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OXFORD BROOKES UNIVERSITY

A Review of Marketing Strategies of Amazon and its effectiveness

Word Count: 7467

Table of Contents
Part 1: Objectives and Research Approach................................................................................ 4 Importance of Marketing ....................................................................................................... 4 Introduction of Amazon.com ................................................................................................. 4 Introduction of Benchmark Company (Walmart) .................................................................. 5 Research Objectives ............................................................................................................... 5 Research Questions and Design............................................................................................. 5 Part 2: Data Collection Methodology ........................................................................................ 6 Research Strategy .................................................................................................................. 6 Case Study Research Method ............................................................................................ 7 Models to be used ................................................................................................................. 7 Model 1: Market Segmentation......................................................................................... 7 Model 2: 7 Ps of Marketing................................................................................................ 8 Research Ethics ....................................................................... Error! Bookmark not defined. Research Limitations ........................................................................................................ 10 Part 3: Analysis, Conclusion and Recommendation ................................................................ 10 Model 1: Market Segmentation........................................................................................... 10 Segmentation ................................................................................................................... 10 Targeting .......................................................................................................................... 11 Positioning ....................................................................................................................... 12 Model 2: 7 Ps of Marketing Mix........................................................................................... 14 Product ............................................................................................................................. 14 Price ................................................................................................................................. 15 Place ................................................................................................................................. 15 Promotion ........................................................................................................................ 16 People .............................................................................................................................. 18

Processes.......................................................................................................................... 19 Physical Evidence ............................................................................................................. 20 Amazon Marketing Analysis................................................................................................. 23 Conclusion ............................................................................................................................ 24 Recommendations ............................................................................................................... 24

Part 1: Objectives and Research Approach


Importance of Marketing
Marketing is considered to be the most important activity of a business in any industry. It is the determinant of the recognition of a companys products and services and hence source of its sales and profitability. A business is making profits if it is marketing well and might lose credibility with weak or no marketing. Internet marketing as also known as online marketing, web marketing, eMarketing, etc. literally means marketing through internet using websites. Online marketing is the most efficient interactive tool in modern era where marketers and customers trade materials and services through advertising on the web or online (Shaw, 2006). Many companies and businesses now are moving their marketing strategies to more of eMarketing where they can directly target their customers and create value for their brand and equity. Online marketing is cost effective that requires the least of the risk management while the sales and revenues can increase rapidly.

Introduction of Amazon.com
Amazon.com is an American based multibillion earning electronic commerce company which was incorporated in 1994. The companys headquarters and corporate offices are located in the city of Seattle, the state of Washington, USA. The company is the worlds largest and strongest online retailer and number 7 at the worlds top innovative companies. The market cap for the company till May 2013 was recorded to be $ 119.01 B. As for brand rankings, its stands at number 28 among the most powerful brands of the world (Forbes, 2013). Though the company was incorporate in 1994, yet it opened its virtual doors to the World Wide Web in 1995 with the biggest selection of books online. Later on the company diversified its services and extended its business to software, games, online shopping of apparels, clothes, food, furniture, cars, machineries and many more products. Along with providing users an online platform for books and other mentioned products, the company provides advertising services along with co-branded credit card agreements so that customers can market their products online and trade with each other (Amazon.com, Inc., 2012). The company focuses on providing services to its customers based on price, convenience and selection. In the present age, Amazon.com has penetrated the internet

marketing deeply with greater share of the market in providing products as well as a source site for consumers and business companies to sell and buy almost every kind of product online. Amazon might be in the online marketing industry but it is among the major retailers of the world, so it has to face tough competition from giants like eBay, Walmart, Apple, Netflix, Barnes & Noble, Staples, etc.

Introduction of Benchmark Company (Walmart)


Wal-Mart Stores, Inc. is an American based multinational and multibillion earning retail store corporation that has its store chain extended to departmental and warehouses store. The retail stores range in various formats around the world being the biggest retail store corporation. As of May 2013, the market cap for Wal-Mart was $ 242.53 B making it the number 1 in sales, 7th in market value and 24th in the worlds most powerful brands (Forbes, 2013). Wal-Mart fist opened up back in 1962 with Sam Walton starting a single store in the city of Rogers, Arkansas State, USA where its headquarters are located. With a number of stores in USA, the business is expanded internationally in numerous regions with almost 10,000 stores serving around 200 million customers on weekly basis (Wal-Mart Stores, Inc., 2012). Wal-Mart with the technology age now also has entered the online retail market whilst giving tough competition to Amazon.com. The company sees a rapid growth in future for its eCommerce business while it is successful operating in US, UK, Canada and Brazil. Wal-Mart invests in people and market and its Walmart Labs has strong mobile and social media marketing talent (Wal-Mart Stores, Inc., 2012).

Research Objectives
The purpose of this study paper is to analyse the marketing strategies of Amazon.com and their effectiveness on the goals and objectives of the business. In this research general marketing strategies with the application of certain models will be discussed and evaluation will be made by comparing the strategy success or failure of Amazon.com with that of WalMart.com which would be acting as the benchmark.

Research Questions and Design


The following research questions will define the scope of our study; 1. What approach does Amazon.com use if applied with the 7 Ps of marketing mix?

2. What are the market segments and targeting strategy of Amazon.com and how does it positions its brand? 3. How does the website of Amazon attract customers and what benefits they obtain by using different tools and applications of the website? 4. What is the competitive position of Amazon.com in marketing aspects as compared to Wal-Mart? 5. What should the company practice in order to increase or retain its market share and position in the industry? We will use the descriptive research approach as part of secondary research methodology. Marketing is more of a qualitative and contextual activity, so descriptive will be most useful and a little touch of quantitative data will be given to evaluate the financial comparison of both the companies performances in the market.

Part 2: Data Collection Methodology


Research Strategy
As mentioned earlier, this paper will be based on secondary research methodology. The difference between primary and secondary research methodology is that in primary technique the data collected is first-hand or based on information generation involving interviews, questionnaire, reviews, field study, etc. (Hamilton, 2005) which is time

consuming and more costly; while secondary data involves extracting and collecting data information from already available sources. In the secondary methodology data sources like authentic journals, news articles, textbooks, online books, company reports and corporate websites of the companies along with other internet resources will be used (Weathington, et al., 2012). The data collection is easy, less time consuming and low costly because of the readily available information from such sources (Hamilton, 2005). To answer the research objectives and questions here, the most suitable approach will be to use inductive empirical research. In this method, we will be studying individual cases on Amazon.com and Wal-Mart and apply the selected models on them to analyse their current eMarketing strategies and tactics to gain competitive advantage over each other (Johnson & Christensen, 2011). This will diversify our research approach to Case Study methods.

Case Study Research Method


We have decided to use the case study method in order to study the marketing strategies that has been implemented by Amazon.com in order to achieve the market competitiveness. As marketing is an important part of the strategic management of a company, there are many cases regarding successful companies on how they process, approach and what kind of tools and instruments they use and apply in their business. So, in order to define such research areas and revealing the strategies of Amazon.com, using case studies will be the best method. Apart from that, the annual reports of both the companies will be studied as they have more comprehensive and reliable information from the company itself and the strategies regarding marketing and management can be analysed. The main aim of this research paper is to study the global market practices of Amazon.com that has made it among the top brands around the world with the help of inductive approach through case studies (Jeffrey A. Gliner, 2000).

Models to be used
Model 1: Market Segmentation
Segmentation Segmentation is the process of dividing the overall market of a product or service into differentiated groups or sectors. The segmentation of each group is based on the different desires of people in that particular group as each of them is homogeneous. Market segmentation is carried out after careful market research on what the consumers want, when they want and how they want it (Hill & Jones, 2007). With the changing era, the demand of consumers change rapidly and that is why business companies have to invest much more in their R&D in order to create and sustain the customer value. Local, national and international markets consists of many types of customers with different needs and values (Burrow, 2008). Segmentation has certain benefits for the business managers. It enables the marketers to study customers needs, satisfaction and potential of profitability from each market segment and compare the market opportunities within different segmented groups. Thus firms with available resources can separate the marketing and production programs in order to satisfy each segment according to their own needs. The segmentation helps in the effective budget allocation as different segments can be allocated

with different amount of finance and thus resources can be used more efficiently (Havaldar, 2005). Targeting The next step after segmentation of the market is the targeting where companies focus their target towards a particular or multiple segments. Segmentation is the evaluation of the groups and targeting is the selection of the group (Kotler & Armstrong, 2011). The process of targeting usually involves consideration of the companys resources as they choose to choose those areas and people which would give them a profitable return. More resources means that the company can choose multiple segments at a time and differentiate each market team to different segment. Lack and scarcity of resources usually keep the business firms to stay focussed on a single market segment (Weinstein, 2004). Positioning Positioning is the process through which marketers create a brand image in the customers minds. Positioning includes identification of a market place for a brand product or service and occupy it (Hill & Jones, 2007). The strategies involved are according to the market placement i.e. price, promotion, packaging, competition and distribution. Once, the company decides on making segments and targeting particular ones, it should then decide on how it can provide its products to the targeted segment and what positions it wants within those segments (Kotler & Armstrong, 2011). Companys usually have a positioning statement where they describe about who the target customer is, what they want, what is the product name and category, what does it provide and how it differentiates form competitors. A brand is effectively positioned through its unique, differentiated and demonstrable value (Weinstein, 2004).

Model 2: 7 Ps of Marketing
Usually researchers look at 4 major Ps of marketing while evaluating a companys strategies. But in this study paper, we have chosen 7 Ps for elaborative analysis of the whole marketing techniques used by Amazon.com. These seven are: product, price, promotion, place, people, processing and physical evidence (Henry, 2008). The Ps are evaluated even by the

marketers themselves due to continuous change of products, customers and markets with constantly changing demands.

Product Product means what the company offers to its customers which may be tangible or intangible. While analysing the product of a company, considerations are made for the products range, its design and quality, usefulness, the technology related factors, vale, brand and its appearance. The goods and services which the company offers to its target customers are included in product (Burrow, 2008). Price The amount of money which the company sets for a specific product and which the customers have to pay is called the price. It is a method of increasing the product value to the customers. Pricing strategy depends upon many important factors like whether it is to raise sales and gain profit or improve the image of product. Price is also set on the basis of the cost what the customers can pay or according to the competitors prices (Henry, 2008). For marketing function of a business, the pricing strategy is very important in terms of increasing value and profits (Kotler & Armstrong, 2011). Place Place is the activity or strategy of the company which determines the availability of its products and services to target customers. It usually includes distribution and inventory channels along with the transportation and location of the company. Therefore, it is vital for them to have a proper presence in that area and a diverse distribution channel for its products to reach the customers (Burrow, 2008). Promotion Promotion is conveying information and value of the product or service to the customers through channels like T.V/media ads, banners, flyers, sales representatives, etc. Promotion is what marketing actually works for. Companies each year spend a hefty amount of money on promotional campaigns not only advertising their products/services but also showing their social and corporate responsibilities (Burrow, 2008). Processes Processes is associated mostly with customer service and value creation. It shows how effectively have the company been able to market itself outside and within the organization. The processes might include handling customers, orders, identifying the needs through

feedback (Cant, et al., 2006). Processes overall include all operations of the marketing mix where marketers can deliver value. People For any product or service experience, people are the most important elements. They are the determinants of the success of an organization and its operations. People in the marketing mix include the founders, employees, culture, etc. (Stevens, et al., 2005). within an organization which are involved in the foundation and achievement of business goals of the company. Physical Evidence Physical evidence means some recognition or particular specific presence of the company within the market. It usually involves the product packaging, companys logo, stories and news about the brand, offices, online presence, sales staff, etc.

Research Limitations
The resources were scarce and much data lacked the objectivity of our research. That is why the data analysis and research processes are limited (Kumar, 2008). The critical analysis of research has led to be biased which could not be avoided. Some of the relevant data is not provided by the companies as it is confidential and they fear threat of competitive takeover (Kumar, 2008). Finding relevant and updated data has made us consume much time in the whole research process.

Part 3: Analysis, Conclusion and Recommendation


Model 1: Market Segmentation
Segmentation
Amzaon.com has divided its operations into two major segments i.e. North America and International. The reviews and performance of the company within its internal self is based on the evaluation of results from both these regions. The company allocates these segments to expenses included in marketing, general and administrative, fulfilment and technology and content. As for Amazon.com, most of the technology and content expenses occur in the

North American regions (Amazon.com, Inc., 2012). Further the segmentation of consumers in internet users having access to internet markets. The segments includes all sectors from consumers to sellers to business companies ready to market their products and services through the eMarketing tools and instruments provided at the platform of Amazon.com (Carroll, 2011). Wal-Mart has segmented its market into three divisions including USA, International and Sams Club. While the prior two are targeted for international and US markets, Sams Club is a warehouse chain operated and owned by Wal-Mart. It is named after Wal-Marts owner Sam Walton. The club is exclusively for membership owners and those having Sams Club membership can get products on discounted price both from the club warehouse and WalMart stores all over the world.

Targeting
As the main market segment of Amazon.com is the North American and International markets, its target groups include people from teenage to all above age who are able to use internet and can understand the online eCommerce terms and agreements. The primary targets in the beginning of the business were the book readers who wanted to have books out of their reach available to them through some handy source (Bercovici, 2013). The site provides plenty of books either through publishers or other readers to be sold or for free in order for people to easily find what they are looking for (Amazon.com, Inc., 2012). Later on the company in past few years expanded its reach to more of an online retail store. The consumers include paid or non-paid depending upon the type of product or services they require. Males and females with ambition to earn through the internet trading and advertising through a reliable platform are attracted by Amazon.com to use it as their means of business (Wong, et al., 2009). Amazon.com even acquired Zappos as a means to understand the minds of young women who are online customers (Lashinsky, 2012). Amazon targets consumers from all around the world to cover its international market. With alliances and ties with third party sellers across the world, it gains access to consumers at global level. The targeted group has users who are early adopters and tech savvy. For such customers, Amazon has separate sites like Amazon mp3, Amazon Appstore, Amazon Kindle, etc. (Amazon.com, Inc., 2013). Also the psychology of such customers is that they seek convenient shopping with easy availability at delivery at their doorsteps.

Apart from customers, Amazons main target is the sellers or business companies. Amazon aims at attracting maximum number of business firms and other sellers to use it as a platform for business trading (Advisor, 2013). It is one of the primary objective of Amazon as it would not be a retail marketer if it does not have any sellers to begin with. Similarly, the Amazon Appstore provides marketing area for applications and software developers to sell their products online to a multi diverse global customer market (Amazon.com, Inc., 2012). Wal-Mart targets people with low income as its motto says low prices, always. As per WalMarts CMO, they have categorized the targeted market into three groups now. The brand Aspirationals include people who are passionate with brand names as KitahcenAid, etc. The other group is of Price-Sensitive Affluents including people who have quite a wealth but love deals and combos. The last one are the value-price shoppers including people who cannot afford much money or much items and prefer low prices for all (Barbaro, 2007).

Positioning
Amazon positions itself quite well in the market by targeting its customers through a large number of online marketing channels. In the online retail stores list, Amazon has been keeping the top slot way ahead of any of its competitors including eBay, Walmart, etc. As for the position or image of the company in customers mind, Amazon has been satisfactory except for the following analysis of Kindle Fire, the smart tablet by Amazon (O'Connor, 2013). A survey revealed that the customers of Kindle Fire or owners are willing to spend much money on Amazon through Kindle as of a population of 29% agreed but only 54% of the owners show their satisfaction with it (Appleinsider, 2012). Amazon has a dominant position in the eCommerce industry as shown in the analysed results. This shows that Amazon has positioned itself quite well in the customers mind without being low at satisfaction level. Position strategy is demonstrated by following diagram of Aakers Model that shows brand personality component of positioning: Aakers Model for Brand Personality The following model of brand personality is applied on Amazon based on illustrated model of Aakers 1991 model

Source: (Aaker, 1991)


The cells filled in Grey color are characteristics for Amazon associated if it was a person.

Amazon has low price strategy besides it being an online marketing company. Such strategies have made its image much better among customers.

On the contrary, Wal-Mart has always been great at positioning itself in the market. Being the largest retail store, it had nothing to worry about losing customers on online platform around 5 years back. Customers likewise always had a positive image of Wal-Mart in their minds and trusted it to have everything of their interest. Yet when Amazon started rising as the largest online retail store, Wal-Mart slowly started losing its customer as well as merchant market to Amazon as people would find it easy to sit at home and shop for low and discounted prices. So, then Wal-Mart decided to extend to the eCommerce business and compete with Amazon at the same level (Welch, 2012). Currently, both Wal-Mart is

rising as an online store too as it has positioned itself to be behind Amazon in competing in the industry.

Model 2: 7 Ps of Marketing Mix


Product Amazon.com is an online retail and marketing website which acts as a service provider for customers and sellers to trade using its platform. At the beginning, the website used to sell books and reading materials online (Amazon.com, Inc., 2012). Later on, it opened up trading facilities for people to sell and buy books and other stuff from each other. With the passage of time, the company has diversified its products and services to numerous departments and is now the largest online retailer in the world providing business companies to sell their products online through Amazon.com. The different departments with products include books and audible, unlimited instant videos, clothes, shoes & jewellery, mp3s & cloud players, digital games & software, appstore for android, sports and outdoors, beauty health & grocery and many other household and commercial products of electronics, toys, etc. (Amazon.com, Inc., 2013). Amazon products also include Amazon Glass, Kindle Fire tablet and many more. Amazon with constant innovation also launched its selling hub for seller customer who want to sell their products online (Schoultz, 2013). The website is incorporated regularly with user friendly tools as in the beginning, new users usually find it difficult to operate the website due to its rich tools. These changes are incorporated into a website of Amazon in order make it more user friendly (Schneider, 2009). The services with regards to these products which Amazon offers include using the portal and other tools for the seller customer and the consumer customer (Nielsen & Pernice, 2010). The portal offers transparent

information of the goods offered, their payment terms, after sale service and also the delivery service of the goods offered. Though Amazon does not own these consumer goods as its own products but it should be kept in mind that the quality and delivery of the product and services is the responsibility of Amazon (Damsch, 2010). Wal-Mart like Amazon has almost the same products as it could sell online. Amazon has an edge of first mover and market leadership in online marketing industry. Wal-Mart online offers people to select and book sustainable agricultural products, fish and other items from

the index and order them to be delivered at their doorstep. Its aim is to provide products that are sustainable and affordable (Wal-Mart Stores, Inc., 2013). Price Although Amazon is an online retailer yet it aims at providing goods and services to the customers at comparatively low prices. The prices though are fixed and amazon does not offer any auction services now. Price Listing & Price Match The website offers fixed price listing and variable price listing. Amazon offers options of price matching in the website along with price lists, shopping cart prices, surcharges and many other price information which the consumers require (Amazon.com, Inc., 2013). Amazon usually does not price match with other retailers except for the televisions but keeps the price competitive. As for some used and new products according to the availability, Amazon does offer less than other market sellers (Amazon.com, Inc., 2013). The list price on the website actually displays the full detailed retail price of the product. The pricing is done on either the suggestions of the supplier or manufacturer or according to the standard industry practices. The List Price is based on such that on any day, it may or may not show the prevailing prices as it is an estimate of comparative price. For some goods and items, the title mentioned is open-stock prices in The List Price and offered in sets where the aggregate of the retail price suggested by the manufacturer are mentioned (Amazon.com, Inc., 2013). Sam Wilton while founding Wal-Mart had this philosophy of always low price implemented in the company and it is still being followed within the company (Wal-Mart Stores, Inc., 2013).

Place
Amazon already is a retail online store where consumers can order their selected goods, items and services and have them delivered home at their door steps. Amazons headquarters are located in Seattle, USA, yet it employees thousands of workers. The company has its offices, customer service centres, fulfilment centres, software development and data centres globally.

North America Within the North America including USA and Canada, Amazon has offices and other centres in multiple states including Arizona, California, Nevada, Texas, South Carolina and Ontario, Toronto and many others (Amazon.com, Inc., 2013). Europe & Australia The European headquarters off Amazon.com is in Luxembourg City of Luxembourg. Other major operations in Europe are in Germany, France, Ireland, The Netherlands, Italy, Spain, Slovakia, Romania, Sweden and United Kingdom. As for Australia it has corporate offices in Sydney and Melbourne (Amazon.com, Inc., 2013). Asia & Africa In Asia, the headquarters is in China and Japan along with many fulfilment centres. While customer service and development centres are located in India along with Web Services in Singapore (Amazon Web Services, 2013). Africa only has development centre and customer service in South Africa, Egypt and Morocco. Central & South America For Central America, Amazon has customer services and data centres in Costa Rica while Brazil in South America (amazon.com, 2013). Distribution Centres Amazon spends heavily on its distribution centres as they are the main drivers of its business delivering goods and items to its customers. But this spending had caused it a fall in the profits for about 37 percent in the first quarter of year 2013 as reported by the company. But this was still somewhat less what the forecasts had expected so the shares went as they were (Wingfield, 2013). Reason being that Amazon is facing tough competition as many have entered the online marketing industry including eBay, Apple and the big one named Wal-Mart.

Promotion
Amazon.com as by its basic business is an online marketing website company, so advertisements and promotions of products and services are at large with many different options for the users to choose from either they are the buying consumers or the selling consumers (Turban, 2006). The promotions and deals segment of the website includes

Promotional Codes and Offers, Gold Box Deals, Rebates and Lightning Deals along with a section of the Terms and Conditions for these promotional deals (Amazon.com, Inc., 2013). The promotional codes and offers section further includes claiming free product offers, redeeming promotional codes and receiving multiple items or best value discounts as for constant and regular users there are many advantages which the website offers. Similarly other sections are further subdivided as Gold Box Deals into About and Quick Picks. When demanded acclaim for a rebate, the company takes about 12-15 weeks to process the request (Amazon.com, Inc., 2013). Coupons On seasons, Amazon offers discounts and coupons as an example can be taken of its Backto-School offers recently. The company provides coupons as the risk of profit margin loss is less and thus the offer was made for coupons of $5-$25. And as for further promotion the offer is a tricky one too as it requires the customers to share the Amazon.com link along with their desired statement to their Facebook page. Once a customer does that, Amazon confirms and notifies him/her of the coupon added to his/her amazon.com account (Brownell, 2013). TV/Studio Promotions Amazon also has studios where it promotes young gadget inventors through a childrens program. The characters in the show are three teenagers shown to solve technology and other science related problems of their clients. But the newer version is said to have concentration on elders as well. The purpose of the show is supposedly to encourage the creativity and innovation within children and young adults. In 2014, three more children programs are expected to start by the Amazon Studios (Ingraham, 2013). Wal-Mart recently launched a new campaign with new image for targeting school customers with the motto, The Real Walmart (Heller, 2013). Mobile Marketing Amazon has extended its promotional strategies and has now entered the mobile marketing media. The company offers the developers incentives in order to promote the applications by Amazon in mobile and advertise its products in the developers applications like games etc. as an approach to walk along the smartphone online shopping booms. As for reports say, Amazon offers the application developers a commission up to 6 percent in order to

advertise and promote its products in their apps. Mobile marketing is the new hike in the eCommerce world and Amazon has seized the opportunity to promote itself through it (Jopson, 2013). Local Advertising As for website advertisements, Amazon.com offers its customers to use the site as a market platform to connect to millions of other customers. The three divisions offered are Amazon media group, Amazon product ads and Amazon Local (Shimp, 2010). The media group gives options to selling consumers to engage their brand with the customers through online display of ads on Amazon websites, mobile apps and Kindle. The product ads division is a pay per click option where the advertiser has to pay to Amazon in return of its advertisement only when the customer clicks on the particular product of the advertiser (Amazon.com, Inc., 2013).

People
Amazon has a number of employees all across the world mostly in development and customer services sector. An estimate of 88,400 employees work in Amazon.com globally in corporate offices, customer services, fulfilment centres and software development centres (Amazon.com, Inc., 2013). The current CEO, Chairman of the Board and President of the company is 49 years old Jeffrey P. Bezos has been the incorporation in 1994 with a team of directors including Tom A. Alberg, John Seely Brown, William B. Gordon, Alain Monie, Thomas O. Ryder and a few others. Employees and Benefits At Amazon, employees are offered the chance to work with great people on exciting projects with a ton of opportunity for growth. But it also recognizes that Amazonians have a life outside of work and need a break every once in a while. That's why Amazon provides a full range of benefits for its employees and their eligible family members. While the benefits may vary slightly from location to location, basics for full-time, U.S. employees include Health Care, Time Off, Saving Plans, Employee Stock and Relocation Assistance (Soper, 2012). Culture The director of Global Talent Acquisition at Amazon.com, Susan Harker in 2011 explained the companys philosophy of people recruitment along with the innovation process.

According to Susan, as Amazon is a consumer centric company, the team there works hard to innovate according to the customer desires due to which it works backwards. No matter what business segment or what position there is, the employee has to be customer focused (Cenedella, 2011). Critiques 1. Many critiques have been rumored against Amazons work hour policies. It is said that the company employees many of the staff on the basis of zero-hour contracts. It is a harsh working situation where the employees have to wear tracking tags so that their boss can keep an eye on them. Those who are signatory to such contract still are not sure of being paid income but during the whole shift, they are obliged to walk as long as 15 miles a day. Further claims reveal that their toilet breaks are limited and controlled and also they can be dismissed and re-hired (Ledwith, 2013). 2. Amzon.com is a technology giant and in the USA is considered as inspirations and gurus of jobs and innovation. But in other countries especially in Germany, Amazon is facing crisis despite it being the second biggest market of the company. The difference lies in the work culture as the Germans claim that the company has brought the American work practices to their region which they claim to be an opposition to organized labor. Such norms are against the European work culture (Wingfield, 2013).

Wal-Mart considers its employees as the key movers of the business and thus considers them as the associates of the organization. Aligning organizational goals with valuable talent from recruitment and selection policies makes the companies smart and successful (Storey, et al., 2009). Promoting and encouraging the internal faculty and acquiring best class talent externally is the outcome of an enhanced management process that leads to progress and success (Taylor, et al., 2008). The learning and growth opportunities for employees are accelerated by this approach of balance score card (Crain, 2009).

Processes
Amazons processing is very unique which Amazon calls as the Fulfillment Web Service Functionality. The process allows the merchants to automatically ship their items to Amazon

and then later automatically delivered to the customers. The process includes three key services (Amazon Web Services, inc., 2013). Inbound and Outbound Service In this service, the merchants can crate and send ship their inventory as inbound to the Amazon warehouses (fulfillment centers). Amazon provides such tools and instruments on its website which enables the merchants to send their items to Amazon warehouse along with the packing slips and label creation (Amazon Web Services, inc., 2013). In outbound service, the merchants can use the Amazon fulfillment processing for all the sales either own their own website or other websites of different merchants. (Amazon Web Services, inc., 2013). Inventory and Shipping Service After the shipment and orders are completed, the merchants can use the inventory service in the fulfillment web service to keep a track and check on their inventory status in the Amazons warehouses. (Amazon Web Services, inc., 2013). As for customers, Amazon provides them a platform and service to keep track of their orders. On the website, the customers can use options of tracking their order, time and rates of shipping, special options for shipping and also information on general and international shipping (Amazon.com, Inc., 2013). Guarantee Claims Although Amazon is committed in providing quality items to its customers and has a large population of satisfied customers yet it heeds to their claims of guarantee and returns in serious processing manner. It A-Z guarantee program makes the customers to trust Amazon and its sellers. The program is for those who actually want to claim while there havent been any vast guarantee claims (Amazon.com, Inc., 2013).

Physical Evidence
Offices Amazon has its offices around the world where its operations are as described above with fulfillment centers in different parts of the world. It is said that the company has the largest space of urban offices in the world especially its main headquarters in the heart of Seattle. The buildings of the company blend into the environment of the city and no one could guess unless told of that they are passing through the corporate headquarters of Amazon. Visiting

there makes people excited about their experience as it is hard to capture all the essence of the natural environment (Yarow, 2013). Warehouses Although Amazon spends billions on its warehouse and is moving very fast on warehouse building spree, yet the inside of warehouses and the functions and operations have always been criticized heavily. The company recently ramped up the warehouse buildings by investing about $13.9 billion in order to make delivery for customers more efficient and be competitively ahead of its competitors (Kucera, 2013). Website The main domain of website is Amazon.com while changes are made with different regions as amazon.cn for China, amazon.fr for France, amazon.co.jp for Japan, etc. Amazon can be said to be the main innovator behind the internet marketing and shopping. The new era demands business companies to have websites as technology is causing rapid changes in industry and it is important for everyone to keep in touch with these changes. Presence on the web means that the customer can be in touch with the business or company all day all year without any consent of time zone or labour availability. Online shopping stores never stop operating due to automatic systems (Wilson, 2011). As Amazon already is a company with all its business on the website, it continuously needs to innovate and develop new tools, software and instruments to run the website and keep it according to the changing demands and desires. Though the address for the website might be different, yet the interior design for the website is same in all areas. The difference lies in language as amazon.cn has Chinese language (Amazon.com, Inc., 2013), while for Japan it is their national language in amazon.co.jp (Amazon.com, Inc., 2013). Once opening the site, customers get to see various options on the news feed and all over the website, there are advertisements and packages along with the upcoming and present attractions. The tabs on the top of top of the website give the customers options to make account, add wish list to cart, shop by departments, see gift cards, see their own account, see Todays deals, seek for help from representatives, search for their desired items on the search option, and many more offers available (Amazon.com, Inc., 2013). Further down the website, there are options to see partners of Amazon with access to website in different regions like India, Italy, UK, France, etc. Kindle, IMDB, junglee.com,

Zappos, Askville and any of other acquisitions of Amazon can be seen (Amazon.com, Inc., 2013). Thus to say overall, the website provides a whole outlook for sellers and buyers to view the companys major business and its partners. Logo The following image shows the original logo of Amazon which can be seen everywhere in its website.
Figure 1

Source: (Charles, 2013) As the logo shows the name of the company Amazon, a yellow arrow can be seen on the lower side pointing from A to Z. The meaning behind this picture is that the company sells everything from A to Z. Also, as the shape of the arrow is curved outwards, it represents a smile indicating that customers would be happy after shopping from the company (Passmore, 2011). Wal-Mart Logo Wal-Mart also has a physical evidence of offices and warehouses in almost all countries it has its operations with. As being a physical retail store, it can be found in major cities of many countries and also as alliance with other stores in some areas. The website is now also operating and has been working successfully. The logo of Wal-Mart has been changing since its historical creation and now on the website as well, the latest one is being used since 2008 (Wal-Mart Stores, Inc., 2012).

As the logo shows the name and the slogan/motto of the company, the star spark sign indicates the idea or innovation that has been carried out since Sam Walton came up with the retail store idea (Wal-Mart Stores, Inc., 2009).

Amazon Marketing Analysis


Since 2010, Amazons market to sales ratio, although is not very high, however is still increasing and has moved beyond 4.5% in recent year (figure 1). The need to is to evaluate has it really effected the companys sales and the profitability at last? The answer considering the table below clearly says NO.

Amazon 2012 Sales ($ M) Marketing Expenses ($ M) Net Profit/(Loss)


Source: Amazon (2012; 2011)

% Change 2010 30,792 1,029 1152 2012 23.17% 47.73% -106.18% 2011 36.40% 58.41% -45.23%

2011 42,000 1,630 631

51,733 2,408 -39

The above provided financial information of amazon reveals the company firstly, amazons sales has not copped with its marketing activities, and secondly, despite increasing companys revenues its profitability has been decreasing over the year and has turned into loss in recent years, and increased market expenses has not helped company to avoid its losses. Although the marketing and sales are positively correlated factors, however in case of amazon the correlation is pretty much weak, thus this has not helped companys revenue to increases rather there possibly are some other hidden factors behind increased sales among which inflation (increasing prices) is perhaps the most significant. Also as noted previously, Amazon product life cycles has reached at maturity level, therefore the marketing activities of its products is not of worth to add much values to its revenues, unless the company has made any innovation in e-commerce market.
Marketing to Sales Ratio (%)
5.0% 4.5% 4.0%

3.5%
3.0% 2.5% 2.0% 1.5% 1.0% 0.5%

0.0%
2012 2011 Amazon 2010

Source: Amazon (2012; 2011)

Figure 1

Conclusion
Amazon was the first ever online retail market with its business starting from book selling to later as an overall store with products ranging from grocery to furniture and electronics to software and services. Also the company acts as a platform for merchandisers, manufacturers and other sellers to advertise their products and services online to be reached to multi million people around the world. Amazon is in dominant position in ecommerce market that may be due to organizational inclination towards ecommerce from foundation of it. However, it is facing intense competition in internet industry due to low level of threat in online retailing and lucrative profit incentives. Wal-Mart online offers price match and discounts for products and also have membership cards for loyal customers to get coupons and packages based on the membership. Amazon has a strong position in the Northern Americas and central European states with its other region locations in China, Japan and also in African countries like Egypt and Morocco. The company has a chain of warehouses and is among the largest warehouse builders in the world as it needs ample space to store its inventory ready to be delivered when ordered. The company does face critiques from media and labour unions for its hectic and miserable conditions for the warehouse works who are paid less but work harder and longer. Amazon is efficient in advertising itself and positioning itself in the market and nor is facing a rising completion from Wal-Mart which has extended its physical retail presence now to online marketing and covering up the market it lost rapidly.

Recommendations
Amazon is recommended to look out for the business loss in sales in particular regions and make quick strategic decisions to cope up with the changing market. Wal-Mart is rapidly increasing its online presence to which Amazon should respond. Wal-Mart currently only sells products and goods available in its stores and from its related merchandisers. Amazon can use its advertising and corporate platform to traffic in more consumers and advertisers who want to sell their products through reliable sources.

The situations in Germany and other areas regarding labour laws and work hour regulations at warehouses should be opted out as soon as possible. Amazon is greatly dependent upon its suppliers and warehouses and should any further mishap or problem occurs, it would not be beneficial for the business. There are new markets emerging in Asian regions especially in lower Middle East including Qatar, Dubai, Bahrain and other UAE states and also in Indian and other South Asian countries. Amazon.com can avail the opportunity and penetrate these markets as the labour in the subcontinent is relatively cheaper and more productive. With technology advancements in India, more innovation will run into the company and the company can efficiently achieve its operational objectives and business goals.