Essay: Analysis Of Flipkart And Amazon." (46 Characters)

Market Projections

Discuss about the Analysis of Flipkart and Amazon.

Amazon is one of the largest e-commerce companies which was founded in the year 1994 by Jeff Bezos at the back of his garage, Jeff had a clear vision in his head, to change the landscape of online shopping in the world. He identified certain lacunae with the present practices and was on a mission to change the ecosystem of how consumers shop online. Initially started as an online book seller, the company’s product offering ranges to almost anything to everything .Its consumer durables, electronics, lifestyle products, home décor, books & DVD are the highest selling products (Kalia, 2015). The company is further moving in the direction of adding few million items in its existing shopping list. Amazon made a revenue of around 138 Billion USD and employs more than 500,000 employees. The company’s base is in Seattle but it has registered offices in more than 12 countries and distributes products in more than 180 countries. Amazon is by far the largest e-commerce companies on the planet earth. It is estimated that almost 90 million people are active on Amazon and use its brilliant application to order products. The company has been seamlessly using the traditional and the contemporary medium of promotion to increase the brand advocacy and generate huge profits for the company (Roy & Charaborti, 2017).

The idea of the report here is to create a market plan for the launch of new product services at Amazon in the India market, the company wants to launch an online grocery store for its Indian audience. The idea here is to do a situational analysis, SWOT and industry analysis for the new product and the existing digital ecosystem. Further in the report, market and cost analysis will be done to have an understanding of the STP, at the end how the digital tools of marketing can be used for the penetration and promotion of its new product and services. The report will provide a comprehensive study of the digital marketing concepts in tandem to Amazon.

Situational analysis refers to the collection of methods which managers use to analyse organization’s internal and external environment in order to understand the capabilities, customers and business environment of the organization. SWOT is a part of situational analysis which focuses on the strength and weakness of the organization which is internal to it, and expose to opportunity and threats which are external in nature.

E-commerce industry in India has boomed suddenly due to increased smartphone penetration in the world’s second largest country by population. India with a population of 1.32 Billion is one of the largest markets for the e-commerce companies. The demographic, purchasing power parity and economic liberty makes India a very promising destination. The e-commerce market is estimated at 12 billion in Gross merchandize value in the year 2016 and the market is supposed to grow at 25% CAGR. The e-commerce market in India will further show strength by penetrating in the tier 2& 3 markets. People are becoming more and more aware to the benefits of e-commerce companies (Sahay, Mukherjee & Dewani, 2015).

Segmentation Analysis and Strategy

Initially the e-commerce companies were offering products related to lifestyle, fashion and entertainment, but with the increased penetration the companies started selling anything to everything. The online grocery market in India has few players like Big Basket, Grofers & Flipkart, but the inability of any player to address the comprehensive needs of the Indian audience leaves a big market for Amazon to leverage the opportunity. Out of a population of 132 Billion, only 14% of the population shops online, this validates the decision of Amazon to foray into the grocery and fresh food vegetable market in India. According to early estimates the grocery market in India is poised to grow at the same pace as that of the consumer electronic and lifestyle product segments.

The drivers of the online grocery market for India are:

• Same day delivery of vegetable products
• Fast delivery of the grocery items
• Tie up with the local stores for procurement
• Subsidized rates to cut the competition and strive in the Indian subcontinent.

India is a diverse market, there are numerous local manufacturers, industries, e-commerce companies fighting to increase their market share and in the middle of everything is the Indian population. Understanding such a diverse and complex market is a tough job at hand. Amazon though has been successful in implementing its marketplace business model in India with great success. The company has chosen the same market to launch its Grocery and Fresh food delivery services to leverage its model of economies of scale and gain a market dominance and leadership position in the Indian Market.

Amazon wants to launch its services initially to the Tier 1 customers and eventually after analysing the performance of the Tier 1 market, the company will move to Tier 2 and Tier 3 market audience. Market segmentation is an important element while selecting choosing the audience for the product and services. It is a process of segmenting the population in accordance to the demographics, geographic, physiographic and the behavioural characteristic of the audience. The strategy of Amazon is to target the working female population, independent living bachelors and working families. Based on the above criteria the Segmentation of Amazon grocery business segment is:

Geographic	Tier 1 cities of India
Demographic	Male and Female
Age group	20-45 years
Behavioural	Working professionals, Newly wed couples and individual bachelors
Lifestyle	Millennial, Online shoppers, high affinity towards digital platforms, smartphone users.

Amazon has positioned itself in the Indian market as a provider of quality goods and services at the lowest price. The company is also known for its assured fast delivery to even the remote location according to the timeline it provides to its consumers. Hence, the positioning of the company is of a customer centric firm, whose policies and procedures revolve around its esteemed customer base (Prashar, Vijay, Singh & Parsad, 2017). A mind map will further help in understanding the positioning of Amazon:

• Reliable service provider
• Vast collection of products
• Great refund policy
• Excellent customer support and services
• Timely delivery of Products
• Amazon prime
• Reliable service provider
• Low cost goods

Amazon cares for the country in which it operates; it always wants the local manufacturers to grow along with the company. Hence, the company is reliant on procuring from the local manufacturers and selling their goods on the platform. This marketplace model is a win win strategy for the company as well the local manufacturers, manufacturers get to sell their produce on the largest e-commerce website and Amazon makes it possible for the goods and products to even reach the remote location. Its logistic collaboration with few players in the Indian market further intensifies its procurement and order fulfilment metric (Sahu & Pradhan, 2017).

India is an extremely competitive market when it comes to e-commerce market. Everyday start-ups are coming up with service differentiation to attract the audience to their website, offering low prices, early discounts, bundle products and marketing promotions are some of the ways to lure the customers. Amazon on the other hand is brilliant with customer acquisition; the company uses traditional and contemporary tools of marketing in tandem to attract the customers. Some of its acquisition strategies include:

• Social media promotion
• SEO and SEM marketing(Khanna & Sampat, 2015)
• Blogs
• Road shows
• TV Commercials
• Newspaper advertisements
• Twitter marketing
• Events
• Sponsorship

All these customer acquisition strategies have been fairly successful in expansion of the customer base at Amazon.

Value Chain-It is one of the fundamental frameworks which are used to analyse the internal activites for the firm, the goal of the exercise is to understand which activities are most important to the business. In the case of Amazon, they focus on cost leadership to have a competitive edge over its competitors.

Amazon relies heavily on its marketing mix to promote its product and services to its target audience. The marketing mix is a comprehensive strategy for Amazon to capture the sentiments of the Indian market

Products	Consumer electronics Consumer durables Lifestyle Products Fashion Home décor Books DVD Kindle Technology products (Alexa)
Price	Low pricing strategy to penetrate the price sensitive Indian market
Place	Amazon.com the website to shop for the products
Promotion	Social media, digital media and offline marketing
Physical evidence	Branding on its packaging material, the logo, website
People	Excellent customer support to handle the grievance of its customers
Process	Customer centricity in the process designing

Positioning in the Marketplace

Amazon is leaving no stone unturned to penetrate the Indian sub-continent and glue the Indian audience towards its new product and services. The company has collaborated exclusively with YouTube, to broadcast the video branding of its newly opened grocery market. You tube which has one of the highest eye balls from the audience across the globe, leveraging the channel for branding activities is of paramount importance. The company is also coming up with 5 -6 commercial targeting different customer segments across all the video and written content platforms to deliver the necessary impressions (Smith, Rupp & Offodile, 2017)

Close to 100 million people have downloaded the Amazon app for online shopping and are very happy with the experience the company provides them .The company is effectively using and leveraging the technology of big data analytics to understand the behaviour of online customers, his taste and preference, his shopping behaviour, likes and dislikes, and effectively using all this data to produce highly targeted content to them. The content is pushed to this audience either through app notifications or in form of e-mail campaigns. The purpose of this high intent promotion is to increase the traffic on its website (Kaur & Wadera, 2017)

E-commerce is spreading like a wildfire globally, busy lifestyles, more options to evaluate shopping online; ability to make comparison among products and high discounts being offered is getting the attraction of millions of customers. People who feel like shopping on the go or shop in their natural surroundings are the biggest beneficiaries of e-commerce marketing. Some of the e-commerce tools which are used by the companies for sustained profitability and increased traffic on the website are:

Tools	Purpose
Social Media	Facebook- The biggest source of revenue from Facebook is through advertisement. Companies use Facebook to remarket its product and to increase the brand awareness (Ryan, 2016). Instagram- Rapidly growing social media platform which is used for the purpose of communicating the discount, increasing brand awareness, remarket the product to the customers and create a brand recall value (Kingsnorth, 2016). Snapchat- The filters offered by Snapchat is making the platform really popular amongst the millennial, Amazon wants to leverage the growing popularity of the platform by showing content relevant to its target audience.
SEO/ SEM	Organic and inorganic promotion of the website and its products in the search query through effective placing of the key words in the content
Blogs	Blogs are being used to drive consumer awareness on the development company is doing in the Indian market. The blogs also act as backlinks which eventually increase the traffic on the website
E-Mail Marketing	High targeted content is pushed to the audience based on their consumer profiling(Strauss, 2016)
Mobile marketing	India has considerable number of smartphone users, and the people want to consume information on the go. Amazon by using the services of push notification keeps reminding people of the products in their basket, or the products which would internet them. The strategy is to indulge them in the product offering of Amazon

The understanding of the concept is to derive the benefits from the online channels of marketing. The above mentioned topic can be segregated into three parts:

As mentioned earlier, Search engine optimization is an organic marketing promotion through which keywords are added in the website and blogs in accordance with the relevancy of the search. The above said is done to appear on top in the search query through search engines. SEM on the contrary is an inorganic promotion tool, through which company creates ad for increased visibility in the search query. Both these tools are very useful to drive awareness of the brand and increase the traffic on Amazon website.

Amazon is planning to buy few companies in India to give strength to its logistics arm; meanwhile the company has struck deals with the big logistics players in the Indian industry to help the company in fast delivery of its products. The company has created a platform for the use of both the logistic company and Amazon itself to track the shipment while it is out for delivery. The web interface seamlessly tracks order for both the stakeholders and ensures timely delivery of the products.

Procurement of Goods and Services

Amazon stands tall when it comes to maintain relationship with its clients. The company is customer centric not only in its business approach, but also in understanding the needs of the customers, they empathize with the customers and accordingly curate solutions to give them increased benefits. The company acknowledges every review which is posted on the website, reads and replies to every mail address to its customer service department and proactively tries to mend the service failure, wherever the company acknowledges it made a mistake. CRM is undoubtedly one of the strong areas contributing to Amazon’s success.

Amazon web services or the cloud services, which was initially created to safely use and protect the consumer database and use it to better market the products to the customers, is one of the highest revenue generating arm of Amazon. AWS in the present day not only earns revenue for Amazon but also manages the consumer data to market products in accordance to their latent needs. Thus Amazon web services are one of the most intelligent used techniques by Amazon to improve the shopping experience of its audience.

The wide scope of digital marketing has been already covered in the earlier section; however there are certain limitation to the usage and potential of digital marketing. Some of the limitation can be cited as:

• Due to limitless potential of the digital marketing platform it becomes difficult to track down real time consumer complaints and feedback.
• Customer complaints and feedback are always visible to the public; hence the company is always under public scrutiny.
• It is easy for a company to find itself a victim of negative influence, the openness of the digital marketing channels have given too much power in the hands of consumers which can be used to tarnish the image of the company.
• It is still an evolving field, every company is talking digital and social, but there are only a few companies which have mastered the art of digital marketing and using good strategies to make an impact on the consumers.

Conclusion

The Report can be concluded by saying that Amazon has a great opportunity in India; the company has all the tools and resources to capture the Indian grocery market and create an impact. Amazon has to leverage on its strength, which is being a customer centric company, and provide the price sensitive Indian market with best quality products in short span of time. Social and digital marketing platform will be of immense help to Amazon in continuing to increase its brand awareness and sustained profitability in the business.

References

Kalia, P. (2015). Top e-Retailers of India: Business Model and Components. International Journal of Electronic Marketing and Retailing, 6(4), 277-298.

Karthikeyan, P. (2016). A Study on Challenges Faced By Startups in Indian Logistics Sector. Imperial Journal of Interdisciplinary Research, 2(11).

Kaur, B., & Jain, T. (2016). Attracting Customers’ to Online Shopping Using Mobile Apps: A Case Study of Indian Market. In Securing Transactions and Payment Systems for M-Commerce (pp. 117-140).

Kaur, J., & Wadera, D. (2017). Affiliate Marketing Strategy of Amazon India. Driving Traffic and Customer Activity Through Affiliate Marketing.

Khanna, P., & Sampat, B. (2015). Factors influencing online shopping during Diwali festival 2014: Case study of Flipkart and Amazon. in. Journal of International Technology and Information Management, 24(2), 5.

Kingsnorth, S. (2016). Digital marketing strategy: an integrated approach to online marketing. Kogan Page Publishers.

Mishra, S. V., & Kotkar, S. N. (2015). A Study on Current Status of E-Commerce in India: A Comparative Analysis of Flipkart and Amazon. International Journal of Advance Research in Computer Science and Management Studies.

Prashar, S., Vijay, T. S., Singh, H., & Parsad, C. (2017). Typology of Indian e-buyers: Clustering on the basis of Online Shopping Motives. World Review of Science, Technology and Sustainable Development, 13(1), 3-17.

Roy, S. K., & Charaborti, R. (2017). Case Study 5: Amazon. in: Surviving in a Jungle. In Services Marketing Cases in Emerging Markets (pp. 45-59). Springer, Cham.

Ryan, D. (2016). Understanding digital marketing: marketing strategies for engaging the digital generation. Kogan Page Publishers.

Sahay, A., Mukherjee, S., & Dewani, P. P. (2015). Price discount framings on product bundles with shipping surcharges in the Indian market: Examining the weighted-additive and reference-dependent models. Journal of Indian Business Research, 7(1), 4-20.

Sahu, S. K., & Pradhan, S. K. (2017). Marketing Management: An Indian Prospective. Educreation Publishing.

Smith, A. D., Rupp, W. T., & Offodile, O. F. (2017). Amazon. com, Inc.: Retailing Giant to High-Tech Player?(pp. 3-6).

Strauss, J. (2016). E-marketing. Routledge.