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Amazon Presentation - Consumer Behavior
- 1. Ana Barrera ConsumerBehavior Ms. Davilla 9/5/2017
- 2. Content of theAnalysis • Website Description • Consumer Segmentation • Delivery and Excellence • Marketing & Promotion Strategy • Perception • SWOT Analysis • Insight and Conclusion
- 3. Amazon.com a digitalshop around the corner
- 4. Amazon.com a digitalcolossus
- 5. Amazon.com Vision From 1994,Jeff Bezos knew he could create a retail website that would not have the limitations physical businesses encounter. “You could build a store online that simply could not exist in any other way. You could build a true superstore with exhaustive selection; and customers value selection.” Jeff Bezos
- 6. Amazon.com Timeline A Amazon floatson the Nasdaq in NY, market capitalization of $438m. Launces in Amazon UK 1997 Expands into CD and DVD’s 1998 Expands into toys and electronics 1999 Launches a marketplace. 2000 Launches Amazon Web service, its cloud computing platform 2002 Amazon Prime is launched 2005
- 7. Amazon.com Timeline A Launches Kindlee-book reader 2007 Amazon Games launches 2008 Amazon Studios launches to create original TV content 2010 Echo, Amazon voice- activated device launches 2014 Celebrates 20th birthday with market capitalization standing in excess of $245bn 2015 Amazon bought Whole Foods. 2017
- 8. All these companiesbelong to Amazon
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- 10. Amazon: Has had oneof the fastest growths in the internet’s history
- 11. Amazon Web Servicesdrives these companies
- 12. Amazon Consumer Segmentation DemographicSegmentation - People with Access of Internet - Age Group of 25 to 50 years with 45% of online buyers being in the age group of 35 to 49 - More Focus increasing towards younger audience Psychographic Segmentation - Focuses on Personalization and customer Loyalty - Keeps a modern and Dynamic image by redesigning the website frequently - Quality customer care to develop long term relationship with customer. - Recommend and suggest products that the customer has liked in the past rather push new things or suggestions Geographic Segmentation - Appeal to all over the world - Sell Digital where physical is difficult - Focuses on developed areas and slowly working on getting the rural area audience by focusing on application sale since better penetration of smart phones in rural India than laptops Situational Segmentation - Most online purchases done for convenience - Keeps adding new categories to attract new customer - New Lightening deals every day, Every Hour - Low pricing a major factor for online purchase
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- 14. Jeff Bezos 3Big Ideas
- 16. Amazon Began withBooks
- 17. Amazon need toget big fast
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- 20. STRENGTHS S - Being theworld’s leading online retailer, Amazon derives its strengths primarily from a three-pronged strategic thrust on cost leadership, differentiation, and focus. This strategy has resulted in the company reaping the gains from this course of action and has helped its shareholders derive value from the company. - Amazon primarily derives its competitive advantage from leveraging IT (Information Technology) and its use of e-Commerce as a scalable and an easy to ramp up platform that ensures that the company is well ahead of its competitors. - One of the key strengths of Amazon is that it enjoys top of the mind recall from consumers globally and this recognition has helped it enter new markets, which were hitherto out of bounds for many e- Commerce companies. - Using superior logistics and distribution systems, the company has been able to actualize better customer fulfillment and this has resulted in Amazon deriving competitive advantage over its rivals.
- 21. WEAKNESSES W • In recentyears, Amazon as part of its diversification strategy has been “spreading itself too thin” meaning that it has allowed its focus to waver from its core competence of retailing books online and allowed itself to venture into newer focus areas. While this might be a good strategy from the risk diversification perspective, Amazon has to be cognizant of losing its strategic advantage as it moves away from its core competence. • As Amazon offers free shipping to its customers, it is in the danger of losing its margins and hence, might not be able to optimize on costs because of this strategy. • Considering the fact that Amazon is an online only retailer, the single-minded focus on online retailing might “come in the way” of its expansion plans particularly in emerging markets. • One of the biggest weaknesses and something that has been oft commented upon by analysts and industry experts is that Amazon operates in near zero margin business models that have severely dented its profitability and even though the company has high volumes and huge revenues, this has not translated into meaningful profits for the company.
- 22. OPPORTUNITIES O - By rollingout its online payment system, Amazon has the opportunity to scale up considerably considering the fact that concerns over online shopping as far as security and privacy are concerned are among the topmost issues on the minds of consumers. Further, this would improve the company’s margins as it lets it reap the advantages of using its own payment gateway. - Another opportunity, which Amazon can capitalize on, relates to it rolling out more products under its own brand instead of being a forwarding site for third party products. In other words, it can increase the number of products under its own brand instead of merely selling and stocking products made by its partners. - Amazon can increase the portfolio of its offerings wherein it stocks more products than the norm currently which places it in a position of strength and comfort as this can translate into higher revenues. - The fourth opportunity, which Amazon has, is in terms of expanding its global footprint and open more sites in the emerging markets, which would certainly give it an edge in the uber-competitive online retailing market.
- 23. THREATS 22% T - One ofthe biggest threats to Amazon’s success is the increasing concern over online shopping because of identity theft and hacking which leaves its consumer data exposed. Therefore, Amazon has to move quickly to allay consumer concerns over its site and ensure that online privacy and security are guaranteed. - Because of its aggressive pricing strategies, the company has had to face lawsuits from publishers and rivals in the retailing industry. The obsessive focus on cost leadership that Amazon follows has become a source of trouble for the company because of the competitors being upset with Amazon taking away the business from them. - Finally, Amazon faces significant competition from local online retailers who are more agile and nimble when compared to its behemoth type of strategy. This means that the company cannot lose sight of its local market conditions in the pursuit of its global strategy.
- 24. 2017 Insights –Click for Video
- 25. Reference • Amazonwhitepapaer, www.fabernovel.com •www.Amazon.com
- 26.