MAJOR PROJECT REPORT

ON

“MARKETING STRATEGIES OF AMAZON”

Submitted for the partial fulfillment of the degree of the

“Bachelor of Business Administration (BBA)

Management Education and Research Institute

Affiliated To Guru Gobind Singh Indraprastha University

Sector 16-C Dwarka, New Delhi

Supervised by: Submitted by:

Ms. Shweta Ahuja Pranjal Shokeen
Assistant Professor 02335101722
MERI
 CERTIFICATE

This is to certify the project titled “Marketing Strategies of Amazon” submitted in partial fulfilment of
the degree of Bachelor of Business Administration (BBA) from Management Education and Research
Institute, New Delhi, under my guidance and direction.
To the best of my knowledge and brief the data and information presented by him in the project has
not been submitted earlier.

Shweta Ahuja

(Project Supervisor)
 DECLARATION

I hereby declare that the following documented project report titled “Marketing Strategies of
Amazon” submitted by me to Management Education and Research Institute is a bona fide work
undertaken and has not been submitted to any other University or Institution for the award of any degree
diploma/certificate or published any time before.
I hereby certify that all the endeavour put in the fulfilment of the task are genuine and original to the
best of my knowledge & I have not submitted it earlier elsewhere.

(Signature of a Student)
Pranjal Shokeen

BBA,6th semester

(0233510722)
 ACKNOWLEDGEMENT

I have been very fortunate to get the opportunity to work on research project “Marketing Strategies
of Amazon”. I hereby take this opportunity to express my profound gratitude towards Guru Gobind
Singh Indraprastha University for giving me an opportunity to work on a valuable project.

I would like to extend my deepest regards and gratefulness to Shweta Ahuja ma’am, my project guide
who continuously guided me throughout the course of the project. Her close monitoring and constant
encouragement throughout the course of this study resulted in successful completion of this project.

(Signature of a Student)
Pranjal Shokeen

BBA, 4th semester

(0233510722)
 CONTENT

[Link]. Particulars Page No.

1. Chapter-1: Introduction 1-23

2. Chapter-2: Literature Review 24-29

3. Chapter-3:
Research Methodology
1. Research Objectives
2. Methods of Data Collection 30-32
3. Research Design
4. Data Analysis Method

4. Chapter-4:
DATA ANALYSIS AND INTERPRETATION
1. Tools for Analysis
2. Resulted Pie Charts, Tables, Bar Charts 33-45
3. Correlation Table

5. Chapter-5:
FINDINGS AND SUGGESTIONS
1. Findings 46-50
2. Recommendation
3. Conclusion

6.
BIBLIOGRAPHY 51-52

7.
ANNEXURE 53-57
 CHAPTER - 1

INTRODUCTION

1
1.1 HISTORY OF AMAZON

In 1994 Jeff Bezos, a former Wall Street hedge fund executive, incorporated [Link],
choosing the name primarily because it began with the first letter of the alphabet and because of
its association with the vast South American river. On the basis of research he had conducted,
Bezos concluded that books would be the most logical product initially to sell online. [Link]
was not the first company to do so; Computer Literacy, a Silicon Valley bookstore, began selling
books from its inventory to its technically astute customers in 1991. However, the promise of
[Link] was to deliver any book to any reader anywhere.

While [Link] famously started as a bookseller, Bezos contended from its start that the site
was not merely a retailer of consumer products. He argued that [Link] was a
technology company whose business was simplifying online transactions for consumers.

The [Link] business strategy was often met with skepticism. Financial journalists
and analysts disparaged the company by referring to it as [Link]. Doubters claimed
[Link] ultimately would lose in the marketplace to established bookselling chains,
such as Borders and Barnes & Noble, once they had launched competing e-commerce sites. The
lack of company profits until the final quarter of 2001 seemed to justify its critics.

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However, Bezos dismissed naysayers as not understanding the massive growth potential of
the Internet. He argued that to succeed as an online retailer, a company needed to “Get Big
Fast,” a slogan he had printed on employee T-shirts. In fact, [Link] did grow fast,
reaching 180,000 customer accounts by December 1996, after its first full year in operation,
and less than a year later, in October 1997, it had 1,000,000 customer accounts. Its revenues
jumped from $15.7 million in 1996 to $148 million in 1997, followed by $610 million in 1998.
[Link]’s success propelled its founder to become time magazine’s 1999 Person of the Year.

The company expanded rapidly in other areas. Its Associates program, where other Web sites
could offer merchandise for sale and [Link] would fill the order and pay a commission,
grew from one such site in 1996 to more than 350,000 by 1999. Following Bezos’s initial
strategy, the company quickly began selling more than books. Music and video sales started
in 1998. That same year it began international operations with the acquisition of online
booksellers in the United Kingdom and Germany. By 1999 the company was also
selling consumer electronics, video games, software, home-improvement items, toys and games,
and much more.

To sustain that growth, [Link] needed more than private investors to underwrite
the expansion. As a result, in May 1997, less than two years after opening its virtual doors to
consumers and without ever having made a profit, [Link] became a public company,
raising $54 million on the NASDAQ market. In addition to the cash, the company was able to use
its high-flying stock to fund its aggressive growth and acquisition strategy.

Although offering more types of goods broadened its appeal, it was [Link]’s service that
gained it customer loyalty and ultimate profitability. Its personalization tools recommended
other products to buy on the basis of both a customer’s purchasing history and data
from buyers of the same items. Its publishing of customer reviews of products fostered a
“community of consumers” who helped each other find everything from the right book to the
best blender.

3
As noted above, Bezos claimed that [Link] was not a retailer but a technology company. To
underscore the point, in 2002 the company launched Amazon Web Services (AWS), which
initially offered data on Internet traffic patterns, Web site popularity, and other statistics
for developers and marketers. In 2006 the company expanded its AWS portfolio with its
Elastic Compute Cloud (EC2), which rents out computer processing power in small or large
increments. That same year, the Simple Storage Service (S3), which rents data storage over the
Internet, became available.

S3 and EC2 quickly succeeded and helped popularize the idea that companies and individuals
do not need to own computing resources; they can rent them as needed over the Internet, or “in
the cloud.” For example, in 2007, soon after launch, the S3 service contained more than 10 billion
objects, or files; five years later, it held more than 905 billion. AWS is even used by
[Link]’s rivals, such as Netflix, which uses both S3 and EC2 for its competing video
streaming service.

When Bezos founded [Link], the strategy was to not carry any inventory. However, in
order to achieve more control over deliveries, in 1997 the company began holding inventory
in its warehouses. In 2000 the company started a service that lets small companies and
individuals sell their products through [Link], and by 2006 it had started its Fulfillment
by Amazon service that managed the inventory of such business. Its growing inventory-
management business spurred its $775 million purchase in 2012 of Kiva Systems, a robotics
company whose devices automate inventory-fulfillment duties.

4
Nevertheless, despite having branched out well beyond online retailing, the bulk of the
company’s revenues continues to come through selling products online (though its most profitable
division remains AWS), and that is where much of its investment has been targeted. Over the years
it has acquired or invested in many online retailers, such as the shoe seller Zappos, which it
purchased for $847 million in 2009.

The Kindle Shakes Up Publishing

In 2007 [Link] began to sell its own Kindle e-readers, which helped energize the e-book
market. In 2011 the company introduced a related low-cost tablet computer, the Kindle
Fire, and by 2012, the Kindle Fire was estimated to constitute 50 percent of
the tablets sold that used Google’s Android mobile operating system.

After its first full year of selling books in 1996, book publishers praised the new service as a
great way to help them clear their backlists of slow-selling books. However, with the
introduction of the Kindle, tensions began to build between publishers and [Link]. The
company wanted to sell new e-books for a fixed price, well below what new printed books sold
for, prompting many complaints from the publishing industry.

By 2010 the rift between book publishers and [Link] over the price of e-books had grown.
The publishing company Macmillan books threatened to pull its e-books from [Link], which
retaliated by removing all Macmillan books, both printed and electronic, from the site. However,
within weeks, [Link] capitulated and allowed Macmillan and other publishers to set prices
of e-books.

In 2009 the company introduced its first publishing line, Amazon Encore, dedicated to popular
self-published and out-of-print books. It also let individuals publish their own e-books. In 2011 its
e-book ambitions led to the launch of Amazon Publishing with the intent to develop and
publish its own titles. That year [Link] announced that Kindle e-books were outselling
all printed books. While many book publishers continue to derive significant revenue through
sales at [Link], the company is no longer considered by publishers merely as another
bookseller. It is now also a major competitor in their industry.

5
1.2 COMPETITORS

Top Ecommerce competitors of amazon

Who is Amazon competing with? You might be surprised. From small niche websites to
other retail business giants, Amazon has its hands full with online competitors.

Online stores

The ecommerce industry is growing at an exponential rate. In fact, retail ecommerce sales
worldwide are expected to reach $4.8 trillion by 2021.

That’s right; nearly $5 trillion is up for grabs!

But take a moment to think about how many online stores exist. No one directly monitors the
exact number of ecommerce websites across the globe. However, it’s estimated that there are
upwards of 24 million stores selling products on the Internet today.

There is just one Amazon.

Let that sink in for a moment. While Amazon might be dominant, it is just one website out
of millions of others selling online.

This is power in numbers at its finest. One of those websites might not take a huge chunk of
Amazon’s market share on its own. But collectively, every online store poses a threat to
Amazon.

6
Niche ecommerce stores.

When Amazon first launched back in 1994, the company specialized in selling books online. But
today, the company doesn’t necessarily have one clear-cut specialty. As I said before, they sell
everything.

But some customers will always prefer buying from niche stores, brands, and
manufacturers.

Amazon is obviously very good at what they do. But in terms of knowledge and quality, they
can’t compete with smaller niche shops that are experts in a particular industry.

A few examples of niche products include beard oil, CBD for pets, and vegan cosmetics.
Consumers are more likely to buy products like this directly from a company that specializes
in those industries.

Furthermore, 66% of shoppers worldwide, and 73% of Millennials say they are willing to
spend more money on sustainability. So niche ecommerce sites can even charge more money for
their products.

7
Walmart

Walmart is another global giant. This big-box department store generates $514.41 billion in net
sales per year. That’s more than double Amazon, although a large percentage of Walmart’s
sales obviously come from brick-and-mortar purchases.

There are more than 11,000 Walmart physical store locations across 27 countries.

While Walmart is best-known for its physical department stores, this retail giant also has a
significant presence online. Behind Amazon, Walmart is the second most popular online store
in the United States in terms of ecommerce revenue.

With Walmart’s international presence and customer base, they will be a continuous threat to
Amazon in the ecommerce space.

Walmart’s online sales are growing at 40% year-over-year. At this pace, you can expect this
giant to take away even more Amazon business in the coming years.

8
Alibaba / Aliexpress

Alibaba is a China-based online retailer. This international giant specializes in wholesale

selling online, which is a differentiation factor compared to Amazon.

Another unique difference between Alibaba and Amazon is its overall business model.
While Amazon is run entirely under one roof, Alibaba is split into separate businesses:

 Alibaba.
 Taobao.
 Tmall.

Alibaba is the B2B focus of the company, while the other branches focus on B2C and
multinational brands, respectively.

As of June 2019, there are 755 million Alibaba users worldwide. The company is responsible
for 58% of all online retail sales in China.

Alibaba sold $30.8 billion of products on November 13, 2018, the Chinese version of Black
Friday known as “Singles Day.”

With an international presence, a dominant market share in China, and B2B sales in addition to
B2C focus, Alibaba is a force to be reckoned with. Plus, any website that can do $30 billion in one
day can definitely win against Amazon.

9
Otto

Otto is a European online retailer. The company is best known for innovation throughout
the years to keep pace with the times. At its core, Otto is a trading company, meaning that
it sells products from other brands on its ecommerce platform.

It’s essentially a one-stop-shop for buying online in Europe. Some of Otto’s top categories
include fashion, electronics (like Apple and Microsoft products), home goods, and sports.

One of the reasons why Otto is so popular is due to its user-friendly interface. The platform
makes it easy for consumers to shop online.

In 2019, Otto generated roughly $3.8 billion in revenue from online sales. While this may seem
marginal compared to Amazon, it’s still extremely impressive.

Otto has a 13.7% annual growth rate. 72% of their sales come from furniture, appliances,
and fashion purchases. This makes them unique compared to Amazon.

10
JD

Formally 360buy, JD (Jingdong) is another Chinese ecommerce business. This Fortune

Global 500 company is a direct competitor of Tmall, which is run by Alibaba.

At [Link], consumers can buy a wide selection of products at an affordable rate. The website
also has a “buy in bulk” category, which is another reason why it goes head-to-head with Alibaba.

[Link] is also an affiliate of JD. This site is in English and ships to more than 200 countries
worldwide. It also offers 24/7 customer service and 30-day returns.

Jingdong has more than 305 million active customers. Its quarterly active customer accounts are
increasing at a 22% year-over-year growth rate.

11
eBay

Everyone is familiar with eBay. This website was a pioneer in consumer-to- consumer
selling through an online marketplace. Over time, eBay has evolved and become more than just
a way for consumers to buy and sell their own new or used merchandise.

Today, eBay is used for B2C sales in addition to its traditional C2C model.

In terms of marketplace website visits, eBay is second to Amazon, with just under 20% of the
market share.

The site traffic to eBay is impressive. It’s nearly double Walmart, and we’ve already established
how successful Walmart is in the online space.

With the ability to bid on products and the unique way for buyers and sellers to connect
online, eBay is a top competitor to Amazon.

12
FLIPKART

Flipkart is a newer ecommerce company compared to some of the other competitors on our list.
This Indian-based ecommerce platform was founded in 2007 and quickly became the largest online
retailer in India.

In 2018, Walmart acquired 77% of Flipkart’s shares, valuing the company at $22 billion.

With Walmart controlling the majority stake of Flipkart, there’s no telling where the company can
go from here.

More than 100 million users are registered on Flipkart. The platform’s user-friendly design, mobile
app, and customer service make it one of the up-and-coming Amazon competitors. With such a
wide range of products offered through Flipkart, the company is poised for continued success
in the coming years.

13
Rakuten

Rakuten is a Japanese ecommerce company.

The business generates more than $2.3 trillion per year in retail ecommerce sales. In 2019,
Rakuten controlled 14.1% of the total global ecommerce market in terms of retail sales.
Furthermore, they are responsible for nearly 10% of the total ecommerce retail share in Japan.

Rakuten generated more than $134 billion in Japanese ecommerce sales alone in 2019.

In 2010 they purchased [Link] to expand its global presence in the United States. Aside from
[Link], Rakuten has acquired other ecommerce companies like PriceMinster (France) and
[Link] (UK). They also ventured into acquisitions like Ebates (cash-back rewards) and Viber
(VoIP software).

As Rakuten continues to expand and buy companies across varying industries and regions, they
will attempt to keep pace with Amazon.

14
Newegg

Newegg is a global leader in selling electronics like laptops, TVs, cameras, phones, and computer
products online. The company generates $2.7 billion in revenue by offering electronics at an
affordable rate.

The fact that Newegg is successful in the electronics space is threatening for Amazon.
That’s because electronics is Amazon’s most popular category.

44% of Amazon shoppers in the U.S. have purchased an electronics product through the platform.
Clearly, Amazon relies on those sales.

Newegg’s market share takes billions away from Amazon in this category.

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 1.3 MARKETING STRATEGIES

A marketing strategy refers to a business's overall game plan for reaching prospective
consumers and turning them into customers of the products or services the business provides.
A marketing strategy contains the company’s value proposition, key brand messaging, data
on target customer demographics, and other high-level elements.

AMAZON’S MARKETING STRATEGIES

Amazon marketing strategy relies on the following four pillars:

1. Offering the widest range of products. The largest internet retailer in the world by revenue
offers hundreds of millions of products. The majority, 58% of products offered in Amazon
platform are from third-party sellers.

2. Using customer-friendly interface. The tech giant has an advanced interface that
integrates personalized recommendations and recent browsing history, among others.
3. Scaling easily from small to large. The e-commerce and cloud computing company has
experience and competence in scaling from small to large. This factor plays in instrumental role
exploring new business segments.
4. Exploiting affiliate products and resources. Up to date, the tech giant has taken a full
advantage of affiliate products and resources to contribute to the bottom line of the business.

Generally, Amazon marketing strategy is based on the following principles:

 Amazon 7ps of marketing mainly focuses on product and place elements of the marketing
mix. Offering hundreds of millions of products in the USA alone, Amazon product range
is the widest among online and offline retailers. Moreover, the company is able to offer its
products for competitive prices due to massive cost savings based on online nature of business
operations.

16
 Amazon segmentation targeting and positioning practices are associated with targeting the
widest customer segment. The retail giant does this with the application of multi-
segment, adaptive and anticipatory positioning techniques.
 Amazon’s unique selling proposition integrates the widest choice of products and services
offered at competitive prices, fast delivery and exceptional customer service. The e-
commerce giant places these unique selling propositions at the core of its marketing
communication messages.

 Amazon marketing communication mix integrates print and media advertising,

sales promotions, events and experiences, public relations and direct marketing. The
company places a particular focus on print and media advertising and sales promotions
elements of the marketing communication channels.

1.3.1 Marketing mix

Product Element in Amazon Marketing Mix

Amazon products can be divided into the following four categories:
1. Amazon websites that enable hundreds of millions of products to be sold by Amazon
and by third parties across dozens of product categories. About 58% of all items sold in Amazon
websites in 2018 was from third-party sellers. There are more than 100 million Paid Prime
members.
2. Electronic devices such as Kindle e-readers, Fire tablets, Fire TVs, and Echo. In 2018,
customers bought tens of millions of Echo devices, and Echo Dot and Fire TV Stick with
Alexa. Since the first generation of Echo, customers have bought more than 100 million
Alexa-enabled devices. In 2018, the company improved ability of Alexa to understand
requests and answer questions by more than 20%.
3. Media content. An extensive range of products and services, including cloud- based
services that can be used to produce content.
.

17
4. Amazon Web Services (AWS). This segment offers a wide range of global compute,
storage, database, and other service offerings. AWS serves developers and enterprises of all sizes,
including start-ups, government agencies, and academic institutions.

Place Element in Amazon Marketing Mix

Traditionally, Amazon didn’t have physical stores and the company relied on online sales channel
due to e-commerce nature of its business operations. Starting from 2015, the online retail giant
has been concentrating in physical retail “during which time it’s opened half-dozen bookstores
that double as gadget emporia, a score of campus bookstores that don’t sell books and a
convenience store without cashiers.” Moreover, Amazon also has an alternative store format
that operates in a cost- effective manner. “Students order textbooks and dorm furnishings
online and come to these stores to pick them up. The centralized pickup location reduces
shipping expenses. The company is also testing a grocery pickup service at two locations in
Seattle. Once it launches, Prime members will be able to order groceries online and visit one of
these stores for pickup, skipping the aisles.”To summarise, Amazon has an omnichannel sales
strategy and customers access its offerings through its websites, mobile apps, Alexa, and
physically visiting Amazon stores.

1.3.2 Amazon mainly uses the following two types of positioning:

Multi-segment positioning. Amazon offers a wide range of products and services, successfully
exploiting more than one segment at the same time. Specifically, the online retail giant sells
almost 120 million products, appealing to the needs and wants of a wide range of customer
segments.

Adaptive positioning. The online retail giant closely monitors changes in external marketplace
and addresses increasing customer expectations by periodically repositioning of products
and services according to changes in the segment.

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1.3.3 Amazon’s Business strategy

Amazon business strategy can be described as cost leadership taken to the extreme. Range, price
and convenience are placed at the core of Amazon competitive advantage. The global online
retailer operates with a razor thin profit margin and succeeds due to a combination of economies of
scale, innovation of various business processes and a constant business diversification.

Amazon business strategy is guided by four principles: customer obsession rather than competitor
focus, passion for invention, commitment to operational excellence, and long-term thinking. The
following four points constitute the cornerstones of Amazon business strategy:

1. Regularly entering into new niches and segments. Started only as an online shop for
selling physical books in 1997, today Amazon sells anything that can be sold online in the
global scale. Sophisticated global logistics represents one of the solid bases of Amazon
competitive advantage. The tech giant has used this advantage extensively to engage in
successful business diversification. Recently, the company launched Amazon Home Services, a
simple way to buy and schedule local professional services as a continuation of its diversification
strategy.

The e-commerce giant occasionally finds new niches and segments accidentally, while

looking for solutions to problems faced by the business. Amazon Web

Services (AWS) can be shown as a stark example for this. Specifically, back in year 2000 Amazon
was struggling to keep up with high growth speed of the business and

scale problems. The company developed internal systems for its own needs to run infrastructure
tasks such as computing, storage and database. Moreover, by 2003 the
company had become highly skilled at running reliable, scalable, cost-effective data
centres out of need. Around that time, the management figured out that many other companies
faced the same scaling and data management issues. Accordingly, AWS was developed to help
companies to deal with these issues in a profitable way for Amazon.

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2. Strengthening Amazon ecosystem. Ecosystem is placed at the core of Amazon corporate
strategy. Amazon ecosystem consists of merchants, writers, reviewers, publishers, apps
developers, and the information market of commentators, analysts, journalists and feature
writers who get the word out about opportunity on the Amazon platform. Amazon senior
leadership engages in deriving maximum benefit from each component of company ecosystem, as
well as, strengthening relationship between the components.

Therefore, due to aggressive expansion of range of products and services within Amazon
ecosystem, it would not be correct to classify its business operations within a single industry. As
it has been noted by company’s vice president of user experience “Amazon is in the
business of taking the right decisions for customers”.

3. Uncompromised focus towards customer service. Customer obsession can be specified as a

cornerstone of Amazon business strategy. The largest internet retailer in the world by revenue
focuses on long-term growth rather than short-term profit. In its attempt to “seek to be Earth’s
most customer-centric company”, Amazon does not bother with the competition too much.
Instead, it has been noted that “Amazon puts a chair in every boardroom to represent the
customer — a physical reminder to innovate on their behalf.”

4. Focusing on Amazon leadership values. Gaining maximum contribution from human

resources is another source of Amazon competitive advantage. Working for Amazon is highly
challenging experience and employees are expected to take on heavy workload, often
sacrificing work-life balance. Amazon leadership values consisting of 14 principles, such as
customer obsession, insisting on the highest standard and diving deep, play an instrumental role
in terms of increasing the input from human resources.

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1.3.4 Amazon Communication Mix
Amazon marketing communication mix deals with individual elements of the marketing
mix such as print and media advertising, sales promotions, events and experiences, public
relations and direct marketing.

Amazon Print and Media Advertising

Amazon uses print and media advertising extensively in order to communicate its
marketing message to the members of the target customer segment. The most memorable
Amazon TV ads include a video clip featuring former Top Gear host Jeremy Clarkson
promoting Amazon Fire TV, a promotion deal reported to cost Amazon GBP 160 million.

Moreover, TV commercials promoting Amazon feature cute animals in order to associate the

brand image with qualitative values. This strategy indicates to changes in Amazon marketing

message in a way that “rather than hawking hardware like Kindle e-readers, furry pets are

pitching Amazon’s USD 99,00 Prime membership, which features delivery discounts and media

streaming.” Recently, the online retail giant released “Mom’s Here” TV advertisement on Oprah

Winfrey Network, targeting mothers for Amazon Echo. In 2019 Amazon overtook Netflix as

the top advertiser for video streaming services and increased TV advertisement spending

by 28% for Amazon Prime Video. Print advertising is used by Amazon extensively as well via

magazines, journals, newspapers and billboards. In the latest move, Amazon started to print

advertisement messages, pictures and cartoon characters from “Minions” movie on its shipping

boxes, marking the start of a new type of print advertising.

Viral marketing also plays an important role in Amazon marketing strategy.

Amazon is one of the earliest adopters of viral marketing and the company is credited with the

creation of the first affiliate program. In one of the most noteworthy cases, a video clip

illustrating a new service ‘Prime Air’, that involves the delivery of the purchase by a flying

robot in about 30 minutes proved to be a viral hit among internet users generating more than 10

million views.
21
 The largest internet retailer in the world by revenue also uses celebrity endorsement on occasional
manner. Super Bowl ad ‘Alexa Loses Her Voice’ featured chef Gordon Ramsey, rapper
Cardi B, comedian Rebel Wilson, and actor Anthony Hopkins and it is widely considered to
be a successful ad.

Amazon Sales Promotions

Sales promotions is one of the main tools in Amazon marketing strategy used in a frequent
manner. Amazon sales promotions techniques include the following:

 Seasonal sales promotions. Amazon announces seasonal sales promotions during holidays and
festive periods, especially during Christmas and New Year holidays. The e-commerce giant also
regularly organizes Prime Day midyear sales, which is also known as “Christmas in July” sales.

 Money off coupons. Amazon Prime members can use exclusive money off coupons
from their favourite brands. Amazon coupons can also be purchased from a wide range of third
party websites such as [Link], [Link] and [Link]

 Loyalty Card. The Amazon Platinum Mastercard gives 1.5 points for every £2 spent on the
Amazon website plus spenders get one point for every GBP 2 spent on the card elsewhere.
Additionally, Amazon Prime membership is developed as en effective customer loyalty
program. The largest internet retailer in the world by revenue offers a wide range of gifts cards
to customers such as physical gift cards, email gift cards, bulk gift codes, API integration and
swift claim.

 Free Gifts. The e-commerce giant gives away free gifts to current and potential customers in
various forms. Specifically, customers can download or stream more than 10.000 free MP3
music, there are free books available in Amazon Kindle and customers can also get free
shipping for orders USD 25 or more. Moreover, customer can order free sample boxes and
some customers can get items for free to review…

22
 Loyalty Card. The Amazon Platinum Mastercard gives 1.5 points for every £2 spent on the
Amazon website plus spenders get one point for every GBP 2 spent on the card elsewhere.
Additionally, Amazon Prime membership is developed as en effective customer loyalty
program. The largest internet retailer in the world by revenue offers a wide range of gifts cards
to customers such as physical gift cards, email gift cards, bulk gift codes, API integration and
swift claim.

 Free Gifts. The e-commerce giant gives away free gifts to current and potential customers in
various forms. Specifically, customers can download or stream more than 10.000 free MP3
music, there are free books available in Amazon Kindle and customers can also get free
shipping for orders USD 25 or more. Moreover, customer can order free sample boxes and
some customers can get items for free to review…

23
 CHAPTER - 2

LITERATURE REVIEW

24
LITERATURE REVIEW

A literature review is a comprehensive summary of previous research on a topic. The

literature review acknowledges the work of previous researchers, and in so doing, assures the
reader that your work has been well conceived. The purpose is to convey to the reader what
knowledge and ideas have been established on a topic, and what their strengths and weaknesses
are. Some previous studies on the topic are as follows-

1. Competing with Complementors: An Empirical Look at [Link] Feng Zhu,

Qihong Liu Business 2018

Platform owners sometimes enter complementors product spaces to compete against them directly.
Prior studies have offered two possible explanations for such entries: platform owners may target
the most successful complementors so as to appropriate value from their innovations, or they may
target poor performing complementors to improve the platforms overall quality.
Using data from [Link], we analyze the patterns of Amazon’s entry into its third-party
sellers product spaces. We find evidence consistent with the former explanation: that the
likelihood of Amazon entry is positively correlated with the popularity and customer ratings
of third-party sellers products. We also find that Amazon entry reduces the shipping costs of
affected products and hence increases their demand.
\Results also show that small third-party sellers affected by Amazon entry appear to be
discouraged from growing their businesses on the platform subsequently. The results have
implications for complementors participating in various platform-based markets.

2. Affiliate Marketing Strategy of Amazon India J Kaur, D Wadera - … and Customer

Activity Through Affilate Marketing, 2018

Affiliate marketing is one of the oldest forms of marketing in which one refers someone to

25
to any online product (Open Topic, n.d.). When the consumer buys this product on the basis of
the given recommendation, then the person who has referred him receives a commission. This
commission could vary from $1 to $10000, on the basis of the type of product which has been
referred (Open Topic, n.d.). The rapid development of the term “Affiliate marketing” which is a
performance based internet marketing practice, has made the online selling market even more
competitive. Many companies are now venturing into the forming or improving their affiliate
programs and giving higher incentives to keep the affiliates loyal. This study is a qualitative
study about the Affiliate program presently run by Amazon Company.

3. On optimization of simulation execution on Amazon EC2 spot market B

Kamiński, P Szufel - Simulation Modeling Practice and Theory, 2015

Large scale simulations require considerable amounts of computing power and often cloud services
are utilized to perform them. In such settings the execution costs can be significantly decreased
through the use of the Amazon spot price market. Its downside is that Amazon can interrupt
the user’s computations when her bid price is too low. This poses a problem in finding an on-line
bidding algorithm that balances the computation cost and the simulation experiment completion
time. We identify key drivers governing the spot prices on Amazon EC2 and using these
insights propose an adaptive bidding strategy that simultaneously minimizes the computation cost
and the delays due to computation termination. We show that bidding close to a spot price and
dynamically switching between instances is a strategy that is efficient and simple to
implement in practice. In the paper we present a simulator of the EC2 spot pricing mechanism.
The simulator can be easily used to develop and test other bidding strategies on Amazon spot
price market.

4. Amazon. com, JR Wells, B Weinstock, G Ellsworth, G Danskin - 2015

In January 2019, [Link] Inc (Amazon) became the most valuable company in the world,
above Microsoft, Apple, and Alphabet (Google). Jeff Bezos, Amazon’s founder and CEO was
now the world’s richest man. On January 31st, 2019, Amazon announced 2018 operating profits
of $12.4 billion, up from $178 million in 2014, on sales of $232 billion, up from $89

26
billion four years earlier. The shareholders expressed their satisfaction, but not all were
happy with Amazon’s meteoric rise. Many traditional retailers in the United States were going
bankrupt, while major competitors such as Walmart and Best Buy were forced to invest
aggressively in online retailing to prevent their market share from eroding. Every retail
sector appeared to be under threat, fueling anxieties that Amazon and America’s other tech giants
were becoming too big and powerful. In the United States, Amazon was drawing criticism
from across the political spectrum, with calls for it to be broken up. Meanwhile, the European
Union was also investigating its practices. Did Amazon’s success threaten its very existence?

[Link] Amazon: Wrestling big ideas in a bruising workplace J Kantor, D

Streitfeld - The New York Times, 2015

The company is conducting an experiment in how far it can push white-collar workers to get
them to achieve its ever-expanding ambitions. At Amazon, workers are encouraged to tear apart
one another’s ideas in meetings, toil long and late (emails arrive past midnight, followed by
text messages asking why they were not answered), and held to standards that the company boasts
are “unreasonably high.” The internal phone directory instructs colleagues on how to send secret
feedback to one another’s bosses. Employees say it is frequently used to sabotage others.

6. Coopetition-based business models: The case of Amazon. Com P Ritala, A Golman, A

Wegmann - Industrial Marketing Management, 2014

Coopetition (collaboration between competing firms) is a phenomenon that has recently

captured a great deal of attention due to its increasing relevance to business practice. However,
current research on coopetition is still short on explaining how the potential advantages of
coopetition can be realized over time as part of an individual firm business model. In order
to gain insights into this, we conduct a longitudinal, in-depth case study on the coopetition-
based business models of [Link]. We find evidence of three distinct coopetition-based
business models: Amazon Marketplace, Amazon Services and Web Services, and the
collaboration between Apple and Amazon on digital text platforms. We conclude by forwarding
several propositions on how value can be created and captured by involving competitors in
a firm business model. As a whole, the results contribute to the current understanding of how firms

27
– as well as their stakeholders – can better benefit from coopetition.

7. The case of Amazon. com: towards a conceptual framework of online

customer service experience (OCSE) using the emerging consensus
technique (ECT) P Klaus - Journal of Services Marketing, 2013

The concept of online customer service experience (OCSE) has recently received great interest
from academia and businesses alike. Despite the belief that providing superb online experiences
will influence customers online buying behavior, most of the research focuses solely on the
controllable factors of the online experience. This paper seeks to address these issues.

8. Amazon: love them? Hate them? Let follow the money T

Treanor - Publishing research quarterly, 2010

What is Amazon up to and why? Amazon reported $24 billion in annual revenue, from their
2009 year-end financial results. The Media/book category delivered $5.96 billion, or 1/4 of their
total revenue. That’s considerably more than any of the largest companies in the traditional print
or digital book business. Barnes and Noble/B Dalton collected $4.52 billion (2008), while
Borders/Waldenbooks combined revenue was $3.11 billion (2008). Amazon’s book revenue
steadily increases, while Borders and Barnes and Nobel continue to decrease. What strategies and
values are fueling this growth? What is their vision and where have they put their money?
Amazon has a demonstrated history of consistent behavior since their start-up in 1995, with
big visions, long-term strategies, dedicated to streamlining, surgically eliminating costs, prolific
innovations, strategic investments, and an obsession over the customer. We’ll track Amazon’s
M&A investments in book publishing and digital to see exactly what they are doing to
learn where they may be going. It is wise to stay current on one of the most influential
companies in the world.

28
9. Research note: What makes a helpful online review? A study of customer reviews on
Amazon. Com SM Mudambi, D Schuff - MIS quarterly, 2010

Different business has different business requirements. Affiliate marketing has many versions. A
business selects an appropriate affiliate marketing method which is based on the objective of
advertising and the targeted customers. The same must also be in synch with the marketing
campaign.
Affiliate marketing has become a very profitable online marketing tool for many companies.
As explained by Prussakov (2007), the affiliate programs are a new type of marketing strategy in
which the partners or affiliates advertise products of the company. It has also been explained
that this type of marketing is performance based, as the compensation is based on the amount
of clicks.

10. Does it pay to be a first mover in e. commerce? The case of [Link] K Mellahi, M
Johnson - Management Decision, 2000

Using [Link] as a case study, the present research explores first mover
(dis)advantages in ecommerce. It examines whether or not [Link] has sustained
early mover advantages. What are these advantages? And how has [Link] reacted
to late movers? Evidence generated from the case study suggests that the maintainability of
first mover advantages in ecommerce depends on three main factors: continuous innovation,
speed of implementation and patenting.

29
 CHAPTER - 3

RESEARCH METHODOLOGY

30
RESEARCH METHODOLOGY

3.1 Objectives

i. To analyze the approach of Amazon.

ii. To analyze the effectiveness of marketing strategies used by Amazon.
iii. To analyze the customer’s response towards the services provided.

3.2 Methods of data collection

A structured questionnaire was designed to collect the data required to test the Conceptual
model. Primary data has been collected from a sample of undergraduate students pursuing their
bachelors in management through questionnaire. A convenience sample has been taken for
this research.

Their age is 10 and above. The questionnaire included a synopsis of the goals of the study.
College students are known to be among the most connected group and who form the major part
of digital population. The questionnaire was prepared though google forms and was circulated
electronically. Participation in the survey was limited to people living in Delhi and NCR only
and 48 percent were females, while 52 percent were males.

31
3.3 Research design
The research is conceptual and exploratory in nature. The data used in the research is of
qualitative nature. Though data has been collected through questionnaire, however, it is
somewhat also influenced by findings from earlier research papers that have been published and
other relevant reports based on Amazon. Various case studies have also proved fruitful towards
reaching a conclusion for this research. The research model to guiding the project revolves
around the strategies and policy framework and how it helps Amazon to maintain and enhance its
customer relations.

Survey and sampling - A self - administered questionnaire, with close ended questions
was developed and administered to a convenience sample. Close ended questionnaire has
been chosen to keep the research comprehensive. The questionnaire was circulated over
google forms throughout the sample population.

The sample is majorly of undergraduate students who are generally the users of such e commerce
platforms.

3.4 Data Analysis method

The data collected through google forms has been presented through graphs, pie charts,
histograms, and other comprehensive charts and tools. Further, the case studies and published
reports and journals have helped in subjective analysis of data.

32
 CHAPTER - 4
DATA ANALYSIS & INTERPRETATION

33
DATA ANALYSIS

1. Gender

Fig : 4.01

We can see through the data collected from the questionnaire that both the genders prefer
online shopping as ecommerce websites provides variety of products, there is something for
everyone.

The Graph here is divided approximately equally with females being 48% & males being
52% out of 50 respondents.

34
2. Age group

Fig : 4.02

Through the research we can see that around 60% of the people are Students. Youngsters have
more time to spend on phone hence they end up buying the most products from ecommerce
websites.

35
3. Profession

Fig: 4.03

The Profession of 50% of the respondents is students. Students are inclined towards
digital World and loves ordering online.

Other 50% responents are from various professions like Service, Business,
Professional, House wife.

36
4. Income of Respondents

Fig: 4.04

As we saw the major population responding to the survey are students so it means they have not
started earning or earn a little bit.

Here we can see 40% of respondent earns nothing & 24% earns less than 20K which is ok for a
student going to college.

37
5. Online Shopping

Fig: 4.05

There was no surprise here. If you use the internet you would have shopped online
sometime. 94% of the people who filled our questionnaire have ordered online.

38
6. Alternative to Amazon

Fig: 4.06

There are many ecommerce websites fighting to be no.1.

But who holds the no.1 spot? Amazon

49 out of 50 people have heard of Amazon. This shows the reach of Amazon around the world.
Other runner ups were Flipkart, Snapdeal & Myntra (Indian ecomm websites) as this survey was
conducted in Delhi, India.

39
7. Where did people hear about amazon?

Fig: 4.07

There are many places where Amazon promotes itself. The marketing of Amazon is done majorly
on these platforms- Online advertisements, Television Advertisements, Sponsered searches, Bill
boards, Promotionsla emails, friends and family & other Initiative.

Through this Pie chart we can analyze and say that people heard about amazon through online
and television adverts.

40
8. Advertisement

Fig:4.08
This bar graph also shows that people purchase more products from amazon after looking at
the online adverts and television adverts more than bill board adverts.

That is the reason why Amazon spends more on online adverst rathen that bill boards and
promotional emails.

41
9. What does people like about Amazon

Fig: 4.09

People like the variety of the products and services offered by amazon and the speed of
delivery. Amazon delivers in a day or 2 where aliexpress take around a month.

42
10. Exchange Policy of Amazon

Fig: 4.10

54% strongly agree and 28% agree that Amazon provides resonable return or exchange policy.
This is a strong point why Amazon leads in the ecommerce world because it provides customer
satisfaction like no other.

43
11. Estimated Delivery

Fig: 4.11

64% of the people agreed that Amazon delivers by the time of estimated delivery and 18% agreed
it delivers before estimated delivery date sometimes.

44
12. Overall Experience

Fig: 4.12

Overall experience of 92% of the reespondents was satisfactory.

Other 6% were neutral & 2% were unsatisfied.

45
 Chapter –5

FINDINGS & RECOMMENDATIONS

46
Findings

1. The finding of the study states that the audience gender wise is divided equally but people
who purchase online are more youngsters aroung the age of 18.

2. Almost everyone have heard about the Ecommerce site Amazon. This shows the reach and
coverage of Amazon to almost all parts of the world.

3. As people who responded to the survey are more of the youngsters, they haven’t started
earning yet or they earn little around 20k a month.

4. As youngsters don’t have household responsibility, they can spend the money they get on
online shopping. Youngsters prefer online shopping way more because it is convinient.

5. Amazon uses various marketing strategies likes online/television adverts, sponsered searches,
bill boards, promotional emails and other initiatives. We can see in the Fig: 4.07, around 60% of
people heard about Amazon through online and television adverts. These marketing strategies are
working better than others.

6. As people heard more through Television and Online Adverts. People tend to purchase
more looking at the adverts Online and Television too, Because people trust where they first
saw the branding of this ecommerce site.

7. We can see in Fig: 4.09 Amazon offers many Customer satisfaction services and people love
the customer satisfaction given by them. People Prefered Amazon more than other Ecommerce
sites because of there wide range of products and Fast delivery. Amazon offers around 353
Million Products, and they have mastered the fast delivery process better than other ecommerce
websites. Other Customer satisfaction services that Amazon offers are after sales services,
payment options provided, safety of transaction etc.

47
Recommendations

Amazon is the ultimate online retailer around the world. Its nearest but not even close competitors
are e-bay and best buy. But the competition is growing day by day.

1. Competing in the market:

Like past, amazon in future will have to come up with special something. The global market is
changing day by day. Business competitors are investing large to take amazon down. There is no
room for relaxation. It is very challenging and has to be consistent in the market to be number one
retailer shop.

2. Innovation of new Product:

It is essential for amazon to think out of the box and bring new products to satisfy and retain
customer to be loyal to [Link]. Amazon always offered its customer better quality and better
service. But in future it may not be the same. People in today‟s world ask for more. Amazon has
to be smart enough to understand the customer need before even customers know about it.

3. Integration of New Technology:

Technology is making progress like the spread of light. Company like amazon‟ needs to be
adaptive and technology friendly to retain its domination in the market. Amazon‟s new technology
of Drone delivery system indicates it is planning and investing significant amount of money in
technology for near future.

48
4. Customer Loyalty:

For a upward revenue stream customer loyalty is essential.. Amazon‟s most of the buyers are its
repeat customers who are loyal to amazon. But growing competition can be a risk to amazon‟s
loyal customer.

5. Global Expansion:

Amazon is expanding its business around the world. But this may cause significant strain in
number of sectors like management, inventory, supply system and more over to amazon‟s market
place. “We may not be successful in our efforts to expand into international market segment”
(annual report 2013) International market is very challenging because of political and economic
conditions. Upgrading e-CRM and investing more towards customer information for better
understanding the customer needs and behavior is essential.

49
CONCLUSION

After conducting the survey on marketing strategies of amazon we are able to conclude the
following-

The survey was done with 50 respondents out of which 48% were female and 52% were male
respondents with 58% of the respondents in the age group of 18-24. With the help of the survey
we were able to learn that the population segment that orders most online is students with zero
income. The most known website for e-commerce is amazon followed by flipkart where as the
least known is otto. Both online and television advertisements play an equal role in making people
aware of amazon. Television and online advertisements again play a major role in complying
people to shop from amazon hence the company chooses to spend more on advertising than other
promotional methods. Providing a vast variety of products is the major driving force that compels
people to shop from amazon. The respondents vastly agree that amazon not only provides easy
return option but also delivers within the estimated time which adds to its popularity. Hence,
amazon provides an overall satisfactory experience and we can attest that the marketing strategy
of amazon is bringing fruitful results.

50
BIBLOGRAPHY

51
History Of Amazon
[Link]

COMPETITORS
[Link]

MARKETING STRATEGIES OF AMAZON

[Link]

7ps Of Amazon

[Link]

Segmentation of Amazon
[Link]
target-customer-segment/

Business strategy
[Link]
diversification/

Communication Mix Of Amazon

[Link]

52
ANNEXURE

53
1. What is your Gender?

 Male
 Female

2. What is your age?

 10-17
 18-24
 25-35
 35 & above

3. What is your Profession?

 Student
 Service
 Business

54
4. What is your Income in Rupees?

 None
 Less than 20k
 20k-40k
 40k-60k
 60k-80k
 80k & above

5. Do you shop online?

 Yes
 No

6. Which E-commerce websites have you heard of ?

 Alibaba
 Walmart
 Rakuten
 Otto
 eBay
 Flipkart
 Newegg
 Snapdeal
 Myntra

55
  Amazon

7. Where did you get to Know about Amazon?

 Online advertisements
 Television advertisements
 Sponsored searches
 Bill boards
 Promotional emails
 Friends and Family
 Other Initiatives

9. Which Sources makes you purchase from amazon?

 Online advertisements
 Television advertisements
 Sponsored searches
 Bill boards
 Promotional emails
 Friedns and family
 Other initiatives

10. What do you like about Amazon?

 Variety of products and services

 Customer satisfaction provided

56
  Payment options provided
 Fast delivery
 Resonable return or exchange policy
 Transaction security

11. Does Amazon Provide reasonable return or exchange policy?

 Strongly agree
 Agree
 Neutral
 Disagree
 Strongly disagree

12. Do you get the product by the time of estimated delivery ?

 Yes
 No
 Sometimes
 Before estimated delivery

13. Based on your overall experience, are you fully satisfied with the products and services
provided by Amazon?

 Satisfied
 Neutral
 Unsatisfied

57