
of Technology students, Bozos Tells of technological advances that
have not only enabled customers to find products, (and now at 28 million
items), enabled products to find customers [italics original].
Amazon.com focuses on the customer experience. It wants customers to
quickly access their hearts desire and obtain it without hassle. It has
spent billions enhancing and developing its website interface and
customer relations.
There are numerous methods that Amazon.com uses to assist the
customer. All customers may send e-mails to Amazon.com requesting
clarification about purchasing or other information. Nor are all responses
automated. Amazon.com engages many employees simply to respond
to customer issues by phone and e-mail.
These are but the first few pages of Amazon.coms extensive marketing
manual. By refusing to compromise with mediocrity, Amazon.com has
revolutionized ecommerce. Millions of customers, who are reading their
books, donning their jewelry, or vacuuming their floor, are a living
testament to Amazon.coms success. Are you one of them?
10. THE POWER OF PAGE SPEED

Page speed has been a large focus for Amazon.com. The time it takes
for a webpage to load can have a large impact on user experience and
sales. After analyzing the ratio of sales to website performance, Amazon
discovered that for every 100ms of page load time there was a 1%
decrease in sales. So how fast does your website need to be? Many
usability experts propose that the ideal page load time is 2 seconds or
less. You can easily test the page load time of your own website by using
free tools such as WebPageTest.org





11. PERSONALIZE THE SHOPPING EXPERIENCE

One thing that Amazon does very well is personalizing the shopping
experience to each user. Going to Amazons homepage youll see
different sections such as Related to Items Youve Viewed, Inspired by
Your Shopping Trends, Recommendations for You in.., etc. Amazon
knows that the more relevant the product is to the user the more likely
users will purchase. Online retailers can learn from Amazon and
personalize the shopping experience as much as possible. This may be
easier said than done but many common ecommerce platforms offer
3
rd
party addons to provide similar functionality. An easier alternative
involves showing users recently viewed products. While it might not be
as fancy as Amazons elaborate personalization strategy, its a simple
way to personalize the shopping experience while improving the average
order value.

12. MAKE SEARCHING A BREEZE

The search bar can have a significant impact on the user experience,
especially for larger online retailers with many products. The faster a
user can find their desired product the more likely it is that the user will
purchase. Amazon makes searching a breeze by automatically
suggesting popular products and categories. Other ecommerce websites
can use this tactic to drive users straight to the product pages and
improve conversion rates.
13. USERS NEED REVIEWS

Users rely on product reviews to make informed decisions before
purchasing an item. Amazon does an amazing job of providing and
visualizing customer reviews to help potential buyers become customers.
Clearly displaying product reviews can significantly improve the
conversion rate of a product page. Amazon also leverages email to
solicit reviews from customers. This trick can help other online retailers
build social proof for products and boost sales.
14. RECOMMEND SIMILAR PRODUCTS

Focusing on average order value is often one of the easiest yet
overlooked ways to improve sales. Amazon does a great job of
influencing users to purchase more than just one product.
Bundling products together or including a related products section is an
easy way for online retailers to improve their average order value. The
addition of these sections can also have a SEO benefit by creating
internal links and sending link juice to other product pages on the
website. Amazon even takes this strategy a step further by suggesting
similar products during the checkout process.

15. TEST, TEST, TEST

Test everything. The success of Amazon can largely be contributed to
the companys culture to always test new ideas. Amazons CEO Jeff
Bozos once said If you double the number of experiments you do per
year youre going to double your inventiveness. Adopting a culture that
allows for continuous testing can have a high payoff in the long run. So
what types of tests does Amazon conduct? Product prices, marketing
channels, calls to action, colors, navigation, button styles, messaging,
shipping rates, etc. If you can think of it, chances are theyve already
tested it.

16. CREATE TONS OF CONTENT
Amazon has 248,000,000 pages stored in Google's index. Each of these
248,000,000 pages has the opportunity to rank for any number of
keywords in search engines. Now that's quite a bit of on-page SEO juice!







17. EXPERIMENTATION AND TESTING AT AMAZON
The Culture of Metrics also led to a test-driven approach to improving
results at Amazon. Matt Round, speaking at E-metrics 2004 when he
was director of personalisation at Amazon describes the philosophy as
Data Trumps Intuitions. He explained how Amazon used to have a lot
of arguments about which content and promotion should go on the all
important home page or category pages. He described how every
category VP wanted top-center and how the Friday meetings about
placements for next week were getting too long, too loud, and lacked
performance data.
But today automation replaces intuitions and real-time experimentation
tests are always run to answer these questions since actual consumer
behaviour is the best way to decide upon tactics.
Marcus (2004) also notes that Amazon has a culture of experiments of
which A/B tests are key components. Examples where A/B tests are
used include new home page design, moving features around the page,
different algorithms for recommendations, changing search relevance
rankings. These involve testing a new treatment against a previous
control for a limited time of a few days or a week. The system will
randomly show one or more treatments to visitors and measure a range
of parameters such as units sold and revenue by category (and total),
session time, session length, etc. The new features will usually be
launched if the desired metrics are statistically significantly better.
Statistical tests are a challenge though as distributions are not normal
(they have a large mass at zero for example of no purchase) There are
other challenges since multiple A/B tests are running every day and A/B
tests may overlap and so conflict. There are also longer-term effects
where some features are cool for the first two weeks and the opposite
effect where changing navigation may degrade performance temporarily.
Amazon also finds that as its users evolve in their online experience the
way they act online has changed. This means that Amazon has to
constantly test and evolve its features.





18. AMAZON.COM TECHNOLOGY
It follows that the Amazon technology infrastructure must readily support
this culture of experimentation and this can be difficult to achieved with
standardised content management. Amazon has achieved its
competitive advantage through developing its technology internally and
with a significant investment in this which may not be available to other
organisations without the right focus on the online channels.
As Amazon explains in SEC (2005) using primarily our own proprietary
technologies, as well as technology licensed from third parties, we have
implemented numerous features and functionality that simplify and
improve the customer shopping experience, enable third parties to sell
on our platform, and facilitate our fulfilment and customer service
operations. Our current strategy is to focus our development efforts on
continuous innovation by creating and enhancing the specialized,
proprietary software that is unique to our business, and to license or
acquire commercially-developed technology for other applications where
available and appropriate. We continually invest in several areas of
technology, including our seller platform; A9.com, our wholly-owned
subsidiary focused on search technology on www.A9.com and other
Amazon sites; web services; and digital initiatives.
Round (2004) describes the technology approach as distributed
development and deployment. Pages such as the home page have a
number of content pods or slots which call web services for features.
This makes it relatively easy to change the content in these pods and
even change the location of the pods on-screen. Amazon uses a
flowable or fluid page design unlike many sites which enables it to make
the most of real-estate on-screen.
Technology also supports more standard e-retail facilities. SEC (2005)
states: We use a set of applications for accepting and validating
customer orders, placing and tracking orders with suppliers, managing
and assigning inventory to customer orders, and ensuring proper
shipment of products to customers. Our transaction-processing systems
handle millions of items, a number of different status inquiries, multiple
shipping addresses, gift-wrapping requests, and multiple shipment
methods. These systems allow the customer to choose whether to
receive single or several shipments based on availability and to track the
progress of each order. These applications also manage the process of
accepting, authorizing, and charging customer credit cards.

19. DATA DRIVEN AUTOMATION
Data is king at Amazon. He gave many examples of data driven
automation including customer channel preferences; managing the way
content is displayed to different user types such as new releases and
top-sellers, merchandising and recommendation (showing related
products and promotions) and also advertising through paid search
(automatic ad generation and bidding).
The automated search advertising and bidding system for paid search
has had a big impact at Amazon. Sponsored links initially done by
humans, but this was unsustainable due to range of products at
Amazon. The automated programme generates keywords, writes ad
creative, determines best landing page, manages bids, measure
conversion rates, profit per converted visitor and updates bids. Again the
problem of volume is there, Matt Round described how the book How to
Make Love Like a Porn Star by Jenna Jameson received tens of
thousands of clicks from pornography-related searches, but few actually
purchased the book. So the update cycle must be quick to avoid large
losses.
There is also an automated email measurement and optimization
system. The campaign calendar used to be manually managed with
relatively weak measurement and it was costly to schedule and use. A
new system:
Automatically optimizes content to improve customer experience
Avoids sending an e-mail campaign that has low clickthrough or
high unsubscribe rate
Includes inbox management (avoid sending multiple emails/week)
Has growing library of automated email programs covering new
releases and recommendations
But there are challenges if promotions are too successful if inventory
isnt available.






20. AMAZON PARTNERSHIP STRATEGY
As Amazon grew, its share price growth enabled partnership or
acquisition with a range of companies in different sectors. Marcus (2004)
describes how Amazon partnered with Drugstore.com (pharmacy),
Living.com (furniture), Pets.com (pet supplies), Wineshopper.com
(wines), HomeGrocer.com (groceries), Sothebys.com (auctions) and
Kozmo.com (urban home delivery). In most cases, Amazon purchased
an equity stake in these partners, so that it would share in their
prosperity. It also charged them fees for placements on the Amazon site
to promote and drive traffic to their sites. Similarly, Amazon charged
publishers for prime-position to promote books on its site which caused
an initial hue-and-cry, but this abated when it was realised that paying
for prominent placements was widespread in traditional booksellers and
supermarkets. Many of these new online companies failed in 1999 and
2000, but Amazon had covered the potential for growth and was not
pulled down by these partners, even though for some such as Pets.com
it had an investment of 50%.
Analysts sometimes refer to Amazoning a sector meaning that one
company becomes dominant in an online sector such as book retail such
that it becomes very difficult for others to achieve market share. In
addition to developing, communicating and delivering a very strong
proposition, Amazon has been able to consolidate its strength in
different sectors through its partnership arrangements and through using
technology to facilitate product promotion and distribution via these
partnerships. The Amazon retail platform enables other retailers to sell
products online using the Amazon user interface and infrastructure
through their Syndicated Stores programme.
For example, in the UK, Waterstones (www.waterstones.co.uk) is one of
the largest traditional bookstores. It found competition with online so
expensive and challenging, that eventually it entered a partnership
arrangement where Amazon markets and distributes its books online in
return for a commission online. Similarly, in the US, Borders a large
book retailer uses the Amazon merchant platform for distributing its
products.
Toy retailer Toys R Us have a similar arrangement. Such partnerships
help Amazon extends its reach into the customer-base of other
suppliers, and of course, customers who buy in one category such as
books can be encouraged to purchase into other areas such as clothing
or electronics.

21. AMAZON MARKETING COMMUNICATIONS
Amazon state that the aims of their communications strategy are
(unsurprisingly) to:
1. Increase customer traffic to our websites
2. Create awareness of our products and services
3. Promote repeat purchases
4. Develop incremental product and service revenue opportunities
5. Strengthen and broaden the Amazon.com brand name.
Amazon also believe that their most effective marketing communications
are a consequence of their focus on continuously improving the
customer experience. This then creates word-of-mouth promotion which
is effective in acquiring new customers and may also encourage repeat
customer visits.
Amazon used the personalisation enabled through technology to reach
out to a difficult to reach market which Bozos originally called the hard
middle. Bezoss view was that it was easy to reach 10 people (you
called them on the phone) or the ten million people who bought the most
popular products (you placed a superbowl ad), but more difficult to reach
those in between. The search facilities in the search engine and on the
Amazon site, together with its product recommendation features meant
that Amazon could connect its products with the interests of these
people.
Online advertising techniques include paid search marketing, interactive
ads on portals, e-mail campaigns and search engine optimisation. These
are automated as far as possible as described earlier in the case study.
As previously mentioned, the affiliate programme is also important in
driving visitors to Amazon and Amazon offers a wide range of methods
of linking to its site to help improve conversion.
Amazon also use cooperative advertising arrangements, better known
as contra-deals with some vendors and other third parties. For
example, a print advertisement in 2005 for a particular product such as a
wireless router with a free wireless laptop card promotion will feature a
specific Amazon URL in the ad. In product fulfilment packs, Amazon
may include a leaflet for a non-competing online company such as
Figleaves.com (lingerie) or Expedia (travel). In return, Amazon leaflets
may be included in customer communications from the partner brands.

22. USE THE CROWD TO CREATE "SEGMENTS OF ONE"
Amazon and many of these sites are brilliant at leveraging the wisdom of
the crowd to create "segments of 1," or segmentation that is so granular
it focuses on each individual person and their specific online behavior,
wants, and needs.
The pages I view and emails I get from Amazon are unique to me. They
offer suggestions for books, movies, and other products I might like
based on my personal purchase history and shopping patterns. Like
Netflix, Google, Facebook, YouTube, and so many other high trafficked
sites, Amazon uses the wisdom of the crowd to personalize the user
experience and dramatically increase conversion .
23. MARKETING TAKEAWAY
Stop obsessing about web design and instead focus on making your
website effective. Rather than spending your time and money on making
your site look pretty, spend it on optimizing your website pages, creating
remarkable content that attracts visitors, and optimizing your site and
landing pages for lead generation. Your site can be the prettiest website
in the world, but if it doesn't generate leads and customers for your
business, what's the point?
The more pages you have on your website, the more pages your site
can be indexed for in search engines. More pages also means more
opportunities for your prospects to find you in search engines and more
chances to rank for your business' top keywords. The best way to create
tons of website pages is by blogging. Start a business blog, publish
frequently, and make sure each post is search engine optimized for your
best keywords. The more optimized content you have, the better your
chances will be of getting found online.

24. WHITE SPACE IS OVER-RATED
To be honest, it looks like someone threw up their Halloween candy all
over Amazon's web pages, but it doesn't seem to matter. In fact, really
none of Compete's top 10 sites are particularly Apple-esque in design,
which many web designers seem to idolize. Most of them have near
zero white space and are chock full of stuff. That said, if they are the top
10 most visited websites, it just goes to show that web design isn't the
most important thing. Rather, being effective is what wins
25. E-COMMERCE STRATEGY
Amazon employs a multi-level e-commerce strategy. Amazon started off
by focusing on Business-to-Consumer relationships between itself and
its customers, and Business-to-Business relationships between itself
and its suppliers but it then moved to incorporate Customer-to-Business
transactions as it realized the value of customer reviews as part of the
product descriptions. It now also facilitates customer to customer with
the provision of the Amazon marketplace which act as an intermediary to
facilitate consumer to consumer transactions. The company lets almost
anyone sell almost anything using its platform. In addition to affiliate
program that lets anybody post Amazon links and earn a commission on
click through sales, there is now a program which let those affiliates
build entire websites based on Amazons platform.
26. PRICING STRTEGY
That strategy is changing as the company expands into the vast grocery
and consumer packaged goods market through its AmazonFresh
business.
Now the priority is convenience rather than the lowest prices, an
approach that could limit how much of this market Amazon can grab
from grocery store operators like Safeway and Kroger and other rivals
including Wal-Mart Stores, FreshDirect and the start-up Instacart.
AmazonFresh, which delivers groceries and related items the same day
or the next day, started as a test in Amazon's home town of Seattle
several years ago. The service expanded to Los Angeles earlier this
year and launched in San Francisco Wednesday. If those cities perform
well, the company may expand to many other urban areas and even
outside the U.S.
27. AMAZON'S KINDLE STRATEGY
Amazon's strategy was simple -- it wanted to make money when people
used its products, not when they bought them. Amazon typically prices
its Kindle e-readers and Kindle Fire tablets at or slightly below cost. By
tightly integrating the devices with Amazon's online store, Amazon
hopes to make money by selling lots of e-books, music, movies, and
other stuff to Kindle and Kindle Fire users over time.
However, until recently, the strategy looked like a bust. While Amazon's
e-readers and tablets were popular, the company's media sales growth
was lackluster. More recently, though, Amazon's media sales growth has
picked up again in North America. This suggests that the Kindle strategy
is finally succeeding.


















28. DISTRIBUTION STRATEGY
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

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 Amazons 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.






29. CUSTOMER RETENSION STRATEGY


Kindle became another reason for customers to come back to
Amazon.
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
Amazon made it difficult for customers to switch platforms for
reading their e-book through their proprietary format
Plays with various offers in Amazon instant video, the video on
demand service.
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
Annual subscription saving schemes for loyal customers



Apple Amazon Paypal NetFlix
200
137
94
20
Total Customer accounts in millions

30. CUSTOMER CARE STRATEGY
If you make customers unhappy on the Internet, they can each tell
6,000 friendsJeff Bezos (CEO Amazon).
Amazons customer service was ranked No 1 in 2009 and 2011
by American Customer Satisfaction Index
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 customers
Amazon introduced many of the current ubiquitous best-practices
to e-commerce industry. Below are a list of innovations bought by
them
Amazon introduced many of the current ubiquitous best-practices
to e-commerce industry. Below are a list of innovations bought by
them