Analysis of the Marketing Mix Strategy of Amazo.

com, lnc

Submitted by:

Chutikarn Keadtho 6110750107

Naruedee Suwan 6110750131
Nalinnipa Wudthinaraporn 6110750263
Worakarn Wongritkrai 6110750476
Unchanada Getgotin 6110750611

Section 415

Present to:
Asst.Prof. Mana Luksamee-arunothai, Ph.D.

01101423 Marketing Business Economics

First Semester, Academic year 2021
Bachelor of Economics (English Program)
Kasetsart University
 Amazon Marketing Four P’s

1. Product concept

Describe your product’s characteristics in the first column and the characteristics of your competitors’
products in the second column.

Your Product Your Competitors’ Product

Product E-commerce website E-commerce website

Product Variety Amazon's product varieties include eBay's product varieties include retail
retail goods, Amazon Prime, goods, and online auction.
consumer electronics, delivery, Cloud
services and more.

Product Appearance Amazon’s appearance focuses on eBay’s appearance is multinational

multinational technology products
which provide more services with
advanced technologies and
innovation for clients by giving
trustworthiness and fast delivery.
technology products which mainly focus
on online marketplace and auction
place.

Product Quality Quality products control from Quality products depend on seller
warehouse (self-check)

Product Features Attractive sales page, keyword Friendly used in sales page, mobile
providing, secure payment system, friendly
mobile friendly

Product Functionality The functionality of Amazon can be The functionality of eBay can be used
used for every day and an for every day and action-to-pay.
action-to-pay, diverse payment
system.

Services Amazon provides 24/7 customer Tracking systems, discount coupons

service via call center and directly to
email and fast delivery with tracking
systems. Membership will receive
discount coupons.

Brand Name Amazon eBay

Packaging Amazon has reduced packaging eBay uses eco friendly packaging with
weight per shipment by over 36% strength and flexibility shipping.
and eliminated more than 1 million
tons of packaging.

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Warranties Free return and shipping for Prime, Return for 30 days
no compensation need provide for
wrong orders from Amazon

Further Assessment

1. What features are considered Amazon is multinational technology products providing many
basic features by your customers technology solutions such as marketplace, video streaming,
(ones that must be offered)? cloud system as the considered feature that should be offered to
the customers.

2. What features are missing from
the existing product/service
choices in the marketplace? How
can your product/service address
this gap?
The missing Amazon’s features are a variety of languages in the
application and website, and low number of fulfillment centers in
Asia. Thus, Amazon should provide more languages for different
local customers and build fulfillment centers in Asia in order to
induce the Asian customers since the cost of shipping will be
lower.

3. What are the key features/benefits
of your product and service,
especially as they compare to
what your competitors are
supplying?
The key features of Amazon, especially as it compares to the
competitors is that Amazon not only provides an e-commerce
marketplace but also a variety of products that are related to
consumer behaviour both individual and enterprise such as
Amazon Prime, and AWS.

4. How can your product give you an Amazon is a well recognized e-commerce brand which has over
advantage in the marketplace? 300 million active customer accounts worldwide. Amazon is a
global scale using Amazon's state-of-the-art international logistics
capabilities.

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2. Price Concept
For each of the following pricing strategies, describe the advantages and disadvantages of using that
method for your product. Which is the best one for you to use?

Advantages and Disadvantages for Your Product

Cost-Plus Sell something for more than its cost (the cost + profit margin)

Value-Based Good quality products with low price and fast shipping can increase customer
experience and keep customer base. (Value-based pricing can be a great way to
differentiate yourself as a quality merchant while pushing up your margins as high as
possible.)

Competitive Match External Competitive Price or stay below the External Competitive Price.

Going-Rate Amazon’s pricing model is based around keeping prices as low as possible for the
buyers. This means the prices of products can change numerous times, even during a
single day.

Skimming Amazon refers to initially raising prices when sellers introduce a new invention or a
non-existent item to the Amazon marketplace.

Discount Amazon offers promo codes and coupons for customers to receive a discount price.

Loss-Leader Since there are several e-commerce platforms, Amazon tries to use the pricing
strategy to compete with other companies to encourage customers to buy products.

Psychological In terms of payment options, Amazon influences consumer decision making by using
the Subscribe and Save feature to pay the lower price. Therefore, it uses Artificial
Intelligence to remember consumer behavior.

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For each of the following pricing aspects, describe the advantages and disadvantages of your product in
the first column. In the second column, describe to what extent your competitors are following that
approach.
Advantages and Disadvantages
for Your Product
Payment Period Customers can pay within 14 days.
Advantage: Good for customers
Disadvantage: Lack liquidity of sellers
because have to wait
Allowance Advantage: Customers can add funds
and cancel the gift card and
subscription services to others at any
time. Moreover, several programs are
provided for Amazon employees such
as medical coverage.
Seasonal Allowances Advantage: The employees will earn
income if they work on holiday days.
Bundling of Sellers can create bundles composed
Products/Services of different products to create a new
bundled product.
Advantage: Well-designed product
bundles provide convenience and
value to buyers and can boost sales
and profits for sellers.
Trade Discounts There are coupon codes, discount There
codes, discount for a new customer, subscriber discounts, and order
and promotion. discount promotions.
Price Flexibility Amazon might change the price of an
item based on consumer demand,
price fluctuations at a competing
retailer, or even the time of day and
weather conditions.
To What Extent Are Your
Competitors Using This Policy for
Their Products?
Customers can pay within 4 days.
Advantage: Good in terms of liquidity
for sellers
Disadvantage: Customers have less
time for payment.
Selling limits
Advantage: Sellers will get an
increase in allowance when they can
give buyers a great service.
Advantage: When you have an eBay
Store, you get more listings with zero
insertion fees and pay lower final
value fees, compared to selling
without a Store. You also get access
to additional tools to manage and
promote your business.
Sellers at eBay can also generate
bundles which are packages that
contain a base product plus additional
items or accessories. This is called
custom bundles.
are shipping discounts,
Buyers can compete by choosing a
low starting price which can help to
create more interest. They can add a
reserve price.This is the lowest price
that consumers are willing to accept
for the item.
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Price Differences Amazon created a group of sellers ​If a consumer's item qualifies, they
Among Target with similar characteristics and used will receive a coupon for the
Customer Groups the lowest price. difference to use on a future purchase
on eBay.com.

Price Differences Advantage: Amazon has long offered
Among Geographic the same price among geographic
Areas areas to avoid a risk of price
discriminate across locations and
angering their customers due to the
transparency of the Internet and the
fear of antagonizing customers.
Ebay does not have price differences
among geographic areas for a
homogeneous product due to buying
and selling involving a sealed-bid
second-price auction.

Volume Discounts and Tiered discounts available exclusively
Wholesale Pricing to Amazon Business customers for
higher-volume purchases.
Advantage: Help capture customers'
attention, gain their trust, and earn
their business
There are volume pricing and tiered
discounts for buyers purchasing
multiple quantities of items.
Advantage: The improved item page
experience makes it easier for buyers
to buy more, so they save on
shipping.

Cash and Early None None

Payment Discounts

Credit Terms Amazon provides Amazon.com Store
Cardholders which can buy any
product and pay over time with a
variety of promotional financing
options; pay equal monthly payment,
at 0% APR, over the financing offer
period.
Ebay provides an ebay Mastercard
and ebay extras Mastercard. The
customers’ points add up every time
they use your eBay Mastercard to
make a purchase, with no annual fee.

Further Assessment

1. How sensitive is your target market to changes For the company, the target customers are
in prices? massively price-sensitive. So using the right pricing
strategies will dramatically increase its ranking and
conversions.

2. How does your expected pricing compare to
your competition’s pricing?
There are many competitors in multi technology
companies.The pricing in Amazon has compared
to competitors pricing because Amazon should
adjust the price to compete with the relative
company.

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 3. Will pricing make your business special? Since Amazon’s customers are price sensitive,
Amazon will adjust the price related to competitors’
companies.

4. How will your product/service provide a better Company has used innovation and technological
price-performance balance than your advance to come up with new products to serve
competitors’ products/services? the customers.

3. Place Concept

In the first column, describe how your product is distributed. Describe your competitors’ product distribution
in the second column.

Your Product Your Competitors’ Product

Direct Sales Amazon is a retailer which means it is
an online intermediary. However,
Amazon also sells its own product
lines directly via the Amazon
application and website.
eBay is an online intermediary for
sellers to list items, choose a price
and shipping options. Then, buyers
can bid or buy the products.

Reseller Sales Amazon’s resellers are better able to
cut retail prices and remain profitable,
creating an advantage over the other
resellers. No real limit to how many
resellers could offer the same
products. The sellers will send their
products to Amazon warehouse.
eBay launched a partnership with
wholesale liquidator Bulq that lets
resellers tap into items customers
returned to Target and other big
retailers.

Market Coverage Amazon is mainly an online eBay is an online marketplace where

marketplace opening for many sellers sellers can sell their products freely.
to sell their products.

Inventory There is a service for sellers to send eBay uses third-party inventory
their products or inventory to store at management software to help sellers
Amazon's warehouse which is called organize their products or inventory
Fulfillment by Amazon (FBA). effectively.

Transportation Amazon uses the local postal and
courier services for the transportation
of packages. Developing their own
service to deliver 50% of orders in
advance to be the majority of
deliveries.
eBay’s transportation uses third-party
providers to offer faster delivery,
logistics savings to help the site’s
sellers compete for online consumers
and using an eBay technology
platform to store, pack and ship
inventory.

Logistics Fulfillment by Amazon (FBA) lets eBay's offering allows sellers in

sellers store their products in categories with fast-moving inventory
Amazon's fulfillment centers, and and offer their customers free
then Amazon picks, packs, ships, and shipping and faster delivery for

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 provides customer service for these
products.
potentially boosting their sales.
Sellers who qualify for the service
will be able to tap into
eBay-negotiated rates for overnight,
two- and three-day shipping and use
eBay-branded packaging.

Further Assessment

1. What is the best way to sell your Directly selling Amazon products is the best way because
product? Direct selling? Through a Amazon is a retailer in the e-commerce market. It is
seller? Will this be a competitive advantageous as Amazon collects the fee from resellers and
advantage or disadvantage? the annual member fee.

2. How will your plan for coverage and
other place decisions compare to
those of your competitors? Will this be
a competitive advantage or
disadvantage?
Amazon has its own warehouse to keep all products from
resellers, therefore it has coverage and guarantee that all
those products will not damage and also have easy delivery
to customers directly and rapidly. To compare with eBay, it
does not have a warehouse, so the sellers have to send the
product to the customer directly. eBay acts as an
intermediary. Amazon gains the advantage due to the system
creating the reliability to customers that the product is surely
available.

4. Promotion Concept

Describe your product’s promotion in the first column and your competitors’ promotion in the second.

Your Product Your Competitors’ Product

Advertising Using all media channels both offline Using all media channels both offline and
and online online

Radio Radio advertisement Radio advertisement

Television Using celebrities and brand Using celebrities and brand ambassadors
ambassadors to promote. to promote.

Print Newspaper advertising, Magazine Newspaper advertising, Magazine

Electronic Amazon’s social network system eBay’s social network system

Word of Mouth Customer’s reviews Customer’s reviews

Generic none none

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Public Relations In the case of social and Initiative to reduce plastic packaging
communities, Amazon had donated
tens of thousands of emergency
supplies to aid Haiti where the
earthquake was hit in 2021.

Personal Selling Amazon has launched personal eBay allows sellers to create accounts and
shoppers by prime wardrobe to help sell goods on the website. Also, they
customers to styling their outfit. provide the auction place as well.
Customers take up to 7 days to
decide what they would like to buy.
Also, returns are free and easy.

Sales Promotion Amazon promotion sellers can offer eBay provides sale events in some periods
their products at a low cost to by reducing prices for selected items or
incentivize their audience to tell categories.
friends and family about the
products. It helps them reach new
leads that result in conversions.

Further Assessment

1. What promotion efforts are most The promotions that are most effective for Amazon’s target
effective for your target market? market are using third party advertising such as Google Ads,
Facebook Ads as well as customer reviews and verifying of
the products.

2. How can your promotion strategy give
you an advantage in the marketplace?
Customer reviews will be the advantage for Amazon since
the reviews can show how users enjoy or are comfortable
with these products. They can give the star on each product
in order to make customers trust in these products. So, the
company can arrange some discounts to encourage more
customers.

Reference
https://amzinsight.com/amazon-repricer-pricing-strategy/#:~:text=2.,item%20to%20the%20Amazon%20mar
ketplace.

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