MARKETING

Question 1: AMAZON

Introduction about AMAZON:

Amazon.com, Inc. (/ˈæməzɒn/) is an American multinational technology company based in Seattle,

Washington, that focuses on e-commerce, cloud computing, digital streaming, and artificial intelligence.
It is considered one of the Big Four technology companies along with Google, Apple, and Facebook.

Amazon is known as well-established industries through technological innovation and mass scale. It is
not only the world's largest e-commerce marketplace but also the largest Internet company by revenue
in the world. It is the second largest private employer in the United States and one of the world's most
valuable companies.

Amazon was founded by Jeff Bezos in 1994. The company initially started as an online marketplace for
books but later expanded to sell electronics, software, video games, apparel, furniture, food, drinks
delivery, toys, and jewelry…

( a part of the Amazon Headquarters)

Place:

Traditionally, Amazon didn’t have physical stores and the company relied on online sales
channel due to e-commerce nature. Starting from 2015, the online retail giant has been
concentrating on physical retail “during which time it’s opened half-dozen bookstores that
double as gadget emporia, a score of campus bookstores that don’t sell books and a
convenience store without cashiers.”

Moreover, Amazon also has an alternative store format that operates in a cost-effective manner
( cách thức chi tiêu hiệu quả) . “Students order textbooks and dorm furnishings online and come
to these stores to pick them up. The centralized pickup location reduces shipping expenses.
The company is also testing a grocery pickup service at two locations in Seattle. Once it
launches, Prime members will be able to order groceries online and visit one of these stores for
pickup, skipping the aisles. Prime Free Same Day and Prime Free One Day services are
available in more than 8000 cities and towns. Prime service is available in more than 50 cities in
9 countries now.

(Branches of Amazon in America)

Price: respectively

Amazon’s business is highly seasonal ( kinh doanh cuả amazon mang tính thời vụ cao) The
company generated 33%, 32%, and 34% of its annual revenue during 2015, 2016, and 2017.
This pattern of revenue generation has certain implications on Amazon pricing strategy.
Amazon pricing strategy can be generally described as cost leadership; nevertheless, the
largest internet retailer in the world also applies alternative pricing strategies in certain
segments.

( Turnover of from 2004 to 2018)

Cost leadership is placed at the core of Amazon pricing strategy. Analysts note that “Amazon’s
strategy is to frequently lower prices until they beat competitors–for all products”. Famously, the
online retail giant changed the price of Bible more than 100 times during the last five years.

Additions : al range of pricing strategies used by Amazon sparingly include penetration pricing,
price skimming, psychological pricing, product line pricing, promotional pricing and geographical
pricing strategies. The e-commerce giant earns fixed fees, a percentage of sales, per-unit
activity fees, interest, or some combination of these according to its seller programs.

Promotion:

This component of the marketing mix involves the strategies and tactics that a company uses to
communicate with its target market. Amazon.com Inc. aims to persuade its customers to visit its
websites and pay for its online services. The following ones are used in such promotional mix,
arranged according to importance in the company’s e-commerce business: Advertising (most
important), sales promotions, public relations, direct marketing.

Advertising functions as the primary means for Amazon to communicate with its target market.
For example, the company has an affiliate program for website owners or online publishers to
earn revenues by displaying advertisements and corresponding links to products sold on the
Amazon.com website. This strategy widens the company’s market reach. Also, Amazon.com
Inc. applies sales promotion as a secondary strategy to attract customers and persuade them to
purchase goods and services on the website.

On the other hand, the firm strengthens its brand image through public relations programs, such
as Amazon Smile, which donates a percentage of sales to charitable organizations. These
programs enhance consumer perception about the corporation [Read: Amazon’s Stakeholders
& Corporate Social Responsibility Strategy]. Moreover, in using direct marketing, the company
directly communicates with businesses to offer its online services, such as publishing and digital
content distribution. In this component of Amazon.com Inc.’s marketing mix, advertising is the
main determinant of the organization’s marketing communication effectiveness.

( Amazon Smile)

Product:

In this component of (amazon the marketing mix), Amazon’s products or product mix is
considered. As the top player in the online retail industry, the company offers a wide selection of
products that address market needs: Retail service, Consumer electronics, Retail goods,
Amazon Prime, Digital content distribution service, Amazon videos, Amazon Web Services
(AWS), Amazon Publishing, Amazon Fresh, Amazon Prime Pantry, Amazon Dash, Vidieo
direct.

Amazon is primarily an online retail business. As such, its main product is retail service provided
through its e-commerce website. Some of the retail goods available on the website are also the
company’s, such as: (cho VD) those sold under the Amazon Basics - amazon brand. In addition,
the firm offers Amazon Prime, which is a membership product that includes shipping service for
purchases on Amazon’s online website. The company has also expanded its product mix to
include consumer electronics like the Amazon Kindle e-book reader and the Kindle Fire tablet.
Such expansion led to an improvement of the effectiveness of the company’s marketing mix in
getting a bigger share of the e-commerce market. Amazon Video is an on-demand video
streaming service offered to customers in some locations in the United States, Europe and
Japan.

( Amazon Kindle Paperwhite)

On the other hand, Amazon Web Services (AWS) is a set of online services, including cloud
storage. Amazon Publishing offers book-publishing service using a number of imprints.
Moreover, Amazon Fresh and Amazon Prime Pantry are the company’s services for orders and
delivery of grocery items. Furthermore, the company has integrated additional technology in the
purchasing process. For example, Amazon Dash enables customers to purchase household
items by simply clicking a button that connects to the Internet. Video Direct enables sale or ad-
supported free viewing of user-generated videos. These product lines indicate the company’s
efforts in continually broadening its product mix. Amazon.com Inc.’s marketing mix increases in
effectiveness as more products.

People:
Amazon gives a great importance to its workforce. Irrespective of what level and domain of the
organization they are working people get benefits from Amazon which makes it a desirable
employer. These benefits include health, financial, assistance programs, some time off like
vacations and equity plans. There are nearly 2,300,800 employees working across the globe
round the clock to ensure best customer experience and as Amazon is the most visited website
in retail space (1.27 billion/year) it offers its employees a great deal of training and development
activities.

Process:
Amazon is a world leader in ecommerce and web services and has got a strong process
oriented business. As we have seen earlier that Amazon strategically divided its warehouses
and fulfilment centres for operational efficiency, it also uses the best in the business technology
to support its daily activities and also in its advertisements, serving the customer like providing
the information about the location of his package. Also its association with websites like Twitter,
where by reacting to any tweet from Amazon people can add any product to their cart. Its
customer relationship and information management are core to its business strategy.

Physical Evidence:
Amazon’s biggest physical presence is its website. As it is an online retailer the place of service
is its website and apps which very user-friendly and built with great design. Amazon’s
warehouses and fulfilment centres present in all countries of its operations are the largest one
can ever find. It has logo which is very well resembling what Amazon stands for, i.e. an arrow
from a to z which implies one can buy anything on Amazon. Its packages also sport this logo.
Amazon releases its financial reports also for its investors and users yearly providing
information about where company stands and where it aspires to go. Hence, this summarizes
the Amazon marketing mix.