Evaluation of Amazon Marketing Techniques | Assignment Help
Introduction
Amazon is one of the giant company and captured almost 50% of online market with the help of rapid technological innovation. Amazon has greater focus on its customers rather than its rivals. In order to capture larger market, Amazon adopted reliable marketing strategy. Amazon has adopted different marketing strategies for its different products (Chaffey, 2020).
In order to attract number of customers, Amazon applied cost leadership and customer centric approach. With the help of analyzing actual buying behavior of customers, Amazon targeted upper-class and middle-class people by categories them into two broad categories such as psychographic and demographic. It’s all marketing strategies is based on online media marketing, search engine marketing and mass marketing. In addition to this, Amazon product portfolio is wide which include books, DVDs, Kindle, Mobile phones, gamming consoles, clothes, jewelry and consumer durable goods. Such a large product portfolio keeps prices low and larger audience (Dudovskiy, 2020).
Moreover, Amazon has invested in e-commerce and online business by acquiring IMDB.com, Zappos.com, audible.com and Jungle.com. Amazon attract its customers with the help of online marketing channels such as sponsored search, associate programs, email marketing, TV advertising and promotional activities. Its promotional activities include free shipping, discounted coupons, lightening deals and low cost (Phillips, 2019).
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Figure 1. Amazon Marketing Channels. Adapted from “What is Amazon marketing? And what is the best Amazon marketing strategy to use?” by Angela Yuan, 2020 (https://sellics.com/blog-on-amazon-advertising-marketing-overview/). In public domain. A
Problem Statement
The study has been performed in order to examine and evaluate the Amazon’s current marketing strategy and its effectiveness with respect to the current external and internal environment with the help of different analysis frameworks such as SWOT analysis, PESTEL analysis and BCG Matrix.
Situational Analysis
In order to examine the Amazon’s marketing strategy and its competitive an extensive research has been performed by approaching different official websites and related articles.
SWOT Analysis
It is the mostly used tool for having an internal analysis. It is the preliminary part of the strategic decision-making process of an organization. A detailed SWOT analysis of the Amazon’s marketing strategy has been performed in order to examine the internal position of the company (İ Yüksel, M Dagdeviren, 2010).
Strengths
Strengths are strong points of your organization. It is the area in which the organization is performing well and has excellent working abilities at. Currently, Amazon has 90 million prime members along with active 310 million members. Amazon helps small sellers to introduce their products and successfully capturing 2000 sellers every day. With the help of extensive marketing tools, Amazon’s customers are 55% repeat buyers, which lower the cost for attracting new customers. Amazon’s media sales accounted for 17%, in 2011. Amazon has a brand value of $125 billion and ranked at third position in the Global Brand Ranking 2019 (Yua, 2020).
Weaknesses
They are the weak characteristics of your organization. Amazon is offering free shipping, which lowered down its profits. Some of the products such as VOD and website services are questionable because they have low growth rate. Moreover, only accessing online marketing tools will capture online users (Albane, 2019).
Opportunities
Opportunities are also the external factors like threats. They could be considered as development in the technology or market, a profitable deal/contract or an expansion of the business operations. Amazon should capture and expand its business in developing countries by using online and offline marketing tools. Gorilla marketing and offline marketing tools will also capture larger audience. In addition to this, promotional activities for promoting online purchasing will also yield additional long-term advantage (Dudovskiy, 2020).
Threats
Threats are those factors which can harm your business, they exist outside the organization. Amazon is facing high threat of competition from its rivals, which is lowering down its profits. Internet low power and offline audience is another threat. Another threat is the technology security system and restricting customers to trust on online purchasing. Thus, Amazon should apply technological security system for strengthening its business (Phillips, 2019).
PESTEL Analysis
A detailed PESTEL analysis has been performed in order to examine the prevailing external situation of the market and the co-respondence of the company’s marketing strategy with respect to the external environment (Iveta Dočkalíková – Kateřina Kashi, 2014).
Political Factors
Prevailing political and legal conditions also play an important role for the growth of a firm. Developed countries has stable political conditions, which led toward better governmental regulations and policies. European countries and USA have stable political conditions (Yua, 2020).
Economic Factors
Demand and supply forces play a crucial role in developing an economic environment. Sometimes economic conditions are considered as threat, while sometimes as opportunities. In developing countries, disposable income is increasing which provide a greater opportunity to expand in these markets. Moreover, in different countries labor and exchange rates are different which provide high dependency (Albane, 2019).
Social Factors
An industry could also get affected by the social and cultural changes. Amazon targeted upper-class and middle-class individuals by categories them into two wide-ranging categories such as psychographic and demographic (Phillips, 2019).
Technological Factors
Now a days, technology changes very fast and requires more R&D work. In this fast-changing technological era, Amazon adopted online marketing tools along with making extensive technological innovations, which enabled it to compete with rivals. Now a days, technological innovation is become main competitive advantage in e-commerce business. Increasing trend of cybersecurity and technological security is another main concern and get higher attention from the government as well as companies (Shaw, 2018).
