Marketing management

presentation.
Case study of amazon.com
Presented by
Manju Jerry Che

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TABLE OF CONTENT
• 1 INTRODUCTION
• 1.1 Background • 3.3 Marketing mix
• 3.4 SWOT analysis
ECONOMIES OF SCALE
AUCTIONS
TECHNOLOGY
INTERNATIONAL GROWTH • 3.5 Other strategies
• Problem statement
• Objective
•4
• 2.0EXTERNAL ANALYSIS
CONCLUSION/RECOMMENDATION
• 2.1 Consumer relations
S
• 2.2 Political factors • References
• 2.3 Economic analysis
• 2.4 Technological analysis
• 3.0 INTERNAL ANALYSIS
• 3.1 Market segmentation
• 3.2 Product positioning

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Company logo
• 1200 12th Avenue, Suite 1200
Seattle, Washington 98114
U.S.A.

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INTRODUCTION OF AMAZONE.COM
• Amazon.com, Inc. ("Amazon.com" or
the "Company"), the Internet's number
one book, music and video retailer,
opened its virtual doors on the Web in
July 1995. Amazon.com, one of the
most widely known, used and cited
commerce sites on the Web, offers
more than 4.7 million book, music CD,
video, DVD, computer game and other
titles. The Company offers its
customers a superior shopping
experience by providing value and a
high level of customer service.
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• Amazon.com was incorporated in 1994 in the state of Washington and
reincorporated in 1996 in Delaware. The Company's principal
corporate offices are located in Seattle, Washington. Amazon.com
completed its initial public offering in May 1997 and its common stock
is listed on the Nasdaq National Market under the symbol "AMZN."

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Background and literature review of
amazon.com
Name Amazon.com, Inc.
Logo
Industries served Internet, Online retailing
Geographic areas Worldwide
served
Headquarters U.S.
Current CEO Jeff Bezos
Revenue $ 61.09 billion (2012)
Profit $ -39 million (2012)
Employees 88,400 (2012)
Main eBay Inc., Netflix, Apple Inc., Barnes & Noble,
Competitors Inc., Wal-Mart.com USA, LLC.

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Background and literature review of amazon.com
• The Early 1990s: Beginnings
• Throughout the 1990s, the popularity of the Internet and World Wide Web
swept across the world, and personal computers in most businesses and
households got hooked up in some form or another to Internet providers and
Web browser software.
• In 1994, Bezos left his job as vice-president of the Wall Street firm D.E. Shaw,
moved to Seattle, and began to work out a business plan for what would
become Amazon.com.
• Bezos eventually decided that his venture would sell books over the Web, due
to the large worldwide market for literature, the low price that could be offered
for books, and the tremendous selection of titles that were available in print.
• The web site debuted in July 1995 and quickly became the number one book-
related site on the Web.
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• Going Public in 1997
• After less than two years of operation, 
Amazon.com became a public company in May
1997 with an initial public offering (IPO) of three
million shares of common stock. With the
proceeds from the IPO, Bezos went to work on
improving the already productive web site and on
bettering the company’s distribution capabilities.
• Another growth area for Amazon.com was the
success of its “Associate’ program. Established in
July 1996, the program allowed individuals with
their own web sites to choose books of interest
and place ads for them on their own sites,
allowing visitors to purchase those books.

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2001-2002
•  During 2001, the company focused on cutting costs. It laid off 1,300
employees and closed a distribution facility. The company also added
price reduction to its business strategy. Amazon.com reports its first
net profit during the fourth quarter.
• In 2002, the company launched its apparel store, which included
clothing from retailers.

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Economies of Scale
• According to Bezos from a
technology standpoint, the
company had already incurred
the fixed costs of developing
software for the online
storefronts. Expanding into other
product categories would allow
the company to spread these
fixed costs across a larger pool of
transactions leading to greater
profits.
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Auctions

• In 1999 Amazon.com announced that it was introducing Amazon.com

Auctions36. This was a bold move on the part of Amazon to
overthrow the large Internet auction house eBay.
• Amazon wanted to leverage its large customer base and encourage
them to become buyers or sellers on its auction service.

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Amazon.com as Technology Provider
• A key partnership was
announced with Target on
September, 2001. Target agreed
to use Amazon.com technology
for order fulfillment and
customer care services on its
Target.com, MarshallFields.com,
Mervyns.com and
GiftCatalog.com web sites.

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International Growth
• According to amazon.com
without opening web sites and
distribution centers abroad,
Amazon.com had consistently
served a global audience. In July
1995, the customers of the
company came from 45 different
countries39. Currently, the
company sells to over 150
countries40.

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Problem statement and objective
• Should Amazon have remained an online bookstore?
• There is a considerable amount of academic and practitioner
definitions of customer experience focusing on the emotional aspects
of the experience. Zaltman (2004) states that individual preferences
are created or modified by the sensory or emotional elements
generated by the total experience, rather than by the attributes that
products or services are able to offer. For businesses, the benefit of
delivering compelling experiences can be used, for example, to
generate customer loyalty (Gobe & Zyman, 2001; Pine & Gilmore,
1998).

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Main objective
• 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.

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EXTERNAL ANALYSIS
• A technique for identifying and listing the Political, Economic,
Social, Technological, Environmental and Legal factors in the
general environment most relevant to an organization.

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Customer relations

• Harnessing and maintaining this competitive advantage is critical to

Amazon, since the company both relies on its customers to post
customer reviews online and to purchase products on its website.
• Michael Porters competitive advantage model of
• cost leadership,
• differentiation and
• focus

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POLITICAL analysis

Political situation in a country has its effect on number of things. Some

decisions can have effect on business practices too, like recently Google
has been banned in China due to some data in its data bank which
according to Chinese authorities was not suitable for China’s interests. 
Amazon has no immediate problems in operating in china and luckily
recent lifting up of restrictions on e-commerce has given chances of
more business to Amazon.

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ECONOMIC FACTORS

• Economy in US and Europe has saturated and buying power has gone
down but buying power of people in China and India and many
eastern countries has gone up and so is the use of internet in these
areas. This promises an increase in business for Amazon in these
areas.

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TECHNOLOGICAL analysis
• Ever increasing speeds and better connectivity provides huge options
for Amazon to increase its business. With such speeds Amazon can
offer its users many online features such as online video and music
download for far less price as compared to actual possession of these
products.

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Internal analysis
• Amazon theoretically has even more customer profile data and would
be able to execute a similar segment strategy to actively drive
demand. 
• They have a product recommendation engine based on past purchase
and browse behavior, but that doesn't get to identifying a deeper
customer need state or life event changes.

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Market segmentation
•  focuses on behavioral aspects such as brand loyalty, price
consciousness, value consciousness and readiness to buy.
• Other geographical aspects include nationality, gender, age, religion,
education, income, family size 

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Positioning

• This what the customer has in

mind about your product or
service.

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Marketing mix
PRODUCT
• Amazon is an international ecommerce company, using connections to the internet from various
gadgets such as phones and tablets, to allow its customers to browse and purchase products
immediately. These products are then delivered to the customer, using delivery service companies.
Amazon has built up a huge product base, and sells almost everything, including:
• Kindle
• Books
• DVDs
• Mobile phones/tablets
• Gaming consoles and games
• Clothes for men/women and children
• Jewelry
• Gardening equipment

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place

• Amazon has customer service

bases in many of the countries
where it has an online presence,
with most bases being located in
the different states of the USA.
Amazon employees are friendly
and relaxed.
•  the bottom line of the company
is enough to enable massive R&D
efforts to secure the website. 

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Promotion/communication

•  Amazon has broadcast

television commercials, these
are mostly in the American
market. 
•  Amazon uses mainly web based
advertising, and they make some
use of billboard and smaller
methods of advertising.

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price

• Amazon is competitive with its

low prices, and has little ways of
staying ahead of its market
contemporaries.
• premium account for deliveries
• Trained employees lowers cost

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Swot analysis

Strengths Weaknesses

1.Cost leadership strategy 1.Only online presence

2.Superior quality services and products 2.Selling at zero margins
3.Strategic acquisitions 3.Negative publicity
4.Efficient distribution chain and logistics
5.Economies of scope

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Swot analysis

Opportunities Threats
1.Online payment system 1.Online security
2.Release more its own brand products and services 2.Lawsuits
3.Increase services and product portfolio through 3.Strategic alliances
acquisitions 4.Legislation against tax avoidance
4.Open more online stores in other countries 5.Regional low cost online retailers
5.Physical presence

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Other strategies

• THREAT OF NEW ENTRANTS

• BARGAINING POWER OF
SUPPLIERS
• BARGAINING POWER OF BUYERS

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Conclusion/Recommendation
• Amazon has successfully grown from a small web based book
seller to a hugely successfully company selling everything from
books to clothing to music. Amazon has positioned itself as a low
cost alternative to brick and mortar companies which sell the
same products.
• It will need to continue to refine its competitive offerings in order
to provide the best customer experience possible.

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References

• Amazons Pest- SWOT- porter’s five forces Analysis. Retrieved on June 16, 2011 from 
http://essaysbox.com/2009/06/amazons-pest-swot-and-porters-five-forces-analysis/ .
• Amazon’s Product and Services. Retrieved on June 16, 2011 from www.amazon.com . 
• David Boddy (2008),Management: An Introduction, 4th ed. Prentice Hall, New Jersey.
• Heinz Weihrich& Harold koontz (1997), Management: A Global Perspective, 10th ed. McGraw Hill,
New York.
• Kalpanik S, Zheng, Colin (2010), Inside the Giant Machine – An Amazon.com Story, Createspace.
• Robinson, Tom (2009), Jeff Bezos:Amazon.com Architect, ABDO.
• SWOT Analysis of Amazon. Retrieved on June 16, 2011 from http://
mba-lectures.com/marketing/swot-analysis-marketing/1157/swot-analysis-of-amazon-com.html .

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