A Project on:
ADVERTISING STRATEGIES OF FLIPKART AND THEIR EFFECT ON STUDENTS OF BHU
Under the Guidance of:
Submitted By:
Prof. Usha Kiran Rai
Rakesh Singh
Sr. Faculty, FMS, BHU
Milind Kasi
Acknowledgement The satisfaction, which accompanies the successful completion of the project, is incomplete without the mention of a few names. We take this opportunity to acknowledge the efforts of the many individuals who helped us make this project possible. We would like to express our sincere gratitude to our Project Mentor Prof. Usha Kiran Rai, Sr. Faculty, FMS, BHU for giving us an opportunity to work under her esteemed guidance which helped us to improve upon our lacunae during the project research. We are very grateful to her for providing us with every possible opportunity & freedom to learn and explore. We are deeply indebted to her for her suggestions, constant inspiration and encouragement. We would also like to thank all our batch mates and students of 1 st semester for their support during data collection.
Rakesh Singh Milind Kasi
Contents: S.No.
Particulars
1
Introduction
2
Funding
3
Acquisition
4
Flipkart’s Success Mantra
5
Future Road Map
6
Threats in future
7
Research Methodology
8
Research Design
9
Secondary Data analysis
Advertisements used in newspapers and magazines Online Advertising Flipkart on Twitter and Facebook
10
Primary data analysis
11
Findings
12
Suggestions
13
References
INTRODUCTION Things are easier said than done! To realize our dreams and that also in such a grand manner is really a tough task. The founders of Flipkart have probably conquered their dreams with the amazing success of Flipkart. Flipkart is something which has really opened up the Indian e-commerce market and that also in a big way. Flipkart was co-founded by Sachin Bansal and Binny Bansal in Oct 2007. Both are graduates from IIT-Delhi and have prior work experience in Amazon.com They both were solid coders and wanted to open a portal that compared different e-commerce websites, but there were hardly any such sites in India and they decided to give birth to their own e-commerce venture - Flipkart.com Thus was born Flipkart in Oct 2007 with an initial investment of 4 lac (co-founders savings). It was never going to be easy since India has had bad past experiences with e-commerce trading. It was not an easy segment to break into, people were very particular in paying money for something which they had not seen and received. The trust was missing in the Indian customers. So what Flipkart had to do was to instill trust and faith in their customers. And they did exactly the same, will discuss more on how they did so later in the post. Flipkart began with selling books, since books are easy to procure, target market which reads books is in abundance, books provide more margin, are easy to pack and deliver, do not get damaged in transit and most importantly books are not very expensive, so the amount of money a customer has to spend to try out one's service for one time is very minimal. Flipkart sold only books for the first two years. Flipkart started with the consignment model (procurement based on demand) i.e. they had ties with 2 distributors in Bangalore, whenever a customer ordered a book, they used to personally procure the book from the dealer, pack the book in their office and then courier the same. In the initial months the founder's personal cell numbers used to be the customer support numbers. So, in the start they tried their best to provide good service, focus on the website - easy to browse and order and hassle-free, and strove hard to resolve any customer issues. Since there were not any established players in the market, this allowed them a lot of space to grow, and they did in fact grew very rapidly. Flipkart had a revenue of 4 crore in FY 2008 - 2009, 20 crore in FY 2009 - 2010, 75 crore in FY 2010 - 2011, and the revenue for FY 2011 - 2012 which ends on 31 Mar 2012 is expected to be 500 crore. This is indeed a massive growth. The company targets revenues of 5000 crore by 2015.
The company started from 2 employees and now has around 4500 employees. Flipkart started with consignment model as discussed above, since most of the customer issues like delivery delays etc. result from procurement model, the company started opening its own warehouses as it started getting more investments. The company opened its first warehouse in Bangalore and later on opened warehouses in Delhi, Kolkatta and Mumbai. Today the company works with more than 500 suppliers. As on date more than 80% orders of Flipkart are handled via warehouses which help in quick and efficient service. A humble beginning from books, Flipkart now has a gamut of products ranging from: Cell phones, laptops, computers, cameras, games, music, audio players, TV's, healthcare products, washing machines etc. etc. Still, Flipkart derives around 50% of its revenue from selling books online. Flipkart is the Indian market leader in selling books both offline and online, it enjoys an online share of around 80%. The electronic items have a large number of players like Naaptol, Letsbuy, Indiaplaza, Tradus, Infibeam, Yebhi etc. The electronic market share is distributed among them in different unknown proportions. India has around 13.5 crore internet users today where as the number of homes with Cable and Satellite (C&S) television is 10.5 crore. The expected internet users will reach a figure of 30 crore by 2014 and C&S homes are expected to be 14 crore by 2014. Thus India has a tremendous internet growth and with the customers getting accustomed to e-commerce, the future of e-commerce sector is definitely rosy. An approximated 25 lac people have transacted online this year, the number is all set to increase with time. Also to mention most of the Flipkart customers use internet from PC's/Laptops to order goods. The use of mobile internet is very less at the moment, but with the advent of smart phones the use of mobile internet for e-commerce transactions will soar with time. India has 8 crore mobile net users at the moment, the number is expected to swell to 22.5 crore by 2014. Funding:
Initially funded by the Bansals themselves with 4 Lakhs(INR).
Flipkart has since then raised two rounds of funding from venture capital funds Accel India (in 2009) and Tiger Global Management (up to the tune of US$10 million) (in 2010).
Private equity firms Carlyle and General Atlantic are in talks to jointly invest about $150 million to $200 million in Flipkart, according to sources.
Acquisitions: 2010: WEREAD, a social book discovery tool. The stated goal was to give Flipkart a social recommendation platform for buyers to make informed decisions based on recommendations from people within their social network. 2011: Mime360, a digital content platform company. 2011: Chakpak.com is a Bollywood news site that offers updates, news, photos and videos. Flipkart acquired the rights to Chakpak’s digital catalogue which includes 40,000 filmographies, 10,000 movies and close to 50,000 ratings. Flipkart has categorically said that it will not be involved with the original site and will not use the brand name. 2012: Letsbuy.com is India's second largest e-retailer in electronics. Flipkart has bought the company for an estimated US$ 25 million. Flipkart’s Success Mantra
Great customer service: Flipkart users are more satisfied than that of their competitors. Great customer service has been its hallmark.
Easy to use website, hassle free payment system: The user interface is sleek and easy to use.
Cash on delivery/Card on delivery mode of payment: This has been a major instrument in Flipkart’s success. Almost 60% of its sales happen through this mode. Cash on delivery created trust in the minds of Indian customers who were always weary of making payments online.
Focused on user experience: Every other e-commerce site, tried to cram the maximum of amount of information possible into every single page whereas Flipkart focused on providing only the relevant info
Future Road Map
They aim at 10 times growth and eyes at $ 1Billion sales by 2015.
They will look at bigger investments in their supply chain and technology.
Investment will be made in large warehouses and increased automation of their process, so that the product is not delayed.
They intend to enter in to various new categories and expand their current categories as well.
Everything except for groceries and automobiles will be available on Flipkart in future.
To go further in the value chain, Flipkart is looking at associations with a larger number of suppliers and partners, both nationally and internationally.
Threats in future: There are no major foreseeable threats in the future. The company has built a great brand name, they just have to maintain and enhance the same. Need to keep introducing more products, adapting to the changing needs of the customer with time. The entry of Amazon.com in 2012 in the Indian e-commerce space has been cited as a big challenge to Flipkart. However Flipkart is a respected Brand name in India and should be able to compete with Amazon. Amazon being a very big company can bring in serious competition to Flipkart, since Amazon can bear more losses in the beginning to gain customer base. But again Indian market is growing at a rapid pace as access to internet increases and people become more aware of e-commerce sites and start trusting the same; hence Indian market is sufficiently big at-least for these two giants to co-exist beneficially.
Research Methodology Research Objectives •
To study the advertising strategies used by Flipkart.
•
To analyze the factors and their effect on the students in BHU.
Research Design The research design is descriptive in nature. Sample Design Population: All consumers of Flipkart Sampling Frame: Students in BHU Sampling Unit: Individual students in BHU Sample Size: 150 (Male: 120, Female: 30) Sampling technique: Non-probability sampling, Convenience Sampling Location: BHU, Varanasi Duration: 3 weeks Data Collection method: Survey and General Observations Instrument: Questionnaire Data Collection Primary data collected with the help of survey conducted on BHU students using a questionnaire. Secondary data present on the websites.
Research Plan Study of Advertising strategies used by Flipkart to position itself among Students of BHU
Designing the questionnaire
Collection of primary data
Analysis and Interpretation of data
Findings
Secondary Data Analysis: Advertisements Used in Newspapers and Magazines: Newspaper advertising works on the fundamental of building trust and confidence with the readers. Newspapers have the greatest impact because of the following reasons: 1. Experts say the greater the exposure of the advertisement, the longer is the period of its impact among the readers. Therefore experts feel if an advertisement stays in the memory of a consumer for a longer time, chances are quite probable that he might opt for purchasing or availing your services as and when required. This counts for higher sales and brand awareness. 2. A newspaper reader is so involved in his reading that sometimes the content in the advertisements creates an emotional impact on him. It is this power of being able to evoke an emotional response with the reader that goes in favor of newspaper advertising. 3. In other media, especially online media, people get perturbed by the distractions in the form of pop-ups and other advertisement forms that keep flashing on and off the screen. In fact experts’ points out that instead of having any favorable impact, these ads serve to distract the readers. However newspapers, point out experts, involves a focused reading where there are no disturbing and unwanted flashes of advertisements. As there is no distance between the reader and the story it seems that the reader actually undergoes all the emotions in the story himself, leading to increase in the trust factor. Taking advantage of this trust quotient, advertisers cash on newspapers to send their messages loud and clear among the readers. Hence, Flipkart has used advertisements in newspapers and magazines which are colorful, bright; most of the images consist of kids, and have clear messages. Here are some of the advertisements used by Flipkart in Newspapers and Magazines.
Online Advertising The number of internet users is on a rapid rise worldwide and is used by people of all age and types. Internet has become a major medium for communication, entertainment and is in the process of replacing traditional entertainment, promo products, and informative Medias. Some businesses are finding that handing out a promo product such as pens, business cards, and mugs are too costly and yield little results. Likewise, traditional marketing forms such as television, radio, newspaper, magazines, etc., are becoming a thing of the past. Internet has also become a major and effective medium for advertising and it has be predicted that the online advertising and marketing is soon going to replace the advertising through traditional medias such as television, radio, newspaper and magazines. I have picked around 10 advantages of online advertising (not in that order) when compared with the traditional offline advertising. 1) Wider Coverage The online advertising gives your ads a wider coverage and this globally wider coverage helps in making your advertisements reach more audiences, which may ultimately help you in getting better results through your online advertising campaign. 2) Targeted Audiences when compared with offline advertising, online advertising always helps you to reach the targeted audience and this helps in making your campaign more profitable and getting more relevant leads. 3) Affordable Another main advantage of online advertising or marketing is the much affordable price when compared with the traditional advertising costs. With a much lesser cost you can advertise on the net for a wider range of audience and geographical locations. 4) Easy to Track and Measure Conversion Measurability and easiness to track the conversion makes online advertising miles ahead on the traditional advertising methods. A lot of effective analytics tools are available to measure online advertising campaigns which help in more improvisation of the ads.
5) Speed Online advertising is much faster than offline advertising and you can start sending out your ads to a wider audience, the moment you start your advertising campaign. 6) Informative In online advertising, the advertiser is able to convey more details about the advertisement to the audience and that too at relatively low cost. Most of the online advertising campaigns are composed of a clickable link to a specific landing page, where users get more information about the product mentioned in the ad. 7) Flexible Payment Payment flexibility is another added advantage of online advertising and marketing. In offline advertising you need to pay the full amount to the advertising agency irrespective of the results. But in online advertising there is the flexibility of paying for only qualified leads, clicks or impressions. 8) Better ROI Since online advertising is mainly focused on performance based payment, you ROI is sure to be far better when compared with offline advertising. 9) Easy Audience Engagement Online advertisement makes is easy for the audience to engage with your ads or products. As an advertiser we would be able to get more feedback from the audience and thereby improve the quality of our ads going forward. 10) Better Branding Any form of advertising helps in improving the branding and online advertising stands a notch high in improving the branding of your company, service or product. Flipkart being an online mega store advertises its products and the offers in different internet sites, screenshots of which are being shown below
Tweets about Flipkart Flipkart stays connected with its users via twitter, they answer most of the queries’ put up by their customers and carefully evaluate all the suggestions which were posted in the twitter which keeps the customers happy and in turn keep the management of Flipkart happy. Some of the tweets are shown below:
PRIMARY DATA ANALYSIS AND INTREPRETATIONS:
Number of Respondents and their distribution:
Chart Title
Male: 120 Female: 30
Male
Female
20%
80%
We took a survey of 120 respondents, where number of female was 30 and that of male were 120. These students were of International Hostel, Triveni Hostel, SNPG Hostel, 1st and 3rd semester students of FMS, BHU. 1. How often do you purchase from Flipkart? Always--Often--Occasionally---Rarely--Never 80 70 60 50 40 30 20 10 0
68
28 0
0
24 0
Male
8
22 0
0
Female
Frequency of purchase done by Male is higher in comparison to female. Most of the male students purchase occasionally while most of the female students purchase rarely from Flipkart.
2. How did you come to know about Flipkart? a) Friends b) Television c) Newspapers and Magazines d) Advertisements on Websites e) Others if any please Specify ………………
68 70 60 50 40 30 20 10 0
40 18
12 2
Male
10 0
0
0
0
Female
Most of the students came to know about Flipkart through friends followed by television and online advertisements. This proves that word of mouth strategy by Flipkart is the most successful means of making people aware about them and their products. This success can only be gained through satisfied customers who act as advocates for your products.
3. What category of products do you purchase from Flipkart? a) Books and Stationary b) Electronic Items c) Mobile and accessories d) Health and Beauty products e) Music, movies and posters f) Cameras g) Watches h) Others(Please specify)……………..
Chart Title 120 100 80 60
Male
40 20 0
Female
Male students purchase more categories of products then female students. Books and stationery, Electronic items, Mobile & accessories, cameras, watches and others (bags, belts, etc.) are purchased more. Books & stationery and electronics items are more famous among the students. 4. My frequency of purchase has increased/decreased/remained unchanged since my first purchase.
70 60 50 Increased
40
Remain Unchanged
30
Decreased
20 10 0 Male
Female
The frequency of purchase for most of the male students has increased while it has remained unchanged for most of the female students. 5. I sometimes don’t purchase a certain category of products because of:
(a)Delivery time (b) I can’t touch and experience product online (c) Replacement time (d) Price (e) Habit of purchasing from open market (f) Lack of immediate service (g) Lack of trust (h) Others (please specify if any) 120 100 80 60 40 20 0
Male
Female
Delivery time, inability to touch and experience the product online and lack of trust are the major impediments for students of both genders on doing online shopping. 6. How often does the Flipkart promotional scheme on websites influence you to visit their site? Always-----Often-----Occasionally-----Rarely-----Never
Axis Title
How often does the Flipkart promotional schemes on different websites influence you to visit their site? 90
80 70 60 50 40 30 20 10 0
Always
Often
Occasionally
Rarely
Never
Male
0
18
84
8
10
Female
0
0
4
22
4
Promotional schemes influence more male students than female students to visit the website of Flipkart. The frequency of visit is still very less as most of the male students occasionally visit Flpikart while incase of female students it is rare. 7. How often does the product review influence your decision?
Always-----Often-----Occasionally-----Rarely-----Never
How often does the product review influence your decision? Axis Title
90 80 70 60 50 40 30 20 10 0
Always
Often
Occasionally
Rarely
Never
Male
22
83
11
1
3
Female
0
0
11
17
2
Male students more often go through the product review before making their decision to purchase than female students who occasionally read the product review before taking their purchase decision. Product review is a kind of word of mouth strategy where product users leave their review on their experiences with Flipkart. 8. Kindly rate the importance of these parameters on your buying decision: 1 (Least important)-2-3-4-5(Most important)
Importance of factors for students that Flipkart focuses on: Axis Title
6.00 5.00 4.00 3.00 2.00 1.00 0.00
Ease to Cash Quality Replac Price Range Home access Warran Packagi Deliver on of ement and of Deliver and ty ng y Time deliver produc Guaran Discou Produc y analyze y t tee nt ts produ…
MEAN(Male)
4.48
4.75
4.93
3.96
4.06
4.92
4.25
3.11
2.97
4.49
MEAN(Female)
4.63
4.10
4.97
3.43
3.97
4.20
4.07
3.13
2.90
4.13
Almost all the factors that Flipkart is focusing onto are of high importance to the students in BHU, while packaging and warranty have average importance in the decision making before any online purchase they make. Home delivery and quality of product has the maximum importance while packaging has the least importance for the students before making a purchase.
9. Kindly rate the importance of these parameters on your level of satisfaction for the same. (5:Satisfied; 4: somewhat satisfied; 3: average; 2: somewhat dissatisfied; 1: dissatisfied)
Axis Title
Satisfaction Level 6 5 4 3 2 1 0
Mean(Male) Mean(Female)
Ease to Cash Quality Replac Price Range access Home on of ement and of and Warran Packagi Deliver Deliver ty ng y Time deliver produc Guaran Discou Produc analyze y produc y t tee nt ts ts 5
5
4.65
3.12
4.47
3.82
2.68
4.86
4.81
2.56
4.93
4.30
3.93
3.87
3.43
3.67
4.07
3.43
4.27
3.63
Almost all the factors that Flipkart is focusing onto are of high importance to the students in BHU, and Flipkart has been successful at imparting them and creating satisfied customers. The only area of concern for Flipkart is the delivery time where both male and female students seem dissatisfied.
EFFECTIVENESS OF TELEVISION COMMERCIALS OF FLIPKART
Actors 5.00 4.90 4.80 4.70 4.60 4.50 4.40 4.30 4.20 4.10 4.00 3.90
4.89 4.73 4.78
4.77
4.75 4.65
4.61 4.45
4.40 4.28
Mean
Humor 6.00 5.00 4.00 3.00 2.00 1.00 0.00
4.95 4.78 4.65 4.63 4.69 4.66 4.09
3.97 3.81 4.02 Mean
Message 6.00 5.00 4.00 3.00 2.00 1.00 0.00
4.15
4.79 4.78 4.70 4.54 4.78 4.43 4.45
3.74
3.31 Mean
Music 4.40 4.20 4.00 3.80 3.60 3.40 3.20
4.03 4.11 4.03
4.20 4.24
4.11 3.75
3.83
3.75
Mean
3.55
Story 6.00 5.00 4.00 3.00 2.00 1.00 0.00
4.23
4.77 4.78 4.85 4.87 4.95 4.84
4.30 4.09 3.06 Mean
Overall Effectiveness 6.00 5.00 4.00
3.00 2.00 1.00
4.79
5.09 4.23
4.67 4.77 4.88 4.75
4.15 3.96
3.51 Mean
0.00
Ten different television commercials launched by Flipkart were shown to the respondents and were asked to rate them on six different parameters to judge the effectiveness of the commercials over the students of BHU. All the six parameters viz. Actor, humor, message, music, story and overall effectiveness were rated high on the likert scale as excellent or good. The ten commercials shown were carrying 10 different messages that Flipkart serves with. The messages that these commercials carried were cash on delivery, home delivery, warranty, packaging, replacement guarantee, warranty, quality of product, price and discount, ease to access and analyze and range of products. The effectiveness of the commercials proves that the messages that Flipkart wanted to convey were very well presented and positioned into the prospects mind. They used children in their commercials as actors in order to convey the message and change the mindset of Indian consumers that online shopping is safe and more convenient. Flipkart used the tagline “No kidding, No worries” and kids as actors to convey that “If a kid can do it, why cant you?”
Findings • Frequency of purchase is more among Men. • Word of mouth was more influential in promotion as many people was made aware by their friends. • Most of the students are satisfied with the services of flipkart and are willing to recommend them to make purchases from flipkart. • Except packaging and warranty, all others are considered important in the decision making of online purchases. • Almost all the factors that Flipkart is focusing onto are of high importance to the students in BHU • The commercials used by Flipkart are effective enough to convey the message since the ads are interesting enough to gain attention and position itself into the prospects mind.
Suggestions: Flipkart has successfully placed itself into the prospects mind making it the India’s largest online store with huge range of products. But Flipkart still needs to work on their core competence that is books and stationery items. With the entry of Amazon.com it will be a huge competitive market for Flipkart and hence will have to position itself better, as we still see that huge percentage of females are still unaware of Flipkart. Those female who purchase, has a very less frequency which has remained unchanged. Therefore they need to get aggressive at providing better services which can be fulfilled by reducing the delivery time, selling second hand products which will increase consumers’ affordability much more and enhance penetration into the market. They can even have their retail stores which can give an access to consumers to feel and analyze the products, which will help them win the consumers faith. Price will still be a factor as amazon being a huge company will use its economies of scale to remove their competitors from the market; therefore they need to be more competitive on that aspect. Be very focused on consumers and build amazing experiences for the customers.
References:
Wikipedia
www.flipkart.com
www.youtube.com
www.thehindu.com/arts/magazine/article3290735.ece en.wikipedia.org/wiki/flipkart forbesindia.com/blog/editors-blog/flipkart-ceo-responds-to-our-cover-story/ www.vccircle.com/news/2012/08/14/news-roundup-flipkart-raise-100m-new-investors in.linkedin.com/company/flipkart.com www.startupdunia.com/interview-with-flipkart-founder-binny-bansal-776 www.facebook.com/flipkart www.hindustantimes.com/technology/industrytrend/how-flipkart-broke-indias-onlineshopping-inertia/so-article1-780440.aspx businesstoday.intoday.in/story/flipkart-online-shopping-e-commerce-order-booksonline/1/20797.html www.youtube.com/watch?v=9cu11bw30su www.youtube.com/watch?v=zeu1hmxdd-a Images from Google Images.com Commercials from Youtube.com
