DIGITAL MARKETING :FLIPKART’S GROWTH A SUCCESS STORY

• WAS SERIES • 19 March 2015

Presented by Kishan K P

DIGITAL MARKETING

• In simplistic terms, digital marketing is the promotion of products or brands via one or more forms of electronic media. Digital marketing differs from traditional marketing in that it involves the use of channels and methods that enable an organization to analyze marketing campaigns and understand what is working and what isn’t – typically in real time.

Introduction

• ..\DIGITAL MARKETING\IIM BANGALORE DIGITAL MARKETING.pdf

• ..\DIGITAL MARKETING\delhi-school-of-internet-marketing-full-course-curriculum (1).pdf

Digital marketers monitor things like what is being viewed, how often and for how long, sales conversions, what content works and doesn’t work, etc. While the Internet is, perhaps, the channel most closely associated with digital marketing, others include wireless text messaging, mobile instant messaging, mobile apps, podcasts, electronic billboards, digital television and radio channels, etc.

What we want from Digital Marketing?

Visibility Awareness Engagement Branding Leads

You are there only if they can find you

Provide information to engage people ongoing basis.

Generate awareness of your products or services

Build Trust & Credibility with potential customer

Develop capability for people to contact you online.

Implementation Scope

Website Micro site SEO PPC ORM Mobile

The digital marketing implementation plan will start with website, which is engaging and interactive. The concept and the website will be promoted through search engine optimization, social media marketing, Email marketing, SMS marketing, mobile marketing, and paid ads at various related sites and social networking platforms.

Offline / Online

Offline, bustling crowds pass by your place of business. Some of the passerby traffic notices you and walks in.

"Location, Location, Location"

Online, people search for information. Millions of people. Each searches alone.

"Information, information, information"

Search Engines

•search engine will gather, sort & report information from the Internet, based on your topic of interest

•But, search engines also offers a lot more than search alone…

• Google – Searches 4,285,199,774 web pages in an hour

• 28% of Google searches are for a "product/service name", 9% are for a "brand name" and 5% are searches for a "company name".

• 85%* of all Web site traffic and 70%* of all online purchases originate from a search engine. (*Jupiter Research)

• Micro Commerce opportunities for new products and services will generate an estimated $60 bln in revenue per year by 2015 according to Gartner. A micro purchase is a purchase valued at less than $5 and conducted electronically, where the settlement can be either prepaid, by subscription, on-the-spot, or invoiced.

Definitions • SE = Search Engine is a tool that enables users to locate

information on the World Wide Web. Search engines use keywords entered by users to find Web sites which contain the information sought.

• Web Directory = a search service that arranges the web pages it knows about into categories and subcategories.

• SEO / SEM = A form of online marketing, Search Engine Optimization / Search Engine Marketing is the process of making a site and its content highly relevant for both search engines and searchers. Successful search marketing helps a site gain top positioning for relevant words and phrases.

What is Targeted Advertising?

Your customers see your ad when they search

Your ad reaches users at the moment they demonstrate interest

Search Marketing Defined

Improving the visibility of your website and increasing website traffic by placing your brand in front of consumers when searching for relevant products and services in Search

Engines

Search Engine Optimisation(SEO)

Search Engine Advertising(SEA)

Search Engine Advertising

SEA

ADVERTISERS PAY ON A COST PER VISITOR BASIS FOR TRAFFIC DELIVERED TO THEIR SITE THROUGH SEARCH ENGINE LISTINGS

Trends

Companies spent more than five times on PPC as compared to SEO in 2010

Types of searches

Search engine optimization/cont’dHow SEO elements affect organic listings

Title tag

Meta description tag (or first para of text if no meta des has been added)

Keywords

The text ad is displayed on Google search results page under “Sponsored Links”

The text ad is displayed on Google search results page under “Sponsored Links”

User clicks on the ad and is brought to the relevant landing page

User clicks on the ad and is brought to the relevant landing page

User types in a search query on Google Search PAID

SEARCH

RESULT

Google Search

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SEO: Search Engine Optimisation

SEO

Websites are ranked by relevancy according to search engine algorithms (i.e. a compliance checklist)

Affected by website design.

Content NetworkTheme Content

(Text Ads)

Video TargetingVideo Sites Video Ads

Contextual Targeting - Gmail

Google shows Ads after evaluating the context and the relevancy of its placement

Gmail Ads

Contextual targeting reduces the cost of conversion and improves the quality of lead.

There are 100’s of similar website where the ads can be shown

Marketing Strategy- Through radius targeting

A) Understanding the targeted search of the customer,

B) Understanding the geography on the basis of search,

C) Radius targeting of the campaign and navigating to the landing page,

D) Reducing the bounce rate and increasing the relevant visitors

Defining geography of targeting

Search engine marketing/cont’dPaid placements - Google

Paid placements

Search Engine Advertising

SEA

Advertisers pay on a cost per visitor basis for traffic delivered to their site through Search Engine listings

Keyword Research

When you begin the process of keyword research, the first step is to think like your target audience and how they would enter the phrases for what they are searching for.

Keyword Research

Keyword research involves so much more than just looking up search frequencies. Critical factors such as budget restrictions, competition levels, and business strategy must be considered in order to develop a results-driven search marketing plan..

SEARCH ENGINE OPTIMIZATION

• Search Engine Optimization refers to a specialized form of Digital Marketing activity whereby a company or business achieves the best possible online visibility over the most prominent and popular search engines like Google ,Yahoo,Bing. SEO is considered as one of the most cost effective marketing strategies to promote any business, brand, product or services to customers not just in a local region but throughout the world.

SERACH ENGINE PERIODIC TABLE

• ..\GOOGLE ADWORDS\SearchEngineLand-Periodic-Table-of-SEO-2013.pdf

What is Adsense?How it works?

GOOGLE ADWORDS

• Google Ad Words is simple and efficient. It allows businesses to promote their products, services or brands. Google gives businesses the option of paying for their ads on a CPM (Cost per Thousand Impressions) basis or on a PPC (Pay Per Click) basis. It also allows businesses to run, maintain, measure, and track results from their paid campaigns.

What is AdSense?

.custom searchcustom search

Google AdSense is a program run by Google that allows publishers in the Google Network of content sites to serve automatic text, image, video, or interactive media advertisements, that are targeted to site content and audience

ADWORDS• Let’s say you have a webpage specifically on the topic of

“business insurance.” Once visitors arrive on your site, Google AdSense immediately starts working, displaying relevant content in ads. When visitors click on these links, two things happen:

• Google makes money through its AdWords program charging advertisers a cost per impression or cost per click rate based on the number of times users either see or click on the add.

• Publishers make money with a share of what Google collects from the advertiser for the ads seen or clicked on from their websites.

What is AdSense?

banner ad

banner adbanner ad

searchsearchPublishers getpaid whenreaders click on ads –

Pay Per ClickCPM

adad

adad

How does AdSense work?

Publishers make space for ads via display

(banners, text, video) or custom search box

Google ad servermanages inventory of adspaces, giving publishersaccess to large pool of

advertisers

ADVERTISERS

Google adpartners bid for

those spaces viareal-time auction

PUBLISHERS GOOGLE AD SERVER Real-time-bidding e.g.

How does Google optimize revenue for Publishers?

• Think of Google’s AdWords and AdSense as two complementary parts of Google’s advertising program:

• One allows businesses to signup and buy ads to be displayed by Google across the Web alongside relevant content.

• The other lets Web publishers partner with Google to help spread that advertising by placing it on their pages for a share of the profit.

AdSense vs AdWords

• Google AdWords is for business owners mainly to create advertisements to appear on search, publishers and partner networks. Advertisers using Google AdWords pay Google to increase traffic and conversions on their sites.

• Google AdSense on the other hand is a monetization tool and is free for content providers and publishers that have already generated significant traffic and want to monetize that traffic.

AD WORKSHEET

• Download the ad writing worksheet.pdf

WE ALL LIKE SHOPPING

WE ALL LIKE THE INTERNET

PUTTING THE

2GETHER

(SHOPPING+INTERNET)=?

ON-LINE

ONLINE SHOPPING=AMAZON FLIPKART

FOUNDERS

SACHIN BANSAL & BINNY BANSAL

Introduction• Flipkart- Worlds top 10 most visited E-commerce website in India with

regards to traffic.

• Multiple payment methods available for customers to make payment more easy.

• Fastest growing e-commerce website in India

• It sells nearly 30 products per minute.

Founded in 2007 by Binny Bansal & Sachin Bansal.

Started with sell ing of Books,

Operation exclusive to India, with HQ at Bangalore, Karnataka

First book sold- “Leaving Microsoft to change the world” by john Wood

Later expanded business in other products l ike • Electronic goods

• Apparels

• Home and kitchen appliances etc.

History

RISKING IT ALL ON THE LINEThere was huge risk taken by both the Bansal's as both of them got a high profile job in the worlds biggest e-commerce website named Amazon. Leaving Amazon to start their own company with just Rs. 4,00,000 involved a huge risk as there was no guarantee that their idea would succeed or not.

It was result of this risk taking only that today Flipkart generates Rs 1.5 Crore a Day.  It has a record user base of 1 Million in India only.

Flipkart claims to have 26 million registered users, clocking over eight million daily visits.

BUSINESS RESULTS• In FY 2013–2014, Flipkart crossed the INR7 billion (US$130million) mark

as Internet usage in the country increased and people got accustomed to making purchases online. Flipkart projects its sales to reach INR50 billion by year 2015. On average, Flipkart sells nearly 20 products per minute and is aiming at generating a revenue of INR50,000 crores by 2015 end. Flipkart has also set a target of shipping a billion units a month and serving 100 million customers by 2018. As of now, Flipkart ships about eight million units a month.

• It expects to sell about 25 million units(Products) per month and to add 100,000 Re sellers

• Taken 3 million sqft of Prime Office space with the embassy Group @ Bengaluru at an average rent of Rs.300 crores

• Flipkart is currently in growth stage

• Sales revenue is increasing every year• The biggest deal in the consumer Internet space so far is Flipkart’s acquisition of Myntra at a staggering 370

Million dollars(Ind Rs.2300 crores)

Order Lifecycle

Attract users to the site(www.FlipCart.com/FlipKart) Family, Friends, SEO, SEM,WoM, Brand Building Provide selection Make it easy to Find & Discover productsProvide details to evaluate a product Description, Specifications Price well Have to be competitive to the most obvious options Provide convenient payment options Online, COD Confirm payment

Order Lifecycle(contd)

Get the item Procure from Supplier (Just-in-time) (Supplier selection) Keep Inventory (Inventory Prediction, Planning)

Clean & Check for sanity Pages missing, MRP printed lesser than told to you

Pack the item Tamper proof, weather proof, breakage proof

Select courier & hand-over Courier performances vary across regions a LOT

Get tracking id & communicate to customer Follow-up for timely delivery

Take care of returns (faulty product/user changes their mind) Minimize returns

This is Dhanda

No glamour – this is dhanda and very traditional at that.Your competition is on SP road and Chandni Chowk.

Dealing with suppliers: > Signing agreements with suppliers > getting them to share data feeds > getting them to fulfill your orders

Dealing with Payment GatewaysSetting up & operating large warehousesDealing with Couriers Now (e-cart)People may not be as forthright & honest

Micro Analysis- Suppliers & Intermediaries

Supplier or merchants What merchant gets!!! • Open platform for everyone to become merchant

• Required a product portfolio to get registered as a merchant on Flipkart

• Product is placed depending on the category of the product.

• Product undergoes a Quality check by the company itself before getting live

• Brand name visibility

• Quick and easy access by the customers

• Increase in the sales by reaching out customers.

• Also brand presence on social networking sites.

Myntra + Flipkart

• Flipkart’s Reason Wanted apparel products specialization, deeper understanding of fashion, aesthetic presentation and

experience. Fashion products to become the most popular category in the near future.

• Myntra’s Reason To have a stronger distribution network with the present ratio being at 70:250 To foray into the mobile platform To increase warehouse capacity by 4 times

CRM AT FlipkART

Monday, March 23, 2015

Customer relationship management practices

A CUSTOMER CENTRIC APPROACH TO MANAGEMENT

Flip kart can be said to be the pioneer in initiating the skeptical Indian shopper into online retailer.

Flipkart has built itself on the core foundations of reliability, quickness, credibility, variety and quality. It uses Customer Relationship Management as its differentiating factor.

Providing good customer service enables Flipkart to enjoy high levels of customer satisfaction, generate repeat business and ensure positive word-of-mouth.

The customer is informed at every step through e-mail/text when the order has been confirmed order summary & shipment details + tracker informing customer if order has ⇾ ⇾been delayed.

Easy to reach out to the customer service team through their social media channels as well as a customer care number.

Customer complaints are quickly addressed and there are transparent return and exchange

policies.

Monday, March 23, 2015

SUPPLY CHAIN MANAGEMENT(cnt..)

Monday, March 23, 2015

Monday, March 23, 2015

Strategic CRMCustomer-management orientation

The company philosophy echoes in their tagline “making better our service promise”. The founders believe that huge discounts alone cannot sustain a successful business, customer satisfaction and preferences need to be addressed to keep the flame going.

Flipkart has built itself on the core foundations of reliability, quickness, credibility, variety and quality.

Providing good customer service enables Flipkart to enjoy high levels of customer satisfaction, generate repeat business and ensure positive word-of-mouth.

Senior management believes that as the retail sector evolves, customer satisfaction will be a key driver of success for most brands and organization.

Monday, March 23, 2015

Technological Support At The Operational Level To facilitate CRM: Sales Force Automation

SFA is the application of technology to support regular sales functions and includes tools that are employed by users to perform administrative and other repetitive tasks.

SFA transforms repetitive and routine manual processes to automated processes, which helps sales reps operate in a more efficient manner.

For example, applications such as quarterly automated sales reports and calendaring tools are key elements of sales technology. The domain for SFA applications includes the attainment and storage of information. SFA tools assist sales reps in formulating a professional sales encounter.

Sales reps can remain in contact with distant customers via e-mails and cell phones, thus reducing travel hours. They can also receive and manage orders from customers in an easy, timely fashion.

Addition-ally, applications like calendaring and routing tables help sales reps reduce downtime and increase their own production during regular work hours.

Monday, March 23, 2015

Customer Knowledge Discovery

Flipkart has an amazing recommendation system at place to make product discovery faster and seamless. The recommendation system used by Flip Kart predicts user’s intent and helps connect them with products they need or perhaps be interested in an automated manner. They help users in following ways :

Help find: similar products. Ex: recommendations to buy a apple phone when surfing Nokia phones.

Help decide . Ex: people who viewed this ended up buying.

Complete the purchase experience Ex: cases for phones, laptop bags etc.Excite or wow

Monday, March 23, 2015

Customer Demographic Analysis And Customer Behavior Modeling

Flip kart's customers fall in to the categories of youth, avid book readers, technology enthusiasts and online shoppers. Therefore, it has carefully demarcated and segmented each of the demographic categories and modeled the customer behavior to understand their needs and preferences. It creates data models from the following sources:

Bought historyBrowse historyCompare historyBought itemsWish list itemsRated products Cart additions

Monday, March 23, 2015

Customer Value Assessment

Value assessment at Flipkart is done through various metrics such as:

Click-through-ratesRelevance/ quality Visibility

Click-to-order

Monday, March 23, 2015

Straightforward Return And Exchange Policies

Flip kart allow its users to return products if unsatisfied within 30 day period with full refund of money or exchange for another product.

This allows customers to shop online without worrying about the risks involved.

It uses the Wallet feature to debit the refund money that can be used to make a purchase from the website.

Monday, March 23, 2015

InveINIIntory Management

Flipkart doesn’t believe in getting the product once the order is placed. The products are all there in the inventory itself. When one place the order online, the CRM system sends the request to the inventory store and the team ships it within 2hours of receiving the request.

“Never promise something that you do not have.”

Flipkart WalletAdd money and enjoy a hassle free shopping experience!

The Wallet is a prepaid instrument that enables you to shop on Flipkart multiple times by making a one-time payment of a certain value. This will be added to your Wallet as prepaid balance. When you select the Wallet as the mode of payment for your order, the corresponding amount will be deducted from your Wallet balance.

Contd..

Latest Technology & Strategy In CRMCustomer Experience ManagementToday, however, a shift is occurring towards thinking about customer relationship management more in terms of the customer experience. Thus, customer relationship management is becoming customer experience management. This transition is in large part being driven by the previously discussed impact of social media.

Consider for example that it was very impressive when Microsoft got to 600 million outlook users and dominated the email market in what was thought of at the time as ‘just a short’ 15 years. However, Facebook now exceeds 800 million users and reached that milestone in half the time it took Microsoft to dominate the email market.

The lesson is that when a company places a greater focus on a great customer experience and combines that with the modern mechanisms to make those experiences go viral, stratospheric growth is possible.

Monday, March 23, 2015

International E-Retailing Store

Amazon

• World’s Largest Online Shopping site founded in 1994.

• In India launched in June, 2013.

• Has one of the best delivery networks in India.

• Site Rank: 10.

Ebay

• American E-commerce company founded in 1995

• Better known for its Trading facilities(Buy & Sell).

• Provides some of the amazing deals which you can’t find on any other sites.

• Site Rank: 26.

Jeff Bezos

Recent news

• Flipkart had a big billion day sale on Monday 6th october 2014 which had a sales top up of Rs 6 crores in 10 hours

• Fliplart targets $8 billion in online product sales in 2015

• Undeterred Flipkart gears up for next Big Billion-Day sale; event to be many times bigger than the previous one

Flipkart's 'Big Billion Day': From behind the scenes

• It took more than 700,000 man hours (six months of work put in by 280 people over 14 hours every day) of planning to get the back-end systems for The Big Billion Day ready

• As much as 50 tonnes of copper were moved across the country for cabling. It meant more than 800 km to be ready for the sale.

• Also, 50 km of fibre-optic cable — 30 km flown in from outside of India — was laid.

Flipkart co-founders apologise for glitches• A day after they claimed to have made history, Flipkart co-

founders Sachin Bansal and Binny Bansal reached out to customers with a personal apology, acknowledging glitchesduring the company’s ‘Big Billion Day’ sale ,In an email sent to each Flipkart buyer, the Bansals addressed all these issues. “Yesterday was a big day for us. And, we really wanted it to be a great day for you. But at the end of the day, we know your experience was less than pleasant,” the email said. “We did not live up to the promises we made and for that, we are really and truly sorry.”

Snapdeal

• Founded in 2010.• Since then it has been growing

at very fast rate.• You can find everything on this

site from hat to shoe and from bags to watches.

• Site Rank: 291(Globally)

15(India).

Jabong

• Indian fashion and lifestyle e-commerce portal founded in 2012.

• Ships 14,000 orders on a daily basis out of which 60% were from small towns.

• Has set a record for sale in the male fashion category in 2012.

• Site Rank: 301(Globally)14(India).

• 2013, October:$160 Million from Dragoneer Investment, Morgan Stanley, Sofina, Vulcan Capital,

Tiger Global

• Flipkart, the poster boy of Indian e-commerce, is again in talks with investors to raise at least

$500 million. The Bengaluru-based company, which raised close to $2 billion in 2014, was

discussing fund-raising with existing as well as new investors, sources said.

INVESTMENTSINVESTMENTS

• $12bn Flipkart's value

• $400mn Snapdeal is seeking, according to reports

• $2bn Flipkart raised in 2014.

• $1bn Snapdeal raised last year, $627 million came from SoftBank

• $8bn Flipkart aims to double gross merchandise volume (GMV) to by 2015.

• $3bn Snapdeal has increased its GMV target to by March

CHALLENGES

CHALLENGES

Glowing reviews:

AMAZON

• 80 percent of Amazon’s product reviews were positive. people who received free products from publishers, agents, authors, and manufacturers.

FLIPKART

• The lesson: Encourage reviews of your business, especially when you’ve got a happy customer on your hands.

Niche Product

AMAZON (E-BOOK)

• People are reading more than ever because of the ease of E-books. E-books from Amazon are also popular among those with iPads because of Amazon’s expansive selection

FLIPKART

• Lesson: If you’ve got a niche product that you’re known for, keep your focus on it and maintain a wide selection

Value-added differentiation

AMAZON

• Amazon.com works hard to achieve value-added differentiation through customer-focused information services. Amazon.com's site retains customer preferences and provides automated customization for users

FLIPKART

• Lesson : should focus on the customer preferences and give them advantage of customization of product

Price Control

AMAZON

• Amazon still manage to get a hold on its price differentiation when compared to other physical or online store

FLIPKART

• But with flip kart , they are still not getting it. Customer still find a wide gap in price b/w flip kart and other online store.

3 possible scenarios

Amazon buys Flipkart: (Probability: 40%) This is the dream Flipkart founders /investors are hoping for day in and day out. The question then will be about what the price will be. If we look at history, it's similar to what Ramesh Chauhan of Parle soft drinks faced when Coke was trying to enter India. He sold off 4 brands: Thumsup, Gold spot, limca and one other for a price of 750 crores when a reasonable value was more likely 275 to 300 crores. It's rumored that Flipkart founders have already asked for 15 billion USD which Amazon thought was ridiculous and turned down. This is the kind of exits current investors are hoping for.

3 possible scenarios

• Amazon crushes Flipkart: Amazon brings in its own expertise, processes, patents, IP, brand and offers superior buying experience thereby wiping flipkart out of existence. The problem which flipkart has solved( Logistics) is a commodity and can easily be replicated. I am assuming that flipkart doesn’t have any IPR or patent ( In fact the founders having worked with Amazon earlier might have exploited Amazon's IPR ). The customers quickly switch to Amazon. Finally, Flipkart is sold for a small amount to Amazon. It would be disastrous for founders and investors.

3 possible scenarios

• Flipkart does a Lagaan: (Probability: 10%) Amazon is not able to find its feet in the country. Flipkart finds the battle tough. If Bansals get the government to protect it. They influence the Modi Govt / Make in India Sell elsewhere policy and either drive Amazon out of India or, just like the Naukri Versus Monster showdown, Flipkart becomes #1 and Amazon is comfortable playing the second fiddle.

• Whatever happens THE WINNER IS DIGITAL MARKETING

Current Status of the company • Started with a funding of INR 4,00,000 by the owners and now a billion dollar

company.

In 2013:

•Flipkart Raised USD 160 Million from private equity investor

• Flipkart is operating online since the beginning of the company

• First offline store opened in Bangalore named fliptomania

• Company is going ahead with more offline store in Metro cities like Delhi, Kolkata, etc.

Conclusion• Flipkart, the first billion dollar Internet company from India(going by 2015

estimates )is by far the leading online store in the nation.

• Now that Amazon entered India in early 2012, this news becomes even more significant, considering that Amazon has previously, and unsuccessfully, tried acquiring the company, with Flipkart demanding a very high buyout price.

• With online retail industry in India pegged to reach $1.5 billion (2015), sources suggest that e-commerce is just hotting up in India and we may soon seen many more Internet companies achieving similar success.

References• www.flipkart.com• http://thenextweb.com/in/2012/08/13/digital-music-takes-indias-flipkart-flyte-soars-past-600000-

downloads-6-months/• http://timesofindia.indiatimes.com/tech/news/internet/Flipkart-raises-150m-in-latest-funding-

round/articleshow/15674360.cms• http://www.quora.com/Is-Flipkart-making-a-profit• http://www.quora.com/What-will-happen-to-Flipkart-when-Amazon-launches-its-operations-in-

India• http://blog.flipkart.com/2-new-features-cash-on-delivery-online• http://trak.in/tags/business/2012/06/01/jabong-trumps-flipkart-offers-door-step-card-payment-

cod/• http://www.hindustantimes.com/technology/IndustryTrends/How-Flipkart-broke-India-s-online-

shopping-inertia/Article1-780440.aspx• http://businesstoday.intoday.in/story/flipkart-online-shopping-e-commerce-order-books-

online/1/20797.html

Research Questions

• How did Flipkart get on to the top of India’s e-shopping market in just 4 years?

• What were the strategies implemented by Flipkart to create online business in India?

• There are millions of retail websites and not many have achieved even a fraction of the attention that Flipkart has. What is it that makes Flipkart standout?

• What does Flipkart have that makes its model so Robust?

• What is there future road map?

• What are the major threats for Flipkart?

THE ENDFor the second straight year OFFER.doc