INDUSTRIAL MARKETING

Submitted For partial fulfillment of the requirement for the award of

Masters of business administration IB

Submitted to, submitted by,

Mr.Ajeet Sharma Harshita Jakhodia DEEPAK YADAV

HAIDER ALI

ABHINAV

FLIPKART V/S AMAZON.IN

INTRODUCTION ABOUT FLIPKART AND AMAZON.IN

FLIPKART- flipkart is one of the biggest online shopping site in India. It was founded in 2007 and since it has grown at a very rapid rate. In its beginning period, it was limited to books but now its product range has expanded to a wide variety of electronic goods like mobiles, cameras, watches, kitchen products and various household products. It also provides us music and video games. It is ranked 304 globally by alexa.com. flipkart has fastest product delivery service as compared to other shopping sites. They have changed the way people look at Online Shopping in India. today they are theReal Online Megastore of India. They have also started selling Baby Products Now. So in short, they are everywhere when you think of shopping online.

Interesting facts

It employees more than 4500 employee

2 million sales unit and 4 million visitors per month

Ships out as many as 45000 items a day, clocking daily sales approx. 25 cr.

Company is even setting up its own delivery network, by which company can save up cost associated to the outsourced shipping and logistic function.

AMAZON.IN- Amazon.com is an American electronic commerce company with headquarters in seattle, Washington. It is the largest internet-based retailer in the united states. Amazon.in started as an online book store, but soon diversified, selling DVDs, VHS, CDs, video and MP3 download/streaming, software, video games, electronics, apparel, furniture, foods, toys and jewellery. The company also provides consumer electronics and is also a major provider of cloud computing services.

FLIPKART IS DIFFERENT FROM AMAZON ON THE BASIS OF FOLLOWING FACTORS :

1. ON THE BASIS OF OWNERSHIP amazon is 100% owned by foreigners ( majorly US). Whereas flipkart is 80% owned by foreigners (VC/PE firms) and 20% by Indians.

2. ON THE BASIS OF VOILATION OF LAWS- amazon has not violated any law till date. As far as flipkart is concerned, it has violated multi brand FDI law of the country and has done an eye wash with respect to WS retail.

3. MAJOR OBJECTIVE- The major objective of flipkart or one can call it the secret of success of flipkart is the quality of service they offer and their major investments are going into improving and maintaining the service quality by providing genuine and trustworthy products to the customer and they also help in spreading awareness about the brand. On the other hand, amazon has passed this stage of being a single seller and has transformed into a market place with multiple sellers. It has also expanded its offerings with a strong focus on kindle, App store, Music and Cloud.

4. ON THE BASIS OF RISKS AND BACKUP- If we talk about who has more to lose in the battle of sales figures, well surely Flipkart. This is because, flipkart does only one kind of business, which is that of online retailership. On the other hand, amazon is backed up by more business streams, which its been successfully carrying out. Lets take the example of Amazon web services which is known to be generating a lot of revenue for the company. Even if it has to incur loss, it will not be more than Flipkart.

5. ON THE BASIS OF DRONES AND OTHER INNOVATIONS- It is a recent buzz according to which Amazon is busy building(or has probably built) drones to increase its business. Sooner or later drones will be acting as your local delivery boy and will be delivering goods at your footsteps and giving online retailership just another level. So you do not have to worry anymore whether the person delivering goods to your address is confused at how to find your address. This innovation is noo longer being thought by Flipkart.

6. ON THE BASIS OF BOOKS- Both the brands are known to have started their travails with books. Books was what amazon began with and it was what flipkart targeted to achieve first when they were nothing but a warehouse. However, talking about books, it is popular opinion that amazon is cheaper dealing with when it comes to books. Not only does it involve less shipping charges, it has more seller options usually as compared to flipkart.

7. ON THE BASIS OF THE MODEL OF WORKING- Comparing Flipkart and Amazon, one can dig out the old pages and the new and can infer that both had started with their own warehouse but today, both follow the common similar marketplace model. However, talking about the same, Flipkart and Amazon India are known to be sharing a difference which is again about books. While Flipkart enjoys putting its warehouses into good use when it comes to stocking books. Amazon likes to continue working in the trend it enjoys- that is, with the marketplace model.

8. ON THE BASIS OF PRESENTATION OF WEBSITE- While the website of Flipkart is presented with the use of bright colours and beautiful buttons, Amazon lags much behind in the name of presentation and colours, if not in anything else.

9. ON THE BASIS OF EASE-OF-USE AND CONVIENENCE- When it comes to ease-of-use and convenience, Flipkart does a very appreciable and convenient way for the typical customer. Log on to the Amazon india website and all you find is a confusing set of links. You do not understand where to click and where to not. Besides, if a user wants to order something at amazon india, lets say a book, he cannot do it just like that. One needs to have a user account at amazon, separately registered by the user. This kind of rudeness is something which the flipkart people havent shown. There is no need to create a special Flipkart account, registering separately for the same.

10. ON THE BASIS OF SAME DAY DELIVERY- According to this plan, if you are a customer and are so desperate to get the products through Amazon you ordered that you want them delivered on the same day, you can enjoy this facility, by paying an extra fee of rupees 99. In case of flipkart, you need to place your order before 6pm, in order to get the same day delivery, othervise if the order is after 6pm then it will be delivered the next day.

11. ON THE BASIS OF DELIVERY MANNERS- There is a subtle change in the delivery manners of both the companies. For example if you order two products say- a movie DVD and a book. Then you may receive your book the next day by Amazon and the DVD may arrive a few days later if the seller takes more time to ship it. What the Flipkart will do- it will ship the two products in the same package and will most likely make you wait. Flipkart understands how a person expect his products to come all together and make it simple. Some have the opinion that Amazon too saves it expense by avoiding any intervention in the delivery process.

12. ON THE BASIS OF SELLING YOUR PRODUCT- A look at the Amazons india top left page will let you to the sell page. It elaborates the user as to how he\she can actually sell his product on Amazon india without going through an elaborate process to get his business listed in the website.

13. ON THE BASIS OF REVENUE: flipkart US$ 1 billion (gross merchandise 2013-14) and amazon revenue is US$ 88.988 billion (2014)

Flipkart Discount Deals and Offers They do not provide coupon codes like other online stores, however they keep launching new deals and offers for their customers such discount deals on mobiles, electronics, books, watches, clothing, footwear and more. These deals gives extra discounts to their customers.

Spply chain of flipkart

Flipkart

Bpo

Flipkart bpo designed in such a way that other e commerce website can outsource delivery of several products through flipkart .

Pricing

Flipkart priing designed in such a way that other e commerce website outsource delivery of product through flipkart

Logistics

Flipkart logistics is getting designed in such a way that other e commerce website can also outsource delivery to flipkart.

Distributor

Flipkart distribution is getting designed in such a way that flipkart can become official distributor of several co.product future in india

Eg-motorola ,google

Inventory stocking

Delivery centre ware house Stocking level

Threshhold forcasting Inventory management system

Product inventory

Delivery and logistics

No of orders serverd daily>30,000

Logistics body is assigned

Location of the product customer product

Deliverylocation

prirority

Automated software sends information about the product

Delivery to these logistics services.

SUPPLY CHAIN OF AMAZON

Assessment of amazons supply chain

Items displayes onlineare unique to each other

Customer service representative localized to each country

Higher prices

Possible competitors on second and third markets

Each country has access to different kind of products

Repetitive inventory at different locations.

Amazon supply chain-

Amazon supply chain-

Customer

customer

amazon

pull

Pull

Retail store

distributor

warehouse

Cut short process

publisher

publisher

Amazon supply chain

conventional book store supply chain

CUSTOMER CENTRIC MODEL

In the supply system of Amazon, there is a unique approach about how they handle their customers which they describes it as starting with the customer and moving backwards.as depicted in the diagram above they are customer focus and they are frugal which means, they spend much money on things or items customers really like and lastly they are very innovative in their supply

Networks where they constatntly, brings in new technology to assist with their supply chain network.

Flipkarts strategy in solving problems in E-commerce1. Discoverability:

It is the case with any venture on the web, How does the customer find us? Answer: Organically! Flipkart has been the baap of SEO. This has been the most important contributor to their success. Only when you see people coming to you, you get encouraged to delivermore and keep adding. There is no fun (motivation) in adding features to a product that no one is using.

SEO did not come the straightway. There were particularly 2 things that are worth mentioning.

a. Yahoo News:

Untillast year Flipkart had a feed of Yahoo News on its product pages. From what SEO means, this is to increase the keyword density and introduce original content on the page, as the product description across all books sites is same.

b. We Do Not Sell Used Books:

We DO NOT sell old books or used books. All the books listed at Flipkart.com are new books.

The books listed at Flipkart.com are NOT available for free download in ebook or PDF format.

The magic of this text is that if searched for free eBookor pdf download you would always get Flipkart among the top results. These are very popular search queries and Flipkart had nothing to do with it but still they cashed in. This was also the time when Flipkart had Adsense embedded. People would come to the site, see nothing like a PDF download button, and then see an ad for PDF download and click. This meant more revenue for Flipkart. Given that the margin on books are very small after the discount, Flipkart was probably earning more by saying what they did not do than by doing what they actually were suppose to do.

2. Payments:

No credit card/net banking, fear to transact online, repeat transaction failures, no access to web these are the common problems with online payments. What Flipkart is doing to overcome these?

Flipkart had at least 4 different Payment Gateways integrated. They introduced Cash-on-Delivery. Then they are also doing order on phone. Payment via DD/Cheque is also accepted.

2 basic things that they are currently doing that take little technical effort but quite some product management will:

a. Auto redirection to banking site: Unlike most other ecommerce sites, Flipkart never lands you on CCavenue page, you are auto redirected to the banks page where the info is required to be filled. Flipkart by-passes 1 unnecessary page by passing the required parameters directly to CCavenue and not through a user interface.

b. Banks Status: Flipkart maintains its own real time status if the banks net banking is working or not. So there are no surprises after you have chosen the bank and then go to the net banking page.

3. Inventory:

In the world of eCommerce, the players keep a standard list of products and then go outprocuringit only when there is an order placed.There is no inventory on their end and there is no live status of inventory from their supplier. Remember The Alchemist, Never Promise something that you dont have.

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After placing an order, they would keep looking for the product at multiple places. After a week you might get a call saying that either the product is not available and we will do a favor by refunding your money or if the product is there, it is not the color/size that you asked for.

Flipkart was no different in 2009, many customers used to get similar calls after days of ordering. But for the last 1 year at least Flipkart maintains its own inventory (or at least it seems so). They are selling what they have. From pure hearsay, Flipkart is taking up a big warehouse in Bangalore and is in talks for one in NCR as well. One of the few companies that is using the funding to build a business and not spend it like a FMCG company on ads

4. Delivery:

Flipkart is exploiting the delivery problem as a cashable need gap and building itsowndelivery backend.Flipkart is seen deliveringthroughtheir owndeliveryboys in Bangalore and at times within 12hrs from order.

Flipkart has started putting fliers in newspapers in Bangalore with a product listing, call-to-order phone number and a promise of delivering tomorrow. This means more discoverability, no payment problem and no delivery delay.

Flipkart is looking to build its own courier company. The recent $20Mn funding from Tiger Global was only part of a larger sum they are known to be raising. Flipkart is looking to raise $100Mn at a valuation of $200Mn.

PRICING STRATEGIES

Without going into the theoretical and the management theories, pricing can be set on the following points:

1. Operating Margins - Essentially determining what the company earns to sustain business and turn a profit

2. Strategic pricing - Basically overall pricing strategy where some products are given at a higher discount in order to capture market share or consumer mindshare.

So individual product pricing can be higher or lower while the overall picture is kept in mind so that the company as a whole can sustain itself on an overall profits or deep enough pockets to work on losses for sometimes.

Price is optimized best when the overall cost to the company per product is optimized. So that means here the contributing factors have to be looked at and the costing there has to be optimized.

So looking at the major cost factors that affect the E-Commerce that are taken care of Flipkart:

PRMOTION STRATEGY OF AMAZON

Amazon.com creatively applies technology to deliver personalized programs and services, as well as flexible merchandising. The Company employs a variety of media, business development and promotional methods to achieve these goals. The Company also benefits from public relations activities as well as online and traditional advertising, including radio, television and print media.

The Company extends its market presence through its Associates Program, which enables associated Web sites to make products available to their audiences with order fulfillment by Amazon.com. Approximately 200,000 Web sites have enrolled in the Associates Program. Amazon.com associates include Yahoo! Inc. ("Yahoo!"), America Online, Inc. ("AOL"), Excite,Inc., Netscape Communications Corporation, GeoCities, Microsoft Corporation and AltaVista Company.

The 'Advantage for Books and Music' program is designed to increase the visiblity and sales of titles from independent publishers, authors, artists and labels. This free program provides the tools and framework to ensure their books and music appear more often, more prominently, and with 24-hour availability throughout Amazon.com's catalogs of book, music and other titles.