PRODUCT MANAGEMENT

ASSIGNMENT

KUMAR UTKRIST (G19021)

RISHI SHEKHAR JHA (G19035)
SASIDHARAN CHANDRASHEKHAR (G19037)
Amazon overview

Amazon is an American multinational technology company that focuses on e-commerce, cloud computing,
digital streaming, and artificial intelligence. It is known for its disruption of well-established industries
through technological innovation and mass scale. It is the world's largest online marketplace, AI assistant
provider, and cloud computing platform as measured by revenue and market capitalization. Amazon is the
largest Internet company by revenue in the world. Amazon was founded by Jeff Bezos in in July 1994. The
company initially started as an online marketplace for books but later expanded to sell electronics,
software, video games, apparel, furniture, food, toys, and jewellery. Amazon distributes downloads and
streaming of video, music, and audiobooks through its Amazon Prime Video, Amazon Music, and Audible
subsidiaries. Amazon also has a publishing arm, Amazon Publishing, a film and television studio, Amazon
Studios, and a cloud computing subsidiary, Amazon Web Services.

Prime Video

Also known as Amazon Prime Video, is an American Internet video on demand service that is developed,
owned, and operated by Amazon. It offers television shows and films for rent or purchase and Prime Video,
a selection of Amazon Studios original content and licensed acquisitions included in the Amazon's Prime
subscription. Launched on September 7, 2006 as Amazon Unbox in the United States, the service grew with
its expanding library, and added the Prime Video membership with the development of Prime. It finally
launched in India in 2016, nearly a year after its larger American rival Netflix started streaming movies,
television content and documentaries in the country
After tying up with film makers and film studios since September 2016, Amazon Prime’s video content
portfolio is led by Bollywood movies, a popular content category in India. Its major competitors in India are
Hotstar, Voot, SonyLiv , netflix etc.
Market Opportunity and Set Up

Launched at a much cheaper rate compared to Netflix in India, Prime Video is now moving fast with
partnerships to expand its user base in the country. The company recently partnered with telecom
provider Vodafone giving its customers access to Amazon Prime video at promotional rates. Vodafone’s
merger with Idea cellular, creating India’s largest mobile phone company with a total subscriber base of
400 million customers. This is a significant number of the total mobile phone subscribers in the country,
which exceeds 1 billion. Amazon’s strategy with Prime Video in India differs from Netflix as the company is
focusing on local content and smartphone video consumers as its target audience. By partnering with
India’s largest telecom operator, Amazon can penetrate into this user base and also build a competitive
edge against local players such as Reliance Jio which are offering similar streaming services on mobile
phones.

India is a “mobile-first” economy and a majority of its population uses the internet on their smartphones. It
is estimated that the country will have nearly 500 million smartphones by 2020, double from the current
estimate of 200-250 million smartphones. As telecom operators roll out 4G services and reduce data tariffs
in a competitive environment, consumption of videos on smartphones is likely to increase significantly.
India’s young population favours watching content on the go, leading to an increase in video consumption
on mobile devices. Further, 90% of households in the country have a single television set, making a mobile
device the default personal entertainment tool for individual consumption. The country is expected to
have 650 million internet users by 2020, making it a huge market for video on demand consumption.
Amazon is looking to tap into this growth to penetrate deeper into the Indian market. By partnering with
telecom service providers, the company is enticing users to watch its content on their smartphones with a
4G connection. This strategy is likely to work in India, since a majority of the population is not likely to
invest into a fast broadband connection at home to view content on large screens. Further Amazon is using
this partnership to promote its related services. Users signing up for Amazon Prime via Vodafone will get a
Rs. 250 cash back in their Amazon Pay account. This will ensure that the company drives registrations for
this service, leading to higher e-commerce volumes in the future.

With a huge growth potential in India, Amazon is looking to grow revenues on thin margins and become
ubiquitous in the region. It is already a key player in the e-commerce segment and by driving prime
memberships through prime video the company is looking to grow its market share further in the country.
While Netflix cannot be considered to be its direct competitor in the region due to a different business
model, several local players can prove to be a threat for Amazon. For instance, another large telecom
operator in India, Reliance Jio, is offering movies and TV series for its subscribers at a nominal membership
fee. This company has a model similar to Amazon Prime, where Jio members (akin to Prime members) get
several perks such as free movies and TV series upon subscribing for a phone connection. Partnering with a
competing telecom company (which has now become the largest in India) is a smart strategic move by
Amazon and should cement its position in India.
Product building
- Heart of strategy: Amazon describes the vision of their business as to:
“Relentlessly focus on customer experience by offering our customers low prices, convenience, and a wide
selection of merchandise.”
The vision is still to Consider how these core marketing messages summarizing the Amazon online value
proposition are communicated both on-site and through offline communications.
Of course, achieving customer loyalty and repeat purchases has been key to Amazon’s success.
Amazon Video
Key features of Amazon Video include editorial and customer reviews; Web pages tailored to individual
preferences, such as recommendations and notifications; 1-Click® technology; secure payment systems;
searching on our websites as well as the Internet; browsing; and the ability to view selected interior pages
and citations, and search the entire contents of many of the books we offer with our “Look Inside the
Book” and “Search Inside the Book” features. Our community of online customers also creates feature-rich
content, including product reviews, online recommendation lists, wish lists, and buying guides,."
Amazon Video communicates the fulfillment promise in several ways including presentation of latest video
availability information, notifications, and options for on demand purchase and update facilities.
This focus on customer has translated to excellence in service with the 2018 American Customer
Satisfaction Index giving Amazon.com a score, which was one of the highest customer satisfaction score
recorded in any service industry, online or offline.

-Technological impact:
The importance of technology and an increased focus on Artificial Intelligence and Machine Learning.
According to founder and CEO, Jeff Bezos, technology is very important to supporting this focus on the
customer
Amazon Video: Architects and engineers must advance research in directions that no academic had yet. All
the effort put into technology infuses all of the teams, processes, decision-making, and approach to
innovation in each of Amazon video businesses.
The technological improvements from the beginning of the business in 2016 to the present have been
huge. From establishing an online video portal and website to shifting to completing an app-based
subscription. The rate currently has been rising from thousand users to a million

-Delivery side factors

Amazon Video Customers

Amazon video roughly has 101 million customer accounts, but just about one-third active customers in its
marketplaces and Amazon is seeking to increase this. With more intriguing and insightful content, amazon
is making its way to increasing the active users.
Also, Members are also encouraged to join a loyalty programme, Amazon Prime, a fee-based membership
program in which members receive free or discounted express shipping, in the United States, the United
Kingdom, Germany and Japan.

-Marketing factors

Throughout time, pricing and discounting approach has improved. The initial focus was on the addition of
new clients, motivated by aggressive marketing and discounts using different marketing platforms. This
approach later changed to customer retention, where the emphasis was on controlling the consumer
lifecycle and getting the right quality customers by proving them good online content.

Competition and challenges

With Netflix, Hot star offering similar line of services, Amazon Video’s life has not been a pleasant ride but
rather ‘intensely competitive’. The four main parameters on which it is judged are :
1. Price
2. Content Library
3. Supported Devices
4. Interface and ease of Use
The other factors which may pose bit of a challenge in the near future considering the aggressive stance of
other players especially Netflix
 Publishers, producers, and distributors of physical, digital, and interactive media of all types and all
distribution channels.
 Web search engines, augmented social networks, web portals, and other online and app-based
means
 Companies that provide information technology services or products, including on- premises or
cloud-based infrastructure and other services; and
It believes the main competitive factors in its market segments include "selection, price, availability,
convenience, information, discovery, brand recognition, personalized services, accessibility, customer
service, reliability, speed of fulfillment, ease of use, and ability to adapt to changing conditions, as well as
our customers’ overall experience and trust in transactions with us and facilitated by us on behalf of third-
party sellers".
Metrics measuring product development of Amazon video
1. Increase customer traffic to our websites
2. Create awareness of our products and services
3. Promote repeat purchases
4. Develop incremental product and service revenue opportunities
5. Strengthen and broaden the Amazon.com brand name.

Amazon believes that their most effective marketing communications are a consequence of their focus on
continuously improving the customer experience. This then creates word-of-mouth promotion which is
effective in acquiring new customers and may also encourage repeat customer visits.
As well as this Marcus (2004) describes how Amazon used the personalization enabled through technology
to reach out to a difficult to reach market which Bezos originally called ‘the hard middle’. Bezos’s view was
that it was easy to reach 10 people (you called them on the phone) or the ten million people who bought
the most popular products (you placed a Superbowl ad), but more difficult to reach those in between. The
search facilities in the search engine and on the Amazon site, together with its product recommendation
features meant that Amazon could connect its products with the interests of these people.
Initial Team & Pilot Project

Amazon had set up its Prime Video business in Mumbai after launching it in USA and Netflix had already
made its entry into Indian market. Prime was Amazon’s subscription service which allows buyers for free
and faster delivery of goods bought on Amazon, free content viewing, and free music streaming: all
included in an annual subscription of Rs 499 in India, expected to go up to Rs 999. In its first month,
Amazon had 5.82 million active users, according to data from app tracker App Annie. That number almost
doubled by May 2017to 9.57 million. Total engagement time tripled from 622 million minutes to 1,815
million minutes in the same period.

The Indian OTT market had a huge potential and Amazon was ready to cash in. It started with the basic
pillar of entertainment in India, Bollywood, with licensing of movies like Baby and Airlift. The pay per use
concept of web series was not explored yet. Prime Video explored this with Mayank Sharma’s Amazon
Original Breathe which launched in 2018. It was a roaring success which paved the path for other web
series to be produced by Amazon and delivered on its platform.

Unlike its main competitor, Prime tried to relate to Indian populace by exploring the original content which
explores the various facets of Indian society. The result was Inside Edge, which delves into cricket, politics
and relationships. The attention to detail has been a key aspect in creating the original content for Indian
users.

Comedy is a big market in India, so Amazon went after the segment in a big way. It started with 14 stand-
up comedy exclusives in the first year. But it not just stopping at The Ministry and the stand-up exclusives,
there were six exclusives and a reality comedy show in the pipeline which translated into “One Mic Stand”.

Another segment that they initially planned to explore was the children segment with shows like Chota
Bheem and created an original series after the popular movie Baahubali. The response from their original
content strengthened their resolve to deliver a different content than the normal Television which Indian
users used to watch.

With the acquiring of license to bring recently released Bollywood movies on their platform, Prime made it
a one-stop platform for entertainment. The plan to get to the masses took the next step by introducing
content in languages such as Hindi, Tamil, Telugu, Kannada, Malayalam, Marathi, Bengali, Punjabi and
Gujarati and user interface in Hindi, Tamil and Telugu.
Revenue Model and Business Model

At a technology conference near Los Angeles in 2016, Jeff Bezos said : “When we win a Golden Globe, it
helps us sell more shoes”

Prime members usually spend on average more twice as much money on Amazon.com as non-prime
members. So, by adding other benefits to Prime it's makes the service appealing to more people, and by
getting them to subscribe Amazon buys itself new loyal customers. Additionally, there are many movies
and TV shows on Amazon that aren't included with prime, and by having you as a steady prime video
viewer they increase their chances threat you'll buy from them what you're interested to watch instead of
turning to their competition.

A superficial look gives the following three ways of generating revenue from Amazon Prime:

1.) Part of the prime membership fee goes to pay for prime video

2.) By adding video streaming to prime the get more people to shop more on Amazon.com

3.) By offering free content the increase the probability of people using amazing video to buy paid movies
and TV shows instead of other places

Amazon follows a cost per first stream metric model for generating revenues. It basically assesses the cost
to the company to glue a customer on their video platform. That is calculated by the show’s production
and marketing expenses divided up to the number of people who stream that program after signing up.
The aim is to lower this cost.
The cost per the first impression allows it to see what shows are driving up subscriptions. In fact,
when Amazon had launched “The Gran Tour Season One” its cost per the first impression was $49. In other
words, new Amazon Prime subscribers watched “The Grand Tour” as soon as they joined in. This helps
Amazon Prime to build its customer base and deliver improved content.

An example of classifying some content based on this model is given below:

This enables them to understand which shows are driving new subscribers in and which shows are proving
to be redundant.

Amazon has a diversified, yet integrated business model as shown in the figure below

Amazon has unlocked financial resources which were not available in the past. This allowed it to start
“designing” its business model. Amazon is using the streaming platform Prime Video, to attract
subscribers, retain them and most importantly convert them into Amazon‘s products buyers.
With Prime, Amazon creates a buzz that drives higher conversion rates. It also allows Amazon to lower its
acquisition costs. As Prime comprises of a two-day fast delivery service, it ultimately leads to increase in
higher sale of its physical products.