Zappos.docx

University of San Agustin College of Commerce

A Strategic Marketing Plan Presented to DR. ALFREDO E. DAQUILA

In partial fulfilment Of the Course requirements for MM 421 –Strategic Marketing

Presented by GILDORE, Vince NG, Jana QUILANTANG, Jessa

March 22, 2019

Contents I.

Executive Summary................................................................................................................. 3

II.

Situation Analysis ................................................................................................................ 4 A.

The Internal Environment ................................................................................................ 4

B.

The Customer Environment ............................................................................................. 7

C.

The External Environment ............................................................................................. 10

III.

SWOT Analysis ................................................................................................................. 16

A.

Strengths ......................................................................................................................... 16

B.

Weaknesses .................................................................................................................... 16

C.

Opportunities .................................................................................................................. 17

D.

Threats ............................................................................................................................ 17

E.

The SWOT Matrix ......................................................................................................... 18

IV.

Marketing Goals and Objectives ........................................................................................ 19

Marketing Goal A: Develop long-term relationship and customer service with customer ...... 19 Marketing Goal B. Innovation .................................................................................................. 20 V.

Marketing Strategy............................................................................................................. 20 A.

Product Strategy ............................................................................................................. 21

B.

Pricing strategy............................................................................................................... 21

C.

Distribution/ Supply chain Strategy ............................................................................... 22

D.

Integrated Marketing Communication (Promotion) Strategy ........................................ 22

VI.

Marketing Implementation................................................................................................. 23

VII.

Evaluation and Control ...................................................................................................... 24

2

Zappos: Delivering Happiness I.

Executive Summary

Zappos - a company that thrived on taking risks and doing what others probably would not even consider doing. They believed that Customer satisfaction and building long term Customer relationships were the keys on making long term profit and stability. They were a company that was willing to adapt and innovate in order to compete with the ever-evolving economy. They focused on high risk, high reward strategies that if given enough time, preparation and proper implementation, would certainly lead to long term profit for the company. They focused on long term goals and stuck with it knowing that by being consistent with good customer service would certainly have a long-term benefit for the company.

Time was always a strategy that they always used. Spending extra time on trying to earn the trust of a customer was one of Zappos’ keys to success because having a happy customer led them to more orders. Implementing a free delivery and 100% return policy were risky. But, because of this customer trust was earned and in an unorthodox way, it created more profit for them because customers see transparency in the company. They were also always ready for customer queries which is vital in attracting more buyers since customers prefer companies that provide more info and knowledge in their products. The company was not only focused on customer service but were also focused on their own employees. Some may say that we should only focus on our job at hand and that is to attract buyers but if you do not have the right personnel to attract buyers then there are no way things would work. In a way, Zappos’ employee strategies led them to long term success because by 3

giving proper training and employee benefits to their employees, their employed were more equipped to attract potential customers. Overall, Zappos had its fair share of ups and downs but through it all, they stayed ready and prepared for everything and in the end their strategies have led to success. They focused on long term goals and equipped themselves with all the necessary tools for success. They believed that customer satisfaction and long-term customer relationships were the keys to success and based on their history, They have truly succeeded on that strategy. II.

Situation Analysis

A. The Internal Environment Zappos’ marketing goals and objectives mainly focus on delivering excellent customer service and developing long-term customer relationship. These objectives are achieved by factors that are being implemented and practiced by the company. One is through the company’s online store website which offers a unique and addicting shopping experience to customers as well as to window shoppers. The company offers a wide selection of shoes, apparel, accessories, and more. Zappos strives to make the shopping experience easy and enjoyable for customers wherein the company’s strategy offers free shipping to customers. In cases where customers may not be satisfied with their purchases, Zappos offers a 100% Satisfaction Guaranteed Return Policy. Although this strategy may attract financial complications to the company, Zappos believe that those customers who have the higher return percentages are the most profitable because they have experienced Zappos’ customer service and return policy, which creates customer loyalty to the company. Winning over shopper’s loyalty with the company’s return policy has helped bring high profit margins on customer order transactions.

4

In some cases of Zappos’ customer service, employees stay on customer support calls for hours, sending company complimentary gifts on customer’s birthdays, and sending pizza to customer’s doorstep for tweeting to the company about being hungry are some of the company’s ways to develop relationship with its customers and to attain customer satisfaction. Zappos believe that great customer service is an opportunity to make customers happy. Forming personal, emotional connections with its customers is the best way to provide great service. The company’s service representatives also use social media sites such as Facebook and Twitter to connect and respond to customer concerns. Employees also have authority in their decision-making and ensures to impress the customers by spending as much time as possible in a non-scripted manner.

Zappos’ long-term strategy is based on the idea that great customer service will help the company develop and expand into areas that will meet the customer’s needs and demand. The company believes that great customer experience encourages customers to use the store again. The company also considers word-of-mouth marketing to be one of the ways to attract new customers and believes that “The customer is more powerful than paid advertising”.

The unorthodox corporate culture at Zappos was built on the idea that if you can attract talented people and employees enjoy their work, great service and brand power will naturally develop. Zappos is known for its relaxed and wacky atmosphere where the working environment isn’t just fun but also strategic. According to Zappos, “When you combine a little weirdness with making sure everyone is also having fun at work, it ends up being a win-win situation for everyone. Employees are more engaged in the work that they do, and the company becomes more innovative.”

5

Zappos’ key to creating an effective work environment lies in hiring the right people. However, Zappos’ CEO Tony Hsieh admits that finding great employees is tough. The company looks for potential employees with a sense of humor who can work hard and play hard. The prospects go through both cultural and technical interviews to make sure they will fit with the company. All new employees then attend a five-week training program. And after the initial training is over, employees take 200 hours of classes with the company, covering everything from the basics of business to advanced Twitter use and read at least nine business books a year. Zappos then offer $2,000 to new employees to leave the company after training to make sure that new employees feel committed to a future with the company.

Zappos expects employees to socialize with each other both in and out of the office and are encouraged to support each other, this is because one of Zappos’ core value is to build a positive team and family spirit. Hsieh says that this strategy increases efficiency by improving communication, building trust, and creating friendships.

Zappos’ management is very open to with employees by regularly discussing issue of the company. This create the foundation of Zappos’ relationship with its employees, trust and transparency. Employees receive detailed information about the company’s performance and are encouraged to share information about the company through their company blog and various social media sites. Employees should develop open and honest relationship with stakeholders with the hope that this will assist in maintaining the company’s reputation.

6

B. The Customer Environment Initially the firm’s current and potential customers would mainly be the online shoppers who intently want to buy a product like footwear. Previously, they would only be targeting customers in search of footwear but recently, they expanded their product line to apparel, accessories and even home goods. The firm also designed to allow customers to purchase products in a timely matter. Nick Swinmurn started the online shoe business named Zappos and in 2000 made Tony Hsieh became the company CEO. In 2010, Amazon bought the company for $1.2 billion although Hsieh had rejected an offer but later on 2005 Amazon agreed to let Zappos operate independently and to keep Hsieh as CEO. After the merger, the company restructured into 10 separate companies organized under the Zappos Family. Zappos family tends to pay on the lowaverage to average side of the scale, the relaxed environment and potential for advancement both add value that cannot be counted on a pay check.

One of the core-values the company has made is “Deliver WOW” to customers. The company strives to create unique and addicting shopping experience offering a wide selection of shoes, apparel, accessories, and home products with great customer service. Products are grouped in specialized segments, with some (like outdoor products) on their own mini-sites. Customers can view each product from multiple angles through photographs taken at the company’s studios. In purchasing their products, they help customers shop, even on their competitors’ websites, encouraged them to buy multiple sizes or colors to try. The basic benefit that the firm’s products provide is the ability of the customers to return of what he/she purchased for free. It offers customers a 100% satisfaction Guaranteed Return Policy

7

where the shoppers may return the item if not satisfied within 365 days for a full refund. The firm also emphasize that there will be free shipping to the customer in the delivery of the product.

The customers purchase any of their products from the online website originally called ShoeSire.com transferring orders between customers and suppliers but the website renamed it to Zappos. Zappos was a shopping business wherein customers tend to buy products through online. The website is streamlined for an easy shopping experience. The customer services representatives also actively use social media sites such as Facebook and Twitter to respond to customer issues. The Zappos employees also make short videos highlighting the products features. Zappos created a marketing campaign in 2011 that was designed to catch people’s attention. The company released several advertisements that featured people who appeared to be naked but because of the negative comments and criticism, Zappos pulled out the ads and released an apology that explained the production process. The company also considers word-of-mouth marketing to be the best way to reach new customers.

The warehouses operate around the clock, which allows them to get the product for the customer as fast as possible. Zappos long-term strategy is based on the idea that great customer service will help them expand into other categories. While around 80 percent of Zappos orders come from shoes, the markets for housewares and apparel are much larger. The company says it will expand into any area that is passionate about and that meet their customer’s needs. Its inventory and shipping

8

systems are linked directly to the website via a central database, and its all information systems are developed in-house and customized to the company’s needs.

In relation to the advantages of the firm’s products, Zappos does not compete on price because it believes that customers will want to buy with the best service and selection. In addition, Zappos focuses on satisfying customer services like displaying items on website if it in stock and removes the listing items once the company sells out of an item it is in order reduce customer frustrations. The company built developing long-term customer relationships which create loyalty to the company. Because Zappos believe that forming personal, emotional connections with the customers is the best way to provide great service, these customers are likely to purchases more often and to spend more on each purchase.

Most of the companies have its own flaws and technical difficulties one of these experienced by the firm was the delays and problems in the customers’ orders and deliveries. Some orders had the incorrect shipping information, and products where shipped to the wrong location. Another problem Zappos encountered last 2010; it was from their other websites which is 6pm.com every item was priced at $49.95 for six hours. The company have to shut down the website for a few hours to solve the problem. In January 2012, Zappos disconnect its call center because of the hackers who broke the firm’s computer system and the company had to respond to the theft of 24 million customers’ critical personal information.

9

The firm believes that great customer experiences encouraged customers to use the store again. Zappos long-term strategy is based on the idea that great customer service will help them expand into other categories. Because it is evident that Zappos’ mission is to “provide the best customer service possible” is working well not only for the company but also for the customers. Although this situation caused problems for Zappos and blemished its customer service record, the company believes that it can restore its reputation. The company has retained its unique culture and continues to expand into new product categories.

C. The External Environment

Competition In the manufacturer of shoes in San Francisco ,Zappos biggest rival in its field is the Foot Locker.

Foot Locker Foot Locker is a leading retailer of sports shoes and athletic apparel. The company focuses on high-end athletic footwear and includes all the key brands in its product line. It operates 3,363 stores in 23 countries located in North America, Europe, Australia and New Zealand. Nike is by far the most important brand sold by Foot Locker – accounting for 68% of all sales last year. FL also organizes many events featuring famous sports stars or special product launch activities.

The Intrinsic growth value of Foot Locker

10

Foot locker has experienced strong price growth in the stock market for the past decade, trading as high as $78 in May 2017. But, in the wake of Amazon’s rising power, a whole army of retail stocks have been crushed during the past year – dragging Foot Locker down to attractive price levels. An announced deal in June 2017 between Nike and Amazon added further pressure on Foot Locker's price. Despite all these headwinds, the company's current price of $36 per share, potentially offers value investors an entry point.

Profitability Foot Locker Inc. has the Profitability Rank of 7. It has a higher profitability and may stay that way. Foot Locker have a net profit of 4.9 in 2012, and 6.4 in 2013. Also in 2014 and 2015 Foot Locker had a net profit of 8.1 and 7.2 respectively, in 2016, Foot Locker’s net profit is 7.2 still over taking the net profit margin of the industry, with the industry having 2.52. impressive numbers for current and future investors planning on investing the company. Pricing Due to its large size and well-established connections, Foot Locker has leverage with suppliers, which allows it to get special deals and offer competitively priced apparel. Foot locker sales in 2017 totaled 7 782 million US dollars, an increase of 0.2% compared to sales of 7 766 million US dollars in fiscal 2016 and the most in the company’s history as an athletic business. Full year comparable store sales decreased by 3.1%. excluding the effect of foreign currency fluctuations, total sales decrease by 0.5%. Foot locker net income decrease to 284 million US dollars in 2017, 0r 2.22 US dollars per share, compared to net income of 664 million US dollars, or 4.91 US dollars per share in 2016.

11

The Foot Locker inflect back to positive comparable tore sale by the middle of 2018, with the pace sale continuing gradually strengthen in 2nd half of the year based on the improving depth and variety of premium products that coming from the key vendors. Promotion Foot locker has a gift cards that promote their company, also coupons they promote consumers to buy from foot lockers. They also use social media accounts like Face book, Twitter and Instagram, and then lastly they use flyers almost anywhere in order to be recognized well by the public.

Economic Growth and Stability

San Francisco is one of the best cities in terms of employment rate, they have lower unemployment rate than United States. This speaks that most of the people have the ability to buy their needs and wants. This shows that the rising profit of Zappos pertains to the ability of people to buy what they want. Product development was used by Zappos to improve their products and expanded it accessories line to include purses, hand bags, socks, wallets, belts, and diaper bags which resulted to more customers. As we can see, the more variety of products you could sell, the more people are interested into your brand. They also have endless inventory of shoes in virtually every style, size, and color, so customer will feel free to order what they exactly want

Critical success factors in Zappos includes Product selection, Price competitiveness, free shipping, No hassle returns which included free return shipping and fast delivery in time. The numbers also shows in favor of Zappos leading its way compared to typical companies. Service marketing is

12

higher in Zappos, traditional media spending is lower than other companies, toll free number is available everywhere, invitation to interact is easy to find, openness to talk is ready all the time, toll free number hours is 24/7, they have no out sourcing compared to other companies, they also have employees as advocates.

Legal and Regulatory

In 2009 Hsieh resulted to selling Zappos to Amazon because he believed that the company will be in better hands with Amazon. This resulted because of the conflict in the board members and disagreement between Zappos and Sequoia Capital. The board members believed Hsieh had his soul experiments that made the company great, but in terms of sales, they are not getting the full profit of the company’s capability to top the market in sales, which the board members are after. Amazon and Zappos had a deal that Hsieh would sell it to Amazon with the conditions that they would retain the culture and great customer service. Although they thought that Zappos was not fit for Amazon, Hsieh was determined to fit in with Amazon with the help of its CEO Jeff Bezos, continuing to live the culture of Zappos retains the customer loyalty to the company.

The company also faced some technical difficulties which resulted to conflicts in customer orders and shipments in 2011. Zappos also faced a bug in its website where every item was identically priced in 6 hours. This resulted to $1.6 million loss in sales during 2010. The company was also hacked in January 2012 who broke into the company’s computer system. They faced security breach where 24 million customer’s personal information was stolen from

13

their website and gave risk to people’s security, but Zappos promised to resolve the issue and bring back the customers privacy.

Political Trends

The current issues in San Francisco that could affect the firm’s marketing activities is the Transportation, many residents rely on transportation and Zappos is an online shop that needs to deliver an item that is ordered right away through transportation. Transportation could affect the flow of it if it is kind of traffic, it delays the delivery time of an item. I can also see that benefits for city workers could also be affecting the firms marketing activities, this one of the many budget related concerns because if Zappos faces a loss in profit or they are cutting the budget for employees, they might lessen the benefits of their workers, in terms of health, allowance, and incentives which could affect the performance of individuals consistency in their field of work. It could affect the profit of the company by having a negative mind set on the side of the employee. Another also is the development issues in San Francisco; this could also affect the company’s marketing activities for it lessens innovation and hinders the company to have its maximum growth when there is a scarce of resources and inspiration to yield on.

Technological Advancement

Zappos used of Facebook and Twitter to promote the company in social medias which resulted to positive effects. Also, the online website of the company makes customer feel that it has no difference in buying at the store and making an online purchase to their company. The

14

company’s very fast delivery of the item and easy to order through online made a big hit on their yearly sales. Zappos also promises customers with a full refund if they are not satisfied with the product they have purchased. The company made a customer feedback area in social media so that they will know if the customers had a bad or good experience with any interaction towards the company, they also seek to provide the best service to all the customers and eliminate the negative feedbacks of the customers. The company has created great advertisements and unique approaches to customers which resulted to greater profit and positive outlook towards the company.

Sociocultural Trends

Zappos in its first few years, was making sales but not generating a profit. The company had to step it ip into a whole new level where its primary goal is to give the best customer service through online shopping. Zappos believed that a company could have great sales and many customers by having a wonderful customer service where they will feel like no other difference in shopping on the mall. It led to the company’s greater profit as it always strives to make the shopping experience enjoyable. The company offered free shipping and full refund to unsatisfied customers. With great innovation, spirit of simplicity and best service, zappos extends to inventory and distribution sytems. The company features a live inventory system on its online website where it only displays on item that is in stock and eliminates the unavailable items to avoid customer frustration. The company gave a “wow” to the customers which gave their loyalty to the company before resulting to company’s great service. It starts from flexible, positive, and determined employees,

15

where they went to undergo trainings and supervisions under the company’s hand. They also gave benefits to employees in insurances, supports, and wage hikes in every term they reach. This resulted to positive working attitude by employees and impacted the profit of the company and customer connection. This gave the company Zappos a success in its goal of extending great services and products to all of its customers.

III.

SWOT Analysis

A. Strengths o Has strong brand image o Offers variety of products o Has strong customer relationship management with employees, customer and stakeholders o Provides excellent customer service o Believe in transparency o Cooperative and productive work environment o Excel in “Word of mouth” marketing due to positive feedback from customers o Has strong customer retention o Focuses on corporate social responsibility B. Weaknesses o The merge of Zappos with Amazon resulted with negative impact on customers o Amazon and Zappos offer similar product line with create competition among themselves o Theft of 24 million customer data that include customer’s credit card information and other data.

16

C. Opportunities o The constant growth and demand for products o New trends in the consumer behavior can open up new market o Launching new product lines o Improvement on online security system to develop more trust with customers o Expansion of services by shipping internationally

D. Threats o Introduction of new substitute product/competitor o Product life cycle decline o Economic downturn o Government regulations o Increase of cyber-crime rate o Over transparency

17

E. The SWOT Matrix

oStrengths o-Has strong brand image o-Offers variety of products o-Has strong customer relationship management with employees, customer and other stakeholders o-Provides excellent customer service o-Believe in transparency o-Cooperative and productive work environment o-Excel in “Word of mouth” marketing due to positive feedback from customers

oWeaknesses o-The merge of Zappos with Amazon resulted with negative impact on customers

o-Amazon and Zappos offer similar product line with create competition among themselves o-Theft of 24 million customer data that include customer’s credit card information and other data.

o-Has strong customer retention o-Focuses on corporate social responsibility

SWOT Matrix

oOpportunities

oThreats

o-The constant growth and demand for products

o-Introduction of new substitute product/competitor

o-New trends in the consumer behavior can open up new market

o-Product life cycle decline

o-Launching new product lines o-Improvement on online security system to develop more trust with customers o-Expansion of services by shipping internationally

o-Economic downturn o-Government regulations o-Increase of cyber-crime rate o-Over transparency

18

IV.

Marketing Goals and Objectives

Marketing Goal A: Develop long-term relationship and customer service with customer

o Offer free shipping on deliveries o Listen and study customer preferences to provide accurate service o Provide additional perks, bonuses or special packages to customers who have reached a specific amount of purchases o Always follow correct turnaround time on customer service (from the time of purchase to the time of delivery to the customer) o Be transparent, helpful and polite to customers to create a positive vibe during service o Always be a professional to a customer/s even if they are not because we are here to attend to their wants and needs. o Know your CLIENT – Basically, we should know a customer’s basic information (name, birthday, address, cellphone number, etc.) for us to develop a long-term relationship with him/her. o Incase of customer dissatisfaction, we should be ready to provide a response and solution to the customer right away

19

Marketing Goal B. Innovation

o Attend conventions / seminars to further enhance or develop the company’s system and service o Be open to change and suggestions from others o Listen to Customer wants and demands o Take calculative risks on trying out different ways to improve the company provided that we should be ready for probable solutions incase those risks backfire o Never settle for less, always think of more ways to improve and develop o Provide / adapt to new technologies

V.

Marketing Strategy

The firm set its own standard when it comes to being social and especially in engaging to each of their customers. Their target market for its company were the online buyers either both men and women in different ages but usually middle-aged groups or what do we call “millennials” are mostly interested on it. Since our millennials has been engaged to social medias, Zappos has been social focus. Products were sold through online selling. It is only foot wear that they featured but Zappos lately expand its online selling products like clothing apparel, accessories, and home products with broad selection. Another area on the company’s blog is a section on “Eco-friendly products”. The company highlights new products that are organic and or were manufactured using environmentally friendly procedures.

20

The company engages in multiple social networks. They were the initial adopters of social media in result for the top brand marketing when it comes to social media. Social media account website that made by the firm was Shoesite.com.

A. Product Strategy What makes the company unique is they focus on great customer service because they believe great customer service is an opportunity to make the customer happy. Company’s employees are encouraged to go above and beyond traditional customer service. The Zappos website displays the item if it is in stock. If it is unavailable, the item will be removed to reduced frustrations from the customers. Zappos offers free of shipping and full refund for their consumers. Customers claim of its good service. They meet the needs of its target market and result from having a fun shopping experience beyond their expectations. The company creates the ten core values that guide every activity at the company and form the heart of company’s business model and culture. By these values they can give any satisfaction and well-being to their consumers.

B. Pricing strategy The Zappos does not compete on the price because it believes that customers will want to buy with the best service and selection. Zappos stated that the customers who have higher return percentages are the most profitable because they experienced Zappos’ customer service and the free return policy which leads to the loyalty of the consumers to the company. Zappos policy of winning over shopper with its return policy has helped to bring in high profit margin to its orders. 21

Before the firm’s expansion of sale products of foot wear, Zappos is showing a big increase of profits yearly. Gross sales increases and secured its first round of venture capital which is why they expanded their products.

C. Distribution/ Supply chain Strategy Zappos made the decision to purchase inventory from the manufacturers. The manufacturers were set up only to ship orders directly to retail distribution centers. They continued to outsource warehousing, but this result to again in bad customer experiences with incorrect orders and late shipments. Therefore, the company decided to operate its own warehouse because Zappos workers will ensure customers are satisfied with their experience. Even within the warehouse, Zappos intentionally operates inefficiently in some areas so that it can provide better. This spirit of simplicity, innovation, and great service extends to Zappos inventory and distribution systems as well. With these, they mad made customers with high levels of trust and collaboration in the retail supply chain. The warehouse operates 24 hours a day so that the products could get faster to the customers.

D. Integrated Marketing Communication (Promotion) Strategy The Company considers “word-of-mouth” marketing to reach new customers. They also made short videos and photographs each product with multiple angles. The company created marketing campaign 2011 that was designed to catch people’s attention. The company released several advertisements that featured people who appeared to be naked but Zappos pulled the ads because of its negative criticism. Zappos offers 100% Satisfaction Guaranteed Return Policy. The return policy encourages customers to return the items that do not work out but he or she can return the 22

product for 365 days for a full refund. Customer service representatives also actively use social media accounts to respond to customer issues. By this promotion strategies, they made customer satisfied and loyal not only to the products that they produced but to the company as well. The selling of these products is through online or any social media accounts and delivered through free shipping on any other areas.

VI.

Marketing Implementation

Zappos has a strong presence on multiple social networks. They are near the top of major brand marketing in customer service and social media. They set a high bar when it comes to being social and engaging its customer. One of the unique aspect that Zappos pursue is the benefits that provides for the employees. The firm has an extensive health plan, where it pays 100 percent of employees medical benefits. Other benefits include a flexible spending account, pre-paid legal services, 40 percent employee discount, free lunch and snacks, life-coaching and car pool program. All employees are paid $11 per hour for the first 90 days and increases to $13 per hour after 90 days. The company expects the employees to socialize with each other in and outside of the office because one of the core values Zappos made was to build a positive team and family spirit. Zappos compensation model is to motivate employees and promote personal growth. Hsieh also mentioned that the company’s employees bonding and outings increase the efficiency by improving communication, building trust and creating friendships. A reward of $50 is given to any employee for a great work. In result to this positive working environment employees will tend to have a positive outlook for their everyday work.

23

VII.

Evaluation and Control

Formal Control An input control includes the selection of employees of its own company. Zappos mentioned that the key to creating a positive lunatic and working environment is hiring the right employee to fit the work and eager to learn the strategic environment of Zappos. The company should do a lot before selecting employees because one of the biggest enemies to culture is “hyper-growth”. Potential employees go through both cultural and technical interviews. In checking the potential of the employee, they interview them with questions that will know and gain their confidence. Before starting its work, the new employees will be attending a five-week training program. It includes two weeks on then phones providing customer service and a week fulfilling orders in a ware house. Zappos offers $2,000 to leave the company after the training to make sure that the new employees feel committed to a future with the company. These are what Process controls explained about. An Output controls are explained the outcomes of the marketing strategies of the Zappos company. Based on the customers, they claimed the satisfaction was met through its loyalty to the company.

Informal Control The company shows outstanding customer service. But not only that, Zappos gave each of their employees’ benefits that influence the implementation of marketing strategy. The employees of the company were satisfied of what they get from their employer. These include the extensive health plan, 40 percent employee discount, car pool program. Employees were also given the

24

time to hang out with their co-workers like hiking trips, watching movie, and hang out at bars. Zappos management believes that open door policy is not to have a door in the first place. This explains that the management is very open with employees on discussing different issues that they faced and encouraged to share information about the company’s performance. Employees are evaluated on how well they embody the core values and inspire others. The Zappos compensation model is to motivate employees and promote personal growth. This positive work environment comes with the expectation that the employees will work hard. So this explains the foundation of Zappos’ relationships with their employees which are trust and transparency.

25