This study focuses on Amazon's brand audit in the United States and around the world. The audit would concentrate on five main topics in the organization's marketing strategy. The key issues include a situation analysis in which I will discuss the 3CS of marketing in relation to the organization, SWOT analysis of the organization, marketing objectives, a marketing mix that will include the 4Ps of marketing, and a conclusion on the benefits the organization will have after implementing the marketing activities contained in the research. A marketing plan is a text that outlines a company's marketing policy and strategies.
It covers a variety of marketing related details such as the situation analysis of the organization, budgeting, marketing strategies, execution and evaluation of the strategies. A marketing plan is crucial to an organization’s success in the market since it is a road map which provides direction towards reaching the business objectives of an organization. A situation analysis is the second step in the marketing plan of an organization and is very important in the establishment of a long term relationship with its customers.
It’s used to analyze the organization’s external and internal environment in order to understand its capabilities, business environment and its customers. It consists of several methods of which one important one is the 3Cs analysis. The 3Cs is known to be the most useful way to analyze the organization’s market environment because it provides extensive information. The 3Cs of marketing consists of the; the company, competitors and customers (Siguaw & Judy A, 129-133).
The company
Amazon is the largest Internet retailer in the world when it is measured in revenue and market capitalization. It is based in Seattle, Washington in the United States. Its business is in electronic commerce and cloud computing. It was founded in July 5th 1994 by Jeff Bezos. The firm started as an online bookstore but later on it diversified its business to start selling video, MP3, audio books, video games, electronics, toys, jewelry, furniture, apparel and food. It has various retail websites based in different countries such as in the United States, Ireland and the United Kingdom, Canada, Germany, Spain, Australia, Brazil, China among other countries. It also offers shipping of products to certain other countries (Kantor & Jodi, 74-80).
Competitors
Amazon has a lot of competitors who are in its type of business. Some of the competitors of Amazon are; Walmart which is also a major internet retailer based in the United States, Alibaba, a Chinese conglomerate which operates worldwide, and eBay; an e-commerce company operating worldwide and based in the United States. All these competitive firms offer almost similar products and services as compared to Amazon and they also conduct their business around the world.
Customers
Amazon has over 200 million customers ranging from low income earners to the well off in the society in different countries. It has a huge customer base because of its strategy of having a wide variety of products and selling them at a lower price than their competitors. They also do door to door delivery of products and are soon considering using drones to deliver products to remote areas at a much faster rate.
SWOT analysis
SWOT analysis is an acronym that stands for Strengths, weaknesses, opportunities and threats. It involves identifying the external and internal factors that are unfavorable and favorable to the organization’s strategy in achieving its objective. On this research we will focus on the internal strengths of the organization (Bull & Joseph William, 99-111).
Strengths
Leveraging on information technology to do its ecommerce business. Its website is easy to navigate and is scalable hence attracting more customers as compared to its competitors.
The company offers better customer satisfaction and fulfillment by use of superior distribution and logistics systems. This ensures that all products are delivered to their customers on time. The company has also been considering the use of drones to distribute products to its customers and this will give it an even greater advantage to its competitors.
The company’s brand name is widely recognized and appealing. This has contributed to its ease of entering new market in the United States and across the globe.
Due to its history of operating for more than two decades and having a wide range of products, the company has become a house hold name and has become the favorite from its competitors.
The Company has customer centric processes that record data on the customer’s buying behavior so that they can offer individual items based upon preferences. Besides, a lot of the customers are repeat customers and this means the company spends less resources to acquire new customers.
Weaknesses
Amazon has had a large market share as a world leader in retailing books online but due to its diversification to other wide array of products, its focus has shifted. As a result, it’s losing its advantage as a leader in selling books and this can be a disadvantage since some of its competitors have a larger market share in selling other products other than books.
The strategy of Amazon to offer free shipping to its customers however appealing as it seems, can have an effect on the organization’s optimization of cost.
Since Amazon operates in a near zero margin business model, this model has affected its profitability. The company has recorded huge revenues and high volumes, but this has not resulted into meaningful profits for the organization.
Marketing objectives
The marketing objectives of Amazon over the next few years revolve around its products, pricing strategy, distribution services or delivery of products and cutting production cost. The objectives that Amazon has pertaining to its organization’s goals are as follows (Lee & Ju-Yeon, 73-99).
- Steadily increasing the categories of products that it is offering to its customers.
- Increasing its advertisement and public relation activities to attract more customers.
- Lowering its products price and offering services that allow free shipping of products.
- Find ways to reach to its customers even though its business operates mainly on the internet.
Marketing Mix
Marketing mix are a set of marketing tools that an organization uses to achieve its marketing objectives in a particular market. It consists of the 4Ps of marketing namely; product, price, promotion and place (Huang & Rong, 113-132).
Product
When it comes to products, Amazon has a wide variety of products to its customers and this has increased steadily over the past two decades of its operation. The company’s products don’t just involve online retail but also a variety of other products that cater to the market needs. These include; retail service, retail goods, consumer electronics, amazon prime, digital content, amazon dash and video direct.
Amazon has added 28 new product categories since 2007. One way Amazon is increasing its product range is by attracting more and more third party sellers who bring about a wide array of products and sell them on the amazon website. The company has invested hugely on widening its variety over the last two decades and has seen it come from only being recognized as an online book retailer to having a huge array of products. This has seen Amazon’s product range rise above its competitors such as Walmart whereby Walmart has only 7% of the products that Amazon sells. This means that customers visit the Amazon website more compared to the Walmart website.
Price
On pricing objective, the company is more customer focused than profit focused and concentrates on gaining the customers trust. Hence, over the long term, their plan is to be able to sell more and more items to these customers. This strategy is focused on giving the company sustainable profit over the long time even though it means that they will have less profit per item in the short term. The company is focused in retaining customers by selling its products at a low price and even offering free shipping worldwide with the hope that it will retain a lot of these customers. On the long term they will gain a huge customer base and sustainable profit.
Promotion
Amazon communicates to its target market through the means of advertisement. Amazon has affiliate program for website owners in which the owners can earn revenues by advertising Amazon and having corresponding links to its products in the Amazon website. This has widened the company’s market reach. The company applies sales promotion as a strategy to attract more customers as a secondary strategy. Amazon uses public relations by donating a certain amount of its sales to charity which is done through its program Amazon smile. This has strengthened its brand name and has enhanced customer perception about the organization.
Place
Even though Amazon operates its business online, it has continued to expand its methods of reaching to its target customers through various methods. Its official website is the first method that it uses for transacting with its customers. The websites include Audible.com and amazon.com. The company also operates physical bookstores located in Seattle named Amazon Books. This helps with reaching out to customers who prefer to physically evaluate the products. Amazon Web Services (AWS) is another effective method that Amazon reaches out to its customers. This is where holds summits in various locations in order to interact with its customers.
Conclusion
When the companies objectives are met using the marketing activities aligned above, Amazon will benefit greatly by increasing its profit margin which will come as a result of more sales on its products as the number of customers increase. The advertisements and the public relations strategies will give the company a good reputation and enhance the consumer perception about the organization. As the company finds more ways of interacting with its customers such as the Amazon Web Services forum, the company is going to experience an increase in the number of customers. As the variety of product categories increase, more and more customers will be pulled from its competitors to its website hence will reflect positively on sales. Lastly, its price reduction method and the offer of free shipping is a plus to the organization, as it will attract more customers who are price sensitive.
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