Amazon

Group 1
History
• Jeff Bozos founded Amazon in July 1994.

He chose Seattle because of technical
talent as Microsoft is located there.
• In May 1997, Amazon went public.
• It began selling music and videos in 1998,
at which time it began operations
internationally by acquiring online sellers
of books in United
Kingdom and Germany.
• The following year, Amazon began selling
items including video games, consumer
electronics, home improvement items,
software, games, and toys.
Board of directors
•As of September 2020, the board of directors is

•Jeff Bezos, President, CEO, and Chairman
•Keith B. Alexander, CEO IronNet Cybersecurity, former NSA
Director
•Rosalind Brewer, Group President, and COO, Starbucks
•Jamie Gorelick, partner, Wilmer Cutler Pickering Hale, and Dorr
•Daniel P. Huttenlocher, Dean of the Schwarzman College of
Computing at the Massachusetts Institute of Technology
•Judy McGrath, former CEO, MTV Networks
•Indra Nooyi, former CEO, PepsiCo
Merchant partnerships
• In 2000, U.S. toy retailer Toys "R"

Us entered into a 10-year agreement
with Amazon.
• In 2001, Amazon entered into a
similar agreement with Borders
Group, under which Amazon would
comanage Borders.com as a co-
branded service.
• In June 2017, Nike confirmed a
"pilot" partnership with Amazon to
sell goods directly on the platform.
Logistics
• Amazon Air, a cargo airline for bulk transport

• Amazon Flex, a smartphone app that enables
individuals to act as independent contractors,
delivering packages to customers from personal
vehicles without uniforms.
• Amazon Prime Air is an experimental drone delivery
service.
Products and services
• AmazonFresh
• Amazon Prime
• Amazon Web Services
• Alexa
Subsidiaries
• Amazon owns over 40 subsidiaries, including Audible,

Diapers.com, Goodreads, IMDb, Kiva Systems
(now Amazon Robotics), Shopbop,
Teachstreet, Twitch and Zappos.
• A9.com
• Amazon Maritime
• Audible.com
PRODUCT
• Its retail division include everything from apparels to
auto parts, toys to electronic gadgets, home décor to
health/beauty utilities.
• Gadgets like e-book reader, Kindle and Fire tablets and
phones.
• Digital services like on demand music, video, and e-
books.
• Amazon’s AWS services, which provides web hosting
services for customers and clients, is also a strong
product in its portfolio.
• Publishing services to the business and individuals.
• Grocery items are also being delivered to consumers
by Amazon through its services like Amazon Prime
Pantry and Amazon Fresh
PRICE
• Amazon has Competition-based pricing strategy.
• Amazon offers the lowest of prices and this is made
possible by the efficiency of its operations and also its
web-based business model.
• It adjusts the prices frequently based on the category of
product, time of the day and season.
• Amazon also provides value added services like Prime
where users pay subscription charges for one-day delivery
and early access to the deals.
• Amazon also follows differential pricing, for the same
product it charges different price depending in the place of
consumer as it is having different websites in each country
it operates.
• AWS is also a market leader in offering high-quality low-
priced web hosting solutions.
PLACE
• Global Presence
• Medium to buy: Website and Application
• The annual Amazon Web Services (AWS) Summit held
in various locations enable the company to reach
potential customers and persuade them to pay for its e-
commerce services.
• Once a customer places the order the distribution
channel of Amazon comes into picture where the
products are procured and stored at Amazon’s
fulfilment centres.
• From these fulfilment centres the goods are transferred
to distribution centres and then to customers.
• Amazon uses the local postal and courier services for
the transportation of packages.
PROMOTION
• Aggressive marketing campaigns
• Its major focus is on advertising – through print ads in newspapers.
• Amazon uses creative television commercials and social media
marketing through SEO and targeting customers through their
browsing patterns.
• Amazon also have affiliate programs where website and blog
owners advertise.
• Amazon has mastered this art and give effective sales promotions
and discounts during holiday seasons and festivals resulting in high
visits to the website.
• Public relations exercises to improve brand image like launching
Amazon Smile which donates to charity organizations. ‘Gift a
Smile’ in India is an initiative where people can send their gifts
directly through Amazon to NGO’s that are partnered with the
company.
• Direct marketing to companies for providing its web services is
also performed by Amazon.
Amazon.com bases its marketing strategy
on seven pillars:
Marketing
1. It freely offers products and services.
2. It uses a customer-friendly interface.
Strategy 3. It scales easily from small to large.
4. Creates awareness for its products.
5. Affiliate Program is important in driving visitors.
6. It utilizes universal behaviors and mentalities.
7. It uses existing communication systems.

 Amazon’s segmentation is based on actual purchase
behaviour. Amazon’s micro-level segmentation targets each
customer individually, allowing the company to convert
visitors into long-term, high-value customers.
 Multi-segment positioning. Amazon offers a wide

range of products and services, successfully
exploiting more than one segment at the same time.
Market
Specifically, the online retail giant sells almost 120
million products, appealing to the needs and wants of
a wide range of customer segments.
Segmentation  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.
 Anticipatory positioning. This refers to positioning to

a market segment that has low turnover with the
anticipation that the turnover will increase in the
future. Amazon Web Services (AWS) is a stark
example for anticipatory positioning.
Geographic audience segmentation
 Region: Amazon covers over 100 countries.
 Density: both urban and rural areas.
Demographic segmentation
 Age: people aged from 18-year-old.
 Gender: both males and females.
 Life cycle stage: single, full-nest, empty-nest or solitary
survivor people segmented by classic family life cycle.
Target  Occupation: students, specialists and professionals.
Behavioral segmentation
 Loyalty: ‘Hardcore’, ‘softcore ‘switchers’.
Market
 Benefit: products assortment, convenience competitive prices.
 Personality: easy-going, determined, ambitious.
 User status: non-users, potential, first-time, regular or ex-
users.
Psychographic audience segmentation

 Social class: working, middle, upper.
 Lifestyle: resigned, mainstreamer, explorer, struggler, aspirer,
reformer.
 All in all, they segmented all their customers into the following
categories, sorted by conversion simplicity.
Amazon.com uses low prices as a way of
attracting customers to its e-commerce
website and product offerings.
Price The following pricing strategies are used:
Strategy I.
II.
Market-oriented pricing strategy
Price discrimination strategy
III. Value-based pricing strategy

DISTRIBUTION CHANNEL
• Digital – Software's,
1 2 Prime music, Video,
Kindle etc.
Right quantity Right product
• Physical – Tangible
products
3
• Phygital – Amazon
4
Go
Right place Right time
• Sophisticated information technology
• Extensive network of warehouses
Supply Chain • Excellent transportation
Management • Outsourcing Inventory Management and
Insourcing Logistics
• Distribution channel works on the system of
commission and credit system
• Products are easily accessible from pretty much
SCM everywhere in the world.

• Strategically placed near big metros and population
Warehousing hubs, and inventory is spread amongst them to ensure
supply can meet demand.
• Mini-warehouses in smaller areas to ensure orders can
be sent and delivered fast
• Warehouses are optimized internally.
• Free delivery, prime delivery and even 2 hours prime
now
SCM • Pricing varies for delivery options
• Amazon-branded trucks and delivery vans and there
Delivery
are even deliveries by bike in certain areas.
• Delivery using drones – Amazon prime air in testing
phase
• Also leverages existing delivery routes via Fedex and
UPS, Bluedart etc.
• Utilizes countless automation and robotic
SCM solutions, both to pick and pack orders as well

as stacking and storing inventory.
Technology
• They increase efficiency and delivery speeds,
and also cut down on warehouse and staffing
costs.
• Embracing new technologies like usage of
drones for delivery etc.
• Started manufacturing its own lower-cost
SCM products
• Amazon offers branded lines in everything from
Manufacturing
household products to pets to babies
• Allows Amazon to own the whole lifecycle of
its products – from creation to marketing to
storage to shipment.

Amazon

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Group 1

• Jeff Bozos founded Amazon in July 1994.

•As of September 2020, the board of directors is

• In 2000, U.S. toy retailer Toys "R"

• Amazon Air, a cargo airline for bulk transport

• Amazon Web Services

• Amazon owns over 40 subsidiaries, including Audible,

2. It uses a customer-friendly interface.

Strategy 3. It scales easily from small to large.

4. Creates awareness for its products.

5. Affiliate Program is important in driving visitors.

6. It utilizes universal behaviors and mentalities.

7. It uses existing communication systems.

 Multi-segment positioning. Amazon offers a wide

Segmentation  Adaptive positioning. The online retail giant closely

 Anticipatory positioning. This refers to positioning to

Target  Occupation: students, specialists and professionals.

Psychographic audience segmentation

Price The following pricing strategies are used:

Price discrimination strategy

III. Value-based pricing strategy

SCM everywhere in the world.

SCM solutions, both to pick and pack orders as well

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