FINAL PROJECT REPORT

ON
AMAZON - ECHO DOT

Name: - Samyak Bansod

Section: - MBA MKT1
Roll NO.: - MBA21E06

Submitted to,
Pune Institute of Business Management, Pune.

Under
Savitribai Phule Pune University
 TABLE OF CONTENTS

1) SECTORIAL INFORMATION
1.1) GDP % contribution of the sector
1.2) HISTORICAL GROWTH OF E-COMMERCE IN
INDIA
1.3) PORTER’S FIVE FORCE MODEL ON E-
COMMERCE

2) COMPANY INFORMATION
2.1) COMPANY SNAPSHOT
2.2) SWOT ANALYSIS OF AMAZON
2.3) PRODUCTS AND SERVICE OFFERED BY THE COMPANY
2.4) COMPETITOR ANALYSIS

3) MARKETING STRATEGY
3.1) SWOT ANALYSIS OF ECHO DOT
3.2) MARKETING MIX
3.3) STP OF AMAZON ECHO DOT
3.4) DISTRIBUTION STRATEGY
3.5) DIGITAL MARKETING STRATEGY

4) CONCLUSION
 1) SECTORIAL INFORMATION

E-COMMERCE

E-commerce has transformed the way business is done in India. The Indian E-commerce market is
expected to grow to US$ 188 billion by 2025 from US$ 46.2 billion as of 2020. By 2030, it is
expected to reach US$ 350 billion. In 2022, the Indian e-commerce market is predicted to increase by
21.5%, reaching US$ 74.8 billion.

India’s e-commerce market is expected to reach US$ 111 billion by 2024 and US$ 200 billion by
2026.

Much of the growth for the industry has been triggered by an increase in internet and smartphone
penetration. The number of internet connections in 2021 increased significantly to 830 million, driven
by the ‘Digital India’ programme. Out of the total internet connections, ~55% of connections were in
urban areas, of which 97% connections were wireless.

MARKET SIZE

The Indian online grocery market is estimated to reach US$ 26.93billion in 2027 from US$ 3.95
billion in FY21, expanding at a CAGR of 33%. India's consumer digital economy is expected to
become a US$ 1 trillion market by 2030, growing from US$ 537.5 billion in 2020, driven by strong
adoption of online services such as e-commerce and edtech in the country.

According to Grant Thornton, e-commerce in India is expected to be worth US$ 188 billion by 2025.

With a turnover of $50 billion in 2020, India became the eighth-largest market for e-commerce,
trailing France and a position ahead of Canada.

Propelled by rising smartphone penetration, launch of 4G network and increasing consumer wealth,
the Indian E-commerce market is expected to grow to US$ 200 billion by 2026 from US$ 38.5 billion
in 2017.After China and the US, India had the third-largest online shopper base of 140 million in
2020.Indian consumers are increasingly adopting 5G smartphones even before roll out of the next-gen
mobile broadband technology in the country. Smartphone shipments reached 169 million in 2021 with
5G shipments registered a growth of 555% year on year in 2021. Indian consumers are increasingly
adopting 5G smartphones even before roll out of the next-gen mobile broadband technology in the
country. Smartphone shipments reached 150 million units and 5G smartphone shipments crossed 4
million in 2020, driven by high consumer demand post-lockdown. According to a report published by
IAMAI and Kantar Research, India internet users are expected to reach 900 million by 2025 from
~622 million internet users in 2020, increasing at a CAGR of 45% until 2025.

1.1) GDP % contribution of the sector

The Indian economy grew by 7% in October-December 2016 and is expected to grow at

7.1% in 2016-17. The E-commerce industry which was worth Rs. 1257 billion in 2015 is
estimated to be contributing about 1% of GDP.

Segment-wise estimates for the share in GDP are also put out by some agencies. The B2C
E-commerce segment accounted for 0.16% of India’s GDP in 2013 and is estimated to be
around 0.20% of GDP in 2016.

Key Government and Private Organizations, and Industry Sectors Involved in E-

Commerce.
Ecommerce made up about 0.76 percent of India's GDP in 2017.

This was estimated to reach 0.9 percent in 2018. By being the second largest online market in the
world after China, the country's rapid growth in the digital sphere, specifically following
demonetization in November 2016 and the rise of the mobile payments market facilitates the
opportunity for growth in the years to follow.

The e-commerce market will account for 2.5 per cent of the India's GDP by 2030, growing 15 times
and reaching USD 300 billion, a report said today.

The current market size of e-commerce is USD 20 billion.

 1.2) HISTORICAL GROWTH OF E-COMMERCE IN INDIA

Every year, new technologies made online shopping more accessible and more widely accepted. 

Over the course of this decade of eCommerce growth, Amazon made two-day shipping the industry
standard.

Now, Amazon is pushing the speed of eCommerce shipping even faster, with one-day and even same-
day delivery. 

The eCommerce share of retail sales grew, including a significant leap in 2020.

ECommerce became vital during the COVID-19 pandemic that started in 2020.

And COVID showed the fragility of global supply chains and where eCommerce fulfilment needed to

change.

Increased consumer trust in online transactions has driven much of this eCommerce growth. In
addition, the convenience of 24/7 shopping, the ability to buy hard-to-find or specialty items, and the
ease of comparison shopping have contributed to the continued growth of eCommerce sales since
2010. In 2020, consumers turned to online ordering as a safer way to shop during stay-at-home orders.
 1.3) PORTER’S FIVE FORCE MODEL ON E-COMMERCE

 Competitive rivalry

The number of competitors and their ability to undercut a brand comes under the first of the
five forces. Higher the competition in an industry, the lesser the power of the brand. If a
brand’s competition offers better deals or lower product prices, suppliers and buyers seek
them out. In the e-commerce industry, competition among major players is very high, as there
is no switching cost for customers. The players are constantly competing on the basis of price
and factors that influence buyers’ choices such as quick delivery, discounts, and offers,
variety, customer service, and much more. 

 The Threat of New Entrants

It is not only existing rivals that pose a threat to firms in an industry; the possibility of new
entries in the industry also affects competition. The less time and money a brand’s competitor
takes to enter the market and become viable, the more vulnerable an established brand’s
position becomes. The threat of new entrants in the e-commerce industry is high, as there is
very little cost involved in setting up an e-commerce website.

 Bargaining Power of Buyers

The ability of Buyers to drive prices down or their level of bargaining power is one of the five
forces. Buyers have a lot of power when there aren’t many of them and they have a multitude
of choices to buy from. Moreover, switching from one company to another should be easy for
them. The Bargaining power of customers is very high as there are many players in the
 market with similar products and there is no switching cost. Buyers prefer the brand that
offers the best price among other factors such as product quality and delivery time.

 Bargaining Power of Suppliers

This force examines how much power and control a brand’s supplier has over the ability to
raise prices or lower the quality of purchased goods or services, which in turn would lower an
industry’s profitability potential. The bargaining power of suppliers is low as there are many
suppliers in the market, and therefore the e-commerce brands have the power to choose their
suppliers.

 Threat of Substitutes

The Threat of Substitutes formulates the fifth and final force. This force investigates how easy
it is for customers to switch from a brand’s product or service to another. the threat of
substitutes is very high as there are a lot of sellers with similar products and services, and
there is no switching cost for customers.

It is not mandatory for e-commerce brands to conduct a Porter Five Forces analysis, but it is clear that
it aids in the future of the business. It will point your business team in the right direction by
minimizing threats and weaknesses while maximizing strengths.
 2) COMPANY INFORMATION

2.1) COMPANY SNAPSHOT

Amazon.com, Inc. is a multinational technology company, which engages in the provision of

online retail shopping services. It operates through the following business segments: North
America, International, and Amazon Web Services (AWS). The North America segment
includes retail sales of consumer products and subscriptions through North American-focused
websites such as www.amazon.com and www.amazon.ca. The International segment is
engaged in retail sales of consumer products and subscriptions through internationally-
focused websites. The Amazon Web Services segment consists of the global sales of
compute, storage, database, and AWS service offerings for start-ups, enterprises, government
agencies, and academic institutions. The company was founded by Jeffrey P. Bezos in July
1994 and is headquartered in Seattle, WA.

SHAREHOLDERS

Mutual fund holders 33.30%

Other institutional 27.16%

Individual stakeholders 10.53%

Employees
 Top Executives

Andrew R. Jassy President, Chief Executive Officer & Director

Brian T. Olsavsky Chief Financial Officer & Senior Vice President

Amit Agarwal Senior VP & Country Manager-Amazon India

David A. Zapolsky Secretary, Senior Vice President & General Counsel

Rohit Prasad Vice President & Head Scientist-Alexa

Contact information
Amazon.com, Inc.
410 Terry Avenue North
Seattle Washington 98109-5210

2.2) SWOT ANALYSIS OF AMAZON

Strengths

 Being the world’s leading online retailer, Amazon derives its strengths primarily from a three-
pronged strategic thrust on cost leadership, differentiation, and focus. This strategy has
resulted in the company reaping the gains from this course of action and has helped its
shareholders derive value from the company.
 Amazon primarily derives its competitive advantage from leveraging IT (Information
Technology) and its use of e-Commerce as a scalable and an easy to ramp up platform that
ensures that the company is well ahead of its competitors.
 One of the key strengths of Amazon is that it enjoys top of the mind recall from consumers
globally and this recognition has helped it enter new markets, which were hitherto out of
bounds for many e-Commerce companies.
 Using superior logistics and distribution systems, the company has been able to actualize
better customer fulfilment and this has resulted in Amazon deriving competitive advantage
over its rivals.
Weaknesses

 In recent years, Amazon as part of its diversification strategy has been “spreading itself too
thin” meaning that it has allowed its focus to waver from its core competence of retailing
books online and allowed itself to venture into newer focus areas. While this might be a good
strategy from the risk diversification perspective, Amazon has to be cognizant of losing its
strategic advantage as it moves away from its core competence.
 As Amazon offers free shipping to its customers, it is in the danger of losing its margins and
hence, might not be able to optimize on costs because of this strategy.
 Considering the fact that Amazon is an online only retailer, the single-minded focus on online
retailing might “come in the way” of its expansion plans particularly in emerging markets.
 One of the biggest weaknesses and something that has been oft commented upon by analysts
and industry experts is that Amazon operates in near zero margin business models that have
severely dented its profitability and even though the company has high volumes and huge
revenues, this has not translated into meaningful profits for the company.

Opportunities

 By rolling out its online payment system, Amazon has the opportunity to scale up
considerably considering the fact that concerns over online shopping as far as security and
privacy are concerned are among the topmost issues on the minds of consumers. Further, this
would improve the company’s margins as it lets it reap the advantages of using its own
payment gateway.
 Another opportunity, which Amazon can capitalize on, relates to it rolling out more products
under its own brand instead of being a forwarding site for third party products. In other
words, it can increase the number of products under its own brand instead of merely selling
and stocking products made by its partners.
 Amazon can increase the portfolio of its offerings wherein it stocks more products than the
norm currently which places it in a position of strength and comfort as this can translate into
higher revenues.
 The fourth opportunity, which Amazon has, is in terms of expanding its global footprint and
open more sites in the emerging markets, which would certainly give it an edge in the uber-
competitive online retailing market.

Threats

 One of the biggest threats to Amazon’s success is the increasing concern over online
shopping because of identity theft and hacking which leaves its consumer data exposed.
Therefore, Amazon has to move quickly to allay consumer concerns over its site and ensure
that online privacy and security are guaranteed.
 Because of its aggressive pricing strategies, the company has had to face lawsuits from
publishers and rivals in the retailing industry. The obsessive focus on cost leadership that
Amazon follows has become a source of trouble for the company because of the competitors
being upset with Amazon taking away the business from them.
 Finally, Amazon faces significant competition from local online retailers who are more agile
and nimble when compared to its behemoth type of strategy. This means that the company
cannot lose sight of its local market conditions in the pursuit of its global strategy.
 2.3) PRODUCTS AND SERVICE OFFERED BY THE
COMPANY

 Retail Goods

Amazon product lines include (books, DVDs, music CDs, videotapes, and software), apparel,
baby products, consumer electronics, beauty products, gourmet food, groceries, health and
personal-care items, industrial & scientific supplies, kitchen items, jewellery and watches,
lawn and garden items, musical instruments, sporting goods, tools, automotive items and
toys/games.

 Amazon Prime

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
of $79 (equivalent to $110 in 2021), as well as discounted one-day shipping rates. Amazon
launched the program in Germany, Japan, and the United Kingdom in 2007; in France (as
"Amazon Premium") in 2008, in Italy in 2011, in Canada in 2013, and in India on July 26,
2016.

 Consumer Electronics

In November 2007, Amazon launched the Kindle, an e-reader which downloads content over

"Whispernet", via Sprint's EV-DO wireless network. The screen uses E Ink technology to
reduce battery consumption and to provide a more legible display. As of July 2014, there are
over 2.7 million e-books available for purchase at the Kindle Store. Starting in 2012 Amazon
began offering differing models within generations of its readers starting with the Paperwhite,
Voyage, and most recently the Oasis 2 released in October 2017.

 Digital Content

Amazon's Honor System was launched in 2001 to allow customers to make donations or buy
digital content, with Amazon collecting a percentage of the payment plus a fee; however, the
service was discontinued in 2008 and replaced by Amazon Payments.
 2.4) COMPETITOR ANALYSIS

 Online stores

Ecommerce has taken off over the past few years, taking up 21% of total retail sales in the
United States alone. Although Amazon is the largest consumer marketplace online, small
business owners have one massive benefit. 

 Ebay

In recent years, eBay’s revenue has actually begun to fall, but in 2020 it experienced its best
net revenue since 2013, $10.2 billion. With eBay, sellers list products for sale and buyers find
them in the marketplace. EBay sellers also offer products similar to those offered by sellers
on Amazon. The big difference? EBay Sellers can auction products or have a fixed rate.
Amazon doesn’t offer auction sales.

 Walmart

Walmart saw a massive revenue of $524 billion in 2020, which was $138 billion more than
Amazon’s $386 billion that same year. 

 Flipkart

Flipkart’s revenue has been growing, with a reported 12% increase in 2020 from the previous
year. As the Indian ecommerce market continues to strengthen, Flipkart is one of Amazon’s
biggest competitors in the region.

 Target

Target describes itself as a “general merchandise retailer” and boasts that 75% of the US
population lives within 10 miles of a Target retail store. It reported $93.6 billion in revenue in
2020, which was an overall 19.3% growth rate in sales compared to the previous year.

 Alibaba Group

Alibaba is one of the biggest competitors to Amazon Web Services, with cloud computing
bringing in a revenue of $2.24 billion in three months ending September 30, a 60% year-on-
year rise. That was faster than Amazon Web Service’s and Microsoft Azure’s revenue rise,
which was 29% and 48% respectively. 

 Netflix

While many rising competitors in the video streaming space have cut into its US market
share, it still retains a hefty 20%.
 3) MARKETING STRATEGY

Product: - AMAZON ECHO DOT

3.1) SWOT ANALYSIS OF ECHO DOT

 Strength

As the first smart speaker, Amazon echo has been continuously №1 product since 2016. As a
user, you could easily buy toilet paper or other home suppliers by asking Alexa. If you want to
buy something you have bought before, Alexa will send your request to your Amazon account,
check your previous order, and make the purchase from there. Alexa provides an easy-to-adopt
developer platform in order to encourage the engineers to build natural voice experiences that
offer customers a more intuitive way to interact with the technology they use every day.
Today, Alexa has about 60,000 skills.

 Weakness

Alexa heavily depends on the smart speaker to interact with the user. This creates an extra
layer for the adoption. Unless Google and Microsoft, who have the own search engines, Alexa
may heavily depend on the free content platforms like Wikipedia. Amazon Echo need to be
charged while using it. This feature creates user friction for outdoor scenarios. However, since
the smart assistant also exists in the smartphone, the user need of outdoor scenario still needs
to be evaluated. 55% of smart speaker owners use the speaker to play music. About only 20–
30 skills will be used frequently, but Alexa has about 60,000 skills. How to flawlessly educate
the users about the skills is a big challenge for the company.

 Opportunities

You may have a smart camera, thermostat, TV, switch, etc, but your couch, bed, table, chair,
and dishes aren’t smart yet but when everything becomes smart, there will be more use cases
of smart assistants. As more and more data are exposed, users are worried about privacy more
than ever. 46% of smart speaker owners are concerned about the price, but the users are still
buying it. Therefore, being able to figure out the way to protect users’ privacy may be another
win in the market.
 Threats

Facebook Portal, Apple Home Pod, and other new smart speakers are entering into the market,
the market share chart may change significantly. Amazon isn’t strong in the smartphone
market, smartphone companies like Xiaomi are slowly taking over the smart assistant’s market
share.

3.2) MARKETING MIX

 Product
When purchasing Amazon Echo, customers ideally desire to own a smart speaker that is
convenient and easy to operate. Amazon Echo, a circular can-shaped device, is only 9" high,
has a diameter of 3.27", and contains a 2" tweeter and 2.5" woofer, as well as offers 360
degrees of immerse sound (B&H Features, 2015).The enhanced technological device is
delivered directly to the customer’s front door, is designed to operate from any room in the
house, and is suitable in size to operate on the majority of surfaces.

 Place
Amazon Echo is available for purchase through Amazon’s online shopping network. Amazon
directly ships to all 48 contiguous states, as well as Alaska, Hawaii, and Puerto Rico.
Operating at the convenience of the customer, Amazon Echo can be purchased from any
device that offers Internet access.
 Price
As Amazon Echo operates as the original device, there are several other reconstructive forms
of the product, such as Echo Dot, Dot Kids, Spot, Show, and Plus, each of which generally
sell at a range of prices that differ from the original. Amazon Echo retails at $99.99 and is
distributed at a free shipping rate.

 Promotion
The promotion of Echo is done in a fashion that allows the opportunity to reach as many
consumers as possible. Such promotion occurs throughout various forms of electronic and
written media, including ads, television commercials, billboards, advertisements, newspaper
articles, and all methods of social media.
 3.3) STP OF AMAZON ECHO DOT

 Segmentation

Market segmentation is the move to focus on a specific group. In the case of the Amazon Echo Dot,
Amazon can segment the market by income and age. The age factor will ensure that there is a focus
on the youths and the corporate sector. The smart interaction technology and music playbacks readily
connect to the young generation. Moreover, reaching the group would call for the use of social media
platforms in the marketing activities.
Income will also affect the reception of the product. An increase in the income levels positively
impacts on purchase decisions. A high disposable income implies that the clients will be more willing
to but the Echo product (Amazon Company, 2018). The Amazon group can thus settle for the
corporate sector as well as the middle-income earners. The group would contribute to improving the
sales levels of the brand.

 Target

The target that offers a massive prospect for the Amazon Echo Dot product is the youth. It is
imperative to note that the youth accounts for the most substantial portion of the human population.
The product has features that conform to trends in this age group. Persons under the age of 35 years
will find the product high useful. The smart interaction platforms will readily connect to the age
group. The group also meets the six criteria of an ideal target market. The young population is
growing, it is keen on embracing new trends, it can easily be reached via social media platforms,
using social media platforms in marketing is cheaper, and lastly, it fits in the objective of the Amazon
group. Amazon intends to increase their sales levels by targeting the young population.

 Positioning

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. Using the catchphrase #AurDikhao in
its most recent campaign in India, it has further helped them carve a distinct space in the consumer’s
mind.
 3.4) 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 than 55 fulfilment centres exceeding 43 million square feet.

This does not include Amazon’s new “under-the-tent” strategy of using existing vendor warehouse
space for consumer-packaged goods to more quickly serve customers.  Their aggressive strategy of
infiltrating warehouses and improving their distribution lines brings Amazon to new areas and
customers.

Amazon had created a deep & structured network in order to make the product available at remote
locations that too free of cost delivery charges up to certain limit. Amazon has developed an extensive
global distribution network that continues to grow at frenzied rate.

Currently, Amazon operates an aggregate of over 138,825,900 active square feet of warehouse spaces
in 28 states throughout the United States and Canada, Mexico, United Kingdom, Germany, France,
Italy, Spain, Czech Republic, Poland, China, Japan, India, and Brazil (MWPVL, 2017). In the
beginning, Amazon packages were typically picked up by UPS, FedEx, or the U.S. Postal Service at
one of the fulfilment centers. However, in addition to the cost issue, these third-party delivery
companies have not always been reliable, and when UPS and FedEx failed to deliver thousands of
packages guaranteed to be delivered by Christmas (Jayakumar, 2013), Amazon was forced to revamp
and make strategic moves to gain more control over its delivery system: To “increase capacity for
package delivery”, Amazon purchased thousands of semi-truck trailers “to transport packages
between fulfilment and sort centers around the country” (Stewart, 2015).
 3.5) DIGITAL MARKETING STRATEGY

As we all know, Amazon is an internet eCommerce company, this alone makes its business capable of
utilizing all the tools of digital marketing to its full potential and it has been doing well on these
aspects way better than its competitors.
We will understand Amazon India’s marketing strategy one by one in the coming sections. Let’s start
by knowing how it implements its social media marketing strategies.
 

Amazon’s Social Media Marketing Strategy

Amazon promotes its products on social media, successfully tapping into the social networks’
audience and linking them back to their product pages for the sale.
In today’s times, everyone is on social media. To engage with its audience better it has partnered with
several micro and macro-influencers of the country as well.
Let’s see how Amazon uses various social media platforms, suffice it to say, they leverage all
available channels. It’s on Facebook, Instagram, Twitter, YouTube, and Pinterest as well.
 
Amazon on Facebook
There are 10 million fans who follow Amazon India on Facebook. It uses Facebook mainly for
posting company updates and promotions. It uses aggressive promotion strategies to promote its Sale
Days. It also stays relevant by putting out topic-based posts. Let’s now understand its Facebook
marketing campaigns in detail.
 
Amazon on Instagram
Amazon’s marketing strategy on Instagram has mainly been used for interviews with various artists
from different backgrounds and primary promotions. It has about 2.8 million followers on Instagram.
Its strategy on Instagram is very similar to how it uses Facebook, except for company news updates,
the posts are almost the same both on Instagram & Facebook.
Here are few notable promotions are done by Amazon to create spread laughs and inspiration.

Amazon on Twitter
Amazon India uses a very different approach to acquire new customers on Twitter. It keeps its
followers engaged, uses a wide variety of content, creates customer-acquiring contests, uses multiple
accounts, and participates in trends.
It has a fan base of 2 million on Twitter, which is one the best followers count in the industry.
It uses a conversational tone on Twitter that presents content in such a way that seems to us like
personal recommendations than an advertisement. This has made Amazon seem to sell nearly
everything and they also have content for nearly everything. Here are some of the highlights from
Amazon India’s Twitter handle.

  Amazon on YouTube
The best thing about Amazon’s YouTube advertisements is that they Hook people immediately.
Amazon always tries to keep its ads meaningful and engaging usually by trying to connect with the
customer using an emotional message. In today’s world, where people are worried that the growth of
technology is drawing them apart, Amazon Echo’s new campaign aims to bring Indian families
together with their smart speaker technology.

Amazon’s Email Marketing Strategy

Whenever we purchase from Amazon, we receive emails thanking us for our purchase, asking for a
product review, and even offering a discount on our email. This is called Email Marketing.
Amazon’s email marketing strategy is simple, it sends its customers personalized product
recommendation emails, based on various aspects like – purchase history, past order value, location,
age, gender, and on-site browsing.
 4) CONCLUSION

Amazon business strategy is a hybrid of cost leadership and business diversification. The
online retailer also benefits from encouraging communication between various elements
within its ecosystem and promotion of its leadership principles. The founder and former CEO
Jeff Bezos prefers to base business strategy on things that do not change. Specifically,
consumers will always want low prices, variety and speedy delivery of their orders. Amazon
focuses on these facts via effective integration of information technology into various
business processes. Amazon also 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.

Major weaknesses associated with Amazon include seasonality of the business, low profit
margins and lack of focus on specific product or service categories. Moreover, a weak
competitive position of Amazon’s Fire Phone and damage to the brand image due to tax
avoidance scandal in the UK can be listed as weaknesses of Amazon. Furthermore, harsh
working conditions for warehouse employees is a noteworthy weakness for the tech giant.