PLANNING TO BUILD BRANCHES AMAZON IN VIET NAM

B2C and B2B are two forms of commercial transactions. B2C, which stands for businesstoconsumer, is a process for selling products directly to consumers. B2B, which stands for businesstobusiness, is a process for selling products or services to other businesses. The business systems that support B2B or B2C communications, transactions and sales administration differ in complexity, scope, scale and cost, so it is important that you implement the right system for your customers.

I INTRODUCTION OF AMAZON 2

1 THE MARKET TODAY IN VIET NAM 2

2 WHAT ARE THEY NEED BUYING? 2

3 WHY AMAZON PENETRATES THE E-COMMERCE MARKET IN VIETNAM? 3

4 HISTORY OF AMAZON COMPANY 3

5 WHAT TYPES OF E-COMMERCE AMAZON THAT USING? 5

6 BUSINESS-TO-BUSINESS (B2B) 5

7 BUSINESS-TO-CONSUMER (B2C) 6

8 COMPARISON B2B AND B2C OF AMAZON COMPANY 6

II RESEARCHING THE MARKETING 7

1 Online market survey in Vietnam 7

2 Online market survey of Amazon.com in the US 8

3 Amazon Segmentation, Targeting and Positioning: Widest Range of Target Customer Segment 9

4 Amazon.com's market strategy is operating in the US 11

5 Threats and Opportunities analysis 12

5.1 Strengths 12

5.2 Weaknesses 13

5.3 Opportunities 14

5.4 Threats 15

6 OBJECTIVE 17

6.1 OBJECTIVES OF AMAZON IN THE WORLD 17

6.2 OBJECTIVES OF AMAZON INTO VIETNAM MAKET 18

III PLANNING TO BUILD BRANCHES IN VIET NAM 20

1 Marketing Strategy for Building Amazon’s New Branches in Vietnam 20

1.1 STP of Amazon New Branches 20

1.2 Amazon Competitors: 28

1.3 Places: Ho Chi Minh city and Hanoi city 30

1.4 Meaning of bringing Amazon to Vietnam 32

2 ADVERTISING 35

2.1 MODE OF ADVERTISING 35

2.2 ADVERTISING ACTIVITIES 37

3 Search Engine Marketing and Advertising: 40

3.1 Search Engine: 40

3.2 Advertising: 40

4 ACTION PROGRAMS 44

5 BUDGET 47

5.1 BUDGET EXPENSES AMAZON 47

5.2 BUDGET AMAZON MARKET IN VIETNAM FOR EXAMPLE: 48

IV CONTROL 50

V CONCLUSION 52

I INTRODUCTION OF AMAZON

Vietnam has a population of 96,84 million people in November 2018 Vietnam is a land of opportunity for foreign E-commerce companies because of its young population, high

Internet penetration rate (ranked 17th in the world) and climbing smartphone penetration

rates The penetration of Internet is projected to increase steadily, with the percentage of

Internet users set to reach 65% in 2022

Vietnam first connected to the Internet in November 1997 In the last 20 years, the country

has seen a tremendous increase in the number of Internet users Vietnam had approximately

52 million Internet users in 2017, or a 54% Internet penetration rate, which is above the

global average of 46.5%.This puts Vietnam at the top of Asian countries and the numbers

are expected to continue rising at a fast pace, thanks to relatively flexible bandwidths

services and low cellular data cost With the increasing accessibility to the Internet, more

and more people will have the opportunity to access and use E-commerce services

This rise of Internet adoption can be partly attributed to the country’s high smartphone

penetration rate In the past five years, the country has witnessed a surge in smartphone

ownership, thanks to smartphones’ popularity and the rise of Vietnam’s per capita

disposable income According to 2017 statistics from Google, nearly 72% of the

Vietnamese population use a smartphone As smartphones are key to conduct E-commerce

activities online, the rise of smartphone ownership will have a profound effect on the

E-commerce

1 THE MARKET TODAY IN VIET NAM

Currently, the e-commerce market is quite fragmented and there is no clear market leader

The industry has been somewhat slow to start due to the lack of experience many

Vietnamese people have with the concept of online shopping Many people don’t believe in

the quality of products until they are able to physically touch them and they usually prefer tobuy the item at a physical store after they have viewed it on a website It is thus incumbent

upon e-commerce companies to battle against this skepticism and create trust between the

customers and the online shopping sites

Foreign companies (such as Ebay.vn) are entering the market and more companies in the

country are unify with each other to remain competitive against the larger foreign

competitors (ex the daily deal sites Shopee, Lazada and Tiki ) However, it is clear that themarket is still wide open and relatively easy for new companies to make their entrance

2 WHAT ARE THEY NEED BUYING?

There are clear category favorites for online shoppers, the most popular product categories

are:

- Fashion and beauty products;

- Technology and electronic products;

- Kitchen and home appliances;

- And many other brands and other products

3 WHY AMAZON PENETRATES THE E-COMMERCE MARKET IN

VIETNAM?

Because amazon is not present in the e-commerce market in Vietnam But the number of

Vietnamese internet users has been rapidly increasing for the past decade, naturally, such an

increase in internet users also brings with it an increase in e-commerce activities and digital

marketing Vietnam might be the ideal place to invest into e-commerce and is one of the

most attractive e-Commerce markets in the region for investors Because Vietnam ranks

high among the fastest-growing E-Commerce markets in the region

So with a strong development in the most crowded and potential market in Southeast Asia

Amazon company has made strategic investments in the Vietnam market, with the aim of

affirming the brand name, affirming the prestige of a leading company in the world market

in Vietnam But above all, the amazon company expects it to be a complete fulfillment of

the online shopping needs of many people who have a habit of buying online And bring to

the valuable products, the products have big brands from the world of e-commerce market

in Vietnam That is also the reason that amazon companies penetrates in E-Commerce

market in Vietnam

Expanding Amazon brand overseas is no easy task for sure There are many e-commerce

websites in Vietnam Getting a brand new one like Amazon will certainly be difficult, so

what should Amazon do?

- Build trust by having an outstanding customer service

- Focus on building trust with women

- Build trust by encauraging customer reviews, even by offering discounts be flexible,

when it comes to payment methods

- Encourage card payments, even by offering lower prices

- Make sure you offer prices lower than street prices

4 HISTORY OF AMAZON COMPANY

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AMAZON COMPANY HEADQUARTERS

Amazon company was founded in 1994 by Jeffrey P Bezos Jeff Bezos incorporated the

company (as Cadabra) in July 1994 and Amazons headquarters is in Seattle Washington

United States The name Amazon was founded soon after because the Amazon River is the

largest in the world, and the letter “A” would help the company to show up at the top of

alphabetical lists and the website went online as Amazon.com in 1995

The name Amazon was founded soon after because the Amazon River is the largest in the

world, and the letter “A” would help the company to show up at the top of alphabetical lists

The one thing that made them famous was their books

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AMAZON OFFICIAL LOGO

The logo itself is the company name Amazon, with an arrow below, pointing from A to Z,

representing that they could provide every product in the alphabet and also customer

satisfaction, as it forms a smile

The Amazon.com website started as an online bookstore and later diversified to sell video

downloads/streaming, MP3downloads/streaming, audiobook downloads/streaming,

software, video games, electronics, apparel, furniture, food, baby products, health and

personal-care items, industrial & scientific supplies, kitchen items musical instruments,

automotive items and toys & games, and jewelry

The company also owns a publishing arm, Amazon Publishing, a film and television studio, Amazon Studios, produces consumer electronics lines including Kindle e-readers, Fire

tablets, Fire TV, and Echo devices, and is the world's largest provider of cloud infrastructureservices (IaaS and PaaS) through its AWS subsidiary Amazon also sells certain low-end

products under its in-house brand Amazon Basics

Amazon has separate retail websites for the United States, the United Kingdom and Ireland, France, Canada, Germany, Italy, Spain, Netherlands, Australia, Brazil, Japan, China, India,

Mexico, Singapore, and Turkey In 2016, Dutch, Polish, and Turkish language versions of

the German Amazon website were also launched Amazon also offers international shipping

of some of its products to certain other countries

Amazon serve consumers through our retail websites and physical stores and focus on

selection, price, and convenience Amazon design our websites to enable hundreds of

millions of unique products to be sold by us and by third parties across dozens of product

categories Customers access our offerings through our websites, mobile apps, Alexa, and

physically visiting our stores

Amazon also manufacture and sell electronic devices, including Kindle e-readers, Fire

tablets, Fire TVs, and Echo devices, and we develop and produce media content Amazon

strive to offer our customers the lowest prices possible through low everyday product

pricing and shipping offers, and to improve our operating efficiencies so that we can

continue to lower prices for our customers Amazon also provide easy-to-use functionality,

fast and reliable fulfillment, and timely customer service

Amazon.com operates in three general segments: media, electronics, and other merchandise.Here are its main competitors:

- In the media segment, Amazon competes with auction site eBay (EBAY); media

game-changer Netflix (NFLX)

- Amazon has several competitors in the electronics and general merchandise segment,

many of which are brick and mortar retailers, including Best Buy (BBY), Family

Dollar, Staples, Target (TGT)

- In the third operating segment, Amazon competes with several of the world's largest

companies including CDW (CDW), PC Connection (CNXN)

5 WHAT TYPES OF E-COMMERCE AMAZON THAT USING?

When it comes to the terms "E-Commerce" Most people think of amazon, a types of

modern e-commerce Since the establishment of the website on the network Amazon uses a

variety of business-to-business (B2B) and business-to-consumer (B2C) E-Commerce to help

the company grow to this day And surely, Amazon does both and successful

First, let's find out the definition of e-commerce?

“E-commerce activity means conducting part or the whole of the process of

commercial activity by electronic means connected to the Internet, mobile

telecommunications network or other networks.”

More specifically, e-commerce involves the ability to buy and sell online, while e-business

has more to do with doing business in some form online whether that's buying, selling,

than the term e-commerce, and Amazon is involved in both Furthermore, Amazon doesn't

keep its e-business and e-commerce practices to itself; instead, it invites other businesses to

benefit from Amazon's B2B and B2C applications

6 BUSINESS-TO-BUSINESS (B2B)

The business-to-business side of Amazon is diverse For one thing, Amazon provides

businesses with a means to sell directly on Amazon by setting up their own pages on which

they list items for a nominal fee per transaction or per subscription Additionally, the

Amazon Payments service gives businesses a way to accept payments on their websites

from buyers who have Amazon accounts Beyond that, the Amazon Supply service is a way for businesses to purchase industrial supplies including office and shipping materials

directly from Amazon In addition, Amazon offers order fulfillment, which lets businesses

delegate order packing and shipping to Amazon from any one of Amazon's warehouses

located nationwide

7 BUSINESS-TO-CONSUMER (B2C)

The business-to-consumer side of Amazon actually overlaps somewhat with the B2B side

For instance, when Amazon helps a seller create her own page on which she can list her

products, that's serving consumers, too, although not directly However, Amazon also offers

its own products, both new and used, which consumers can purchase directly from Amazon

Now that Amazon has entered the digital media realm with its exclusive Kindle e-reader andselection of e-books, Amazon serves consumers in this way, too Through the Amazon

Prime service, Amazon provides consumers with discounted instant video and e-books as

well as free shipping specials for a monthly fee

8 COMPARISON B2B AND B2C OF AMAZON COMPANY

Amazon's B2B and B2C services do not include auction-style sales like its competitor,

eBay Rather, all prices are fixed prices Amazon also competes with Google, a company

that itself has entered the business-to-business realm by connecting businesses with relevant

suppliers However, while Google might provide services such as email, for instance

that Amazon does not, Amazon still remains the e-commerce giant that not only sells its

own wares but also enables third-party vendors to sell their products, too From Amazon,

businesses receive help with order fulfillment, transaction processing, cloud data storage

service, advertising and more

II RESEARCHING THE MARKETING

1 Online market survey in Vietnam

According to http://www.internetworldstats.com, Asia currently accounts for about 44% of

Internet users Of which, Vietnam ranks seventh among the countries using the Internet the

most, with the amount of users in 2011 account for 31% of population, equivalent to about

26.8 million people Till 2018, the amount of internet users in Vietnam reached 64 million

users out of a total of 92.02 million people, accounting for 67% of the population

According to data from Stalista, in 2018, there are 49 million users who are shopping

online, reaching 76% of Internet users (64 million people)

The number of internet and online transactions users has increased sharply over the past few

years This proves that Vietnam is growing and is aware of the importance of e-commerce

in present life and will grow stronger in the future

Nowaday, e-commerce plays an extremely important and necessary role for everyone and in

order to meet the demand of domestic consumption, Vietnam has opened many useful

websites to help the exchange of trading faster and more efficiently such as Tiki, Shopee,

Sendo, Lazada, Below are some information that has been surveyed based on the

consumer experience of the above e-commerce sites:

Through statistics and received feedback from customers about the site evaluation, product

quality, quality of service, promotions by number of stars:

Statistics the number of visitors recently in 2018

According to the collected basis information showed that consumers choose to buy the most

on the two major e-commerce site Shopee and Lazada Although Tiki is rated all five starsbut because the product is not diversified as other sites so the number of visitors look to itstill stands behind Shopee and Lazada

The results of the survey of the most purchased products at major e-commerce sites inVietnam

TIKI SHOPEE SENDO LAZADA Best selling

product

categories

Books Houseware Houseware Houseware

2 Online market survey of Amazon.com in the US

According to the research of the company analyzes the ForeSee user experience (USA).),

Amazon provides users with the best mobile shopping experience among the top online

retailers Specifically, Amazon ranks number one, reaching 85 out of 100 exp The

scoreboard is based on an online survey of 40,000 customers who shop at least once at the

largest online retailer between Nov 4 and Dec 2.2017 ForeSee experts interview users

about shopping experience, how expectations are met, scoring on the ideal shopping

experience

Survey shows that Amazon accounts for the trust and loyalty of customers Up to 85% of

people order at least once in the past year on Amazon, 59% shopping at least once a month

Next to the virtual booth, 60% of consumers expect Amazon to have a real store

Amazon has a total of 562,382,292 products as on Jan 10th, 2018

Top 10 Categories

The category Clothing, Shoes, and Jewelry have the highest number of products - 166.28M

products! Amazon’s apparel business has been booming the past year It’s predicted that

Amazon will soon end up with net apparel sales of 62 billion in 2021

3 Amazon Segmentation, Targeting and Positioning: Widest Range of Target

Customer Segment

Amazon segmentation, targeting and positioning involves a set of activities aimed atdetermining specific groups of people as customers and developing products and servicesattractive to this group

Segmentation involves dividing population into groups according to certain characteristics,whereas targeting implies choosing specific groups identified as a result of segmentation tosell products to Positioning refers to the selection of the marketing mix the most suitablefor the target customer segment

Amazon mainly uses the following two types of positioning:

Multi-segment positioning Amazon offers a wide range of products and services,

successfully exploiting more than one segment at the same time Specifically, the online

retail giant sells more than 562 million products, appealing to the needs and wants of a wide

range of customer segments.[1]

Adaptive positioning The online retail giant closely monitors changes in external

marketplace and addresses increasing customer expectations by periodically repositioning ofproducts and services according to changes in the segment

Anticipatory positioning Certain services within AWS such as Amazon Sage Maker,

Amazon Comprehend and Amazon Rekognition are in market segments that currently have

low turnover However, the e-commerce giant has developed these services with the

anticipation that the demand for them will increase in the future

The following table illustrates Amazon segmentation, targeting and positioning:

4 Amazon.com's market strategy is operating in the US

There are three strategies to help Amazon.com improve its competitive advantage:

 Cost control

This strategy aims to offer a lower price than the price offered by competitors, but the quality is comparable to that of the same product This is the key to creating competitive advantage of the company.Amazon.com is based on the convenience of shopping, speed, easy-to-find information, product diversity of online sales channels In addition, when buying a bulk, customers will enjoy special discounts such as discount, shipping fee,

membership card Silver, Gold

 Making a difference with customers

In addition to existing customers, Amazon.com is also focused on analyzing, searching and meeting potential customers in the future So, Amazon.com is always looking for new design ideas, quality, convenience, the criteria are different and better than the competition

at present

One example of this strategy is 1 shopping click This is one of the special features that appeals to customers because it is very simple, through 1-click functionality the product is delivered to any address that was previously delivered with the fastest time and the

information is absolutely confidential

 Focusing strategy

In this strategy, Amazon.com states its goal is to reach out and meet the needs of specific customer groups.This helps the apparatus to operate centrally on a number of customer groups Thus improving product quality

5 Threats and Opportunities analysis

SWOT analysis of Suntory PepsiCo Vietnam

5.1 Strengths

- Strong background and deep pockets:

Amazon has evolved as a global E-commerce giant in the last 2 decades Built on its early

successes with books, Amazon now has product categories that include electronics, toys,

games, home and kitchen, white goods, brown goods and much more

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

preferences demonstrated through purchases or items visited Also, the company claims that

55% of their customers are repeat buyers resulting in low cost of acquisition of new buyers

- Cost leadership:

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

In order to differentiate itself, company has created several strategic alliances with other

companies to offer superior customer service The most important strategic tie ups are with

logistics providers who control costs This contributes in a strong Value chain Because of

playing on economies of scale, Amazon is able to lower the inventory replenishment time

- Efficient delivery network:

With its strategic partners & due to its Amazon fulfilment centers, Amazon has created a

deep & structured distribution network in order to make the product available even at

remote locations It also has free of cost delivery charges in certain geographies

- GLOCAL strategy:

By using the strategy of “Go global & act local”, Amazon is able to fight with domestic

E-commerce companies through absorbing & by forming / partnering with supply chain

companies The branding too is done as per local taste

For example – In India, Amazon is currently using the “Aur Dikhao” campaign to

encourage users to browse more of their products

Picture 2: The strategy of “Go global & act local”

- Acquisitions:

Acquiring companies like Zappos.com, Junglee.com, IMBD.com, woot.com etc has proven

to be a successful and revenue generating step for the E commerce giant

5.2 Weaknesses

- Shrinking margins:

Due to extensive delivery network & price wars Amazons margins are shrinking, which is

resulting in even losses

And because 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

- Tax Avoidance issue:

Amazon has attracted negative publicity on account of Tax Avoidance in countries like U.S

& UK Most of its revenue is generated from these well established markets

- High Debt:

In many developing nations Amazon is still struggling to make the business profitable

thereby affecting the overall profitability of the group resulting into High debt

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

Picture 3: Amazon’s total debt (2015-2017)

- Product flops:

Amazon launched the fire phone in the US which was a big flop At the same time, Kindle

fire did not pick up as strongly as Kindle did Thus, there were several product flops which

caused a dent in Amazon’s deep pockets

And 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 merelyselling and stocking products made by its partners

- Global Expansion:

Expansion mainly in Asian & developing economies will help Amazon because those are

the markets with low competition in E-commerce industries & are not saturated like

developed economies

- Payment system:

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

- Acquisitions:

By acquiring E-commerce companies it can decrease the competition level & also can use

the specialized capacity of the other company

5.4 Threats

- Low entry barriers of the industry:

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

- Government regulations:

Not having clarity on the issues related to FDI (Foreign Direct Investment), in multi brand

retail, has been a big hurdle in the success of the E-commerce players in many developing

nations

And because of its aggressive pricing strategies, the company has had to face lawsuits from

publishers and rivals in the retailing industry

- Local competition:

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

Similarly, there are many local players who take bites from the market share thereby making

it hard for a big player like Amazon to make profits

6 OBJECTIVE

6.1 OBJECTIVES OF AMAZON IN THE WORLD

Amazon.com Inc.’s mission and vision statements contribute to the company’s status as one

of the largest online retailers in the world This success is attributed to stringent measures toensure that the vision and mission statements are fulfilled In theory, the corporate visionstatement provides organizational direction toward a desired future condition of thebusiness On the other hand, the corporate mission statement presents business goals andguides strategic management in the company Based on this business analysis case,Amazon’s mission statement focuses on effective and high-quality service For example, thecompany emphasizes target customers’ convenience in accessing the best selection ofproducts in the e-commerce market The scope of the selection of products available fromthe company is a business strength identified in the SWOT analysis of Amazon.com Inc Inrelation, the company’s vision statement shows a target future of global dominance in theonline retail industry The fulfillment of these official statements facilitates furtherenhancement of the e-commerce business for long-term success in the global market

Amazon.com’s corporate mission and vision statements are fundamental in developingstrategies to support the company’s competitive advantages against firmslike Google, eBay, Apple, Walmart, and Costco Wholesale These competitors create thestrong force of competitive rivalry evaluated in the Porter’s Five Forces analysis ofAmazon.com Inc The company’s corporate vision and mission statements also influencethe operations of its subsidiaries, such as Whole Foods Market Considering the variety ofits products, which include online retail services, digital content distribution, cloudcomputing services, and computer software and hardware, Amazon.com Inc aligns itsvision statement with its mission statement to unify its diverse operations in variousindustries

Amazon’s mission statement is “We strive to offer our customers the lowest possible prices, the best available selection, and the utmost convenience.” This corporate mission

promises attractive e-commerce services to satisfy target customers’ needs The companyfocuses on the variables of price, selection, and convenience In this regard, the followingcharacteristics are identifiable in Amazon’s corporate mission statement:

1 Lowest prices

2 Best selection

3 Utmost convenience

The “lowest prices” component of the mission statement guides the pricing strategiesincluded in Amazon.com Inc.’s marketing mix or 4P Low prices are a selling point thatmakes the company’s e-commerce website and services attractive A correspondingstrategic objective is to reduce operational costs to enable the business to minimize prices.Amazon’s corporate mission statement also points to having the best selection For example,the wide array of products on the company’s website is a factor that attracts customers.Moreover, Amazon.com Inc.’s corporate mission emphasizes convenience, such as inaccessing the company’s products via the Internet This characteristic is a response toconsumers’ use of “convenience” as a criterion when evaluating the quality andattractiveness of online retail services.

Amazon’s corporate vision is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online.” This vision

statement underscores the business organization’s main aim of becoming the best commerce company in the world In this regard, the following characteristics areidentifiable in Amazon’s corporate vision statement:

e-1 Global reach

2 Customer-centric approach

3 Widest selection of products

The “global reach” component of Amazon.com Inc.’s vision statement is all aboutinternational leadership in the e-commerce market For example, in stating the “Earth” asthe market, the company shows that it aims to continue expanding globally Thus, acorresponding strategic objective is global expansion, especially through market penetrationand market development, which are included in Amazon.com Inc.’s generic strategy andintensive growth strategies The customer-centric approach in Amazon’s corporate visionstatement shows that the company considers customers as among the most importantstakeholders in the online retail business This consideration agrees with Amazon.com Inc.’scorporate social responsibility strategy for its stakeholders Moreover, the corporate visionindicates continuing efforts to broaden the product mix These efforts contribute to businessgrowth and to making the company’s services more attractive to target consumers

Amazon.com’s mission statement satisfies many of the conventional characteristics of idealmission statements For example, the company includes target customers and market,variety of products, and basic business aims (pricing and convenience) in the corporatemission However, the company does not include technology and the nature of the businessand its operations In this regard, it is recommended that Amazon add details in its corporatemission to give employees and investors a better idea of what the company is all about Thisrecommendation should make the corporate mission statement more comprehensive,

especially in representing the company’s businesses, such as e-commerce, cloud-basedcomputing services, digital content delivery, software and hardware, and brick-and-mortarretail (Amazon Books).

Amazon.com’s vision statement possesses strong characteristics, such as the specification ofthe company’s target market and an aspect of its marketing mix However, this corporatevision satisfies only some of the conventional characteristics of ideal vision statements Forexample, Amazon’s corporate vision is concise, clear, and abstract enough to ensuresuitability in various areas of the business Still, this corporate vision is not stable enough toensure its suitability in the future of the business For instance, Amazon’s business nowincludes cloud services and brick-and-mortar bookstores Yet, the company’s visionstatement still focuses on e-commerce Thus, it is recommended that Amazon improve itscorporate vision statement by adding these details about such businesses to make thestatement comprehensive in reflecting the future state of the corporation

This launch in Vietnam suggests that Southeast Asia is a focus for Amazon's international

expansion plans Amazon also launched in Singapore, its first market in Southeast Asia, in

July 2017, where it is now operating in full with Prime and Prime Now These first two

forays occurring so close to each other may mean that Amazon has grand plans for the

region, which would make sense as Southeast Asia's e-commerce sales are projected to

climb to $88 billion by 2025, up from an estimated $11 billion in 2017 The region is

particularly valuable to Amazon because the growth of its Prime subscriber base

is reportedly slowing, and international markets, especially ones with the potential of

Southeast Asia, could provide a significant boost

In our report , Amazon describe the vision of their business in Vietnam market 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 summarising the Amazononline value proposition are communicated both on-site and through offlinecommunications

"We work to earn repeat purchases by providing easy-to-use functionality, fast and reliable fulfillment, timely customer service, feature-rich content, and a trusted transaction environment.”

Free shipping offers are used to encourage increase in basket size since customers have tospend over a certain amount to receive free shipping The level at which free-shipping is set

is critical to profitability and Amazon has changed it as competition has changed and forpromotional reasons

III PLANNING TO BUILD BRANCHES IN VIET NAM

1 Marketing Strategy for Building Amazon’s New Branches in Vietnam

1.1 STP of Amazon New Branches

Before setting any branches, we are going to research and segment market into moreparts base on the results we researched and surveyed from the last market that Amazon used

to And the followings are the ways we research and segment market in Vietnam, it will bechanged to more suitable for Vietnamese market and Vietnamese customers’ view

This segmentation involves dividing population into groups according to certaincharacteristics, whereas targeting implies choosing specific groups identified as a result ofsegmentation to sell products to Positioning refers to the selection of the marketing mix themost suitable for the target customer segment

Amazon mainly uses the following two types of positioning:

Multi-segment positioning Amazon offers a wide range of products and services,

successfully exploiting more than one segment at the same time Specifically, the onlineretail giant sells more than 562 million products, appealing to the needs and wants of a widerange of customer segments

Adaptive positioning The online retail giant closely monitors changes in external

marketplace and addresses increasing customer expectations by periodically repositioning ofproducts and services according to changes in the segment

Anticipatory positioning Certain services within AWS such as Amazon Sage

Maker, Amazon Comprehend and Amazon Rekognition are in market segments thatcurrently have low turnover However, the e-commerce giant has developed these serviceswith the anticipation that the demand for them will increase in the future

The following table illustrates Amazon segmentation, targeting and positioning

we do:

segmentation

Segmentation criteria Amazon target customer segment

Ages 15-18, 18-25, 25-30, 30-45, 45 and overGender Males & Females and Others

Life-cyclestage

Students (Secondary pupils, High school Pupil,Undergraduate, )

Bachelor Stage young, single people living and notliving at home

Newly Married Couples young, no childrenFull Nest I youngest child under six

Full Nest II youngest child six or overFull Nest III older married couples with dependentchildren

Empty Nest I older married couples, no childrenliving with them

Empty Nest II older married couples, retired, nochildren living at home

Solitary Survivor I in labor forceSolitary Survivor II retired

‘Hard core loyals’

‘Soft core loyals’

‘Switchers’

Benefitssought

Widest range of productsConvenience of online purchasingCompetitive prices

More opportunities for entrepreneurs for selling,exporting,

More quicker delivering types than current

competitorsPersonality Easygoing, determined and ambitiousUser status non-users, potential users, first-time users, regularusers, or ex-users of a product

Psychographic

Social class All social classes: lower class, working class, middle

class and upper class

Lifestyle

Resigned, Struggler, Mainstreamer, Aspirer,Achiever, Explorer

Reformer, Consulting Prices

Selecting Target Market Segments

Because we all know Amazon is one of the most popular E-commerce website in theworld, we could not focus to one segment only Amazon had not selling good to one

segment, so we decided to apply the Differentiated marketing types on targeting the

market

For each segments, we going to design different separates to offer

The first one, Gender segment

For each gender we will divide the products appropriately Maybe some productssuch as cosmetics, both male and female could not use the same ones, for an example In theVietnam Amazon website of products which could be used for each genders will beseparate It will be easier to consumers for searching products

The table below shows our example:

Prices

Types

Collections

For Income, Age, Family size, Education, Nationality, Occupation segments:

The similar with Gender segment, in these segments we are going to divide productsbase on prices of products, kind of products, color, etc For example, if our customers arestudents, they all most search for some products as books, stationeries etc they rarely searchfor the luxury ones like a car Therefore, the website will able to be added column base onour customers’ income, sizes of family, occupations, educations even their nationalities.Depending on their nationalities, they will choose what is suitable to their customs

For Behavioral segment:

To know and understand our customers’ status, their behavioral about our services,products’ quality We made a survey (current marketing surveying part by Oanh) to get theusage rates, loyalty of customers

And from that survey we can also segment the Amazon market in Vietnam base onthe results we got from Vietnam E-commerce market and Current customers’ feedbacks inoversea into light, medium, and heavy product customers The heavy customers are often asmall percentage of the market but account for high percentage of total consumption Andfrom that, we could call those customers as “Super Fans”, youths and adults (18-30)

The market will be segmented by consumer loyalty Our customers could be loyal tobrands, stores, and companies, they will be divided into groups according to their degree ofloyalty Some customers are completely loyal, they only buy products of one brand all thetimes For example, when they need to buy a new cellphone or an earphone, they will onlysearch for ones of Sony company We will ask them to take part in the Sony users group ofour website, and then we will create more benefits to attract them like providing discountcode for them when they buy Sony’s products or somehow Beside for the easygoing users,

we also provide benefits to attract them such as free for delivery

Positioning

Using customer and product differentiation, we are positioning the Vietnam Amazon

as the most versatile, convenient, cheap and quality for personal and professional customers.Our marketing will focus on social media, entertainment (Music Videos, Film), andinformation capabilities that differentiate the Amazon Vietnam from it competitors

New Branches Product Strategy:

Amazon’s New Branches Strategy in Vietnam, including all the features describedearlier, will be sold a 6-months warranty We will introduce, begin to build 2 new branches

in the next 6-months Building the New Branches Strategy brand is an integral part of ourstrategy The brand and logo (Amazon Vietnam) will be displayed at both 2 branches officesand all of packaging, and reinforced by it’s prominence in the introductory marketingcampaign with a slogan “Amazon Vietnam Amazing Online”

Promotion Strategy:

Amazon.com is an American electronic commerce cloud computing company, ofcourse website or everything in their business is in English The reasons are, first of allEnglish is the most popular language the world, second Amazon was built by American But

we could not build a website “Amazon.com.vn” in English Learning from the currentdrawbacks, we going to build a website that in both “Vietnamese and English”, thanks tothat everyone in Vietnam even Vietnamese Native or Foreigners also easy to search Andlike I used to say above, it (future website) might be added a slogan “Amazon VietnamAmazing Online” to make sure that we will apply everything customer want

Pricing Strategy:

We are going to expect to lower the price of the first 2-weeks for 15% of all Amazonproducts when we start to run this business These prices reflect a strategy of attractingdesirable partners and taking share with other established competitors

Distribution Strategy:

Before moving to our ideas for making Amazon Vietnam, we would like to letreview some distribution strategy Amazon used in the world

In US

“Earth’s Biggest Bookstore”

Amazon used the Internet to change the business of buying books into a very fast,easy and enjoyable shopping experience Amazon has more than 2.5 million different booktitles in its kitty and is very rightly called the “Earth’s Biggest Bookstore”

From the very beginning, Amazon always kept the wholesalers and the publishers ontheir side which thereby allowed them to keep a very truncated inventory and low inventory

a publishing house Amazon used to get a discount of approximately 48% and around 41%from the wholesalers)

Amazon had a general lead time for delivery of 4 to 7 business days across the wholecountry of United States Amazon developed its infrastructure hugely in the late 90’s andeventually launched their Music and Video businesses also The idea was to “Get Big Fast”through diversification and geographic expansion by having more distribution centers intheir business geography

Some would say that the expansion of Amazon was the fastest expansionexperienced by any company for its distribution capacity Expanding and makingdistribution was the first step, next step was to figure out which distribution center will carrywhich all products, given the fact that Amazon not only expanded in distribution capacityacross geographies but also in terms of the product lines in its product portfolio

The 3 aspects of deciding the products to be carried by a distribution center are:

Amazon employed a lot of systems to enhance their operation efficiency The ones whichwere the most impressive and successful are:

1 Pick-To-Light System

2 Radio Frequency Technology

3 Voice Technology

4 Pick Profiles

5 Amazon Standard Identifying Number (ASIN)

6 Performance measuring key metrics

As Jeff Wilke, the Vice President of Operations at Amazon said about what Amazon had,

Amazon quickly adapted to the Six Sigma DMAIC reviews as a tool to reduce variationsand defects in its distribution centers

Jeff Wilke’s team followed 5 strategies to improve inventory management

1 Better forecasting of customer demand by improving the ability of the software byrefining it to the tune of better anticipation of the demands, both seasonal andregional This made sure that risk of buying either too much or too less was reduced

2 Better relations with the wholesalers and direct vendors to cater to any sudden surge

in demand for any particular bestselling book title This was also used to get someneeded momentum for the slow velocity titles

3 Available-to-Promise Functionality: Amazon integrated the supply chainmanagement systems of its suppliers with its own thereby getting a synergy in theprocess Now amazon was able to tell its customers the exact time frame in which itcould deliver the products to them For example, if a product is available with theAmazon distribution center themselves, then the lead time for the delivery of theproduct was within 24 hours But if the product was not available with the Amazon

DC then the lead time for delivery increased to 2 – 3 business days This allowedAmazon to have the information about the inventory of the suppliers at all times atthe very item level

4 Cascading Buying Rules: These rules by Amazon determined which supplier was thebest fit for which product in terms of the price and the options for delivery such that

if the item is not available with the supplier giving the best price then the nextsupplier in cascade will be selected for the delivery

5 Drop Ship Orders: Amazon took some time to adopt this strategy which they shouldhave adopted in the very beginning According to Drop Ship strategy, whenever thecustomer orders an item and the distribution center of Amazon does not have theproduct then Amazon places the order on its supplier Then instead of the suppliershipping the item to Amazon DC and then the Amazon DC shipping the item to thecustomer, the supplier directly ships the item to the customer, thereby drasticallydecreasing the lead time for delivery by removing the unnecessary steps of the supplychain products

In addition to the above mentioned processes and strategies, Amazon also used method

called “Postal Injection” or “Zone Skipping” In this method, the fully loaded truck from

the distribution center directly goes to the major cities, easily bypassing the postal service’ssorting hubs where the delivery packets are sorted according to the respective cities andstates

IN EUROPE

The initial targets for Amazon were UK and Germany, primarily because both thesecountries were the prime markets for book selling and online purchasing in the continent ofEurope Germany had an excess of 2000 publishing houses and UK had an excess of 3000publishing houses Amazon made an acquisition in Europe by acquiring Bookpages andTeleBuch in UK and Germany respectively

Again, in line with the idea followed in US, Amazon Europe wanted to “Get BigFast” Both the UK Amazon.co.uk and German Amazon.de increased their productportfolios by integrating the music and video businesses along with the books business at

the very offset of the culmination of the respective expansions in the two countries Eventhough the competition from the online bookstores of the respective countries was fierce,Amazon was successful in becoming the market leader in both the countries The combinedsales of the 2 countries crossed the 10% of the total Amazon revenue mark, signifying theepic success of the geographic expansion.

The next venture was in France When Amazon entered UK and Germany they did itthrough acquisitions, however when they entered France they did not acquire anyestablished company, instead they got the business up and running from the scratch Theformula was simple here too, “Get Big Fast”, which is why the business started with thecomplete portfolio of books, music, video, toys, et al

Growth in International sales for Amazon grew by 74%, which in turn helped theEuropean business to cross the 13.4% of the total Amazon revenue mark

Challenges in replicating amazon’s US model in EUROPE

Although Amazon was doing well in Europe but the ambition was high as they hadthe intention to repeat the success of Amazon US in Europe too However they wereconfronted with some heavy challenges from the European markets These challenges could

be tackled but to do that they required some radical change in the strategies that Amazonapplied and adopted in US

The 4 main challenges were:

 Selling regulations in Germany & France

prices of the books, which they got from the wholesalers and publishing houses Over herethey could not provide those discounts that they got on the bulk purchases from thewholesalers and publishing houses.

 Payment options

In Europe, more than 62% of the customers used cheques to make the purchases The corecompetency of Amazon was online retail which meant online purchasing via credit cards.This came as a major challenge to Amazon as they did not have any brick or mortar storewhere the concept of payment through cheques can happen

 Different supply market factors

In US, Amazon relied heavily on the suppliers for the books However in Europe theysuffered a setback because of the dearth of wholesalers and big suppliers In UK althoughthey were able to manage the supply with a handful of suppliers, but in France there werenone This forced Amazon to have tie ups with umpteen number of publishers for the supply

of books

So, we do not have to say too much about how to make the concepts of distribution forAmazon Vietnam (Amazon.com.vn), we could easily the benefits and successful ofAmazon’s distribution in US We would like to bring that distribution to Vietnam, butbeside we will change some things to reduce the challenges Amazon faced in Europe

 About selling regulations in Vietnam

We all know that, the best popular e-commerce company for selling book in Vietnamnow on is Tiki They offer their customer discount code for buying books in the fixedprices, cheaper than the other competitors’ prices So, why do not Amazon offer customerthese benefits? Incase Amazon did it in their own country (America) We will fix the prices

on books we sell, which we got from the wholesalers and publishing houses in Vietnam

 About Payment options

The same in Vietnam, most of Vietnamese customer are still used to cash on everypayment from e-commerce to traditional commerce But now on, Vietnamese customer arealso changing their habit in payment, we could see many types of payment are being usuallyused as MoMo, Zalo pay, Samsung pay etc So, we going to cooperate with those company

to bring that payment options to customer

 About different supply market factors

In US, Amazon relied heavily on the suppliers for the books However in Europe theysuffered a setback because of the dearth of wholesalers and big suppliers In UK althoughthey were able to manage the supply with a handful of suppliers, but in France there werenone This forced Amazon to have tie ups with umpteen number of publishers for the supply

of books

In this situation, we will try to rely on the suppliers for the books like Amazon did in

US Amazon Vietnam will be like a retailer of publishers, a number books will be alwaysavailable in Amazon Vietnam warehouse, another number we will contact to publishersimmediately we get orders in our website

1.2 Amazon Competitors:

In oversea

The company's website faced issues on July 16, 2018, the first day of Amazon's hour major promotion "Prime Day." The website Down Detector showed about 15,000reports of issues on Monday afternoon, beginning at roughly 3:05 PM EST, just fiveminutes after the promotion was set to begin

36-Amazon.com operates in three general segments: media, electronics, and othermerchandise Here are its main competitors:

 In the media segment, Amazon competes with auction site eBay (EBAY);media game-changer Netflix (NFLX); Time Warner Cable (TWX); Apple (AAPL)with iTunes; and Google (GOOG) with its Play Store

 Amazon has several competitors in the electronics and general merchandise segment,many of which are brick and mortar retailers, including Best Buy (BBY), FamilyDollar, Staples, Target (TGT), Walmart (WMT), Big Lots (BIG), and SysteMacs Itsonline competition in the electronics and general merchandise segment includesAlibaba Group (BABA), LightInTheBox Holding Co (LITB), Overstock.com(OSTK), PCM, Inc (PCMI), Vipshop Holdings (VIPS), JD.com (JD), Wayfair Inc.(W) and Zulily

 In the third operating segment, Amazon competes with several of the world's largestcompanies including CDW (CDW), PC Connection (CNXN), Insight Enterprises (NSIT),