Marketing Analysis: Amazon's Strategies and Market Performance

This report provides an in-depth analysis of Amazon's marketing strategies, focusing on its executive summary, situation analysis, industry overview, market segmentation, and market mix. The analysis covers Amazon's position in the e-commerce industry, its revenue, and its diverse product offerings,...Read More

Contents
Executive Summary.....................................................................................................................................2
Situation Analysis........................................................................................................................................3
Industry Overview and Sector Description..............................................................................................3
Segment Information..................................................................................................................................6
Market Mix..................................................................................................................................................7
Product Strategy......................................................................................................................................7
Refrences.....................................................................................................................................................9

Executive Summary
Launched in 1994 by Jeff Bezos, Amazon.com is a worldwide leader in the E-Commerce industry. Jeff
Bezos started his business by selling books from his garage. And every time a book gets sold-out, a bell
used to ring. Today Amazon has more than 12000 Employees worldwide. Amazon is the largest internet
seller in the world by its market capitalization and total sales. (Jopson, 2011)
According to fortune 500, Amazon's revenue is $135987 Million – with the profit of $2371 Million. Till
2016 Amazon was able to sell everything: Drones (Prime Air Pregame), convenience store (Amazon Go
chain) and Artificial Intelligence (Alexa Assistant). The company is in the Fortune 500 since 16 years and
gaining its popularity day by day. The main concept of Amazon to earn is: Company used to take a small
percentage of the selling price of products on the website. Hence, allowing its every merchant and brand
to sell their products on the website by giving a little percentage of shares to Amazon. (Fortune 500
Amazon, 2016)
Figure 1Amazon Fortune 500 History
Amazon mainly uses Demographic and Physiographic segmentation for segmenting the market.
Company’s segmentation market is based on purchase behavior, not based on what people were interested

in and what they did in the end. This segmentation marketing helps Amazon to target individual buyer,
converting them into long term and high-value customers. (Sayyed, 2016)
Amazon has adopted an approach of almost-in-time delivery. (Hottovy, 2011). The main objective of the
company is to provide great customer based services and a platform from where anything can be bought
with the help of internet and give priorities to shoppers using techniques. In America, only Amazon has
more than 55 centers for distribution in North America. (Mwpvl.com, 2016)
Situation Analysis
Industry Overview and Sector Description
According to Forbes, E-commerce industry has gained popularity in since few year, the boom in
e-commerce is due to digitalization of Countries and increasing demand in online shopping.
Online shopping is growing and will reach 8.8% of total retail spending in 2018. (Saleh, 2017)
U.K is the country having highest e-commerce sales with 15.6% followed by China 13.8 and
Norway 11.5% (Khalid, 2017). People are not having time so they prefer online markets for their
buying requirement.
Amazon serves three main segments: consumers, sellers, and developers. And here their purpose
is solved by servicing a large number of consumers through their wide range of products using
large seller database. The company is looking forward to developing new warehouse using

aggressive strategy to ease the delivery of products. The company is looking forward to serving
more consumers due to gaining popularity of E-Commerce shopping since a couple of years
especially in Asian countries like India. (Timmers, 1999)
According to a survey by Forrester Research Online Retail Forecast online retail has grown to a
review of $370 in 2017 from $213 in 2012. And according to it 58% Americans shopped online
in the year 2016 out of which 20.3% were aged less than 15 years. This is really a revolution in
internet market as well good stats for Amazon to work on.
According to Remarkety Top 3 Ecommerce markets according to global sales, trends and
statistics are in China, U.S, and U.K

In 2016, Amazon captures more than half of the online e commerce market according to
the CNBC (Gustafson, 2016) and this all happened because of high-speed delivery with an
average delivery speed of 3.4 Days

Segment Information
The company has divided their operation into principal segments which are North
America and International.
North America: This segment consists of those amounts which are earned from retail
sales of products and subscription by North Americans on Amazon’s domain like
www.amazon.com and www.amazon.ca.

International: This segment includes the earning from retail sales of products and
subscription from the consumer worldwide and includes Amazon’s domain like www.amazon.in,
www.amazon.fr and much more. (Ryan, 2016)
Segmentation, positioning, and targeting is known as tactical methods in marketing
(S.T.P) and is most used marketing strategies applied.
Another three main segments of Amazon are consumers, sellers, and developers.
Consumer: The Company serves consumer through its retail website like amazon.com,
Amazon.in etc where consumer orders their product and the order is sent to the seller account.
Sellers: Company serves its seller through seller account where they used to receive
orders from customers.
Developers: Amazon also provides a platform to developers like Amazon cloud and
Amazon web services.
Market Mix
Product Strategy
Amazon has a huge product range in every category.
 Mobile & Tablets
 Laptops
 DVDs
 Kindle
 Gaming Consoles
 Accessories & Apparels
 Gardening Equipment

Amazon started its journey from selling books from a garage and till 2017 Amazon is the highest book
seller in the world. This was the reason for the birth of Kindle. Kindle is an E-Book reading device
brought to by Amazon and this is the reason a new revolution of eBooks came leaving behind the era of
Hard Papers. After the heavy success of Kindle, Amazon brought a new tablet for its consumer named as
Kindle Fire.
Just recently Amazon launched TV and film streaming service Amazon Prime and a new competitor of
NetFlix. This tells how much Amazon is working on its product strategy with the help of technology and
developers. Here is the list of services offered by Amazon currently :
 Retail Service
 Amazon Prime
 Electronics
 Retail Goods
 Digital Content
 Amazon Web Services
 Amazon Video
 Amazon Publishing
 Amazon Fresh
 Amazon Prime Pantry
 Amazon Dash
 Video Direct
This indicates how much effort Amazon is applying in its Product Mix. (Strauss)

Refrences
Fortune 500 Amazon. (2016). Retrieved from Fortune 500: http://fortune.com/fortune500/amazon-
com/
Gustafson, K. (2016). Retail | Amazon captured more than half of all online sales growth last year, new
data shows. Retrieved from CNBC: https://www.cnbc.com/2017/02/01/amazon-captured-more-than-
half-of-all-online-sales-growth-last-year.html
Hottovy, R. (2011). Amazon.com AMZN hare stock focus. 8-9.
Jopson, B. (2011). Amazon urges California referendum on online tax. Financial Times .
Khalid. (2017). Global Online Retail Spending – Statistics and Trends. Retrieved from invescp:
https://www.invespcro.com/blog/global-online-retail-spending-statistics-and-trends/
Mwpvl.com. (2016). Retrieved from Mwpvl.com
Ryan. (2016). Understanding digital marketing: marketing strategies for engaging the digital generation.
Kogan Page Publishers.
Saleh, K. (2017). Global Online Retail Spending – Statistics and Trends. Retrieved from Invescp:
https://www.invespcro.com/blog/global-online-retail-spending-statistics-and-trends/
Sayyed, A. (2016). Strategic Marketing. A Live Case Study on Amazon Marketing. Girin .
Strauss. E-marketing. Routledge.
Timmers. (1999). Electronic commerce. John Wiley & Sons.