Marketing Strategies of Amazon Australia

The report discusses the marketing strategies used by Amazon Australia since its inception and suggests new strategies to increase revenue and market share. It includes an overview of the company, its mission and vision, and analyses the STP strategy, marketing mix, BCG matrix, distribution strategy, brand equity, and competitive study. The report also suggests leveraging existing users, using smart technology and database, associating with local suppliers, and influencing the market through different processes to increase customer base. It further recommends improvising existing marketing strategies by including personalized e-mails, incentivizing reviews, offering reward systems, and improving video streaming quality.

Assignment 2: Report (on Amazon Australia)
1 | P a g e

Executive summary
The research is based on the marketing strategies used by Amazon in the Australian market.
Some of the primary marketing strategies are discussed in connection to the company.
Amazon has already been successful in penetrating the Australian market. However, the
company needs to increase its revenue in Australia. Therefore, the marketing strategies that
the company can still incorporate to improve its service are also discussed in the research.
Besides, Amazon Australia can also strengthen its existing approach to cater to the need of
the Australian customers. To understand how Amazon works, the mission and vision of
Amazon are mentioned along with the overview of the company.
2 | P a g e

Table of content
Introduction:...............................................................................................................................4
Company Overview:..................................................................................................................4
Marketing Analysis....................................................................................................................4
1.0 The Nature of Amazon Australia’s Marketing Strategy or Strategies since it began..........4
1.1 STP strategy:....................................................................................................................5
1.2 Marketing Mix:.................................................................................................................5
1.3 BCG Matrix:.....................................................................................................................5
1.4 Distribution strategy:........................................................................................................6
1.5 Brand equity:....................................................................................................................6
1.6 Competitive study in the marketing strategy:...................................................................6
2.0 Strategic Marketing Options for Amazon Australia moving forward............................6
2.1 The reason behind Amazon targeting the Australian market:..........................................7
2.2 Marketing strategies that will increase the customer base for Amazon Australia:..........7
2.3 Improvising existing marketing strategies of Amazon for catering the Australian market
................................................................................................................................................8
Conclusion:................................................................................................................................8
Reference list:.............................................................................................................................9
3 | P a g e

Introduction:
The following research focuses on the marketing strategies that Amazon Australia used since
it started its business in Australia. Theoretical approaches have been used to understand the
relevant marketing strategies. Besides, the marketing strategies that the company can use in
the future have also been discussed in the following research.
Company overview:
Amazon.com, Inc. is an electronic commerce company based in America. Jeff Bezos. The
CEO and founder of Amazon started his business in 1994. Currently, Amazon is the world’s
largest internet retailer. Headquarters of the company is in Seattle, Washington. Although
Amazon started as an online retailing business, now it also produces electronic devices such
as Kindle, Fire Tablets, Echo etc. Amazon entered the Australian market in the year 2013.
The company has more than 5 million employees worldwide. The mission of the company is
to offer affordable products to the customers, and the vision of Amazon is to use
technological advancement to fulfil the customer requirements.
Image: Amazon Logo
Source: (Amazon.com.au, 2018)
4 | P a g e

Marketing Analysis
1.0 The Nature of Amazon Australia’s Marketing Strategy or Strategies since it began.
Amazon entered the Australian market to expand its business in Oceania. Initially, the
company offered apparels, kitchen items, books, health and beauty products etc. However,
the company has also mentioned that it will provide fresh food items on their websites as well
(The Financial Express, 2018).
1.1 STP strategy:
Amazon is not only one of the world's largest e-commerce websites, but it also has an
international presence. Therefore, the company uses STP strategy for its marketing purpose.
To segment the market, Amazon Australia follows psychographic and demographic
segmentation. The segmentation of Amazon Australia is based on the purchase behaviour of
the customers. The company targets each of the customers through their search history and
purchase history. The target market of Amazon Australia is the high-income and middle-
income group of people who have their certain buying preferences. Thus, the company can
position itself and the products to fulfil the requirements of each of the customers even if
they reside in the remote areas (Li, 2017).
1.2 Marketing Mix:
Amazon started to offer its service in Australia from 2013. The company has a huge range of
products such as books, electronic gadgets, household items, apparels etc. provided by many
vendors through the website. The customers can either view the site or open the mobile
application to browse through the available products, which are delivered to them once they
place an order. Amazon Australia has placed itself as one of the most trusted e-commerce
websites. It has an R&D team that keeps the customer information secure. In order to
promote its service in Australia, Amazon has used television ads, billboards, social media
5 | P a g e

platforms as its promotional tools (Datta et al. 2017). The pricing strategy of the company is
competitive. Both affordable and expensive products are available through the website.
Besides, the customers can also opt form Amazon Prime, which allows the products to be
delivered faster.
1.3 BCG Matrix:
Some of the businesses has been cash cows for Amazon Australia as per the BCG Matrix.
Amazon Prime, its on-demand movies, Alexa, Web store etc are the cash cows for the
company as these generate maximum revenue. On the other hand, video on demand, Kindle
etc are among the question marks on the BCG Matrix as these services have low demand
(Suksantilap et al. 2017). The star products for Amazon Australia on the BCG Matrix are the
products that have a higher rate of growth and high market share as well. These are E-Books,
electronic items etc that have high demand.
1.4 Distribution strategy:
Initially, Amazon shipped the products from USA to Australia. However, the company soon
realized that the company can increase its sales through quick delivery. Therefore, Amazon
Australia has focused to improve its distribution strategy. Amazon Australia has increased the
number of distribution centres and warehouses to cater to the need of the customers as well as
offer employment (Wahlquist, 2018). Besides, the structured network of the company allows
customers in remote areas to purchase products of their choice. The distribution strategy of
Amazon Australia allows the customers to avail free delivery service by making a minimum
amount of purchase.
1.5 Brand equity:
Amazon started its business as an e-book provider. However, the company has steadily
increased its market value through brand equity. Amazon Australia has spent quite a large
6 | P a g e

amount of money in promoting the brand. Besides, the company has also allowed trusted
vendors to work with Amazon Australia in order to maintain the brand equity. According to
the Forbes list, Amazon is one of the most valuable brands in 2017 (Forbes.com, 2018). 55%
of its customers return to the online website for purchasing products of different range.
1.6 Competitive study in the marketing strategy:
As Amazon Australia has catered to different types of needs, the competitors of the company
will change based on the business sectors. Amazon faces stiff competition from Apple when
it comes to providing e-books, movies or audio-books. In terms of providing web service,
Google is the main competitor of Amazon Australia. Woolworths is the biggest competitor of
Amazon Australia with its huge online retail option. Other emerging e-commerce companies
like The Iconic, BigW, JB HiFi etc have also increased the competition for Amazon
Australia.
2.0 Strategic Marketing Options for Amazon Australia moving forward
Since Amazon launched its web services in Australia in 2013, the company has applied many
marketing strategies to enter the market and establish itself as one of the leading companies.
Although Amazon Australia has a competitive edge, the company now wants to increase its
revenue and market share in Australia.
2.1 The reason behind Amazon targeting the Australian market:
According to a study, almost 65% of the Australian population shops online (Forbes.com,
2018). Thus, Australia is a promising market for e-commerce companies like Amazon.
Australia has a steady economy, and the internet is also accessible to a large number of
people. As the e-commerce market is growing in Australia, Amazon has a huge chance of
increasing its sales as well. These are the reasons that Amazon is targeting to improve its
7 | P a g e

service in Australia. To get hold of the Australian market and retain customers, Amazon
Australia must incorporate some new marketing strategies along with the older ones.
2.2 Marketing strategies that will increase the customer base for Amazon Australia:
Amazon has already entered the Australian market, and it is now trying to expand its business
in Australia. Currently, Amazon earns revenue of 500 million AUD to 700 million AUD
annually. Although the income is a fraction of Amazon's 220 Billion AUD yearly revenue,
Amazon is looking forward to increasing the sales.
Leveraging the existing users:
Generally, the users of Amazon Australia keep revisiting the website, and they have a good
relationship with Amazon. Therefore, Amazon Australia can utilise these existing users to
penetrate the market even more. Using the STP marketing strategy, Amazon can position its
products (Michael et al. 2015).
Using the smart technology and database:
Amazon has used the knowledge and data about the customers to influence their purchase
behaviour. This can be a great way to attract the Australian customers as well. Using smart
technology Amazon Australia can keep track of products purchased by every individual
customer. Thus, the company can target each of them as per their needs.
Associating with the local suppliers:
If the customers can buy products from the local vendors, they will not use Amazon.
Therefore, Amazon must associate itself with the local suppliers. Apart from shipping
international products to Australia, Amazon Australia should also supply local products to
encourage customers and suppliers to use the platform for business (Business Insider
Australia, 2018).
Influencing the market through different processes:
8 | P a g e

Amazon has developed business models for getting hold of a market. Similarly, Amazon can
increase the amount of capital for the forward progress of the company. As mentioned
earlier, Amazon is a Big Data company that can utilise the customer data to cater to the
customers as per their requirements. If Amazon Australia wants to become successful, it must
focus on improving the supply-chain management as this can create new opportunities for
the company (Ireckon, 2018). Amazon Australia should create awareness among the
customers about the competitive pricing that the website offers. Using the innovative
approaches such as drone delivery, faster delivery through Amazon Prime subscription etc.
can also increase the customer base of the company.
2.3 Improvising existing marketing strategies of Amazon for catering to the Australian
market
Amazon Australia has become successful because of its user-centric approach and efficient
application of the marketing strategies. However, the company must improvise its existing
marketing strategies to improve its place in the Australian market. Amazon follows e-mail
marketing since the beginning, and it creates awareness among the users about any offers
(Forbes.com, 2018). Generally, these e-mails show similar products that the customers have
purchased. However, to encourage the customers to purchase more, the e-mails from Amazon
must include products that are connected to the purchase history of the customers. Reviews
and ratings are very important as most of the customers buy a product only after going
through the reviews and ratings. Amazon can encourage the customers to write honest
reviews by paying them a small amount of incentive. To increase customer loyalty, Amazon
Australia can offer some reward system based on their purchases. Even if the users share
videos or use hashtags to share photos of Amazon or refer their friends and family to use the
website, they should be awarded as well. The online video streaming option that Amazon
9 | P a g e

has recently started to offer is a good venture. The quality of the videos should be high
resolution for better experience of the customers.
Conclusion:
As it can be seen from the study above, Amazon Australia has already penetrated the
Australian market successfully. However, as the company has been facing issues to compete
with the local vendors as well as the local e-commerce websites and retailers, the company
must improve its marketing strategies. Along with the tried and tested strategies, the company
must include some new marketing strategies that will ensure the growth of Amazon in
Australia.
10 | P a g e

Reference list:
Amazon.com.au. (2018). Amazon.com.au: Shop online for Electronics, Apparel, Toys,
Books, DVDs & more. [online] Available at: https://www.amazon.com.au/ [Accessed 22 Sep.
2018].
Business Insider Australia. (2018). Amazon is quietly building a supplier network for direct
sales in Australia. [online] Available at: https://www.businessinsider.com.au/amazon-is-
quietly-building-a-supplier-network-for-direct-sales-in-australia-2017-11 [Accessed 22 Sep.
2018].
Datta, H., Ailawadi, K.L. and van Heerde, H.J., 2017. How well does consumer-based brand
equity align with sales-based brand equity and marketing-mix response?. Journal of
Marketing, 81(3), pp.1-20.
Forbes.com. (2018). [online] Available at:
https://www.forbes.com/sites/forbespr/2017/05/23/forbes-releases-seventh-annual-worlds-
most-valuable-brands-list/#71cac87d5b55 [Accessed 22 Sep. 2018].
Forbes.com. (2018). [online] Available at:
https://www.forbes.com/sites/theyec/2015/04/03/email-marketing-strategies-you-can-borrow-
from-billion-dollar-e-commerce-giants/#6dcc7c2629e8 [Accessed 22 Sep. 2018].
Forbes.com. (2018). [online] Available at:
https://www.forbes.com/sites/greatspeculations/2017/05/09/heres-why-amazon-is-expanding-
in-australia/#12a745cf1043 [Accessed 22 Sep. 2018].
11 | P a g e

Ireckon. (2018). What is the Amazon Australia threat and what to do about it? - Ireckon.
[online] Available at: https://www.ireckon.com/customer-experience/amazon-australia-threat/
[Accessed 22 Sep. 2018].
Li, J.J., 2017. Rational Thinking of the Marketing Strategy Based on Customer Equity. In
Proceedings of the 23rd International Conference on Industrial Engineering and Engineering
Management 2016 (pp. 69-73). Atlantis Press, Paris.
Michael, E.P.I., Lanza, J.B. and Indriolo, J.A., SocialSign. In, Inc., 2015. Leveraging online
identities to grant access to private networks. U.S. Patent 9,178,883.
Suksantilap, P., Leelasantitham, A. and Glesner, M., 2017. A Survey of Demand Factors
Utilized in the Facial Surgery Service Business Using BCG Matrix. INTERNATIONAL
JOURNAL OF APPLIED, 10(2), pp.124
The Financial Express. (2018). Online retail giant Amazon enters Australian market. [online]
Available at: https://www.financialexpress.com/industry/online-retail-giant-amazon-enters-
australian-market/961120/ [Accessed 22 Sep. 2018].
Wahlquist, C. (2018). Amazon expands in Australia and plans huge warehouse. [online] the
Guardian. Available at: https://www.theguardian.com/technology/2017/apr/20/amazon-
expands-in-australia-and-plans-huge-warehouse [Accessed 22 Sep. 2018].
12 | P a g e