TEAM

6
Life Cycle: Growing

Revenue Annual Growth

₹9600 crores 30%
Online travel and retail:

Key Drivers:
• Internet Penetration
• Burgeoning middle class
• Competitive pricing
Growth Index
0.7

0.6Sales Performance index

0.5

0.4
Market Performance Flipkart Growth
0.3 Index Index
0.2

0.1 Customer Satisfaction

Performance Index
0
2008 2009 2010 2011 2012
Trends

Loading Time

40 89%
67
35 Customer Trends Demodue
Conversions View
to email
30 marketing
Page Exit Ratio (%)

25

20

15
Marketing
10

0
Website Navigation
200
58%%
0 5 10 15
Increase25 in
20
sales30View
Quick during 35GISF
Loading Time (sec)

IT Trends
Page Exit Ratio (%) = A + B*(Loading time) + residuals
 
Segmentation
Category
Age Wise Wise

Most Served
Most Served Segment:
Segments: Books18-35 years
& Electronics
Targeting Strategies

Social Media On-Site

Channels Advertisement

2/3 7/11
Advertisements on home page are Quick link tabs contain links of
of Smartphones and Tablets electronics
Analytical Hierarchy Process(AHP)
Segments Analysed
Electronics Apparels Books

Criteria
• User-interface
• Ease of discovery
• Reach of Network
• Time of delivery
• Customer services
• Prices offered
• Mobile applications and availability on different devices
• Product Range in respective segment
Suggestions: Electronics
Suggestions: Apparels
Threats: Books
Flipkart vs. Amazon India
Quantitative Comparison
Price

Market Share Variety

V= Variety Metric
P= Price Metric Service
S =Service Metric
1−𝑃 1− 𝑃
 𝐿= 𝑤 𝑣 𝑒 + ( 1 −𝑤 𝑣 ) ( 𝛼 𝑄+ ( 1 − 𝛼 ) 𝑒 )
  1
𝑀𝑎𝑟𝑘𝑒𝑡 𝑠h𝑎𝑟𝑒 𝑜𝑓 𝐴𝑚𝑎𝑧𝑜𝑛 𝐼𝑛𝑑𝑖𝑎=𝐿𝑜𝑔𝑖𝑡 ( 𝐿 )= − 𝐿
1+𝑒
𝑀𝑎𝑟𝑘𝑒𝑡
  𝑆h𝑎𝑟𝑒 𝑜𝑓 𝐹𝑙𝑖𝑝𝑘𝑎𝑟𝑡 =1 − 𝐿𝑜𝑔𝑖𝑡 ( 𝐿)
 • Customer Trust

S trength
•
•
•
Quick Delivery
Wide Range of products
High Online Presence

Challenges
• Reduction of page Size
• Overall Improvement

• Growing e-commerce Market

Opportunities
• Untapped Mobile Users
• Logistics expansion

Reliability
• Qlikview
• Incentive to sellers

Efficiency
• Exceptional handling ability
Strategies to tap market opportunities
Regional Language Feature: 5 languages
>40% 20%
Traffic from Tier II & Tier III Cities Increase in Snapdeal’s site traffic

Loyalty Rewards Scheme

• 30% one time customers
• Threat from Amazon
• Retain its customer base by awarding loyalty points
 Loyalty rewards allocation model

x % - Target customer retention

 
y % - The discount to be offered
Evaluation of Proposed Strategies
• Major players studied:

• Customer preference parameters:

• Price
• User experience rating
• Product delivery time
• Website loading time
• Replacement period
Result Validation

Customer Preference Ratio

52 %
63 %
Before After
Marketing Strategies for e-Commerce

Social Media Print Ads

Video Ads Offers

Unique Marketing Strategies
Marketing from the top
Human Interaction Model
Impact
Direct Comparison
Communication
Indirect Communication

   
= =
Unique Marketing Strategies
Exclusive on Flipkart
Thank You
Appendix
Sales Performance Index (SPI)
Ratio of sales of given year to sales of all years in consideration.
Marketing Performance Index (MPI)
Ratio of presence of online community on a site in a given year to
the maximum possible presence of online community on the site in
all years under consideration.
Costumer Satisfaction Performance Index (CSPI)
Derived from reviews and feedback given by customers on the site.

EGI = SPI + MPI + CSPI

 
Sales Performance Index
Year Revenue (in Normalised Weight Sales
Rs. crores) Revenue Perfromance
Index
2008-09 4 0.002057613 0.4 0.000823045
2009-10 20 0.010288066 0.004115226
2010-11 75 0.038580247 0.015432099
2011-12 500 0.257201646 0.102880658
2012-13 1345 0.691872428 0.276748971
Total 1944

Marketing Performance Index

Year Online Normalised Weight Marketing
Community % Online Performance
Community Index
2008-09 1 .01 0.3 .003
2009-10 3 .03 .009
2010-11 8 .08 .024
2011-12 20 .20 .060
2012-13 45 .45 .135
Customer Satisfaction Performance Index
Year Customer Normalised Weight Customer
satisfaction customer Satisfaction
out of 5 satisfaction Performance
Index

2008-09 3.6 .72 0.3 .216

2009-10 3.6 .72 .216
2010-11 3.7 .74 .222
2011-12 3.8 .78 .234
2012-13 4.0 .80 .240

Flipkart Growth index

Year SPI MPI CSPI EGI=
SPI+MPI+CSPI
2008-09 0.000823045 .003 .216 .21982
2009-10 0.004115226 .009 .216 .22912
2010-11 0.015432099 .024 .222 .24143
2011-12 0.102880658 .060 .234 .39688
2012-13 0.276748971 .135 .240 .65175
Acquisitions
weRead.com was the largest social network based book
recommendation and review platform. With more than 3
million readers and 60 million books, weRead captured user-
generated information such as who, within your social network,
has marked a book as a favourite, detailed reviews and user
ratings of books.
Mime360 was a Mumbai based business digital content
platform company which hosts music streaming for labels like
Saregama, Universal Music and Inreco. Mime360 delivers
music content to publishers
like Gaana.com (Indiatimes), Myusic and iMusti, but it also
allows for distribution of video (TV and Films), Games and
Music.
Chakpak.com, a Bollywood news site that offers updates,
news, photos and videos. Chakpak competes with various
other Bollywood portals such as Bollywood Hungama by
Hungama Digital Entertainment, Santabanta.com,
Galatta.com, IBN Live’s movie channel (previously
Buzz18), E24Bollywood and MyPopKorn by Digital Media
Convergence Ltd.
Letsbuy.com, which gets 5 million monthly visits, was
started in 2009 by eTree Marketing Pvt. Ltd and sells
items such as mobile phones, cameras, laptops and home
appliances. Letsbuy.com was the country’s second-largest
online electronics retailer at that time.
 Impact of loading time on Page Exit ratio (Regression Analysis)

Regression Statistics
Multiple R 0.961069295
R Square 0.923654189
Adjusted R Square 0.919635989
Standard Error 3.280610805
Observations 21

ANOVA
df SS MS F Significance F
Regression 1 2473.928915 2473.928915 229.8676175 4.55892E-12
Residual 19 204.4857379 10.76240726
Total 20 2678.414652

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 5.721064935 1.382103763 4.139388871 0.000557308 2.828288513 8.613841357 2.828288513 8.613841357
Loading time 3.58490987 0.236450014 15.16138574 4.55892E-12 3.090014303 4.079805437 3.090014303 4.079805437
Implementation of AHP
The AHP can be implemented in three simple consecutive steps:
1) Computing the vector of criteria weights.
2) Computing the matrix of option scores.
3) Ranking the options.

 Computing the vector of criteria weights

In order to compute the weights for the different criteria, the AHP starts
creating a pairwise comparison matrix A. Each entry ajk of the matrix A
represents the importance of the jth criterion relative to the kth criterion. The
relative importance between two criteria is measured according to a
numerical scale from 1 to 9. Once the matrix A is built, it is then normalized to
get Anorm by using -
 Computing the matrix of option scores
Each entry sij of S represents the score of the ith option with respect to the jth
criterion. In order to derive such scores, a pairwise comparison matrix B(j) is
first built for each of the m criteria The vector s(j) contains the scores of the
evaluated options with respect to the jth criterion.
Finally, the score matrix S is obtained as

 Ranking the options

Once the weight vector w and the score matrix S have been computed, the v
matrix containing the global score is obtained by multiplying S and w, i.e.
Pair-wise comparison of criteria

Normalised form Weightage

Probabilistic Model to understand the impact of
Amazon in e-commerce market of India
 The following statistics have been considered.

To quantify service, it is assumed that there is quadratic relation between price

and service. A quadratic relation is assumed as against a linear relation because
marginal improvement of service requires more effort, as service quality
increases.
 

L can take values from 0 to . A logistic operator is applied on the same to

convert it into the market share of each of the e-commerce service.
Loyalty Rewards allocation model
  % of customer retention = 70 %
 % of one time customers = 30 %
 Profit per sale = ₹ 16 /-
 For simplicity the number of customers is assumed to be 100 (basis)
 We define K to be number of times a loyal customer buys a Flipkart
product in a year and is assumed to be equal to 2 based on conservative
approach
Profit per year,
Scenario after the implementation of Loyalty Rewards strategy: Customer
retention shall be increased due to the introduction of this scheme, but the
company has to bear the discount cost provided to the customer. Target
Customer retention is taken to be x % and the discount to be y % Hence
Profit per year will be

So, for a company to increase its profits,

Hence,
 
Neural Network Model
The model employs a two-layer feed-forward network, with sigmoid hidden
and output neurons to classify the data sets. A total of 1500 data sets with 5
input parameters, 10 neurons in the hidden layer and 3 neurons in the output
layer are used for the creation of the model as shown in fig. 1. In the model
70% of the data sets are used for training, 15% of the sets are used for
validation and the rest 15% are used for testing of the model. The price of
products considered in the model is between 300₹-10000₹ and the User
Experience Rating is considered on a scale of 0 to 5. The input data sets
required for training and formulating the neural network are collected from
prominent sources and the model was then used to evaluate the individual
probabilities of a customer buying the required product from the list of pre-
selected e-Commerce sites.
Validation of Results: The performance of the system was verified by
determining the mean square errors, the Receiver Operator Characteristic
(ROC) curve and by computing the confusion matrix.
The Mean Square Error (MSE): It is the average squared difference between
the target and the outputs which indicates how accurate a model is. The MSE
values obtained in the model during training, validation and testing are given
in table below, The percent error which indicates the fraction of samples
misclassified has a very low value of 8.88e-1% for the proposed model. It
implies that the system fails just 13 in 1500 trials (or has accuracy of 99.2%)
thereby verifying the accuracy and the reliability of the results.
Human Interaction Model
Direct communication

 We defined the purchase intention of ith person at a time t as (t). We can quantify
the effect of direct communication as follows:
  =
 
 Where, Dij = D = Coefficient of direct communication between j (founders)
and I (followers)
This can be further simplified to:
=

Indirect communication
This mode of reaching a new customer ‘i’ via the communication between ‘j’
(founder) and ‘k’ (follower) is known as Indirect communication. Its effect is
given by:
  =
 
 Where, = Coefficient of indirect communication
= Strength of the exchange of information between j and k.
This can be further simplified to:
=
Where M =no. of followers = 36000
The values of D and P are estimated by taking the likes, shares and comments
into consideration.
References
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