ZUCC USQ Marketing Channal9市场渠道)第二次大作业：亚马逊案例分析

1.0Introduction1.1 AuthorisationMr. Bezos, CEO of the , requested this report on 28 November 2011.1.2Aim of the reportThe purpose of the report is to provide an analysis of the major issues facing Amazon in the Amazon case. It aims to suggest recommendations to minimise these problems1.3LimatitationThe most business of the Amazon is taken place in the business so it is hard to find a real store of Amazon.1.4 Scope of the reportThis report provides a background to the case and introduces the channel design decision paradigm. It also refers to the major case issue. And this report provides some analysis method to analyse the case. At last, the report also gives some recommendations to improve the major case issue.2.0Background and Channel Design Decision Paradigm2.1Background is the biggest network e-business company in the America. It first built in the Seattle in 1995, and Amazon is the pioneer to start business in the internet. At first, Amazon only sold books business, but now Amazon sells all kinds of goods such as DVD, computer, TV games clothes and furniture and so on. So far, Amazon has become the online retailer who has the most kinds of goods in the world. Amazon has three big subsidiaries: Alexa Internet, a9 and Internet Movie Database. Amazon and its retailers provide millions of new or used goods for customers. And Amazon is successful in purchasing the other big companies to occupy the oversea markets. In 2004, Amazon purchased the which made the etail of the Amazon combine with the China market experience of . Amazon promotes further customer experience, and promotes the electronic commerce in China. Radical expansion causes some problems, such as Amazon is still losing money, and the online advertisement cost is huge so that Amazon does not get too many profits (Baidu encyclopedia, 2011).2.2Chnanel Design Decision Paradigm2.2.1 Developing possible alternative channel structureIn fact, the is considered as a platform for the retailers tosell their goods. Weber (2008, p.15) claims that …Amazon Marketplace isa sales platform available to businesses or individuals who sell new,refurbished and collectible products.‟ Not strictly speaking, Amazon canbe seemed to be a different retailer. Generally speaking, Amazon do notcontact to the wholesales since the Amazon do not stock many samegoods. It is also because Amazon trades the goods in the internet soAmazon does not have the storage to store the rest goods. It lead toAmazon cooperation with the huge retailers and small retailers morefrequency. In the other hand, the Amazon also produces its own goodssuch as the Amazon tablet PC and some other products. But theseself-owned brand products have small mount, after all, the Amazon‟s innovation ability and the technologies development ability are limited.So the major alternative channel structures are manufactures to customers, manufactures to mail order to customers, manufactures to manufacturer‟s branch to retailers to customers. Amazon does not need to too much channel level because the more channel levels can increase the cost.2.2.2 Evaluating the variables affecting channel structureThe technology, human resource, cost and the amount of retailers and customers can affect the channel structure greatly. A company has a higher technology so that the company can produce its self-owned brand.And than the company can be a manufacturer, it can change the position of the company in the channel structure. And the human resource can also affect the channel structure greatly. If one company has a rich human resource and financial resource, and then the company can make full use of these resource to decrease the intermediaries to reach the aim to change the channel structure. The cost factor is important for the Amazon, since the more intermediaries can make the transportation cost increase.So reducing the unnecessary intermediary is important for Amazon, especially Amazon adopts the lower price strategy. Amazon stock the goods from the cooperative retailers and sell the goods to the customers who always surf on the . The customers are of great important for Amazon since Amazon gets the profits from the customers.2.2.3 Selecting the channel membersFor Amazon, the retailers are its important cooperative partner. Amazon is the biggest platform for many retailers to sell their products to the customers. So it is of importance for Amazon to get on well with a mass of retailers. And Amazon will also pay attention to the customer aspect.The customer is an important element to affect the profits directly. The single product has only a little profit while many products summate can get a lot of benefits. So the number of the customers can decide theprofits of Amazon. Amazon has a big potential advantage for Amazon has large number potential customers. In fact, the wholesalers are not necessary for Amazon. Amazon sells the retailers‟ goods and receives the orders from the customers through the internet. Amazon has no storage to store the inventory so that it can reduce a lot of cost. Amazon will not wholesale a large number of goods from the wholesalers.3.0Major Issue and the Need for Channel Design Decision3.1 Major issuesFirstly, Amazon put too much money into the internet advertisement which leads to the cost increase quickly. And the other competitors also put much money into the internet advertisement so that it brings huge competition pressure for Amazon. Amazon has to put the money into the internet to attract more customers.Secondly, Amazon adopt depreciate strategy to attract the potential customers which makes the sales volume increase but the profits decrease.3.2 Recognizing the need for channel decisionThere are still some problems in the online retailing of Amazon. The retailing environment is changing every time and everywhere. So it is important for Amazon to fit the retailing environment. In addition, the competition in the internet is intense, such as the Buono and Danddang online competitors. The more competitors will make Amazon gain less profit. And there are a lot of elements can affect the retailers‟strategies, and then the retailers‟strategies will effect the Amazon‟s channel decision. Finch et al. (2005, p.48) state that …channel conflict exists when disagreements arise between members over channel practices and policies‟. Finally, with the development of Amazon, Amazon will need more goods to expand the business which can also affect the Amazon‟s channel decision.4.0 Situation Analysis4.1SWOT analysis4.1.1StrengthsIt is convenient for the customers to buy the book from the internetsince they only need to click the mouse and then the goods will be sentto them. The convenience of the Amazon plays an important role inattracting and retaining the customers. In the internet of the Amazon, thedownload speed is very fast even there are a lot of pictures in theinternet, and this action will only take 3-5 seconds. The customers cansearch the goods they need quickly. Once the search results are locked,the website will provide the comments and grade of the book. At themeantime, Amazon will also provide the price of the book of its ownwebsite and the other website to make the customers clear that the pricein the Amazon is cheaper than the other websites. Through this method,Amazon can improve the values and satisfaction of the customers. Thesearch engine of the Amazon is unique since it provides the up-selling,cross-selling and down-selling information. The Amazon website willprovide same books in the other websites when the customers choose abook. The parent company can provide advance management method topromote the development of its subsidiaries.4.1.2 WeaknessesComparing with the other big online bookshops, Amazon is developingand it is not mature. Though Amazon owns a large number of customers,most of them are lower income group. It makes the profits of singleservice are small and it forces the Amazon to depend on lots of andrepeated services to create profits. Amazon adopts low price but sellmore goods strategy which lead to the sales volume increase but theprofits decrease. In order to contend against with the competitors,Amazon also adopts lower price strategy which leads to increase thesales volume but the profits are decreasing year by year. Amazon put too much money into the internet advertisement.4.1.3OpportunitiesThe internet is developing quickly. And the network marketing model of Amazon is based on the network technologies. Beyond all question, the rapidly development will promote the progress and growth development of Amazon. In addition, more and more shops join into the e-commerce and an increasing number of customers are willing to buy things in the internet. The online shopping provides a big platform for the customers to buy things from the internet. Heinemann & Schwarzl (2010, p.261) explain that …online retail today is taking place at a higher level of evolution than in the initial years of e-commerce‟. It provides convenient ways for the customers since they do not need to leave home to buy things. More and more people are choosing the way to go shopping, and it has a big potential. Through the internet, Amazon can show different kinds of goods in the internet for the customers to select.The traditional book stores are limited by the small place which lead to the customers can only choose few goods. With the development of the technologies, the search is more convenient for the customers. And Amazon can provide a lower price for the customers to attract their attention since this method can reduce cost and provide convenience.And Amazon now sells many kinds of goods not only the books such as the CD, software and cloths and so on. These new markets bring many new opportunities for the Amazon.4.2.4ThreatsThe online competition such as the Dangdang website is the biggest competitor for Amazon in China. Amazon develops quickly in the other countries while they may do not know well about the customer‟s preference than Amazon‟s competitors. The off-line bookstore such as Buono is also a big competitor for Amazon. Buono built two e-businesswebsites similar with the Amazon‟s functions and Buono also built thebiggest chain bookstore in the U.S. in addition, Amazon will also facethe education e-book competition. With the development of the newtechnologies, Amazon needs to pay more attention to maintain thesecurity of the website. At last but not the least, the different place hasdifferent laws and regulations to support and limit the online bookretailers.4.2Internal environmentsAmazon has abundant fund and the technology resource. Every year, Amazon put much money into the internet advertisement to attract potential customers. The most important of all, the parent company will provide advance technology for its subsidiaries. Amazon has the unique search engine for the customers to search the goods what they want. It applies the advance technology and brings convenience for the customers. The culture environment is that Amazon believes in “customers are important”. Amazon provides their best and convenient services to their customers. Amazon has a creative ability since Amazon uses their own technology to produce their self-own products.4.3External environmentsNowadays, the network technology develops rapidly and more and more customers are purchasing goods in the internet. The e-business is becoming more mature and influential. And the online retailing will bring many benefits for the local government, so the local government will support the Amazon by some policies and regulations. While in this industry, the competition is also fierce, there are a lot of similar platform in the internet just like the Amazon.With the help of the internet environment, Amazon can use the advantages to gain the competitive advantages to get bigger market.5.0 Setting and Coordinating Distribution ObjectsAmazon owns a large number of customers, so it is necessary for Amazon to set and coordinate the distribution objects. Amazon website has wonderful service software system, and it means the Amazon can provide more convenient and humanized services. The offline distribution also reflects the customers are important idea, and the customers do not pay for the transportation expenses and they can ask to return purchase for no reason. The Amazon provides almost all kinds of goods which make the customers think they can get what they want.Amazon always offers higher discounts to its customers than competitors offer which can attract a lot of customers.6.0 Specifying the Distribution TasksOffer good credit for the customers to let the customers rest assured and then the customers will believe in the Amazon. Amazon has powerful internet- based technologies, so Amazon do not need to consider the picking, stocking, packing and tracking distribution tasks. And Amazon uses the internet technologies, so Amazon has no storage to worry about the inventory problem. Though the Amazon‟s distribution tasks may seem to very simple. Indeed, Amazon has to build a large quantity of huge state-of-the-art storages and employ a lot of people to carry out these distribution tasks. As Rosenbloom (2004, p.194) said that …Amazon. Com found that it had to build a number of huge state-of-the-art warehouses and hire many hundreds of people to perform these seemingly …simple‟distribution task.‟Amazon need to always pay attention to the information in the internet since the Amazon depend on the internet. Maintain the market information can protect the steady of the stocks, so the information is important for Amazon.7.0 Choosing the Best Channel StructureTwo to five levels channel structure is suitable for a company. For Amazon, the best way is not the manufacturer to consumers channel structure since the Amazon is not always the manufacturer. As a big online retailer platform, Amazon is appropriate for the manufacturer to mail order to consumer channel structure. Amazon has a wide cooperation with the big retailers and small retailers in the world. And Amazon connects with them in the internet consanguineously in many fields. The customers use the computers the order the goods and then Amazon will send the goods to the customers‟ home. And this there level is also a short way for Amazon to distribute the goods which can reduce a lot of cost. Especially, the Amazon adopts the lower price and big discounts strategy.8.0 Implementation PlanIt is recommended that8.1Amazon need to change its advertisement strategy and advertise thepersonalized user experience.8.2The always low price strategy can not make the Amazon progress. Amazonneed to provide quality services to make the customers satisfy. Put too much advertisement may not get the expectant effect and even make the company suffer from great losses. Changing the advertisement strategy can help to enhance the effect of the Amazon and then to enhance the market share.8.3 Amazon can borrow ideas from the America information technology to prefectthe supply chain, establish database and enhance logistics system. The information of the Amazon is a big advantage compared to its competitors.With the help of the database, Amazon can realize the zero inventory which can reduce the area of the storage greatly. At the meantime, Amazon can base on the orders to get the products8.4 Strengthen the cooperation with the suppliers to make sure the quality of thegoods and enhance the pre-sales and after-sales services. Amazon is transferring to a comprehensive mall, and during this period, Amazon need to expand the kind of the goods. Strengthen the guarantee of the goods quality can gain the trust of the customers. At the meantime, when Amazon had better to ask for the feedback of the customers to enhance the after-sales service.Schepp et al. (2009, 306) state that …sellers must also know how to encourage feedback, since Amazon buyers are less likely to leave feedback than other online buyers‟.9.0ConclusionAfter analyzing the case of Amazon, it can be concluded that:9.1Amaozn has many competitive advantages compared with Amazon‟scompetitors which can help Amazon get more profits in the internet retailing market.9.2The favourable environment inside and outside Amazon allows the Amazon todevelop quickly in the online retailing industry.9.3In order to compete with the competitors, Amazon put too much money intothe internet advertisement so that Amazon emerges huge cost. And it further leads to Amazon get little profits from its online retailing business.List of ReferencesBaidu encyclopedia 2001, Avon, Baidu Research Engine Service, China, viewed 28November 2011, </view/2606696.htm>Finch, J, Ogden, JR & Agden D 2005, Clep Principles of Marketing: The Best Test Prep for the Clep, 5th, Research & Education Assoc Press, America, p.48Heinemann, G & Schwarzl, C 2010, New Online Retailing: Innovation and Transformation, Gabler Verlag Press, America, p.261Rbsenbloom, B 2004, …Designing the marketing Channel‟, Marketing Channels, 7th edn, South-Western Press, Canada, p.194Schepp, B, Schepp, D & Richardson, G 2009, Amazon top seller secrets: insider tips from Amazon's most successful sellers, AMACOM Div American Mgmt Assn Press, America, p.306Weber, S 2008, Sell on Amazon: A Guide to Amazon's Marketplace, Seller Central, and Fulfillment by Amazon Programs, Stephen Weber Press, America, p.15。