GLOBAL MARKETING

GLOBAL MARKETING Magdalena Mosakowska Priscila Bravo Table of Content I. About Amazon A. Products and services provided by Amazon B. Company's Value Chain C. Countries where Amazon is present II. Markets of Amazon A. USA B. Germany C. India III. Market entry modes of Amazon IV. Segmentation, targeting and positioning V. Product strategy VI. Pricing strategy VII. Distribution strategy VIII. Promotion strategy IX. Sources I. About Amazon Amazon is one of the 500 largest companies in the US and the world's most customer-focused store, because it works to understand arduously how the needs of the clients evolve and based on that, to develop and expand its products and services in areas such as ​e-commerce​ ,​ cloud computing​, ​digital streaming​, and ​artificial intelligence​. While there are companies which belong to only one industry and provide industry-specific products or services, Amazon serves multiple industries at a time such us e-commerce industry, technology industry, retail industry, information technology (IT) industry, telecommunication industry, consumer electronic industry, health care industry, entertainment industry, news media industry, music industry, and one of the most important freight industry which the company acts as an intermediary since it arranges all the details required by a cargo transport between shipper and carrier. In 1994, the company initially started as an online marketplace selling books. It managed to achieve such success that only in the first two months of life, the business sold to more than 45 different countries including the United States. The company's sales were up to $ 20,000 a week. Then it expanded to sell ​electronics, software, video games, apparel, furniture, food, toys, and jewelry. In 1999, T ​ he company launched amazon.com Auctions, a web auctions service but it failed to take advantage of the pioneer of that time eBay. Later, the company launched a fixed-price ​ marketplace business and the now defunct partnership with ​Sotheby's​, called Sothebys.amazon.com. Sotheby’s is a British-founded American ​multinational corporation​. One of the world's largest ​ brokers of ​fine and ​decorative art​, ​jewelry​, ​real estate​, and collectibles​ . Auctions and zShops evolved into ​Amazon Marketplace​, a service launched in 2000 that let customers sell used books, CDs, DVDs, and other products alongside new items. In the same year, Amazon began offering its trading platform to other retailers and suppliers. A fact is that Amazon was one of the first companies to offer and sell goods on the internet on a large scale In 2005, Amazon announced the creation of Amazon Prime, a membership offering free two-day shipping within the contiguous United States on all eligible purchases for a flat annual fee, as well as discounted one-day shipping rates. After, Amazon launched the program in Germany, Japan, and the United Kingdom in 2007, France in 2008, Italy in 2011, Canada in 2013 and India in 2016. The introduction of two-day delivery was the game-changer that established the dominance of Amazon in the online retail industry. In 2007, Amazon informed a new service called Amazon Fresh​, which is a grocery service offering ​ perishable and ​ nonperishable foods​. Moreover, the company launched the Kindle​, an ​ e-reader which there are over 2.7 million e-books available for purchase currently. Later, Amazon announced others services related to healthcare, video, music, publishing, payments, software, etc. In August 2012, Amazon announced ​Amazon Glacier​, a low-cost ​online file storage web service that provides reliable data archiving, storage, and backup. Also It launched offers industrial and scientific components and ​maintenance, repair and operations​supplies. In 2014, Amazon Marketplace is the largest of its kind and begins to enter more markets to be present in almost all continents. In addition, its technology and logistics are rapidly developed by its global work. In 2018, Amazon's expansion has grown in different industries, therefore, it has created new subsidiaries specialized in these areas in order to work on the evolution of the company. Nowadays, it operates on 17 websites that support their business operation globally. It offers more than 20 million items for sale and it has over 40 subsidiaries that Amazon is the owner. Therefore, Amazon is a titan of e-commerce, logistics, payments, hardware, data storage, and media, being positioned as America’s largest online retailer. Products and services provided by Amazon The curved arrow connects two specific letters “a” and “z” which represents the message that it sells everything from A to Z and also the smile that customers would experience by shopping on the Amazon.com 1. Digital streaming It distributes downloads and streaming of ​video​, music, and ​audiobooks through its Prime Video​ ,​ Amazon Music​ , and ​ Audible subsidiaries. It also has a publishing line, Amazon Publishing and a film and television studio called Amazon Studios. Other services are Twitch, Amazon payments, Amazon Appstore and Amazon game studios. 2.​ ​​E-commerce In this group, the company has a retail goods such as, clothing, baby products, electronic devices, ​ beauty products​, gourmet food, groceries which is a home grocery delivery service. Also they offer health and personal-care items, industrial & scientific supplies, kitchen items, ​ jewelry and watches, lawn and garden items, musical instruments, sporting goods​ , tools, automotive items and toys and games. 3.​ ​​Cloud computing In this group there is Amazon Web Services (AWS) is a cloud services platform that provides a variety of story infrastructure services such as storage, networks, databases, application services, computing power, messaging, mobile services, security, identity and compliance, etc. which allow the growth of companies, move faster in the market and lower IT costs. It produces ​ consumer electronics including ​Kindle ​e-readers​, ​Fire ​tablets and ​Fire TV​. Moreover, Amazon offer another type of service more related with the owners of business since Amazon Business (service name) provides a consolidated platform for buying products and supplies from Amazon with shipping benefits, discounts on eligible products, purchase analytics, and price comparisons from different sellers. In this category we also can find the Amazon Prime and Amazon drive, the first is a paid subscription service that gives users access to services that would otherwise be unavailable, or cost extra, to the typical Amazon customer such us free one or two-day delivery, streaming music and video, and other benefits. The second is a cloud application offering secure cloud storage, file synchronization, file sharing, and Photo printing. 4.​ ​​Artificial intelligence This component plays a very important role within the company, there are products like Echo devices which is a brand of smart speakers developed by Amazon. Echo devices connect to the voice controlled intelligent personal assistant service “Alexa”. Another service is Ring Inc. which is a home security and smart home company owned by Amazon. Through these products and services, the company serves individuals, small and large companies either retailers, subsidiaries or manufactures, to develop their e-commerce, technical services, customer service offer, delivery management, reaching more customers worldwide. Also, the main brands use Amazon as a sales channel, to promote their products directly on Amazon website. As examples of services, third-party software developers use Amazon Web Services (AWS) to create applications and services that are provided to Amazon customers and sellers. Besides, The AWS Cloud provides an opportunity for governments to modernize aging infrastructures and improve operational productivity. Currently, buying customers in 180 countries and more than 30 listing categories globally. The following table below shows the countries where Amazon sells. Countries where Amazon is present Region America Country December 2012 Canada amazon​.ca June 2002 Mexico amazon.com​.mx August 2013 amazon​.com July 1994 China amazon​.cn September 2004 India amazon​.in June 2013 amazon.co​.jp November 2000 amazon​.sg July 2017 amazon.com​.tr September 2018 amazon​.ae May 2019 amazon​.fr August 2000 Japan Singapore Turkey United Arab Emirates Europe Since amazon.com​.br Brazil United States Asia Domain name France Germany Italy Netherlands Spain United Kingdom Oceania Australia amazon​.de October 1998 amazon​.it November 2010 amazon​.nl November 2014 amazon​.es September 2011 amazon.co​.uk October 1998 amazon.com​.au November 2017 Amazon has to follow certain regulations in each country such as the case of China and India, because they don’t admit sellers who don’t reside in their countries. Company's Value Chain One of the driving forces behind Amazon transformation and rapid growth is its innovative and highly efficient supply chain. Amazon’s continuous efforts to deliver products to the customers in the shortest possible time and that work put intense pressure on other retail industry and IT industry across the globe, changing the way ​supply chain management works. The following figure below illustrates the essence of Amazon value chain analysis. Amazon Primary Activities These activities have a direct impact on the results of the company and they are necessary for the proper functioning of Amazon. ● Inbound logistics Amazon is characterized by having a low level of inventory in store despite the demand for products it receives daily. The company doesn’t have long-term contracts or arrangements with its vendors to guarantee the availability of merchandise, particular payment terms, or the extension of credit limits. Fulfilment by Amazon (FBA) is a very important part of Amazon inbound logistics for company-owned retail business. Moreover, the economies of scale are an important source of value creation for Amazon inbound logistics. Sellers can also use FBA by stowing their inventory in Amazon fulfilment centers. Thus, Amazon has all the responsibility for logistics, customer service, and product returns. The location, size, and number of warehouses or fulfilment centers are important factors in Amazon’s supply chain success. Its warehouses are divided into five storage areas. Its library prime storage stores books and magazines. Next, its pallet prime storage stores full-case products that have very high demand. Next, case flow prime storage stores high-demand products picked in less-than-case quantities. Its reverse storage accommodates irregularly shaped and low-demand products. Finally, its random storage area stores smaller, moderate-demand items. Also, Amazon uses logistics beyond of its profit and share its logistics services to others. For instance, Beijing Century Joyo Courier Services, an Amazon subsidiary registered with the U.S. government as an ocean shipping provider ● Operations ​ There is a set of services that Amazon offers to its customers, as well as the construction of its own products such as the Kindle or the Amazon Fire. Amazon operations are organized into three segments: 1. ​America​ : This part operates North America focused websites such as www.amazon.com (USA),​www.amazon.ca​(Canada), and​www.amazon.com.mx​(Mexico). 2. ​International​ : This segment operates internationally-focused websites such as www.amazon.com.au (Australia), www.amazon.com.br (Brazil), www.amazon.cn (China) and others. All revenues from international operations are subject to changes in currency exchange rates. : This section deals with global sales of computing, 3. ​Amazon Web Services (AWS)​ storage, database, and other service offerings for start-ups, enterprises, government agencies, and academic institutions. Moreover, AWS offers pay-as-you-go cloud storage, compute resources, networking and computing services and its major customers such as Pinterest, Dropbox, and Airbnb. Amazon is recognized for its innovative strategies to reach more customers and make life difficult for its major competitors, for instance they launched one-hour delivery with its Amazon Prime Now service (which it has since changed to a free two-hour delivery). The following photograph shows how it works ● Outbound Logistics In this part, the orders that Amazon receives and the distribution are related, making the products and services reach customers around the world. Amazon Outbound Logistics is integrated with 3 segments: ​ ulfilment centers:​More than 25 fulfillment centers and sortation centers worldwide. 1.​F How FBA works? Customers send the products to Amazon. ● ​They store them in their fulfillment centers. ● When a customer orders one of their products, Amazon picks, packs, ships and tracks the order for the client. ● ​Amazon also handle returns and refunds. ● ​ Amazon charges both storage fees and fulfillment fees. ● ● ● ● ● ● ● Main Fulfillment centers: Fulfillment center LIL1 in ​ Lauwin-Planque​, ​France​. Fulfillment center in ​ San Fernando de Henares​, ​Spain Fulfillment center in ​ Glenrothes​, ​Scotland Fulfillment center in ​ Germany Fulfillment center in ​Ichikawa​, ​Japan Fulfillment center in Fulfillment centers in ​Seattle and ​New Castle, Delaware and Macon, Georgia​, United States. These relate to products and services that can be downloaded from 2. ​Digital delivery: ​ Amazon website. 3. Physical stores: Amazon acquired Whole Foods chain in 2017 and it wasn’t enough for the capacity of the company, therefore, Amazon started acquiring more companies since then. The company has been working with third companies for the delivery of its products such as UPS, FedEx and TNT. However, during the past decade the largest internet retailer in the world by revenue has been investing aggressively in its own logistics system. Its logistics system comprises increasing numbers of planes, trains, ships, vans, and trucks. Lately, the company has launched Prime Air (a drone delivery system). ● Marketing and Sales This is one of the major sources of value in Amazon chain of operations, but this value is generated thanks to excessive marketing investments. Amazon marketing message conveys the promises of the largest selection of products and services, attractive prices, fast delivery of products and overall superior customer services. Several components of the marketing communication mix such as print and media advertising, sales promotion, events and experiences, public relations and direct marketing are used in an integrated way in order to communicate the marketing message to the target customer segment. According to the balance of amazon sales, about half of all sales on Amazon come from third-party sellers. ● Service Amazon Marketplace and Prime has two types of customers sellers and buyers from Amazon platform. For sellers in particular, Amazon offers Selling Coach program, alerting sellers about opportunities to avoid going out-of-stock, add selection that’s selling, and sharpen their prices to be more competitive. Most Amazon processes are online, for example Amazon's return process is managed online. If there is an issue that does require a customer to speak with a customer service assistant over the phone, they will have access to the customer’s account and order details, meaning that any issues can be dealt with quickly and efficiently Amazon has an incredibly detailed yet easy-to-navigate ​help center​, which lets you drill deep into a number of specific concerns. With streamlined help and customer service paths, shoppers save time and feel empowered as they find their own solutions. In general, warranty and support for Marketplace, AWS, Amazon devices and other services and products. Support Activities ● Firm Infrastructure All the administration, planning, organization, finance and accounting activities that are carried out in the company. ● Human Resources Personnel, training, staff planning, creating sustainable operating cash flow and risk mitigation. The workers of the company can participate in it, since they can have a small package of shares. This is essential since the worker after all is the one who is in contact with the client and the worker will treat the client better if he feels like an owner. ● Technology Development Advanced customer database and analytic tools for personalization and growth. Fully optimized as well as automated warehouses and distribution centers along with robotics technology. Advanced delivery with drones, voice shopping with Alexa, Echo devices, etc. ● Procurement Vast number of vertically integrated suppliers. Moreover, Amazon has several warehouses around the world to distribute its products, strategically, many of them are close to airports to make shipping faster. The combination of sophisticated information technology, an extensive network of warehouses, multi-tier inventory management, and excellent transportation makes Amazon’s supply chain the most efficient among all the major companies in the world. II. Markets of Amazon Source: https://www.statista.com/statistics/672782/net-sales-of-amazon-leading-markets/ 1. E-commerce market in USA The United States is the second largest market for e-commerce with a revenue of US$365 billion in 2019, placing it ahead of ​Japan and behind ​China​. With an increase of 16%, the U.S. e-commerce market contributed to the worldwide growth rate of 13% in 2019. Revenues for e-commerce continue to increase. New markets are emerging, and existing markets also have the potential for further development. Global growth will continue over the next few years. This will be propelled by East and Southeast Asia, with their expanding middle class and lagging offline shopping infrastructure. The e-commerce market includes online sales of physical goods to a private end user (B2C). Included in this definition are purchases via computer as well as mobile purchases via smartphones and tablets. Excluded from the definition of ecommerce DB are the following: digitally distributed services (e.g., travel tickets), online stores dedicated to digital media downloads or streams, online stores dedicated to B2B markets, and sales between private individuals (C2C) within the eCommerce market. The biggest player in the U.S. eCommerce Market is ​amazon.com​. The store had a revenue of US$68.9 billion in 2019. What conditions influence on market attractiveness? The impact have two main factors: macro-environment and competitive environment of USA. Discussing macro-environment it is necessary to mention that Trump’s politics is r​eaching implications for the retail industry, the most apparent of which include potential changes to labor and the supply chain, which could narrow the path to profitability for retail companies. Amazon specifically could face pressure to pay additional taxes. Trump has dubbed big tax shelter​ ," implying that he may examine the prospect of forcing Amazon to Amazon a "​​ pay more in taxes. However, this could be offset by Trump's general policy of reducing the business tax rate from 35% to 15%. The retail industry as a whole will have to navigate the changes in policy. However, for e-commerce companies in particular, higher costs and resistance to automation could limit their ability in the near-term to solve issues with delivery bottlenecks. E-commerce has been on the rise in the last several years, thanks in large part to titans in the industry such as Amazon and Alibaba. And regardless of how Trump's presidency plays out, e-commerce will truly become the future of retail, as nearly all of the growth in the retail sector now takes place in the digital space. USA is highly developed country, what favors running e-commerce business there. People, its culture, habits and also technological factors affects that environment for e-commerce is very friendly. When it goes about competition environment, as was mentioned before Amazon is the leader of online retailing in USA ​(revenue of US$68.9 billion in 2019). It is followed by walmart.com with US$16.6 billion revenue and ​apple.com with US$10.7 billion revenue. Altogether, the top three stores account for 25% of online revenue in the United States. 2. E-commerce in Germany Germany is the biggest market of Amazon in Europe . 27% of German ecommerce generated on Amazon. ​ 88.58% of the population in Germany are internet users, and this figure is growing steadily. German GDP has also increased over previous years and the country has the world’s best-developed ​logistics​infrastructure. That said, there are challenges, particularly as they relate to security, online payment, and environmental and ethical concerns. German growth has also been stagnating over previous years. Germany is the fifth-largest ecommerce market in the world. The total ​projected revenue for 2019 is ​57.8 billion euros​ . It is the second-largest market in Europe after the ​ecommerce in the UK​. It is viewed by many as one of the primary drivers of the digital European economy. The ​most popular online stores (in order) are Amazon, Otto, Zalando, Notebooksbilliger, MediaMarkt, Lidl, Bonprix, Cyberport, Conrad, and Alternate. Amazon accounts for a whopping ​ 27% of all ecommerce sales. Amazon is the undisputed giant in the room when it comes to German ecommerce and, despite strong competition, it is not expected to lose this foothold in the near future. Germany is an interesting market because it has several unique characteristics when compared to other countries, especially the UK and US. It has a very large number of online shoppers and high internet penetration, for example, along with the best logistics network in the world. Growth has been consistent over the last decade and remains relatively stable despite shrinking. 3. E-commerce in India Online retailer ​ Amazon has launched its first shopping website in ​India​. The company took its first steps into the ​ Indian market in February 2012 when it launched Junglee.com, a site which allowed customers to compare prices online but not purchase items directly. From this diagram we can see that are the biggest competitors of Amazon in India’s market. ​Flipkart is the largest online retailer in India, with a 31.9% market share in 2018, followed by Amazon at 31.2%, according to Forrester. After adding the market share of its fashion specialty sites Myntra and Jabong, Flipkart controls a 38.3% market share. Flipkart and Amazon are the two largest players in the booming Indian ecommerce sector. Over the past couple of years, the two firms have been forced to modify their legal structures because of FDI rules announced in March 2016 by the government which allowed FDI in online marketplaces even as it capped the contribution of a single seller to 25 percent of the marketplace’s overall business. Per the current policy, 100 percent FDI is permitted in marketplace e-commerce activities. It is prohibited in inventory-based activities. Company’s CRM records data on customer’s buying behavior. It enables them to offer individual items, related items or bundle them as an offer, based upon preferences demonstrated through purchases or items visited. III. Market entry modes of Amazon Almost all operations in foreign markets are managed by subsidiaries staffed with local employees. Amazon decided to run its international business in a decentralized manner since it is a retailer that sells and distributes physical goods. The market entry strategy of Amazon is based on a hybrid form ● Capital cooperation: joint venture, greenfield investments or ​foreign direct ​investment (FDI). ● Strategic alliances Haven Healthcare, a joint venture between Amazon, JPMorgan Chase and Berkshire Hathaway, created its first offering in the form of health insurance plans for tens of thousands of employees. As an example, with this agreement Amazon could enter to these markets easily through insurance providers in Connecticut, North Carolina, Utah and Wisconsin. To become competitive compared with its rivals in foreign markets, Amazon decided to open and manage local distribution centers. Subsidiaries were set up via acquisition of major competitors or by greenfield investments. Examples of how Amazon expanded to some international markets Amazon first entered the German and UK markets simultaneously via acquisition of telebuch.de and bookpages.co.uk, which were leading online bookshops in these countries. The acquisitions enabled a quick move into the markets as Amazon could take over the local offices and distribution centers with local staff as well as benefit from the established supplier and customer base. The German subsidiary is further responsible for serving the Austrian market for which Amazon created a localized website with offers specific to the market. Amazon regarded the Austrian market as too small to be served by an independent subsidiary. Later, Amazon expanded into China with the acquisition of the leading online retailer for books, CDs and DVDs joyo.com. However, to guarantee a smooth transition from the Chinese online retailer to the Western brand Amazon, the company chose to keep the Chinese brand name for some time before it changed it to Amazon.cn. The company reached the Japanese market via greenfield investment into a wholly owned subsidiary and with the help of a number of partners. Since Amazon considered the distribution system in Japan complex, it allied with Nippon Express Co., a major domestic parcel delivery service to work together. IV. STP – segmentation, targeting, positioning Amazon segmentation, targeting and positioning involves a set of activities aimed at determining specific groups of people as customers and developing products and services attractive to this group. Segmentation involves dividing population into groups according to certain characteristics, whereas targeting implies choosing specific groups identified as a result of segmentation to sell products to. Positioning refers to the selection of the marketing mix the most suitable for the target customer segment. 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. . The online retail giant closely monitors changes in external ● Adaptive positioning​ 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.. Additional examples of anticipatory positioning applications by the e-commerce giant include Amazon Sage Maker, Amazon Comprehend and Amazon Rekognition. Below there is shown a table with segmentation of Amazon and its target customer segments. Type of segmentation Geographic Demographic Segmentation Amazon target customer segment criteria Region More than 100 countries Density Urban and rural Age 14 and older Gender Males & Females Life-cycle stage Occupation Behavioural Psychographic Degree loyalty ● Bachelor Stage young, single people not living at home ● Newly Married Couples young, no children ● Full Nest I youngest child under six ● Full Nest II youngest child six or over ● Full Nest III older married couples with dependent children ● Empty Nest I older married couples, no children living with them ● Empty Nest II older married couples, retired, no children living at home ● Solitary Survivor I in labour force ● Solitary Survivor II retired Students, employees and professionals of ‘Hard core loyals’ ‘Soft core loyals’ ‘Switchers’ Benefits sought Widest range of products Convenience of online purchasing Competitive prices Personality Easygoing, determined and ambitious User status non-users, potential users, first-time users, regular users, or ex-users of a product Social class All social classes: lower class, working class, middle class and upper class Lifestyle Resigned, Struggler, Mainstreamer, Aspirer, Succeeder, Explorer Reformer Amazon.com Inc. uses its marketing mix as a powerful approach to attract consumers to its e-commerce website. A company’s marketing mix or 4Ps (Product, Place, Promotion and Price) is the combination of strategies and tactics used to implement a marketing plan. In this regard, Amazon reaches out to its target online market through its marketing mix, which focuses on the place and price components as major selling points. As the biggest e-commerce organization in the world, Amazon continually faces increasing competition, which can reduce the company’s market share and global growth potential. To address this issue, the company must ensure that its marketing mix is up-to-date relative to market trends. Through a suitable marketing mix, the company enables organizational resilience while supporting innovation for long-term competitiveness of its online retail business. Amazon’s marketing mix (4Ps) is designed to take advantage of the online nature of the company’s e-commerce operations. The components of this marketing mix enable competitiveness and international growth while Amazon.com Inc. innovates its services. V. Product strategy The Amazon portfolio is based on a wide range of complementary and competitive products and services which can be purchased through its e-commerce platform, with the main concept of satisfying the needs of customers, reaching your home without customers having to worry about managing the product or service. One of Amazon's product strategies is to improve the product that is already on the market by innovating, increasing quality, or improving stylistic aspects. For example, of traditional speakers, the company has decided to give this a smart touch to make it more functional and technological. This product is called Alexa which is a ​virtual assistant ​AI technology developed by ​Amazon​, It is capable of voice interaction, music playback, making to-do lists, ​ setting alarms​, streaming podcasts, playing audiobooks, and providing weather, traffic, sports, and other real-time information, such as ​news​. Alexa can also control several ​ smart devices​using itself as a ​home automation​system. Another product strategy is the development of new product lines through increasing the variety of the range, applying individual modifications or developing customized products. Among them we have the following: Product lines Amazon.com ● AmazonFresh ● Amazon Prime ● Amazon Web Services ● Alexa ● Appstore ● Amazon Drive ● Echo ● ● ● ● ● ● ● ● ● ● Kindle Fire tablets Fire TV Video Kindle Store Music Music Unlimited Amazon Digital Game Store Amazon Studios AmazonWireless Profits from Amazon devices such as the fire tablet are neutral as the company continually shows new suggestions on the screen for purchase and by making these devices as affordable as possible gets them into the hands of more and more customers for greater purchase potential On the other hand, Amazon is also managed according to two product strategies such as standardization and adaptation. Adaptation, since the markets in which Amazon operates behave totally differently due to differences in language, politics, aesthetics, customs, beliefs and values, being important factors that must be considered in the international commercialization and that force the adaptation of the product to the market. However, due to the wide range of its portfolio, its strategy also has to be standardized with some products that they offer to markets that tend to become homogeneous due to the pressure of technology, communications and transport. The standardization strategy is to consider that the market is global for the product. In other words, despite the differences between nations, Amazon offers the same product in all markets, helping to reduce adaptation costs and that people around the world can easily identify its products. The main Amazon's approach is focuses on long term decisions, investments, products, services, innovations, etc. For the company it is not a problem if they are earning little income from any decision or investment made in a certain period of time because they know and are sure that they are earning growth in the long term. Thus, the statistics attest to that through the years. Amazon’s story is a differentiator, setting the brand apart from other mega-corporations through its entrepreneurial grass-root beginnings. Their customer centric approach still is one of their highest brand values and drives the whole focus of the business in terms of their business model, brand strategy and customer experience. As the organization experienced exponential growth and added product line after product line, it became known as “the world’s largest online retailer.” Today’s Amazon customers can expect to find anything they’d like to buy—and some things they would never buy—available for sale on Amazon - global brand. This enormous selection of products is a crucial part of Amazon’s brand differentiation. The second prong, regarding the lowest prices, has been part of Amazon’s branding strategy from the beginning. In fact, the company is so dedicated to under-pricing its competitors that part of the business plan was not to make any profits for the first four to five years of operation, in order to keep prices low for customers. Other money-saving features have been added to the retail site in addition to low pricing, the most notable being the Amazon Prime program, which offers customers free two-day shipping, unlimited movie streaming, and now unlimited music streaming for a yearly subscription fee of under $100 amounting to around $8.25 per month. VI. Pricing strategy Amazon has used a variety of pricing strategies through years, focused on keeping prices low and offering a wide selection. Due to the deals that they have daily, they are able to achieve this with ease. Their customer base is loyal and ultimately benefit resulting in Amazon benefiting as well. Amazon’s business is highly seasonal. ​The company generated 32%, 34%, and 31% of its annual revenue during the fourth quarter of 2016, 2017, and 2018 respectively. This pattern of revenue generation has certain implications on Amazon pricing strategy. Amazon pricing strategy can be generally described as cost leadership. Nevertheless, the company also applies alternative pricing strategies in certain segments. Cost leadership is placed at the core of Amazon pricing strategy. Analysts note that “Amazon’s strategy is to frequently lower prices until they beat competitors–for all products”. At the same time, Amazon uses premium pricing for its products and services, where the company possesses solid market share and competitive advantage. For example, publishers with Kindle Direct Publishing are offered 70% royalty option and make their books available in the Kindle Store. Additional range of pricing strategies used by Amazon sparingly include penetration pricing, price skimming, psychological pricing, product line pricing, promotional pricing and geographical pricing strategies. The e-commerce giant earns fixed fees, a percentage of sales, per-unit activity fees, interest, or some combination of these according to its seller programs. International pricing differences The photo shows a highly significant difference between the price on the amazon.uk market and the Canadian market. Today Amazon has created a browser capable of helping customers compare prices between different countries called Amazon International Price Comparison. VII. Distribution strategy Amazon realizes that the most important thing that customers want is the quick delivery of products they order. This is where Amazon’s extensive ​distribution system has come into play. Amazon now has more fulfilment centres exceeding 43 million square feet. Amazon first launched its distribution network in 1997 with two fulfillment centers in Seattle and ​ New Castle, Delaware​ . Amazon has several types of distribution facilities consisting of crossdock centers, fulfillment centers, sortation centers, delivery stations, Prime now hubs, and Prime air hubs. There are 75 fulfillment centers and 25 sortation centers with over 125,000 employee Amazon has ​ Sortation Centers which are responsible for sorting and packages by zip code are the typically delivered to USPS sites. I helps Amazon to speed the delivery process and control the distribution process from the beginning to the end. Delivery Stations​ . In urban areas they are often the last step in the chain before packages reach the costumer. Courier companies and Amazon Flex drivers typically handle these short-range deliveries. Fulfillment centers are the most common type of facility in Amazon’s distribution empire, but hey serve a wide variety of purposes Stores of Amazon: Five international stores of Amazon: Amazon Canada, Amazon France, Amazon UK, Amazon Japan, Amazon Germany. We can notice that in Europe we have only 3 Stores because in those countries are on the top list of the online spending and book sales in Europe We can distinguish two types of distribution channels of Amazon: ● Digital distribution channel - E-books, Kindle reader, Amazon MP3&Cloud Player, Instant video, Mac download store, Appstore for Android, Amazon Cloud Drive, Amazon Game Studios & Softwares ● Physical distribution channel - centralized distribution centres, states and places of tax advantage, faster response time, lower transportation cost. ​Amazon shipping packages are mostly shipped via ​UPS​. In case of destinations not served by ​UPS​, alternate carries like FedEx/DHL are used​ . VIII. Promotion Strategy Promotion mix involves the strategies and tactics that a company uses to communicate with its target market. Amazon.com Inc. aims to persuade its customers to visit its websites and pay for its online services. The following strategies and tactics are used in such promotional mix, arranged according to importance in the company’s e-commerce business: 1. 2. 3. 4. Advertising (most important) Sales promotions Public relations Direct marketing Advertising functions as the primary means for Amazon to communicate with its target market. For example, the company has an affiliate program for website owners or online publishers to earn revenues by displaying advertisements and corresponding links to products sold on the Amazon.com website. This strategy widens the company’s market reach. Also, Amazon.com Inc. applies sales promotion as a secondary strategy to attract customers and persuade them to purchase goods and services on the website. For example, the company occasionally uses discounts and special offers to generate more sales. On the other hand, the firm strengthens its brand image through public relations programs, such as Amazon Smile, which donates a percentage of sales to charitable organizations. These programs enhance consumer perception about the corporation. Moreover, in using direct marketing, the company directly communicates with businesses to offer its online services, such as publishing and digital content distribution. In this component of Amazon.com Inc.’s marketing mix, advertising is the main determinant of the organization’s marketing communication effectiveness. Amazon has successfully positioned itself as a Glocal (Go global Act local) e-commerce giant where one can buy anything & get it delivered at any remote locations. Amazon uses pull mar​ keting strategy. A pull marketing strategy, also called a pull promotional strategy, refers to a strategy in which a firm increases demand for its ​products and draws (“pulls”) consumers to the product. Pull marketing strategies revolve around getting ​consumers​to w​ant a particular product. In a pull marketing strategy, the goal is to make a consumer actively seek a product and get retailers to stock the product due to direct consumer demand. There are several advantages to a pull marketing strategy: ● ● ● ● Able to establish direct contact with consumers and build consumer loyalty Stronger bargaining power with retailers and distributors Focuses on creating brand equity and product value Consumers are actively seeking out the product, which removes the pressure of conducting outbound marketing. ● Used to test a product’s acceptance in the market and gain feedback on the product. There are also some disadvantages of such promotion strategy: ● Works effectively only when there is high brand loyalty. ● Lead time is long as consumers are comparing alternatives before making a purchase. ● Requires creating high demand for a product, which can be difficult in a highly competitive landscape. ● Requires strong marketing efforts to convince consumers to actively seek out the product. Social media are the example of pull marketing strategy and Amazon became a specialist in this game. ​ One of Amazon’s biggest strengths lies in its ability to promote its products on other platforms. The retail giant successfully manages to leverage the popularity of other channels to lead back to Amazon product pages. Lately, Amazon partnered with Snapchat to create visual search tool. Using Snapchat camera, users are now be able to scan an object or its barcode, prompting the pop up of a detailed product card. With one click, the user is redirected to the Amazon platform to buy the scanned product. Then there's Amazon’s affiliates program: users are now allowed to insert affiliate links to promote the products displayed in their boards. On Instagram, you can add a link to your story or profile to lead back to an Amazon product page. But the platform has taken this whole concept a step further with the introduction of its ​ Influencer program​. Amazon is also present on twitter and has more than 3 million followers. There are put funny posts which gives the biggest feedback from the followers. The company’s crucial consumer touchpoint is facebook with over 28 million followers. Amazon’s strategy is to create a loyal community. Social media gives the easiest way to achieve this. Mission – ​ “To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavours to offer its customers the lowest possible prices,” Vision​- “​To leverage technology and the expertise of our invaluable employees to provide our customers with the best shopping experience on the internet” While 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. Amazon also uses advertising networks online so that whenever you check something on amazon, you will see an ad for the same thing somewhere else on some other website. Search engine marketing and getting the company’s name high up the search engine’s results is also a smart promotional ​strategy by Amazon. The founder of Amazon had this in mind when creating the company, deciding that it should start with an ‘a’. In India, Amazon can be seen to rely on the best source of promotion there is – word of mouth. People telling others about the site, or mentioning it in a positive way is a sure way to have a new future customer. However, there are several print media ads to make their presence felt to the people. However, much more is needed in the ​promotions department from Amazon in India because the traffic of Amazon is being taken over fast by ​Flipkart​. VIII. Conclusion Summing up, Amazon is a good example of the company which achieve the success, found its place in many markets and become a leader in e-commerce. From this work we can get information about Amazon’s history, markets, entry modes, segmentation, targeting, positioning, product, pricing and distribution strategy. Analysis of this company gives us the picture how to run the business, it can inspire us and respond many questions. Amazon is in the process of growing its customer base, expanding its distribution network and online power to all corners of the planet. Thanks to its pricing policy, the very low have obtained millions of people on its platform. Moreover, the accessibility of resources and markets is considered in this strategic decision area of operations management. In the case of Amazon the emphasis is on the strategic location of warehouses or fulfillment centers. Amazon.com e-commerce success depends on the high efficiency achieved in its operations management, which directly determines productivity. As the leading player in the e-commerce industry, Amazon is an example of the significance of technologically supported productivity for optimal efficiency of services. Continuous improvement can help enhance the capabilities of Amazon in maintaining adequate support for operations despite global expansion and the broadening of the product mix.Through effective operations management, Amazon keeps its lead in online retail and the e-commerce market. Source https://aws.amazon.com/government-education/government/ https://en.wikipedia.org/wiki/List_of_Amazon_products_and_services https://www.actualidadecommerce.com/que-es-amazon/ https://www.thebalancesmb.com/how-amazon-is-changing-supply-chain-management-4155324 https://corporatefinanceinstitute.com/resources/knowledge/strategy/pull-marketing-strategy/ https://wi.bwl.uni-mainz.de/publikationen/Working_Paper_04_08_KL.pdf https://www.product-frameworks.com/Amazon-Product-Management.html https://www.researchgate.net/publication/319626623_BUSINESS_MODEL_OF_AMAZON_INDIA_ -_A_CASE_STUDY https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/54083920