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Competitive environment and key market trends of Amazon Company

Discuss about the Amazon Marketing Strategy Recommendation Report.

Amazon is best known as the largest internet retailer in the world. This retail e-Business is not a simple case study in regards to the business model analysis. The company sells their products at a standard markup, and it has also pioneered alternative strategies of retail by acting as the gateway to the other retailers and a healthy marketplace, for the goods that are used. (Edelman, 2010)The organization mostly align its line of the business in regards to the sales of the product, services, digital subscriptions and through advertising.

Amazon should major on the demographic and the psychographics segmentation on their marketing strategy. (O'Sullivan and Spangler, 1998) The marketing segmentation strategy is based on the purchase behavior of the customers and rather not what individuals have expressed the interest on, but what they did. They should also have a micro-level segmentation that can target every customer independently, thus allowing the company to convert the visitors to long-term and high valued customers. The customer segmentation involves creating individuals who will purchase in a particular way and various products. The company needs to target more the middle and the upper-class group of people since they have got more experience in the underlying technology. (Timmers, 1999)  These individuals do not have the time and preference of convenience over shopping at the physical outlets. The company needs to improve on their delivery channel outlets so that one can get a product be delivered anywhere in the world at their convenience. On the distribution strategy of marketing, they need to increase on the existing centers; this will help the customers to get quickly the products they placed an order. The aspect of the competitive advantage has made the Amazon to be the leading e-commerce giant and their business model to be tremendously beneficial. They have acquired many e-commerce and IT startups example, pets.com, Woot and jungle.com that has helped them provide high-value services to their customers using the existing technology at a low cost.

The current and the potential competitors of the Amazon Company are the physical world retailers, the vendors, distributors, the manufacturers, producers of the products and the publishers. (Timmers, 1999) There are also companies that provide the e-commerce services, and the enterprises that provide the infrastructure web services or the ones that store information for Amazon. All these groups pose completion for the company either directly or indirectly through carrying of the business one way or another.

The current target market of this company and recommendation to maximize on growth

On the market trend, the Amazon stock has increased up over 40% for the past six months, due to the factors like the improvement of the profitability and the high growth on the cloud services of the business. To add to this, the company sales growth have increased in the international regions as indicated in the quarterly results of the enterprise. (Mahajan and Venkatesh, 2000) The company is predicted to continue to perform on the global e-commerce market for the coming years as a result of its competitive advantages strategies deployed. (O'Sullivan and Spangler, 1998) These plans include the prime programs and the access to the wide range of the network and the delivery centers. There is also a need for the investors to look at the increased competition from the companies like Alibaba, eBay, and the traditional retailers. These companies may limit the market share gains for Amazon in the next five years to come.

The company is targeting the middle and the upper-class individuals. The leading number of online shoppers are the prime buyers, with whom they spend more on average than the regular customers. Damanpour and Damanpour, 2001) Example, in the USA the older customers are more loyal to the services of the Amazon than the younger people. The Amazon Prime seems to appeal more to individuals who are forty years and above and attractive more to the seniors who are above 60 years of age.

In the figure below shows the Business intelligence of estimates of about age distribution of the Amazon US customers.

Amazon can increase on their target group by acquiring more customers. They can do these by setting various programs like the referral sales to leverage on the existing clients, by giving them incentives to refer to their friends. They can also expand their product line. (Edelman, 2010) It is achieved through adding new product lines for the products that are closely related to the current product they have. Another way is to increase the average size of the order. It can be achieved through more aggressive upsells by displaying on their website items on the product detail pages and in their shopping cart.

The primary marketing objective of Amazon are; to continuously build on the customer database to at least 100million household throughout the world in the next five years plan. Secondly, they aim at achieving a market share of around 55% through selling their products and services. (Damanpour and Damanpour, 2001) The third objective to achieve 80% of the customer awareness of their brand to the target market over the next five years plan. I think these targets are realistic and achievable if the company embark on the targeting demographic and psychographic segmentation on their strategy. They target the given group of the individual like the teenagers, the middle class, and the upper class. These objective are specific, measurable and realistic to be achieved within the set time plan of five years, and I feel nothing to be changed.

The people of both target market and the individuals of the Amazon directly relates to the business. Amazon should do more research to discover whether there is enough people to the targeted market group which, is in demand for the certain goods and the services. (Mahajan and Venkatesh, 2000)It is important to invest more in the employees on marketing training since they are the ones who deliver the services. Another aspect to focus more on is the process this issue is significant to Amazon since they need to make their distribution system very efficient. The targeted group wants to get product ordered very easily and quickly. To achieve this, they need to open more outlets centers throughout the world to cater to their client.

On the measurement approach, Amazon ought to use demographic and psychographics segmentation in their marketing strategy. (Timmers, 1999) their segmentation should be based on the actual purchase behaviors. The goals and the objective for the company provide the basis of the measurement approach. The company should thus strive to achieve their purpose towards the five-year plan. I believe in accordance to the extensive campaign and marketing is concerned the company is ranked as the best online retailer, but soon companies like Alibaba and EBay are catching up. They need to include on their digital marketing on their overall objectives so as to drive a successful campaign of awareness across various marketing channels with the aim of, driving engagement and driving sales of their products and services.

References

Damanpour, F. and Damanpour, J.A., 2001. E-business e-commerce evolution: perspective and     strategy. Managerial finance, 27(7), pp.16-33.

Edelman, D.C., 2010. Branding in the digital age. Harvard business review, 88(12), pp.62-69.

Mahajan, V. and Venkatesh, R., 2000. Marketing modeling for e-business. International Journal of Research in Marketing, 17(2), pp.215-225.

Timmers, P., 1999. Electronic commerce. John Wiley & Sons, Inc.

O'Sullivan, E.L. and Spangler, K.J., 1998. Experience marketing: strategies for the newMillennium. Venture Publishing Inc.

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[Accessed 18 July 2024].

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