Elements of the Marketing Process

Elements of the Marketing Process 1.1 Explain the various elements of the marketing process. Marketing Kotler (2010) defines that Marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners and society at large. (American Marketing Association, 2010) Customers Needs, Wants and Demands A successful business starts with knowing the customers. Customers are people who buy products and services from other people such as companies of one sort or another. The company may already know them as friends, neighbors and family but to develop the companys business, it is very important to know what the customers need or want. The needs, wants and demands help the marketers decide the products which they have to offer in the market. Needs Needs are easier to define but very according to social needs, physical needs, individual needs and other factors. The job of marketers is to understand the needs of the customers. Human needs are the basic requirements and include food clothing and shelter. Without these human cannot survive. The products which are under the needs category do not require push. By supplying more closely for the needs of customers, it is mostly successful for the companies which understand the reasons why the customers make the decisions such as what they buy and how they buy. (N.a, 2014) Examples of needs category products transportation sector Wants A difference is frequently made between needs and wants. The marketing concept is the attitude that business decisions should be based on what the consumer wants. (n.a, 2010). Wants are a step ahead of customers needs and also largely depend on the needs of the customers themselves. They are the form of human needs shaped by culture and individual personality (Class notes). For some customers, the wants are simple. On the other hand, other customers may be more specific in their wants. Examples of wants category products Car Demands A step ahead of wants is demands. When a customer wants something which is the best, and also the customer has the ability to buy it, then these wants are changed into demands. The main difference between wants and demands is customers desire. Example of demands category products – BMW Customers Satisfaction Customers satisfaction is a marketing term that relations how products or services supplied by a company meet a customers expectation. Customers satisfaction helps the companies to evaluate their ability in meeting customers needs and expectations effectively. (Zeithaml et al, 2009) Marketing Process The marketing process is the process of analyzing market opportunities, selecting target markets, developing the marketing mix, and managing the marketing effort. Target customers stand at the center of the marketing process. Various Elements of Marketing Process There are various kinds of elements under marketing process. They are – Situational Analysis Marketing Objectives Marketing Strategy Marketing Mix Implementation and Control. Situational Analysis The foundation of the marketing plan, which is known as a situational analysis includes many factors affecting on a business such as Swot analysis, Pestle analysis, Porters five forces and stakeholder analysis. Swot which stands for strengths, weakness, opportunities and threats is to create lists of all of the internal and external strengths, weakness, opportunities and threats to advise strategic planning decisions. Pestle which stands for political, economic, social, technological, legal and environmental is to identify all of the various external factors that might affect a business. A situational analysis can lead the organization of better understanding the factors which will influence its future. (Lorette, 2014) Marketing Objectives The objective is the starting point of the marketing plan. Marketing objectives are goals for the organization which wants to be successful when encouraging its products or services to customers. They should always support the companys mission and goals. They are important because they can show how the company will benefit from marketing, training the employees and managing (Pendergrass, 2013). Every effective goals and objectives are defined by the SMART criteria. SMART stands for Specific Measurable Agreed and Attainable Relevant and Realistic Timetable (class notes) For example – to increase 50 students per month in 2014 to crop at least 70% well-trained students in 2016 Marketing Strategy A strategy is a long-term plan to achieve certain objectives. Therefore a marketing strategy is a marketing plan considered to achieve marketing objectives. STP marketing is a three- step approach to build a target marketing plan. S is for segmentation, T is for targeting and P for positioning (Kokemuller, n.d). Segmentation is essentially a brainstorming activity due to demographics, psychographics, lifestyle, belief and values, life stages, geography, behavior and benefit (Hanlon, 2013). Targeting allows companies to classify the market segments that fit the best with their products. Hanks,(2014) states that Positioning includes the development of a product that the selected target market segment views as unique when compared to similar products in the industry. Marketing Mix Marketing mix is the combination of seven variables under a companys control that can be worked to achieve marketing objectives. Marketing managers use this to produce the best response in the target market. It is important to understand that the marketing mix principles are manageable. (N.a ,2014) Marketing decisions generally fall into the following seven controllable categories named as 7Ps. Product Price Place Promotion People Process Physical Evidence Implementation and Control An effective strategic implementation can determine the outcome of marketing planning. The effectiveness of implementation may be improved by the management of the planning process by building promise and ownership of the plan and its implementation. (N.a, 2013) N.a (2008) states that Strategic Control is the last step of management process, consists of monitoring and evaluating the strategy management process as a whole to ensure that it is operating properly. The basic of control is ability to measure. It compares what should happen actually with what actually happened or is likely to happen. 1.2 Evaluate the benefits and costs of marketing orientation for a selected organization. Production Concept The production concept is a concept where goods are produced without taking into consideration the choices or tastes of the customers. (Manzoor, n.d) Product Concept The customers will prefer products that have better quality, performance, and features as opposite to a normal product in the product concept. This is truly related in some places such as electronics and mobile handsets. Selling Concept The selling concept in marketing is the concept that customers will not automatically buy something they automatically sold. Marketing Concept Riley (2012) defines that A marketing orientated approach means a business reacts to what customers want. The decisions taken are based around information about customers needs and wants, rather than what the business thinks is right for the customer. Most successful businesses take a market-oriented approach. Societal Marketing Concept According to Kotler (2013), Social Marketing is the design, implementation, and control of programs seeking to increase the acceptability of a social idea or practice in a target group. Benefits of Marketing Orientation for MIC Appreciation The promotion of the business can get the appreciation and attention of the targeted students and parents across a wide ranging or specific market. Profits From the market process, the organization can get many profits by improving the attractions of parents and students during marketing yield effects. Adaptability Due to students service or students affair center and students feedback system, the organization can know what happening, feelings, wanting are and what they want to change some services of the school such as rules and teaching methods. Costs of Marketing Orientation for MIC Cost If there are no effect returning, the cost of market research for daily, and weekly or yearly can be one of the disadvantages of marketing orientation. Feedback It is not actually sure or very hard to get effective advices and feedbacks from the targeted students. Time If there are any needs to fix for the organization, too much time will have to be spent for discussions, meetings and so on. References Kotler. P, (2010) what is marketing? How 10 Experts Define It, [Online]. Available at http://www.skylinetradeshowtips.com/what-is-marketing-how-10-experts-define-it/> [Accessed 11th November 2014] American Marketing Association, (2010) what is marketing? How 10 Experts Define It, [Online]. Available at http://www.skylinetradeshowtips.com/what-is-marketing-how-10-experts-define-it/> [Accessed 11th November 2014] N. a, (2014) Marketing Theory. [Online]. Available at http://bussineesscasestudies.co.uk/bussiness-theory/marketing/establishing-customer-needs.html#axzz3lqPnaASn> [Accessed 11th November 2014] N.a (2010) Marketing Principles of MIC, 2nd ed., BPP Learning Media Ltd: London. Zeithaml et al, (2009) Models and theories of customer satisfaction [Online]. Available at http://www.ukessays.com/essays/marketing/models-theories-of-customer-satisfaction-marketing-essay.php> [Accessed 11th November 2014] Lorette. K, (2014) a Situational Analysis of a Strategic Marketing Plan. [Online]. Available at http://smallbusiness.chron.com/situational-analysis-strategic-marketing-plan-1474.html> [Accessed 11th November 2014] Pendergrass. K, (2013) Marketing Objectives as SMART Goals and Part of the Marketing Plan. [Online]. Available at https://www.udemy.com/blog/marketing-objectives/> [Accessed 11th November 2014] Kokemuller. N, (n.d) what is STP marketing? [Online]. Available at http://yourbussiness.azcentral.com/stp-marketing-1769.html> [Accessed 11th November 2014] Hanlon. A, (2013) The Segmentation, Targeting and Positioning model. [Online]. Available at http://www.smartinsights.com/digital-marketing-strategy/customer-segmentation-targeting/segmentation-targeting-positioning-model/> [Accessed 11th November 2014] Hanks. G, (2014) what is STP marketing? [Online]. Available at http://www.ehow.com/info_8693419_stp-marketing.html> [Accessed 11th November 2014] N. a, (2014) what is the Marketing Mix? Description [Online]. Available at http://www.12manage.com/methods_marketing_mix.html> [Accessed 11th November 2014] N.a, (2013) Marketing Strategy Implementation and Control [Online]. Available at http://marketingnotesbook.blogspot.com/2013/01/blog-post.html?m=1> [ Accessed 11th November 2014] N. a, (2008) Strategic Implementation and Strategic Control [Online]. Available at http://managementinnovations.wordpress.com/2008/12/10/strategy-implementation-strategic-control/> [Accessed 11th November 2014] Manzoor. A (n.d) what is the production concept? [Online]. Available at http://science.blurtit.com/77774/what-is-the-production-concept> [Accessed 11th November 2014] Riley. J (2012) Marketing Orientation [Online]. Available at http://www.tutor2u.net/business/gcse/marketing_orientation.htm> [Accessed 11th November 2014] Kotler. P (2013) Social Marketing Concept [Online]. Available at http://www.enotesmba.com/2013/02/social-marketing-concept.html?m=1> [Accessed 11th November 2014]

A summary of Amazon’s business Essay

I’ve used Amazon in my books for over 10 years now since many companies, from startups and small businesses to large international businesses, can learn from their focus on the customer and the approach of using technology and analysis to improve results. It consistently outperforms other companies in its ACSI customer satisfaction rating too. I aim to keep the case study up-to-date for readers of the books and Smart Insights readers who may be interested. In it we look at Amazon’s background, revenue model and sources for the latest business results. I recommend anyone studying Amazon checks the latest Amazon revenue and business strategies from their SEC filings / Investor relations. The annual filings to give a great summary of eBay business and revenue models. A good summary of the latest business model initiatives is available in this Amazon annual report summary for 2011. For Q4, 2010: North America segment sales, representing the Company’s U.S. and Canadian sites, were $7.21 billion, up 45% from fourth quarter 2009. International segment sales, representing the Company’s U.K., German, Japanese, French, Chinese and new Italian sites, were $5.74 billion, up 26% from fourth quarter 2009. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 29%. Amazon has come a long way since it launched in 1995: From: and it’s offices†¦ to it’s current Seattle headquarters: Amazon performs exceptionally efficiently measured against revenue per visitor, which is one of the key measures for any commercial website, whether it’s a media site, search engine, social network or a transactional retailer or offers travel or financial services. Of course profit per user would be quite different due to the significantly lower costs of other .coms like Facebook and Google. Note: SEC is the Securities and Exchange Commission (SEC) which is a government agency for which companies have to submit an open evaluation of their business models and marketplace conditions. Further Amazon case information This case study created by FaberNovel â€Å"Amazon.com: The Hidden Empire† one of five â€Å"Most Favorited† slideshows and one of the five â€Å"Most Popular Technology Presentations† of 2011. Recommended: Amazon Case Study Context Why a case study on Amazon? Surely everyone knows about who Amazon are and what they do? Yes, well that’s maybe true, but this case goes beyond the surface toreview some of the ‘insider secrets’ of Amazon’s success. Like eBay, Amazon.com was born in 1995. The name reflected the vision of Jeff Bezos, to produce a large scale phenomenon like the Amazon river. This ambition has proved justified since just 8 years later, Amazon passed the $5 billion sales mark – it took Wal-Mart 20 years to achieve this. By 2008 Amazon was a global brand with other 76 million active customers accounts and order fulfillment to more than 200 countries. Despite this volume of sales, at December 31, 2007 Amazon employed approximately 17,000 full-time and part-time employees. In September 2007, it launched Amazon MP3, a la carte DRM-free MP3 music downloads, which now includes over 3.1 million songs from more than 270,000 artists. Amazon Vision & strategy In their 2008 SEC filing, Amazon describe the vision of their business as to: â€Å"Relentlessly focus on customer experience by offering our customers low prices, convenience, and a wide selection of merchandise.† The vision is still to offer â€Å"Earth’s biggest selection and to be Earth’s most customer-centric company. Consider how these core marketing messages summarising the Amazon online value proposition are communicated both on-site and through offline communications. Of course, achieving customer loyalty and repeat purchases has been key to Amazon’s success. Many dot-coms failed because they succeeded in achieving awareness, but not loyalty. Amazon achieved both. In their SEC filing they stress how they seek to achieve this. They say: â€Å"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. Key features of our websites include editorial and customer reviews;  manufacturer product information; Web pages tailored to individual preferences, such as recommendations and notifications; 1-Click ® technology; secure payment systems; image uploads; searching on our websites as well as the Internet; browsing; and the ability to view selected interior pages and citations, and search the entire contents of many of the books we offer with our â€Å"Look Inside the Book† and â€Å"Search Inside the Book† features. Our community of online customers also creates feature-rich content, including product reviews, online recommendation lists, wish lists, buying guides, and wedding and baby registries.† In practice, as is the practice for many online retailers, the lowest prices are for the most popular products, with less popular products commanding higher prices and a greater margin for Amazon. Free shipping offers are used to encourage increase in basket size since customers have to spend 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 for promotional reasons. Amazon communicate the fulfillment promise in several ways including presentation of latest inventory availability information, delivery date estimates, and options for expedited delivery, as well as delivery shipment notifications and update facilities. This focus on customer has translated to excellence in service with the 2004 American Customer Satisfaction Index giving Amazon.com a score of 88 which was at the time, the highest customer satisfaction score ever recorded in any service industry, online or offline. Round (2004) notes that Amazon focuses on customer satisfaction metrics. Each site is closely monitored with standard service availability monitoring (for example, using Keynote or Mercury Interactive) site availability and download speed. Interestingly it also monitors per minute site revenue upper/lower bounds – Round describes an alarm system rather like a power plant where if revenue on a site falls below $10,000 per minute, alarms go off! There are also internal performance service-level-agreements for web services where T% of the time, different pages must return in X seconds. 2011 update on vision and importance of technology According to founder and CEO, Jeff Bezos, technology is very important to supporting this focus on the customer. In their 2010 Annual Report (Amazon,  2011) he said: â€Å"Look inside a current textbook on software architecture, and you’ll find few patterns that we don’t apply at Amazon. We use high-performance transactions systems, complex rendering and object caching, workflow and queuing systems, business intelligence and data analytics, machine learning and pattern recognition, neural networks and probabilistic decision making, and a wide variety of other techniques.And while many of our systems are based on the latest in computer science research, this often hasn’t been sufficient: our architects and engineers have had to advance research in directions that no academic had yet taken. Many of the problems we face have no textbook solutions, and so we — happily — invent new approaches†Ã¢â‚¬ ¦ All the effort we put into technology might not matter that much if we kept technology off to the side in some sort of R&D department, but we don’t take that approach. Technology infuses all of our teams, all of our processes, our decision-making, and our approach to innovation in each of our businesses. It is deeply integrated into everything we do†. The quote shows how applying new technologies is used to give Amazon a competitive edge. A good recent example of this is providing the infrastructure to deliver the Kindle â€Å"Whispersync† update to ebook readers. Amazon reported in 2011 that Amazon.com is now selling more Kindle books than paperback books. For every 100 paperback books Amazon has sold, the Company sold 115 Kindle books. Kindle apps are now available on Apple iOS, Android devices and on PCs as part of a â€Å"Buy Once, Read Anywhere† proposition which Amazon has developed. Amazon Customers Amazon defines what it refers to as three consumer sets customers, seller customers and developer customers. There are over 76 million customer accounts, but just 1.3 million active seller customers in it’s marketplaces and Amazon is seeking to increase this. Amazon is unusual for a retailer in that it identifies â€Å"developer customers† who use its Amazon Web Services, which provides access to technology infrastructure such as hosting that developers can use to develop their own web services. Members are also encouraged to join a loyalty programme, Amazon Prime, a fee-based membership program in which members receive free or discounted express shipping, in the United States, the United Kingdom, Germany and Japan. Competition In its SEC (2005) filing Amazon describes the environment for our products and services as ‘intensely competitive’. It views its main current and potential competitors as: 1) physical-world retailers, catalog retailers, publishers, vendors, distributors and manufacturers of our products, many of which possess significant brand awareness, sales volume, and customer bases, and some of which currently sell, or may sell, products or services through the Internet, mail order, or direct marketing; (2) Other online E-commerce sites; (3) A number of indirect competitors, including media companies, Web portals, comparison shopping websites, and Web search engines, either directly or in collaboration with other retailers; and (4) Companies that provide e-commerce services, including website development; third-party fulfillment and customer-service. It believes the main competitive factors in its market segments include â€Å"selection, price, availability, convenience, information, discovery, brand recognition, personalized services, accessibility, customer service, reliability, speed of fulfillment, ease of use, and ability to adapt to changing conditions, as well as our customers’ overall experience and trust in transactions with us and facilitated by us on behalf of third-party sellers†. For services offered to business and individual sellers, additional competitive factors include the quality of our services and tools, their ability to generate sales for third parties we serve, and the speed of pe rformance for our services. From Auctions to marketplaces Amazon auctions (known as zShops) were launched in March 1999, in large part as a response to the success of eBay. They were promoted heavily from the home page, category pages and individual product pages. Despite this, a year after its launch it had only achieved a 3.2% share of the online auction compared to 58% for eBay and it only declined from this point. Today, competitive prices of products are available through third-party sellers in the ‘Amazon Marketplace’ which are integrated within the standard product listings. The strategy to offer such an auction facility was initially driven by the need to compete with eBay, but now the strategy has been adjusted such that Amazon describe it as part of the approach of low-pricing. Although it might be thought that Amazon would lose out on  enabling its merchants to sell products at lower prices, in fact Amazon makes greater margin on these sales since merchants are charged a commission on each sale and it is the merchant who bears the cost of storing inventory and fulfilling the product to customers. As with eBay, Amazon is just facilitating the exchange of bits and bytes between buyers and sellers without the need to distribute physical products. Amazon Media sales You may have noticed that unlike some retailers, Amazon displays relevant Google text ads and banner ads from brands. This seems in conflict with the strategy of focus on experience since it leads to a more cluttered store. However in 2011 Amazon revealed that worldwide media sales accounted for approximately 17% of revenue! Amazon marketing Amazon does not reveal much about its marketing approach in its annual reports, but there seems to be a focus on online marketing channels. Amazon (2011) states â€Å"we direct customers to our websites primarily through a number of targeted online marketing channels, such as our Associates program, sponsored search, portal advertising, email marketing campaigns, and other initiatives†. These other initiatives may include outdoor and TV advertising, but they are not mentioned specifically. In this statement they also highlight the importance of customer loyalty tools. They say: â€Å"while costs associated with free shipping are not included in marketing expense, we view free shipping offers and Amazon Prime as effective worldwide marketing tools, and intend to continue offering them indefinitely†. How ‘The Culture of Metrics’ started A common theme in Amazon’s development is the drive to use a measured approach to all aspects of the business, beyond the finance. Marcus (2004) describes an occasion at a corporate ‘boot-camp’ in January 1997 when Amazon CEO Jeff Bezos ‘saw the light’. ‘At Amazon, we will have a Culture of Metrics’, he said while addressing his senior staff. He went on to explain how web-based business gave Amazon an ‘amazing window into human behaviour’. Marcus says: ‘Gone were the fuzzy approximations of focus groups, the anecdotal fudging and smoke blowing from the marketing department. A company  like Amazon could (and did) record every move a visitor made, every last click and twitch of the mouse. As the data piled up into virtual heaps, hummocks and mountain ranges, you could draw all sorts of conclusions about their chimerical nature, the consumer. In this sense, Amazon was not merely a store, but an immense repository of fact s. All we needed were the right equations to plug into them’. James Marcus then goes on to give a fascinating insight into a breakout group discussion of how Amazon could better use measures to improve its performance. Marcus was in the Bezos group, brainstorming customer-centric metrics. Marcus (2004) summarises the dialogue, led by Bezos: â€Å"First, we figure out which things we’d like to measure on the site†, he said. â€Å"For example, let’s say we want a metric for customer enjoyment. How could we calculate that?† â€Å"There was silence. Then somebody ventured: â€Å"How much time each customer spends on the site?† â€Å"Not specific enough†, Jeff said. â€Å"How about the average number of minutes each customer spends on the site per session† someone else suggested. â€Å"If that goes up, they’re having a blast†. â€Å"But how do we factor in purchase?† I [Marcus] said feeling proud of myself. â€Å"Is that a measure of enjoyment†? â€Å"I think we need to consider frequency of visits, too†, said a dark-haired woman I didn’t recognise. â€Å"Lot of folks are still accessing the web with those creepy-crawly modems. Four short visits from them might be just as good as one visit from a guy with a T-1. Maybe better’. â€Å"Good point†, Jeff said. â€Å"And anyway, enjoyment is just the start. In the end, we should be measuring customer ecstasy† It is interesting that Amazon was having this debate in about the elements of RFM analysis (described in Chapter 6 of Internet Marketing), 1997, after already having achieved $16 million of revenue in the previous year. Of course, this is a miniscule amount compared with today’s billions of dollar turnover. The important point was that this was the start of a focus on metrics which can be seen through the description of Matt Pounds work later in this case study. From human to software-based recommendations Amazon has developed internal tools to support this ‘Culture of Metrics’.  Marcus (2004) describes how the ‘Creator Metrics’ tool shows content creators how well their product listings and product copy are working. For each content editor such as Marcus, it retrieves all recently posted documents including articles, interviews, booklists and features. For each one it then gives a conversion rate to sale plus the number of page views, adds (added to basket) and repels (content requested, but the back button then used). In time, the work of editorial reviewers such as Marcus was marginalised since Amazon found that the majority of visitors used the search tools rather than read editorial and they responded to the personalised recommendations as the matching technology improved (Marcus likens early recommendations techniques to ‘going shopping with the village idiot’). Experimentation and testing at Amazon The ‘Culture of Metrics’ also led to a test-driven approach to improving results at Amazon. Matt Round, speaking at E-metrics 2004 when he was director of personalisation at Amazon describes the philosophy as ‘Data Trumps Intuitions’. He explained how Amazon used to have a lot of arguments about which content and promotion should go on the all important home page or category pages. He described how every category VP wanted top-center and how the Friday meetings about placements for next week were getting ‘too long, too loud, and lacked performance data’. But today ‘automation replaces intuitions’ and real-time experimentation tests are always run to answer these questions since actual consumer behaviour is the best way to decide upon tactics. Marcus (2004) also notes that Amazon has a culture of experiments of which A/B tests are key components. Examples where A/B tests are used include new home page design, moving features around the page, different algorithms for recommendations, changing search relevance rankings. These involve testing a new treatment against a previous control for a limited time of a few days or a week. The system will randomly show one or more treatments to visitors and measure a range of parameters such as units sold and revenue by category (and total), session time, session length, etc. The new features will usually be launched if the desired metrics are statistically significantly better. Statistical tests are a challenge though as distributions are not normal (they have a large mass at zero for example of no purchase) There are other challenges since multiple  A/B tests are running every day and A/B tests may overlap and so conflict. There are also longer-term effects where some features are ‘cool’ for the first two weeks and the opposite effect where changing navigation may degrade performance temporarily. Amazon also finds that as its users evolve in their online experience the way they act online has changed. This means that Amazon has to constantly test and evolve its features. Amazon.com Technology It follows that the Amazon technology infrastructure must readily support this culture of experimentation and this can be difficult to achieved with standardised content management. Amazon has achieved its competitive advantage through developing its technology internally and with a significant investment in this which may not be available to other organisations without the right focus on the online channels. As Amazon explains in SEC (2005) ‘using primarily our own proprietary technologies, as well as technology licensed from third parties, we have implemented numerous features and functionality that simplify and improve the customer shopping experience, enable third parties to sell on our platform, and facilitate our fulfillment and customer service operations. Our current strategy is to focus our development efforts on continuous innovation by creating and enhancing the specialized, proprietary software that is unique to our business, and to license or acquire commercially-developed technology for other applications where available and appropriate. We continually invest in several areas of technology, including our seller platform; A9.com, our wholly-owned subsidiary focused on search technology on www.A9.com and other Amazon sites; web services; and digital initiatives.’ Round (2004) describes the technology approach as ‘distributed development and deployment’. Pages such as the home page have a number of content ‘pods’ or ‘slots’ which call web services for features. This makes it relatively easy to change the content in these pods and even change the location of the pods on-screen. Amazon uses a flowable or fluid page design unlike many sites which enables it to make the most of real-estate on-screen. Technology also supports more standard e-retail facilities. SEC (2005) states: ‘We use a set of applications for accepting and validating customer orders, placing and tracking orders with suppliers, managing and assigning inventory to customer  orders, and ensuring proper shipment of products to customers. Our transaction-processing systems handle millions of items, a number of different status inquiries, multiple shipping addresses, gift-wrapping requests, and multiple shipment methods. These systems allow the customer to choose whether to receive single or several shipments based on availability and to track the progress of each order. These applications also manage the process of accepting, authorizing, and charging customer credit cards.’ Data Driven Automation Round (2004) said that ‘Data is king at Amazon’. He gave many examples of data driven automation including customer channel preferences; managing the way content is displayed to different user types such as new releases and top-sellers, merchandising and recommendation (showing related products and promotions) and also advertising through paid search (automatic ad generation and bidding). The automated search advertising and bidding system for paid search has had a big impact at Amazon. Sponsored links initially done by humans, but this was unsustainable due to range of products at Amazon. The automated programme generates keywords, writes ad creative, determines best landing page, manages bids, measure conversion rates, profit per converted visitor and updates bids. Again the problem of volume is there, Matt Round described how the book ‘How to Make Love Like a Porn Star’ by Jenna Jameson received tens of thousands of clicks from pornography-related searches, but few actually purchased the book. So the update cycle must be quick to avoid large losses. There is also an automated email measurement and optimization system. The campaign calendar used to be manually managed with relatively weak measurement and it was costly to schedule and use. A new system: Automatically optimizes content to improve customer experience Avoids sending an e-mail campaign that has low clickthrough or high unsubscribe rate Includes inbox management (avoid sending multiple emails/week) Has growing library of automated email programs covering new releases and recommendations But there are challenges if promotions are too successful if inventory isn’t available. Your Recommendations Customers Who Bought X†¦, also bought Y is Amazon’s signature feature. Round  (2004) describes how Amazon relies on acquiring and then crunching a massive amount of data. Every purchase, every page viewed and every search is recorded. So there are now to new version, customers who shopped for X also shopped for†¦ and Customers who searched for X also bought†¦ They also have a system codenamed ‘Goldbox’ which is a cross-sell and awareness raising tool. Items are discounted to encourage purchases in new categories! I have a more detailed article on Amazon personalisation / recommendation system He also describes the challenge of techniques for sifting patterns from noise (sensitivity filtering) and clothing and toy catalogues change frequently so recommendations become out of date. The main challenges though are the massive data size arising from millions of customers, millions of items and recommendations made in real time. Amazon Partnership strategy As Amazon grew, its share price growth enabled partnership or acquisition with a range of companies in different sectors. Marcus (2004) describes how Amazon partnered with Drugstore.com (pharmacy), Living.com (furniture), Pets.com (pet supplies), Wineshopper.com (wines), HomeGrocer.com (groceries), Sothebys.com (auctions) and Kozmo.com (urban home delivery). In most cases, Amazon purchased an equity stake in these partners, so that it would share in their prosperity. It also charged them fees for placements on the Amazon site to promote and drive traffic to their sites. Similarly, Amazon charged publishers for prime-position to promote books on its site which caused an initial hue-and-cry, but this abated when it was realised that paying for prominent placements was widespread in traditional booksellers and supermarkets. Many of these new online companies failed in 1999 and 2000, but Amazon had covered the potential for growth and was not pulled down by these partners, even though for some such as Pets.com it had an investment of 50%. Analysts sometimes refer to ‘Amazoning a sector’ meaning that one company becomes dominant in an online sector such as book retail such that it becomes very difficult for others to achieve market share. In addition to developing, communicating and delivering a very strong proposition, Amazon has been able to consolidate its strength in different sectors through its partnership arrangements and through using technology to facilitate product promotion and distribution via these partnerships. The Amazon retail platform enables other retailers to sell products online using  the Amazon user interface and infrastructure through their ‘Syndicated Stores’ programme. For example, in the UK, Waterstones (www.waterstones.co.uk) is one of the largest traditional bookstores. It found competition with online so expensive and challenging, that eventually it entered a partnership arrangement where Amazon markets and distributes its books online in return for a commission online. Similarly, in the US, Borders a large book retailer uses the Amazon merchant platform for distributing its products. Toy retailer Toys R’ Us have a similar arrangement. Such partnerships help Amazon extends its reach into the customer-base of other suppliers, and of course, customers who buy in one category such as books can be encouraged to purchase into other areas such as clothing or electronics. Another form of partnership referred to above is the Amazon Marketplace which enables Amazon customers and other retailers to sell their new and used books and other goods alongside the regular retail listings. A similar partnership approach is the Amazon ‘Merchants@’ program which enables third party merchants (typically larger than those who sell via the Amazon Marketplace) to sell their products via Amazon. Amazon earn fees either through fixed fees or sales commissions per-unit. This arrangement can help customers who get a wider choice of products from a range of suppliers with the convenience of purchasing them through a single checkout process. Finally, Amazon has also facilitated formation of partnerships with smaller companies through its affiliates programme. Internet legend records that Jeff Bezos, the creator of Amazon was chatting to someone at a cocktail party who wanted to sell books about divorce via her web site. Subsequently, Amazon.com launched its Associates Program in July 1996 and it is still going strong. Googling http://www.google.com/search?q=www.amazon.com+-site%3Awww.amazon.com for sites that link to the US site, shows over 4 million pages, many of which will be affiliates. Amazon does not use an affiliate network which would take commissions from sale, but thanks to the strength of its brand has developed its own affiliate programme. Amazon has created a tiered performance-based incentives to encourage affiliates to sell more Amazon products. Amazon Marketing communications In their SEC filings Amazon state that the aims of their communications  strategy are (unsurprisingly) to: Increase customer traffic to our websites Create awareness of our products and services Promote repeat purchases Develop incremental product and service revenue opportunities Strengthen and broaden the Amazon.com brand name. Amazon also believe 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. As well as this Marcus (2004) describes how Amazon used the personalisation enabled through technology to reach out to a difficult to reach market which Bezos originally called ‘the hard middle’. Bezos’s view was that it was easy to reach 10 people (you called them on the phone) or the ten million people who bought the most popular products (you placed a superbowl ad), but more difficult to reach those in between. The search facilities in the search engine and on the Amazon site, together with its product recommendation features meant that Amazon could connect its products with the interests of these people. Online advertising techniques include paid search marketing, interactive ads on portals, e-mail campaigns and search engine optimisation. These are automated as far as possible as described earlier in the case study. As previously mentioned, the affiliate programme is also important in driving visitors to Amazon and Amazon offers a wide range of methods of linking to its site to help improve conversion. For example, affiliates can use straight text links leading direct to a product page and they also offer a range of dynamic banners which feature different content such as books about Internet marketing or a search box.Amazon also use cooperative advertising arrangements, better known as ‘contra-deals’ with some vendors and other third parties. For example, a print advertisement in 2005 for a particular product such as a wireless router with a free wireless laptop card promotion will feature a specific Amazon URL in the ad. In product fulfilment packs, Amazon may include a leaflet for a non-competing online company such as Figleaves.com (lingerie) or Expedia (travel). In return, Amazon leaflets may be included in customer communications from the partner brands. Our Associates program directs customers to our websites by enabling independent websites to make millions of products available to their  audiences with fulfillment performed by us or third parties. We pay commissions to hundreds of thousands of participants in our Associates program when their customer referrals result in product sales. In addition, we offer everyday free shipping options worldwide and recently announced Amazon.com Prime in the U.S., our first membership program in which members receive free two-day shipping and discounted overnight shipping. Although marketing expenses do not include the costs of our free shipping or promotional offers, we view such offers as effective marketing tools. Marcus, J. (2004) Amazonia. Five years at the epicentre of the dot-com juggernaut, The New Press, New York, NY. Round, M. (2004) Presentation to E-metrics, London, May 2005. www.emetrics.org.

Activity Based Costing of City Services Essay

Required: 1. The new mayor became elected with the pledge of rapid privatization. But instead of downright privatization, his first action was to ask for cost estimation of public service. Why do you think he asked for cost estimation instead of privatizing the public service right away? Was it a sensible action? 2. Existing DOT employees were allowed to bid against private businesses. Was it a sensible decision? For example, they could have been just fired. 3. How well did the project team implement ABC for estimating the cost of pothole filling? Do you agree with the manner in which they treated equipment cost and excess capacity? 4. Should the city have allowed the municipal employees to see the ABC estimates and given them the opportunity to reduce their costs? 5. Calculate the bids the city workers will issue for fixing potholes in the Northwest and Northeast quadrants. 6. The new mayor wants to continue to outsource city services through competitive bidding. Do you think that’s a good idea? What are the concerns the city should consider? Colorscope, Inc. Instruction: 1. What was the value statement of Colorscope to customers? In other words, why would any customer go to Colorscope instead of other large printers? We are going to analyze cost structure of Colorscope using a departmental cost allocation method. This is a two stage system. First categorize cost to different production centers (= departments = Job prep, Scanning, Assembly, Output, and Quality). Then allocate cost in each center to a job in the second stage. 2. Complete the following first stage allocation. Job prep Wages $8,000 Depreciation Rent Others* Total MOH DLH POHR Floor space * allocated by DLH Scanning Assembly Output Quality Idle Total 3. Analyze the job profitability by filling out the following sheet with dollars. (Hint: Add labor cost and allocated MOH.) Job # 61001 61002 Revenue Materials Job prep $9,600 Scanning Assembly Output Quality Net profits 62001 Idle Total Profit Then summarize your findings. 4. Analyze the rework cost by filling out the following sheet for the jobs with a rework. Job # 61001 61002 Materials Job prep Scanning Assembly Output Quality Net profits 62001 Total What is the financial consequence of reworks? (Hint: compare the profits before and after reworks.) 5. What would you recommend to Colorscope Inc. to improve their business?

The World Health Organization (Who, 2016) Has Recognized

The World Health Organization (WHO, 2016) has recognized childhood obesity as one of the most significant public health issues of the 21st century. In 2011-2014, the prevalence of obesity among children living in the United States aged 2-19 was 17% (Ogden, Carroll, Fryar, Flegal, 2015). While this percentage has stabilized in the past 10 years, millions of children are affected by this disease and at risk for chronic comorbities (Shapiro, Arevalo, Tolentino, Machuca, Applebaum, 2014). Unfortunately, this alarming statistic is no surprise to me, a primary care pediatric nurse practitioner. Treating these patients for the past 5 years has placed me at the frontline of this epidemic, and thus, has encouraged me to be a catalyst for†¦show more content†¦The ethnic groups studied, in order from highest overweight prevalence to least, include Hispanics, American Indians, Asian/Pacific Islanders, African Americans, and Whites. These ethnic differences were further studied in Anderson and Whitaker’s 2009 study that found racial disparities evident in obese 4-year-old children in the United States. In their study, the highest prevalence was among American Indian/Native Alaskan children, followed by Hispanic and non-Hispanic black, and the lowest prevalence among non-Hispanic white and Asian children. While each study shows slight differences in highest to lowest prevalence of overweight among each race, both studies identify disproportionate high-risk populations. As cited in Kumanyika and Grier’s 2006 article, low-income children are at excess risk of obesity regardless of ethnicity; however, ethnic differences appear in the low-income population. In the most recent NCHS Data Brief (Ogden et al., 2015), the statistics continue to suggest these racial inequalities persist among 2-through 19-year-old obese youths. 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