University of South Wales

School of Business and Society

Module Assessment 1

Tutor: Elenica Pjero

Student: Oluwadare Akinyera

December 2020

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 CHAPTER 1

INTRODUCTION

Amazon is an American electronic commerce and cloud computing company that is based in
Seattle, Washington and founded on July 5, 1994 by Jeffery Bezos, a computer science and
electrical engineering graduate from Princeton University. Amazon is widely regarded as a
colossal tech company, one of the largest Internet-based retailer in the world by sales and market
capitalization and an ‘ e-commerce phenomenon.’(Krishnamurthy, 2005)

Amazon operates through numerous business sections such as: North America, International, and
Amazon Web Services (AWS). The North America sector comprises of retail sales of consumer
goods and subscriptions through North America-focused websites like www.amazon.com and
www.amazon.ca. The International part provides retail sales of consumer goods and
subscriptions via internationally-focused websites. The Amazon Web Services(AWS) segment
encompasses the global sales of compute, storage, database, and AWS service offerings for small
businesses, enterprises, government agencies, and academic organisations. (CNNMoney.com,
2020). The company has also started offering advertising services.(Reuters, 2020).

Amazon serves customers via its online and physical shops. The Company also produces and
trades electronic devices and AI interface software such as Alexa, Kindle electronic readers,
Fire tablets, Fire TVs, and Echo devices, and it grows and makes media content. It also offers
Amazon Prime, a membership package that comprises of free shipping, access to streaming of
various movies and television (TV) series, amongst others.

Source- Reuters.com, 2020(*in millions of US dollars **in US dollars)

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Amazon’s mission is to be the most customer focused company in the world. This is part of their
four guiding values namely: a strong desire for innovation, a promise to operational distinction,
and thinking for the long term (Amazon, 2020). In addition to having four guiding principles,
Amazon has 14 Leadership or working principles that guide all their activities. The first of these
principles is Customer Obsession. Amazon Chief Executive Officer, Jeff Bezos, has popularly
claimed that the company always have “An empty chair for the customer” in all their meeting in
order to hear from and innovate for the consumer.

This report will seek to evaluate Amazon’s marketing strategy and how they try to be customer-
centric or put the customer first in all its processes. Also using Amazon as a case study, this
reports will also seek to analyse critically the statement that "The best marketing strategies aren't
top-down, they're outside in, starting with the customers' needs and wants."

The main objectives of this report are to evaluate Amazon’s strategy in terms of sales and
marketing strategy and tactics used to deduce that the consumer needs and wants in Amazon
impacts their strategic marketing plans. The report will on a numerous academic and financial
literature to support the analysis. Another objective is to also explore the relationship between
the application of specific strategies as presented in this report and evidence found in academic
and financial literature. This report will also try to determine to compare Amazon to its
competitors and provide propositions and recommendations that can further aid the company’s
business growth.

The report layout is arranged into four chapters. The first chapter presents a brief introduction
and the flow of the report, while the second chapter consists of Amazon’s strategic marketing
plan, application processes. A comprehensive critical analysis of Amazon’s marketing strategy
will be evaluated in the third chapter. The write’s recommendations and conclusion from the
report will be the last chapter.

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 CHAPTER 2

STRATEGIC MARKETING PLAN

According to Oliver (2004) Strategy is getting knowledge about an industry’s structure and
dynamics, defining the organization’s relative place in the industry, and taking necessary steps to
either modify the industry’s structure or the company’s place to improve or achieve positive
organizational results. Porter (1996) highlights strategy as creating exceptional and valuable
positions that involves a variety of activities, in essence this strategic positioning is to select
actions that are different and unique from competitors. Salooner et al (2000) puts strategy in the
context of products and refers to it as a wide articulation of the types of products the company
will manufacture, the basis on which these products will contend with those of competitors, and
the forms of resources and proficiencies the organisation must possess or grow to execute the
strategy effectively.

Strategic marketing planning has been referred to how companies attain their marketing goals.
This is usually reached by setting objectives and targets, examining important corporate aspects,
brand development, execution and advancement monitoring (Stephens, 2016). McDonald (1996),
however refers to a Strategic Marketing plan as conferring so many benefits such as: organised
identification of evolving prospects and threats, readiness to change, better communication
amongst business managers, decreasing conflicts between persons and their departments, the
contribution of all points of management in the planning development, added proper distribution
of resources, uniformity of tactics across the company and a more focused direction across the
organization. Nevertheless, a strategic marketing plan is mainly concerned with competitive
advantage – that is to say, establishing, building, defending and maintaining it.

This strategy guides the business processes and is usually revised occasionally based on the
varying trends in the business environment while a marketing plan defines the customers it
embodies, and how values are created.

Organizations are normally intended to have an integrated business plan with the main aim of
giving value to consumers. It includes the organisation’s customised marketing mix, the
resources that the four Ps(product, price, place and promotion) will use to implement the plan.

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The strategic marketing outline aids organisations make more incisive business decisions by
having knowledge of the market and its place. Strategic Planning also helps the organisation
prepare for uncertainties that may arise in future.

Strategic planning however aids companies by giving regular direction in making decisions and
it assists to analyse a firm’s development in a continually and rapidly evolving business
atmosphere, Devra (2018). It is also important to business managers by helping to outline their
aims and advance specific tactics for applying a strategy. (Dutton and Duncan,1987).

Amazon have been able to advance and implement a practical commercial strategy by
concentrating their attention on customers’ needs and wants. They have consistently been able to
endure numerous changes in the business environment and incessant instabilities in economic
market especially after several negative setbacks such as the terrorist attack in 2001 and the
international economic crises in 2008 (Krystal, (2013). They proved their strategic intent by
sustaining a persistent competitive advantage, growing their business segments to other
continents like Asia while also creating its first ever online business in that continent. Amazon
placed special interest on their customer obsession strategic approach by focusing on their
developers, consumers and sellers. (Stockport, 2010)

Strategic marketing aids Amazon analyse the present business climate and to assess Amazon’s
positioning and performance. It also aids in creating clear market objectives and targets in
restructuring product development. Planning is a prerequisite from the financial part of the
organization, through strategic decisions within the company.

Amazon Mission Aligns With Customer Satisfaction

A mission statement helps to direct the regular functioning of an organization and the type of
strategic business decisions it makes. It sets out the way how business processes of organisations
should run. Therefore if a company is to be recognised as customer driven or customer focused,
customers should be an important part of a company’s mission statement (Newman, 2016).
Drucker (1971) referred to Mission as a antecedent to ``clear and realistic business objectives’’

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A mission statement should express the primary purpose of a business enterprise. Bill Stinnett
(2015) in his book Think like your Customers, he recommended that everybody in the business
community have customers who purchase, make use of or profit from anything they make or as
service they offer and that serving the needs of customers is fundamentally what business
organisations do. Consequently, organisations that tend to seek competitive advantage via
customer loyalty need to create a mission-vision statement form the viewpoint of the customer.
The aim of Amazon is to continually increase the level of customer experience by utilizing the
internet and technology to assist customers in finding, discovering and purchasing whatever they
need, and allow organisations and content creators to maximize success (Amazon, 2020)

Amazon’s Mission And Vision With Customer Voice.

Customer's voice refers to the systematic process of recognising the inclinations, wants , needs,
desires and dislikes of the customer. Customer satisfaction and Customer voice go hand-in-hand.
The customer’s voice has evidently been shown to positively add to the capability of customers
to increase the efficiency and amount of their sales, promote a positive brand image and engage
in a range of marketing research initiatives (Lacey, 2012).

Amazon CEO Jeff Bezos stated that “Our customers are loyal to us right up until someone else
gives them a better service or until someone else satisfies them better or gives them a better
voice and preferences.” This is the major reason why Jeff states that the most important objective
of the company is to give smooth and consistent shopper experience to their consumers no matter
where they are and at any time of the day. Sustaining customers starts with getting to know what
motivates individuals to purchase, a brand or service, in addition to realising who your customers
really are and accepting the test-and-learn method that helps to increase customer satisfaction
and experience in the rapidly evolving and dynamic business atmosphere. Customer satisfaction
is one of the most important factors for reaping benefits in a tough and highly competitive
market (Bruhn, 2008), (Chen J. K. & Lee, 2009). This is the reason why Amazon placed the
customer above all others.(Amazon,2020)

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 CHAPTER 3

AMAZON STRATEGIC MARKETING ANALYSIS

In today’s business environment, all organizations endeavor to become customer-focused

(Kaushik, 2013).One of the important ways to accomplish this is to regularly educate the
organization’s employees on each marketing stage or process so that the can be able to meet
customer needs and promote consumer satisfaction. The process of using a this top-down
strategy of promoting the company’s brands and services is referred to as Internal Marketing.
This type of strategy involves employee capacity building, maintaining efficient communication
within the organization, integrating information that will help employees fully understand
marketing processes within the company. Walter et al(1994) recommends that if this strategy is
to be effective, the tope executives must adopt it first.

Amazon’s Internal Marketing Strategy

Internal marketing has played a massive role in developing Amazon’s customer-focused strategy
which has improved the customer service processes of the organization, built a solid customer
loyalty and gained a superior competitive advantage. It is claimed that most of Amazon’s
competitors have always been infatuated with a tightly designed ecosystem of a plethora of
services and applications, while Amazon has placed focus and emphasis on programs that help to
serve their consumers to the optimum in very short time. This shows that understanding the what
the consumers need is in the same vein as comprehending the organization’s principles.

In recent time, Jeff Bezos, current CEO of Amazon has indicated how he expects top level
managers to accept the organization’s customer-centric approach. Walter et al (1994) has stated
how internal marketing success translates to similar external marketing accomplishments.
Amazon made it sacrosanct that all its employees comprehend customers’ needs and wants.

Today’s business world is moving and evolving at a rapid pace and one of the most effective
ways to sustain business operations profitably is to adapt to customers’ needs and wants. Since
no business entity can last without satisfying its customers, Amazon’s approach is to develop its
brand using the customers’ lens using a customer-focused strategic marketing plan whose main

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objective is customer delight. Amazon continues to serve its customers via its various physical
and e-stores whilst placing emphasis on convenience and price.

There are a variety of options open to consumers in order to easily access deals and discounts,
this helps Amazon expand its customer base. Amazon CEO Jeff Bezos recounts that the
company always tries to see customers as guests to a party and they, the hosts. He further adds
that they make it a job daily to make consumers experience better.

Donovan et al (1994 ) stated that one important differentiating factor between an efficient
customer-focused program and ones that doesn’t have a defined program is inspiring leadership.
He also adds that for an organization to be able to maintain customer-focused approach,
leadership must be flair-driven and fully focused. One of the major reason that has seen
Amazon’s remarkable rise and speed is due to the avant-garde leadership approach of its CEO
Jeff Bezos. According to him, one of the reasons why his company was so successful was
placing focus on listening to customers and breaking barriers in ensuring that their needs are
met.These customer-loving and eccentric leadership skills is the marketing approach Amazon
has used to improve its customer growth (Kotler 1988)

Amazon Marketing Mix Strategy

Amazon’s marketing mix will be critically analyzed which has been considered as likely plan to
lure consumers. Amazon’s mission is to be the most customer-centric company on Earth where
consumers can learn and discover anything they want to purchase online at the best and most
affordable price (Bhasin, 2017) The company is the largest online commerce company that
employs a combination of plans and tactics to achieve competitive advantage over numerous
competitors in the ecommerce space. Amazon’s customer-focused approach is believed to aid it
in keeping and luring market shares. The analysis below will be fixed on the hypothesis that a
mixture of the 4Ps of marketing mix are connected and they combine to make the organization’s
marketing strategy much more efficient. It is also claimed that if this strategy is well executed,
the marketing mix strategy will aid companies to attain their marketing aims and goals, ground
the position of its brand in its target markets and give consumers value (Kotler, 2005).

Amazon’s “Product” Mix Strategy

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This strategy underscores the amount of product types that an organization proposes to its
customers. Kotler (2005) states that organizations or firms employing this area of marketing mix
strategy needs to study some of its tools like variety, value, design, features, brand name,
packaging, services, etc.

Despite having a vast array of brands and services on their online store, Amazon has continued
to expand its portfolio and brand diversification varying from retail products and services to
online products such as videos, media streaming services such as Amazon Prime.(Fadikar, 2010).

This helps Amazon’s vision of attaining to be more customer-centric since enabling variation
might achieve customers satisfaction, if they are exposed to a variety of choices and can discover
what truly appeals to them or their needs. Edward (2017) claims that diversification helps to
meet market needs, this in turn brings about customer satisfaction. The company’s product and
service increase has also been a vast upgrade in its marketing mix. The organization has also
offered membership which also includes the shipping fee for customers who purchase through
their trade website.

Further, Amazon has allowed other vendors to put up their wares online and vend their products
via Amazon’s platform. This may have a negative impact on its brand image or decrease its
brand value because of unchecked or unverified quality of goods and services from its partner
retailers. The company may need to check the quality of partner retail products and services that
are put up on its online retail website

Amazon’s “Place” Mix Strategy

This simply means having a knowledge of where all the business transaction networks
assortments, inventory, transportation coverage and logistics all products and services are
heading to. (Mars Library, 2014).

Since Amazon uses the internet platform for its retail business, they employ essentially their
endorsed e-commerce internet site and Amazon books to get across to their customers. Even
though that the organization is run by customer inclinations, they have also launched other
physical stores in some areas that have given customers the opportunity to appraise or examine
their goods before they are bought. Additionally, apart from their online and physical stores and
marketplace, they have also organized an avenue to reach their customers. An example is the

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yearly Amazon Web Services (AWS) Summit (USSEC, 2016). This helps the company to reach
latent customers, engage and persuade them to purchase goods and services online.

Amazon’s “Promotional” Mix Strategy

This marketing mix strategy concentrates on advertising, personal selling, sales promotion and
public relations.

In Amazon’s promotional mix strategy, the organization essentially employs a variety of

approaches to persuade consumers to log on to their website and purchase their online goods and
services. Out of all these forms of promotional strategy, advertising is the most significant in
addition to sales promotion (e.g. discounts).Driving public relation via Corporate Social
Responsibility and also direct marketing are employed.

Amazon uses its partnership program to collaborate with various website owners to exhibit their
merchandise advertisement coupled with links to their online commerce website so that the
partner can earn some commission on sales. This strategy has aided the organization extend to a
significant amount of their target customers and this is complemented by sales promotion where
they uses special promotional offers or rebates to create sales. Sometimes via Amazon Smile,
they usually offer a significant portion of their revenue to charity organizations so as to improve
its brand image and grow customers’ positive perception (Amazon, 2020). All these strategies
are employed to appeal to consumers and in turn satisfy their needs and desires in order to
promote repeated purchases.

This strategical approach enables Amazon to successfully connect with its target audience in a
way that convinces the customer or consumer to repeat a purchase in the future via their online
retail platform.

Amazon’s “Price” Mix Strategy

This marketing mix strategy is based on setting product price points in such a way as to a appeal
to customers and consumers. This marketing approach may also involve employing tactics like
discounts, promotions, credit period, and payment terms etc. (Bennett &Coleman, 2018)

Amazon employs this marketing mix strategy to appeal to customers and consumers for its vast
and wide range of goods and services that are readily accessible via the organization’s online

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commerce website. Amazon employs a combination of different pricing strategies like price
discrimination, market-oriented and value-based pricing which is generally used by the
organization. The market-oriented pricing is based on analyzing prices set by its competitors in
order to be able to set an affordable price to target consumers and customers.

Nevertheless, Amazon usually fixes dissimilar prices for the same product – this referred to as
Price Discrimination. Ferguson (2017) gives an instance of where Amazon’s set price for a
product varied between the UK and the USA. This strategic approach permitted modification of
prices based on the market situations but was also supplemented by a Value-Based pricing
strategy which also considers the value of the product and preferences of the market.

Consequently, this marketing mix strategic approach is able to reflect how flexible the price
alteration of market prices, letting the organization to appeal to more customers. Nevertheless,
for Amazon to confirm their market growth and increase their market share, they need to ponder
over the current business environment dynamics and complexities, increasing competitions and
sudden fluctuations in market trends, which may force the organization to retain its marketing
mix strategy up to date (Edward, 2017). The capacity to maintain competitive marketing
advantages depend on respecting local practices and giving benefits to their customers. However,
Amazon should keep in mind that customers constantly want better service and convenience.

3.3. Amazon’s Segmentation Strategy

In order for business organizations to survive unusual times and wade through the murky waters
of economic waves, they need to be profitable, therefore there is a strong desire to focus on its
profitable clients. Zamin (2014) recommends that “organizations have to focus on their
customers and commit themselves to identify and relate themselves to their customers’ needs”.
This is a general principle to an effective marketing process, where organizations are struggling
to retain current customers and take over uncharted market shares. In the field of marketing, the
customers or a group of customers having the same features are known as “Market Segment”
(Dibb et al. 2012).

Segmentation is a strategic marketing approach that classifies customers according to their needs
so as to better comprehend their needs and provide for them. When customers with needs that are

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alike are identified and classified, then related goods and services can be created for the
segments respectively so that their needs and wants can be satisfied. Segmentation can be
performed using factors like geography, demography, customer behavior, etc.

Segment Acquisition

Acquiring new customers is very important to any business organization, bearing in mind the
worth a new customer brings to the business. This involves convincing customers to buy the
organization’s goods and services, and this usually requires a well detailed and thorough
strategic plan. As explained previously, the most efficient strategic approach to acquiring new
customers is to try to understand what their needs and wants are, then expend resources on
getting these customers (Molly, 2018). Angela (2018) clarifies how hard it is to acquire new
customers but advises business organizations to be patient and take out time in recognizing
specific target niches. Apart from acquiring single customers, Segment Acquisition can also
mean the process of securing customer segments. Segment acquisition is also referred to as the
process by which Executive Leaders secure a definite customer segment via a particular market
share.

In addition, even though the course of getting new customers are much more expensive than
keeping the existing one, 65% of company’s business comes from existing customers (Sharp,
2018). This underscores how critical it is to catering for existing customers. It is a known fact
that there is no business organization that can endure without its customers, therefore business
executives should do more research to comprehend and sustain customers’ needs and wants so
that they can both maintain present customers and gain new customers (Winer, 2001)

Incidentally, Amazon has been known to be efficient in gaining customers because it the made it
easy to place an order on its website and have grown a solid customer relationships such that
customers are not supposed to leave their homes when they place an order, but they are
convinced that the Amazon delivery team will have their packages at their doorsteps at the
earliest time possible . The company’s capacity to acquire a significant share of the market is
also attributed to its personalization and brand engagement strategic approach, which makes
them increase purchase. Automation has made it much more comfortable for Amazon to
document buying data that the organization employs for its marketing strategic plans, for
instance, notifying customers about forthcoming promotions or offers, placing them on

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newsletter list, sending links for Amazon blog or putting up references on their site to activate
proposals on associated goods and services when a customer is going through their site. All of
this actions show how Amazon is geared by acquiring customers and retaining them Businesses
can take a cue from them.

3.4 Targeting Strategy

Targeting marketing strategic approach occurs when the organization has recognized a specific
segment that they hope to position their goods and services to (Doyle et al, 2006). This strategic
approach analyzes the customer’s expenditure capability and the company’s capacity to satisfy
their customer’s needs. John (2017) claims that executing a targeting strategic approach refers to
directing the business’s sales and marketing resources on a specific segment and that:
“Customers should be given a product that is relevant otherwise they will not buy it”.

Alternatively, segmentation is understood as a biased approach which neglects other customers

who are not classified under the segment, therefore a loss of business prospect.

Amazon, a global online commerce business, have been targeting specific customers where their
micro-level segmentation has been established on their buying pattern. This has aided the
business to translate its website guests into continuing customers. Nevertheless, the business
places emphasis on the tech savvy customers because of their online personality to the business
operations. John (2017) contends that “Amazon segmentation targeting and positioning
practices are associated with targeting the widest customer segment. The retail giant does this
with the application of multi-segment and adaptive positioning techniques”. These group of
customers belong to the upper and middle levels of the socioeconomic strata. A couple of them
are entrepreneurs or experts who do not want to expend time visiting a physical store but find it
comfortable to shop via the internet. Principally, Amazon customers may be those searching for
promotions , this is the reason why the business has fixed definite days where they provide huge
rebates to their customers.

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Positioning

As soon as a business has visibly outlined its target segments, it will also focus on working at
what way customers see its goods and services in relation to other brands in the market.
Positioning refers to a proportional way “a consumer looks at the product and the other
competing products available in the market” (Amin 2017).Because consumers remember a
product based on its unique benefits and features., the business will probably ground its
positioning strategic approach on different features such as price, quality, product, emotions and
certain attributes, etc.

Amazon approach is to position itself on price because they are targeting a vast array of
consumers who can opt for physical retailers. In order to sort out this difference, Amazon has
introduced detailed e-commerce internet sites for separate countries and opened some fulfillment
centers that accepted consumers in their indigenous language and with customer service officers
that comprehend the desires of customers.

This is a massive approach to fulfilling clients and helping them at their ease. Efficient marketing
strategic approach is that distributed structure that can serve clients all day and also involves
consumers in the business. Furthermore, after Amazon introduced free shipping in 2001, They
also announced a variety of homegrown payment choices that make the payment process fast,
easy and secure. Fadikar (2015) gives an instance of where the business announced a postal order
for their German and checks for their French consumers and the business’s dependence on the
Europe’s carrier in delivering to its local customers.

Nevertheless, this reliance on the exterior courier companies is very important. To an extent, the
organization’s services can be overwhelming or sustain extra costs, that will eventually be
accrued to the purchaser. A typical instance is when the transport of goods or service needs costs
on gas or other tax expenses that the organization is not able to pay. In this case, the expenses are
accrued to the consumer where the subsequent undesirable effects may decrease customer
fulfillment.

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Once again, even though presenting free shipping services is an effective strategic approach to
appealing and sustaining consumers, it might reduce the company earnings.

3.6 Strategic gaps analysis

Even though Amazon has developed a good customer relationship with its consumers and its
partner sellers, there is a need to cooperate with public organizations such as libraries in order for
customers to comfortably search and seek Amazon’s directory.

Meanwhile Amazon have also embraced physical stores in addition to its online presence. There
is a need to grow an explicit offline marketing strategic marketing approach.

RECOMMENDATIONS

Amazon is a phenomenal and an enviable international brand that are almost flawless in all their
business operations and processes. Nevertheless, there are still some aspects overall that need
improvements. They include:

 Amazon needs to offer consumers an extra inducement to give their feedbacks, examples
can be putting consumers who have given a feedback into raffle draw to win prizes. If
these feedback or reviews are rewarded, more consumers would come back to giving
more feedbacks after every shopping experience.
 All of Amazon's marketing activities are not linked seamlessly. They can be interlaced
into a mutual channel on their website.
 Amazon should not include only celebrities in their video -sharing, they can also show
that they are being customer-centric by using different satisfied customers.
 They should focus on greater customer service and stay separated from other
competition. Their email strategic marketing approach can still be expanded. Amazon
should let customers to sign their label.
 Think about expanding their business. Perform more aggressive Market penetration to
other large economies like Nigeria.

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CONCLUSION

This report has shown that Amazon are an overpowering force with a vivid customer-centric
vision and strategy. It is quite tough not to be challenged by their current and possible capacity to
control because of its massive area of business models, its swiftness and magnitude. It is already
being rated as the most successful conglomerate in human history, and its central reach is still
expanding. Amazon's 'outside-in' marketing strategic approach would enable it to develop into
businesses that that have not been unearthed and almost every commercial institution will be
affected by it. Truly, customer voice, not any other drives the mammoth success and every
strategic marketing decisions in Amazon.

Although they have placed themselves as a great international online commerce company, they
still have to contend with many evolving competitors since several physical stores are opting to
go online. Amazon needs to sustain its strategic marketing mix and remain relevant so as to
continue concentrating on executing their customer-centric strategy. Nevertheless, they still need
to explore other areas of the customer needs in order to maintain their phenomenal rise.

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