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Amazons Marketing Plan
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Executive Summary
The amazon company has been in operation for the last 25 years since its core founder began it
in the year 1993. For the last 25 years, Amazon has been in business; the company shares have
moved from a $1.5 share value at the end of the fiscal year 1997 -1998 to $3500 share value at
the end of the third quarter of the 2019-2020 financial years. According to Dayton (2019), 2018,
statistics claims that Amazon Company hit a 49% market share a 5% share of the market for all
retail spent across the country (Cho,2019). This is more than the company's top three
competitor's combines together in the USA market. The same year the company had at least 197
million visitors every month. Amazon Company has one strategic goal to seamlessly link the
digital and brick-and-mortar shopping experience to be part of every single purchase made. The
company believes in a culture where it's not about selling the goods' quantity and being part of
the customers. They sell their products daily. Amazon's relevance continues as many people
continue being accustomed to the internet globally. The ease at which people can order whatever
they want and get them delivered at their doorstep has continued to ensure that people find the
company's services an essential part of society.
Company Analysis
Amazon Company has been in business since the late years of the 20th century. The company has
hit a value of $1trillion in just under 25 years of existence. The company began as an online
book store in 1994 but has gradually transformed into a retail e-commerce giant worldwide. For
the year ending 2020, the company has seen its share skyrocket and hits its all-time high of
$3000 in the market (Cho,2019).
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The gradual success of Amazon Company has been mainly because of the type of culture
cultivated in the company. The company is customer-oriented, and that the main aim is to ensure
that not only is does it makes sales to its customer but also the customer is happy and contented
with its services. Thus, an employee working for amazon is required from them to meet the
quality requirements and satisfy all the amazon customers.
The company continues to lead in technology innovation and practices that have been the
primary reason the company remains in this competitive market. The invention of devices such
as the Echo fetched the company $22 million dales in 2017 alone (Cho,2019). The company
has an excellent customer services department. The company will literary attend to anyone at any
time of the day from whatever platform they use in less than an hour. This makes it easy to get
issues solved immediately, making the company the most trusted company online.
Market Analysis
Amazon operates in a monopolistic competition where its main consumer of its product is people
who are more conversant with the internet technology. The estimated value of the amazon
market is around 300 million visitors and 100 million subscribers at the company (Cho,
2019). The potential for the company is quiet vast given that in USA 87% are able to use the
internet without any challenges while the 49% of the global population are also internet users.
Hence and because the company has only 300 million compared to the world population that is
around 3 bilion the company has a potential to expand its online dominance in the eccommerce
bussiness.
The company is not well established in major developing nation such as nations in Africa and
Asia. These nations could be potential market that the ecommerce bussiness could thrive and
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with no much competition in this regions. The demands for online eccomerce continue to
increases due to advantages that come with online shopping. Mostly, in the wake of pandemic
many people have resolved in getting their household products and other commodities in order to
avoid overcrowding in the market increasing the demand for the online ecommerce services.
Competitor analysis
Twalmart is one of the fast growing ecommerce giant in the United States. Walmart has been the
one of the major competitot in the USA market making it hard for Amazon Company. In 2018,
the rsing ecommerce giant registered a 43% increase in its online sales. Considering that amazon
has been the dorminant company in this sector this increase in online sale for the walmart is
worrying for amazon since it means that the walmart is winning customers online and with time
the company will be able to get a considerable share in the onlin market.
Apart from the local competition amazon is getting fiercer competition from the china
ecommerce giants such as alibaba.Com and JD.com. The company has literally been removed
forom the Chinese market where is 2012 it commanded a market share iof 15% but as at 2019
the retail giant can only command 1% market value. More online eccomerce company continue
to venture in the bussiness and the, market competition continue to rise on every dawn.
Industry Analysis
The ecommerce market was valued at $9.09trilion at the end of 2019 and it is anticipated that it
will grow further in the coming years. The growth rate is expected to be at 14.7% from 2020 to
2027. With increased accessibility to the internet in major parts of the globe and the
manufactering of cheap smartphones has ensured that people are able to access the internet at
ease.
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The increase in the number of small-scale e-commerce is expected to rise in the years to come.
The small and medium scale e-commerce bussinesses are expected to increase the demand for
the ecommerce services since they can access regions that giant companies have not addressed or
are unwilling to venture. Furthermore, in these times of the pandemic, the brick and motar shop
have been closed in many regions prompting a spike in demand for eCommerce services.
Customer Analysis
Majority of customers in the amazons company are normal customers who are able to use
internet properly. The customers are from all over the globe and need their products shipped to
their country of residence. The ecommerce bussiness is an important one since it allows people
to continue with their day to day chores without much worries of having to schedule a market
trip or shopping trip.
The customers are in dire need of a means to get products at home at a cost effective manner.
One cost that makes customers products expensive is communtor fee to the market. hence with
this communtora fee taken away by the amazon company the products and services that a person
purchases are lessexpensive compared to if they had commutted themselves. Another issues is
time cosciousness in that a person needs a product immediately and they are somewhere they
cannot be allowed to go and buy. Hence, a person orders for these products online.
Swot Analysis
Amazons strength-internal strategic factors
Amazon has a strong brand name that attracts customers all around the globe. At the end of the
2019 fiscal year, its brand value was ranked at $125 billion, just slightly behind apple and google
in the market. Furthermore, the company is customer-oriented in that it aims to give customers
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the best possible services at an inexpensive cost making it readily available to everyone in the
market.
Amazon does not incur any storage cost because it sells everything online. Amazon has ensured
that all the services are online, and thus the cost of running a store is not part of the company's
expense. To offer its services worldwide, the company has formed several strategic allies who
maintain a low-cost structure. The company has also contracted many third-party sellers who
help the company sell the company's products. This third-party merchandise sells products they
own through the amazon company. Amazon sells nearly 2billion merchandise yearly to third
party customers.
The company has not seized in acquiring an upcoming company that the company deems
important or adds a competitive edge. The company knows that the only way to remain
competitive in the market is to make sure that the company can tap into new talents and
technology only found in startups. The acquisition of whole foods was a good strategic move for
the company since now amazon can deliver vegetables and other highly perishable goods in the
market since they have a store to keep them.
The company is not limited to online retail and wholesale sales. The company is not dependant
on revenue from just sales of commodities but also has other tow branches of amazon; amazon
prime that allows Amazon customers to access some extra benefits such as listening and
streaming music throughout their amazon prime account, amazon web services: a subsidiary of
Amazon providing on-demand cloud computing platforms and APIs to individuals, companies,
and government.
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Amazon is one of the few companies in the market that pay their workers a minimum payment of
$15 per hour. Motivation and engagement of workers to a company are fundamental to the
quality of services that an employee will offer the company. Hence, Amazon Company values its
workers and understands that giving its workers competitive pays will motivate them to give
their best.
Amazons weakness- internal strategic factors
Even though Amazon Company is one of the best in what it does, it's not short of weakness. The
company's mode of business is susceptible to imitation in the market. Recently the online retail
business has skyrocketed, and many companies have ventured into the business. Amazon web
services face stiff competition for the market as newcomers such as Netflix give the company a
headache after taking quite a sizeable share of the market that amazon web services have
enjoyed.
Tax Scandals that have left the Amazon company public image jeopardized. Amazon has been
accused of evading paying taxes in countries such as Japan U.K., and the U.S. This affects the
company's image negatively, which results in the loss of the company's share value in the
market. This also scares away potential investors from the company. Another weakness in
Amazon Company is only an online sales retailer and has no physical store that would be used to
sell products that are otherwise not sellable online.
The company's third-party sellers have increased significantly in recent times, making it hard for
Amazon to vet each product sold in its platform and guarantee its customer the highest safety.
This is increasingly worrying because recently, the company has had issues with an order from
the environmental protection agency to remove all the pesticides and unsafe products from its
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platform. The company is also too dependant on distributors. It exposes amazon to unseen issues
such as leading distributors leveraging their position to renegotiate terms, which might cause the
company to lose a lot of money.
Amazons opportunities-external strategic factors
Amazon Company can venture into the developing markets that have not been appropriately
addressed by the available online retailers. The company has sufficient funds, and the company's
brand has established itself as the most reliable and trusted online retailer globally. For this
reason, the transition to these markets would not be that challenging.
The company can change its policies to detect counterfeit products that may be sold via its
platform. Counterfeit products are quality products than the actual product. They may affect the
customers who purchased the product since they may never come back again, mostly when they
have had experience with the original product. Plus, the buyers do not even know that the third
party sellers were responsible and will only assume its amazon's products.
The company has a strategic advantage that many companies require funding, abundant in
Amazon's Company. Hence acquisition is an opportunity that they have to use to increase the
company's competitive edge in the market. Also, the acquisition allows the company to tap into
the new upcoming technologies.
Amazons threats
Amazon has been linked with exploitative labor. The company has been scrutinized for the
number of hours workers have to work and amazon's intensity. Hence, this exposes the amazon
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company to economic, reputational, and legal risks. Amazon Company is an online company that
operates online and makes the company susceptible to cybercriminal activities.
Amazon is susceptible to counterfeit goods being traded on the platform. At times, Amazon's
website is overwhelmed with a wide range of products that may not be easy to determine its
safety and authenticity. For this reason, many products may be sold on amazon.Com without the
knowledge of the company.
Economic prowess in society determines Amazon sales. In economic depressions where people
are spending less or have less to spend, Amazon will also be hit by this because people won't be
trading in the company. The company is also vulnerable to fake reviews that only increase the
authenticity of a product on amazon's website and increase sales since customers rely on reviews
from prior customers. However, some products are counterfeits and end up tarnishing the
reputation of the company. The company is also susceptible to government regulations that may
hinder its work for this reason, and the company does not ship in countries such as Cuba or
Sudan.
Marketing Objective and Goal
Marketing has goals and objectives to ensure that a company can maintain and gain more
customers. The marketing department's primary goal is to get sufficient data from the customer's
feedback, increase traffic to the company's website and sales (Taplin,2017). This data helps a
company to get adequate information about the customer are saying about amazon's service. This
would allow the company to adjust accordingly to make sure that they give the best.
Marketing strategy
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The company plans to fund more on the social media platforms adverts since they have the
highest number of visitors on a daily basis.however, the company still needs to use the amazon
affiliate program in order to target people who could generate a better trafick towards the
company’s websites.Google ads and emails ads will aslo be implemented to also boast that
company’s chances of having high engagement rate in this platforms.
Target Marketing and Positioning
Amazon Company has three positioning strategies in the market. The first is the multisegmented
positioning, where the company offers a wide range of products on its website for the customer
to choose from. This makes them ideal to many customers since they are almost sure that they
will get the services or good they want from the platform. Second positioning is adaptive
positioning where Amazon Company closely monitors changes in the external marketplace and
addresses increasing customer expectations by periodically repositioning of products and
services according to changes in the segment. Lastly, is the Anticipatory positioning where
Amazon place itself in a market position will low turnover rate in the belief that shortly the
turnover rate will increase (Amazon Segmentation, Targeting and Positioning: Widest Range of
Target Customer Segment - Research-Methodology, 2020).
The company will have all its company’s marketing strategies commence the coming year after
1st January 2021. The company will utilize online advertisements and the mode of advertising
that will be afforded more funds will be the social, media advertisement and google ads.
However, an affiliated advertisement will not be neglected, but limited funds will be available
for this advertisement mode. The pricing of the product will also need to be considered during
these years. The price may be adjusted a bit lower to attract more customers given the emergence
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of new competitors in the market. The display of items in the website will also be reconsidered
given that not all detail has been displayed in recent days and this is affecting the decision of our
customer when they lack details they deem crucial before they buy.
Hr Plan
The human resources are key nto any marketing strategy in an organization. The qualtiy of a
products isn the best way to advertise it in the, market. Hence having a good HR will ensure that
a company has its workers more happy and engaged and thus giving the best products that give
their best to the company and hence quality products are realized. This helps to maintain and
attract more customers to the company.
Financial analysis
Amazons financial analysis indicated that the companyis headed in the right direction. At the end
of the year 2019 the debt to equity ration was at a value of 0.36. The ratio indicated that the
company equity are able to pay the value of the company’s debt.the total return on equity was
also recorded at a value of 17.31%, indicating that the company generates an return of $17.31
for every single share invested in the company (Kadim,et al, 2020). The price per earning
growth also recorde a value of 4.96 in the year , indicating that value of the company’sd stock is
slightly overvalued.
Risk assessments
The brand name amazon is not going to lose its value overnight and however. Amazon Company
has an issue with the changes in technology that may affect the types of risks available in the
market. But Amazon is among company’s that have always been the best spotting any change in
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the market and thus changes in technology may not have major effects to the company.Consumer
trend is one risk that worries many companies since it is not predictable and it not detectable
with easily. This trend leaves a lot of companies and organizations in trouble since they end
having low inventory turnover rate, and lots of money is lost are lost in marketing these absolute
products.
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References
Amazon Segmentation, Targeting and Positioning: Widest Range of Target Customer Segment Research-Methodology. (2020, March 29). Retrieved December 13, 2020, from
https://research-methodology.net/amazon-segmentation-targeting-positioning-widestrange-target-customer-segment-2/
Chernev, A. (2020). The marketing plan handbook. Cerebellum Press.
Cho, J. (2019). Amazon. com, Inc.
Kadim, A., Sunardi, N., & Husain, T. (2020). The modeling firm's value based on financial
ratios, intellectual capital and dividend policy. Accounting, 6(5), 859-870.
Majed, S. Z., Nuraddin, S. H., & Hama, S. V. S. (2018). Analyzing the amazon success
strategies. Journal of process management. New Technologies, 6(4), 65-69.
Taplin, J. (2017). Move fast and break things: How Facebook, Google, and Amazon have
cornered culture and what it means for all of us. Pan Macmillan.