Beruflich Dokumente
Kultur Dokumente
ON
COMPARATIVE STUDY OF AMAZON & FLIPKART IN TERMS OF DIGITAL
MARKETING STRATEGIES
IN
BRAND BUILDING ON INTERNET
UNDER THE GUIDANCE OF
PROF:-AMANDEEP KAUR
SUBMITTED IN PARTIAL FULFILLMENT OF REQUIREMENT FOR THE
DEGREE OF
BACHELOR OF BUSINESS ADMINISTRATION
2013-16
SUBMITTED BY:
SHABIR AHMAD
BBA 6TH SEM
ROLL NO : 1340095
SRI SUKHMANI INSTITUDE OF HOSPITALITY AND MANAGEMENT
DERA BASSI
DECLARATION
I, Shabir Ahmad hereby declare that the project work titled "COMPARATIVE STUDY OF
AMAZON & FLIPKART IN TERMS OF DIGITAL MARKETING STRATEGIES
IN BRAND BUILDING ON INTERNET " is the original work done by me and submitted to Sri
Sukhmani Institute of Hospitality and Management, DeraBassi for the fulfillment of requirement
for the award of Degree of Bachelor of Business Administration .
Signature of student.
Acknowledgement
It gives me immense pleasure to be associated with this project. The project was a joyous
learning process. The presentation of the report in the was required has been made possible by
the way of contribution of various people.
First of all, I would like to express my gratitude to Prof. Jaspreet Kaur for her help and
encouragement. I am very thankful to her for her advice, assistance, and constant support
throughout the preparation of this report.
I would like to thank all my beloved teacher for their support and confidence in me.
I would like to express my deep gratitude to all the respondents whose response was of utmost
importance for the project.
S.N0
1
2
Topics
Declaration
Acknowledgement
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Introduction
What is Brand
Characteristics of Successful Brand
Amazon.Com
SWOT Analysis Of Amazon .Com
Flipkart.Com
SWOT Analysis Of FlipKart
Amazon Vs Flipkart
Research Methodology
Data Interpretation And Analysis
Limitations of Brand Building on Internet
Conclusions And Findings
Bibliography
Questionnaire
INTRODUCTION
Digital marketing strategy builds on and adapts the principles of traditional Marketing, using the
opportunities and challenges offered by technology and the digital medium. User-centric
thinking, which involves placing the user at the core of all decisions, is vital when looking at
building a successful digital marketing strategy.
The advent of new technologies means the digital marketing strategist of today is offered not
only a plethora of new tactical possibilities, but also unprecedented ways of measuring the
effectiveness of chosen strategies and tactics. The fact that digital marketing is highly empirical
is one of its key strengths.
Everything can be measured: from behaviours, to actions and action paths, to results. This means
that the digital marketing strategist should start thinking with return on investment (ROI) in
mind. Built into any strategy should be attesting framework and the ability to remain flexible and
dynamic in a medium that shifts and changes as user behaviours do.
Building a strong brand is a complex task. This chapter spells out the traditional brand building
process, highlighting important factors that contribute to the success of each step along the way.
The major characteristics of successful brands are also reviewed.
Different kinds of digital marketing tools are being widely used in the business environment. An
all rounded marketer has to be acquainted with knowledge not only in traditional marketing but
also in the digital marketing regime.
This programme provides participants with the applications of the emerging digital media
technologies from marketing perspectives and to facilitate their full integration with marketing
management and practices.
WHAT IS A BRAND?
According to Rita Clifton, CEO of Inter brand Newell and Sorrell - a leading specialist brand
Consultancy firm - a brand is:
"A mixture of tangible and intangible attributes, symbolized in a trademark,
Which, if properly managed, creates influence and generates value4"
This definition truly captures the essence of a brand, and highlights the importance of brand
management. Branding is about creating 'value', both for customers, and for the company.
This value stems from the products and services that companies create and bring to the market,
but extends further to encompass added values derived from factors such as the brand-customer
relationship, the brand's emotional benefits and its self-expressive benefits other common
descriptions of a brand include - a 'relationship', a 'reputation', a 'set of
expectationsand a 'promise'. It is a company's promise to consistently deliver a specific set
of features, benefits, and services to customers.
build a customer base, when the brand has no competitors to rival its position.
Unique Positioning Concept - If the brand is not the innovator, it must have a unique
Positioning concept - a segmentation scheme, value proposition or augmented brand,
which will add value and distinguish it from competition.
Strong Communications Programme:- A successful brand requires an effective selling,
advertising or promotional campaign, which will communicate the brand's existence, its
function and psychological values, trigger trial and reinforce commitment to it. Without
building awareness, comprehension and intention to buy, the brand is meaningless.
Time and Consistency - Traditionally, brands were not built quickly. It often takes years
to build up the added values, and establish a trusting relationship.
brands are those who are investing heavily in logistics, distribution centres, and customer
care to ensure a completely satisfying end-to-end customer experience.
Strong Communications Programme & Efficient Customer Acquisition Strategy
The key Internet brands have made major commitments to building awareness and have
developed multifaceted, integrated customer acquisition strategies, ranging from online
methods to traditional offline media.
Unique Positioning Concept & Distinct Brand Image
Strong brands are developing unique positioning concepts, to distinguish themselves from
competitors. Yahoo!'s success can be largely attributed to its unique positioning strategy
and distinct image that appeals to its target market.
Strong Partnerships and Strategic Alliances
Rather than doing everything on their own, leading brands have focused on building
strong partnerships and alliances, particularly to secure content and widen reach to new
customer segments and niches.
Intense Customer Focus
Leading online brands have an intense customer focus, and develop a detailed
understanding of their customers' needs. These brands are accumulating knowledge about
customers, through past transactions and solicited input, and by focusing on customer
needs, are leveraging this customer knowledge (learning) to nurture relationships (relate),
by providing better services, customisation and customer care. Customer focus builds
trust and credibility that is central to developing a strong brand-customer relationship
AMAZON.COM
In July 1995, Amazon.com launched with a mission to use the Internet to transform book
buying into a fast, easy, and enjoyable experience. Amazon.com has since evolved from
being an online bookseller into a one-stop shop with "Earth's Biggest Selection TM" of more
than 18 million products, ranging from books and music to auctions and zShops (a portal /
marketplace that online sellers can use to sell their products), and has equity investments in
several e-tailers
Amazon.com has become synonymous with e-commerce, and is one of the few Internet
brands that is recognised all over the world. It is the 57th most valuable brand in the world47,
and the most widely recognised e-commerce brand name in the US (with 60% awareness48).
Amazon serves over 23 million customers from 160 countries, and has sales of over $2
billion. In addition, it is the most visited e-commerce website in America, and one of the top
two or three in Britain, France, Germany and Japan.
In July 1996, Amazon inaugurated the Associates Programme under which other websites
could display the Amazon.com hot-link and offer specific books of interest to their visitors.
This enabled Amazon to reach more customer segments and niches (Figure 6.2). Instead of
paying directly for this exposure, Amazon offered Associates referral fees of up to 15%,
which only applied to sales that resulted from the initial click-through, and not subsequent
purchases. The Associates Programme has been phenomenally successful, attracting member
sites of all sizes, and by 1999 it had over 200,000 members, increasing to over 500,000 by
August 2000.
Business Strategy
The Company's objective is to become the best place to buy, find and discover any product or
service available online.
Amazon.com will continue to enhance and broaden its brand, customer base and electronic
commerce expertise with the goal of
creating customers' preferred online shopping destination, in the United States and around the
world.
Customer Service
The Company believes that its ability to establish and maintain long-term relationships with its
customers and to encourage repeat visits and purchases depends, in part, on the strength of its
customer support and service operations and staff. Furthermore, the Company seeks to achieve
frequent communication with and feedback from its customers to continually improve the
Amazon.com stores and services. The Company offers a number of e-mail addresses to enable
customers to request information and to encourage feedback and suggestions.
Conclusion
Amazon has achieved a customer base of over 23 million people and an annual revenue run
rate of over $2 billion in less than five years. The key factors driving its growth and high
retention rates, stem from its compelling value proposition and high quality end-to-end
customer experience.
Amazon has also benefited from a first-mover advantage giving it an edge over competitors,
however, Amazon's intense focus on customer needs and continual innovation, have kept it
ahead. This customer-centricity is a key hallmark of a successful Internet brand.
Amazon also recognised that service quality is a perception, not necessarily a reality.
Amazon delivers on its promises of a wide inventory of products, secure payment procedures,
speedy delivery and good value.
Strong background and deep pockets Built on its early successes with books,
Amazon now has product categories that include electronics, toys, games, home and kitchen,
white goods, brown goods and much more. Amazon has evolved as a global E-commerce giant
in the last 2 decades.
2.
Customer centric: Companys robust CRM has created customer centric processes in
order to carefully record data on customers buying behavior. This enables them to offer
individual items, related items or bundle them as an offer, based upon preferences demonstrated
through purchases or items visited. Also, the company claims that 55% of their customers are
repeat buyers resulting in low cost of acquisition of new buyers.
3.
Cost leadership: In order to differentiate itself, company has created several strategic
alliances with other companies to offer superior customer service. The most important strategic
tie ups are with logistics provides who control costs. Because of playing on economies of scale,
Amazon is able to lower the inventory replenishment time.
4.
Efficient delivery network: With its strategic partners & due to its Amazon fulfilment
centers, Amazon has created a deep & structured network in order to make the product available
even at remote locations. It also has free of cost delivery charges in certain geographies.
5.
GLOCAL strategy: By using the strategy of Go global & act local, Amazon is able to
fight with domestic E-commerce companies through absorbing & by forming / partnering with
supply chain companies. The branding too is done as per local taste. For example- In India,
Amazon is currently using the AurDikhao campaign to encourage users to browse more of
their products.
6.
1.
Shrinking margins: Due to extensive delivery network & price wars Amazons margins
are shrinking, which is resulting in even losses. In India, Amazon had a loss of $359 crs in the
year 2013-14.
2.
Tax Avoidance issue: Amazon has attracted negative publicity on account of Tax
Avoidance in countries like U.S & UK. Most of its revenue is generated from these well
established markets.
3.
High Debt: In many developing nations Amazon is still struggling to make the business
profitable thereby affecting the overall profitability of the group resulting into High debt.
4.
Product flops Amazon launched the fire phone in the US which was a big flop. At the
same time, Kindle fire did not pick up as strongly as Kindle did. Thus, there were several product
flops which caused a dent in Amazons deep pockets.
Backward Integration: Amazon can come up with its In-house brands in different
product categories. They can also differentiate their offering. This will help them make profits in
highly competitive E-commerce market.
2.
Global Expansion: Expansion mainly in Asian & developing economies will help
Amazon because those are the markets with low competition in E-commerce industries & are not
saturated like developed economies.
3.
4.
Opening physical stores outside U.S: By doing this Amazon can help the customers to
engage with the brand, resulting in increase in repeat purchases & increase in loyal customer
base.
Threats in the SWOT analysis of Amazon
1.
Low entry barriers of the industry: Low entry barriers affect the current players
business as more & more company means tough competition, price wars, shrinking margins &
losses resulting into questioning the sustainability of the players.
2.
Government regulations: Not having clarity on the issues related to FDI in multi brand
retail, has been a big hurdle in the success of the E-commerce players in many developing
nations.
3.
Local competition India has snapdeal and Flipkart who are local E commerce retailers
and are taking away majority of the market. Similarly, there are many local players who take
bites from the market share thereby making it hard for a big player like Amazon to make profits.
FLIPKART
It is an e-Commerce company founded in the year 2007,by Mr.Sachin Bansal and Binny Bansal
both alumni of the Indian Institute of Technology, Delhi. They had been working for
Amazon.com previously. It operates exclusively in India, where it is headquartered in Bangalore,
Karnataka .It is registered in Singapore, and owned by a Singapore based holding company.
Flipkart has launched its own product range under the name DigiFlip, Flipkart also recently
launched its own range of personal healthcare and home appliances under the brand Citron.
Flipkart is presently one of the largest online retailers in India, present across more than 14
product categories & with a reach in around 150 cities. Flipkart is currently a 10,000 member
strong team, with 3000 sellers on its platform and delivering 5 million shipments per month.
2.
3.
4.
High Brand recall: Flipkart has established itself as a renowned E-commerce company
in India through TV ads, online branding and through its presence on social media. Brand
activities like the Big billion day have really increased the brand recall of the company.
5.
Own Payment gateway & Logistic arm: Having its own Logistics arm E-kart &
payment gateway Pay zippy has helped the company to control its Expenses. Thereby passing the
benefits to the end customers.
6.
Exclusive & broad range of products: From having Exclusive rights to launch some
products like MotoG MotoX, Xiaomi Mi3 as well as personal designers segments in garments
category, has helped the company to differentiate and localize its offerings.
Limited Distribution channel reach: Although its logistics arm has kept costs low, the
reach has been affected which is a weakness for Flipkart. Due to use of outsourcing, Global
giants like Amazon & eBay can deliver the product anywhere in the country. However, Flipkart
is still struggling in this field.
2.
Cost of Acquisition: Due to stiff competition in the market & low customer retention,
the cost of Acquisition is high because Flipkart acquires a lot of customers through online
advertising. As per Flipkart data, the company spends R.s 400/- on acquiring a new customer on
an average.
3.
Power in the hand of buyers: Since this industry is flooded with many players, buyers
have a lot of options to choose. Switching costs are also less for customers since they can easily
switch a service from one online retail company to another. Same products will be displayed in
several online retail websites. Product differentiation is almost absent and the fight then begins
on the basis of price only.
1.
Expansion of business: By targeting other emerging markets company can increase their
revenues as well as it can have Economies of scale.
2.
Expanding their Product categories: This will increase their customer base & at the
same time will reduce the cost of acquisition and customer switch.
3.
4.
Supply chain: By optimizing their supply chain they can compete with the other players
& can manage the loosing sales on account of not making the product available due to delivery
constraints.
5.
Establishing in other developing economies: Like Amazon, Flipkart can slowly start
expanding out of India and establish operations in other countries as well which will help
improve revenues.
Threats in the SWOT analysis of Flipkart
1.
Competition: Stiff competition from the global players like Amazon, eBay as well as
local player like Snapdeal, Tolexo and Shopclues who are continuously trying to eat each others
market share.
2.
Government regulations on the issues related to FDI in multi branding retail has been a
big hurdle in the success of the E-commerce industry in India.
It plans to have 10 to 12000 sellers on its plat form within the next few years. Also, on
acquisition of Myntra,Flipkart, currently owns about 50 percent of the organized life style market
in India. It plans to increase this figure to70 percent. It has more than 1,000 sellers now, & it
wants to scale up this number to 10,000 to 15,000 in a years time, & to a few lakhs in 4 to 5
years. Around 40 percent to Flipkarts online traffic now comes from Mobiles. It thus wants to
add more features to its mobile shopping app to increase customers satisfaction& loyalty.
Flipkart is also trying to develop its IT infrastructure, as online shopping is heavily dependent on
technology. It wants to customize its IT framework to perform 2 functionalities. One, its ability
to recommend its buyers to what other purchases can be bought to complement a product that has
been already purchased from Flipkart like recommending a Stereo Headset for a Mobile Phone,
and second one is to simultaneously conduct a live survey by siphoning a small portion of this
data to analyze customers purchase patterns& preferences respectively. Flipkart is also
considering having their own logistics so asto reduce dependability on the third party companies
to provide it. Flipkart has also freshly launched its own Digital
Accessories brand Digiflip, & its apparel brand Flipped, is yet to see how it is likely to perform
in the market. Also, part of its agenda is to be present in more number of Cities, & for that it is
contemplating on having large number of warehouses. It has also increased automation units
supply chain system. Flipkart also wants to include more categories of products in its domain, &
plug the gaps in its existing categories.
Amazon. In
As part of its expansion plan in India, Amazon has been pushing its Kindle tablet, especially the
Kindle Fire range which can automatically act as a catalyst for promoting its merchandise sales.
As customers are majorly shifting from
Computers to Mobile Handsets, they will be majorly benefited from reading e- books &
streaming live Music &Videos through the Kindle devices. Amazon is mostly interested its cash
flow per share valuation rather than percentage margins. Thus, they are likely to offer even larger
discounts to push sales. The company is also in talks with leading retail chains of India like
Future Group, Spencers Retail, Woodlands, Shoppers Stop & Crosswords to act as a selling
platform for their products. Amazon is also planning to introduce its very own mobile handset in
the future through which it hopes customers will have more access to its online store & its
contents. But, perhaps the most interesting & path-breaking service that Amazon is about to offer
yet is using Drones, or unmanned
aerial vehicles to deliver packages to customers. According to Media Reports, Amazon came up
with this concept in the year 2013& will supposedly be launching it first in India in late
2014.The drone, known as Amazons Prime Air is an octocopter, that is fitted with 8 Rotors,
weighing less than 25 kilogram (kg), and travelling at over quickly, especially as nobody else in
the industry has raised as
much money as it has.
OBJECTIVE OF STUDY
RESEARCH METHODOLOGY
Source of Data
Primary Data: Data has collected through direct interaction and customer intercept survey using
questionnaire.
Secondary Data: Data is collected through internet and newspaper
Sample size 50 For Amazon And 50 For Flipkart
No.
Percentage
A. Under 10000
10
20%
B. 10000-20000
15
30%
C. 20000-30000
25
50%
Total
50
100%
According to the survey, out of 50, 20% are under 10000, 30% are 10000 to 20000, 50% are
20000 to 30000.
20%
under 10000
50%
10000-20000
20000-30000
30%
No.
10
15
20
5
50
Percentage
20%
30%
40%
10%
100%
According to survey out of 50,20% are Students, 30% are private Employee, 40% are
Government employee, 10% are Others.
15%
31%
Student
Private employee
23%
Government employee
others
31%
purchase on Flipkart.com
Books
Clothing, shoes & jewelry
Electronics & computers
health &beauty
Others
Total
No.
10
15
5
10
10
50
Percentage
10%
30%
10%
20%
20%
100%
According to Survey out of 50, 10% people Buy Books 30% Clothing, shoes & jewelry, 10%
Electronics & computers, 20% health &beauty, 20% Others.
16%
21%
Books
clothing
Electronic
21%
Health
Other
32%
11%
No.
30
20
50
Percentage
60%
40%
100%
According to Survey Out of 50, 30% are Male And 40% are Female
40%
Male
Female
60%
No.
20
15
10
5
50
Percentage
40%
30%
20%
10%
100%
According To Survey, Out of 50, 40% are very Good , 30% are Good ,20% are Not enough,
10%are Very Bad.
5%
21%
Very good
42%
good
Not Enough
Very bad
32%
Table 6:- . Do you think Flipkart distribution is faster than the other online shopping website?
distribution is faster than the other online
shopping
Extremely agree
Agree
Disagree
Completely disagree
Total
No
Percentage
20
15
10
5
50
40%
30%
20%
10%
100%
According To Survey out Of 50,40% Are Extremely Agee,30% are agree,20% are Disagree, and
10% are Completely Disagree with the distribution is faster than the other online shopping
website
22%
35%
Extremely Agree
agree
Disagree
17%
Completely disagree
26%
No
Percentage
A. Under 10000
15
30%
B. 10000-20000
15
30%
C. 20000-30000
20
40%
Total
50
100%
According to the survey, out of 50, 30% are under 10000, 30% are 10000 to 20000, 40% are
20000 to 30000.
30%
40%
Under-10000
10000-20000
20000-30000
30%
Table 2 :-Profession
Profession
Students
No.
5
Percentage
10%
Private employee
Government employee
Others
Total
15
20
10
50
30%
40%
20%
100%
According to survey out of 50,5% are Students, 15% are private Employee,20% are Government
employee, 10% are Others.
5%
15%
Students
Private employee
Government employee
60%
20%
Others
purchase on Amazon.com
Books
Clothing, shoes & jewelry
Electronics & computers
health &beauty
Others
Total
No.
5
20
10
10
5
50
Percentage
10%
40%
20%
20%
10%
100%
According to Survey out of 50, 5% people Buy Books 20% Clothing, shoes & jewelry, 10%
Electronics & computers, 10% health &beauty, 5% Others.
22%
11%
Books
Clothing, shoes & jewelry
Electronics & computers
22%
health &beauty
44%
Others
No.
35
15
50
Percentage
70%
30%
100%
According to Survey Out of 50, 70% are Male And 30% are Female
30%
Male
Female
70%
No.
25
15
5
5
50
Percentage
50%
30%
10%
10%
100%
According To Survey, Out of 50, 50% are very Good , 30% are Good ,10% are Not enough,
10%are Very Bad.
10%
10%
Very good
50%
Good
Not Enough
very bad
30%
Table 6 :- . Do you think our distribution is faster than the other online shopping website?
distribution is faster than the other online
shopping
Extremely agree
Agree
Disagree
Completely disagree
Total
No
Percentage
20
15
10
5
50
40%
30%
20%
10%
100%
According To Survey out Of 50,40% Are Extremely Agee,30% are agree,20% are Disagree, and
5% are Completely Disagree with the distribution is faster than the other online shopping website
19%
Extremely agree
Agree
57%
14%
Disagree
Completely disagree
10%
business partners generates the transactions and repeat business that counterbalances the costs of
customer acquisition and infrastructure. Repeat transactions provide the basis for a relationship
that, when properly cultivated, creates value for both the company and its customers. This
relationship is the basis for the customer loyalty that creates a successful online brand.
The companies that are successfully building relationships and fostering brand loyalty are
those that recognise that their brand's perceived value hinges on the total end-to-end customer
experience, from the promises made in the value proposition, to its delivery to the customer.
It is about enticing customers, gaining their trust, and making the experience so satisfying that
they are confident in their choice and will return again, and will tell others about it. It aims to
create" apostles", instead of "terrorists". As such, brand-building on the Internet extends
beyond the traditional focus of positioning, advertising, promotions, catchy logos and slogans,
to creating a business that can deliver complete, and completely satisfying, experiences.
As outlined in Chapter 5, the tools for building an online brand include the 7Cs Framework
(Convenience, Content, Customisation, Community, Connectivity, Customer Care and
Communication), and the Interactive Brand-Building Model (Attract, Engage, Retain,
Learn, and Relate). These frameworks highlight the key components and sources of added value
for developing a high quality experience, and the process of building a customer base
and nurturing brand loyalty. The case studies provided a useful and practical insight into the
application of these tools. As such, the next section concludes the dissertation with a
discussion of the key factors that contribute to building a successful online brand.
Bibliography
Fournier, S., 'Consumers and Their Brands: Developing Relationship Theory in Consumer
Research', Journal of Consumer Research, March 1998
McWilliam, G., 'Building Strong Brands through Online Communities', Sloan Management
Review, Spring 2000, pp. 43-54
Anonymous, 'Amazon.com: It's an Ocean, Not A River', A Report by Goldman Sachs
Investment Research, November 11, 1999
Rhodes, D., Dea, J., & Hemerling, J., 'Building a Successful Experience Brand', A Boston
Consulting Group Report, 1999 (www.bcg.com)
Hunter, M., (2009), The 5 Types of Customers increase your loyal customer to increase your sales,
Journal of Small Business, Volume.16, No.2, pp.22-45.
Lee, G.G. &Lin, H.F.,(2005), customer perceptions of e-service quality online
shopping,International Journal of Retail and Distribution Management, Volume.33, No.2, p161-76.
Questionnaire
Question Regarding Flipkart.com
1. Your monthly income is about
Ans
A. Under 10000
B. 10000-20000
C. 20000-30000
2. Profession
Ans
Students
Government employee
Private employee
Others
health &beauty
Others
4. :- Gender
Ans
Male
Female
Good
Not Enough
Very Bad
6. Do you think our distribution is faster than the other online shopping website?
Ans
Extremely agree
Agree
Disagree
Completely disagree
B. 10000-20000
C. 20000-30000
2. Profession
Ans
Students
Government employee
Private employee
Others
health &beauty
Others
4. :- Gender
Ans
Male
Female
Good
Not Enough
Very Bad
6. Do you think our distribution is faster than the other online shopping website?
Ans
Extremely agree
Agree
Disagree
Completely disagree