Marketing Fundamentals of Amazon: SWOT, PESTLE, Competitor and Consumer Analysis

This report provides a detailed analysis of Amazon's marketing fundamentals including SWOT, PESTLE, competitor and consumer analysis. It also covers the company's target market, positioning, branding strategy and marketing mix.

Amazon
Marketing Fundamentals

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Table of Content
Introduction....................................................................................................................................................................... 3
Company Background.................................................................................................................................................... 3
Situational Analysis......................................................................................................................................................... 4
PESTLE Analysis.......................................................................................................................................................... 4
Political....................................................................................................................................................................... 5
Economical................................................................................................................................................................ 5
Socio-Cultural.......................................................................................................................................................... 5
Technological........................................................................................................................................................... 5
Legal............................................................................................................................................................................ 6
Environmental......................................................................................................................................................... 6
Competitor analysis................................................................................................................................................... 6
Consumer analysis...................................................................................................................................................... 7
SWOT Analysis of Amazon...................................................................................................................................... 8
Strength...................................................................................................................................................................... 8
Weakness................................................................................................................................................................... 9
Opportunity.............................................................................................................................................................. 9
Threats....................................................................................................................................................................... 9
Target Market, Positioning and Branding analysis............................................................................................ 9
Marketing Mix................................................................................................................................................................. 10
Product Strategy....................................................................................................................................................... 10
Pricing Strategy......................................................................................................................................................... 11

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Placement.................................................................................................................................................................... 11
Promotion.................................................................................................................................................................... 11
Relevant Marketing Metrics...................................................................................................................................... 12
Conclusion........................................................................................................................................................................ 12
References........................................................................................................................................................................ 13

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Introduction
Marketing in the simplest terms refers to the activity of the company involved in buying
and selling of goods/products and services to the customers. It encompasses functions
such as promotions, delivery of the goods, advertising, selling, by and large it is how the
company communicates with its target audience to increase the brand awareness as
well the sale of its goods. The growth in digital channels of promotions has given an
impetus to the organization’s marketing goals and helps in having 2 way
communications between the consumers and company.
The aim of the report here is to reflect on the evolution of the marketing concept and
outline the elements of the marketing process. Understanding of the PESTLE framework
will further help in delving deep into the marketing ecosystem. Situational analysis will
focus on SWOT, consumer, competitor analysis. Towards the end the report will focus
on target market, positioning, marketing mix of the organization.

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Company Background
Amazon was founded in the year 1994 by Jeff Bezos at the back of his garage, the
company which was started initially as an online book seller, at present boasts of
millions of products in its inventory. The company’s product offering includes
Consumer electronics, consumer durables, home décor, lifestyle products, home
appliances and many more. Jeff Bezos wants to create a company which can satiate the
needs of all the customers by providing them the exhaustive lists of products to choose
from. The success mantra of Amazon success is its innovative marketing strategy which
is in sync with its customer-centric policy. The company which is located in more than
16 countries ships its products across 188 countries, it takes sustained efforts from the
marketing team to spread a good awareness about the company and push its products
to the consumers (Chaffey & Ellis-Chadwick, 2016).
Amazon uses a combination of both traditional and web 2.0 technologies to give an
impetus to its marketing efforts. Amazon has been effectively using TV, Print, Social
media, Digital media, Billboard and Hoardings to spread a word about the company and
its products.

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Situational Analysis
Situational analysis refers to a collection of methods to analyse the internal and external
environment of the company in order to assess the organizational strategic capabilities,
customers and business environment.
PESTLE Analysis
PESTLE analysis is a macro environmental analysis which helps in assessing the
business of the organization in terms of Political, environmental, social, technological,
legal and economic factors.
Political
Amazon is a global organization; hence there is certain implication over the company
owing to its political forces. Political stability of the country is an opportunity for the
organization, in the similar manner, instability of political is a threat to the organization.
Countries like US, UK, Japan, Germany, India and Moscow are great for the business of
Amazon (Bhasin, 2017).
Economical
The factors which impact Amazon with respect to the economic factors are the
purchasing power parity, economic stability, trade relations and the inflation in the

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economy. Developed and emerging markets are source of opportunity for the
organization (Williams & Posner, 2015).
Socio-Cultural
Internet penetration is a strong contributing factor in the success of the organization,
more so as consumers are able to shop for product by just a click. Increasing wealth of
the customers coupled with increasing consumerism is a growth opportunity for
Amazon. All the more people are getting used to the concept of e-commerce, which
further creates an opportunity for Amazon (Strauss & Frost, 2016).
Technological
Advancement in technology is one of the strong reasons for the growth of the company. Growth
in digital channels and new avenues of social media marketing makes it easier for the product to
reach the consumers. Increasing concerns of data theft is a security concern for the
organization; Amazon thus has to work towards ensuring the safety of the data of its consumers
(Kotler, 2015).
Legal
Amazon has to ensure that it complies with the legal formation of the nation before entering it,
it has to make sure that it does not break and legislation rules imposed by the country. For
example increasing product regulation is good for Amazon as it would reduce the counterfeiting
activities of the cheating sellers (Schmidt, Spann & Zeithammer, 2014).
Environmental
Every nation is moving towards the goal of ensuring and bringing environmental sustainability
in the ecosystem, Amazon has very less contribution in this dimension. The company has to roll
up its sleeves and push up its CSR activity in the direction of environmental sustainability
(Smith, Rupp & Offodile, 2017).
Thus, the analysis of PESTLE framework helps in understanding that Amazon is in a comfortable
situation and just has to follow the rules and regulation of the countries in which it operating,
and in no time the company would attain its vision of business sustainability.

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Competitor analysis
E-commerce is growing at a rapid pace, every day a new company is seen entering the e-
commerce space in order to make a mark and gain a slice of the marketing pie. Major
competitors of Amazon are Walmart, E-Bay and Alibaba; the section will focus on the analysis of
different competitors which gives Amazon sustained key advantage
Particulars Alibaba E-Bay Walmart
Countries of
operation
The largest market is
China, limited to
negligible presence in
US
Present mostly across
US, recently shut
down its Asian
business
The biggest rival of
Amazon has a
presence in mostly all
the parts of world,
although a limited
online presence. It
recently brought
Flipkart to dominate
the growing India
market
Business strategy Gives boast to the
local manufacturers
Initially started off as
the auction store has
now moved onto the
marketplace model
Works on the
inventory model in
most of the countries
owing to its large
retail presence
Revenue US $ 39.98 Billion US $ .95 Billion US $ 50.34 Billion
Product Offering Has an exhaustive
product offering
Limited range of
product offering, the
business is declining
due to increasing
threat from Amazon,
Alibaba and Walmart
Leverages its retail
presence to its
product offering. It
has the largest
product offering out
of all the companies.

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Offline presence None None Yes
Growth Strategy Focussed in China
market, charges less
commission to the
sellers and passes on
the benefits to the
consumers
Focussed in only US
market, and targets
the left over
consumers of
Walmart and Amazon.
Walmart believes in
leveraging its
economies and
economies of scope to
create a position of
sustainable advantage
in the e-commerce
space.
(Source: Baker & Saren, 2016)
Consumer analysis
(Source: Miles, 2018)
There are over 7 billion people in the world and internet has a penetration of over 50%, which
makes it over 3.773 billion people as the active Internet users. Smartphone penetration in the
world stands at 66%, which implies over 4.917 billion people in the world. The rationale for the
above mentioned analysis is to show the large penetration of e-commerce owing (Fukawa &
Swayne, 2016).
Demographics- Buyers at Amazon are both Male and female population over the age of 16
years. The consumers are both urban and rural and Amazon has products catering to lower,
middle and the upper class segment of the population.
Geographical- Amazon has presence in over 16 countries and ships products in more than 188
countries. Thus, it can be said that company has a global presence.
Behavioural- Amazon customers are mostly loyal and switchers, due to high availability of
option the company experience high fluctuation in its buyers. People are mostly occupied,
students, working professionals, retired and family audience.

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Physiographic- The customers of Amazon are mostly millennial who are achiever, explorer,
reformist, savvy and have high aspirations.
Thus, it can be said that major consumers of Amazon product are millennial who fall in to the
age range of 18-35 years. These consumers look for quality product with fast delivery at
reasonable price. Amazon ensures that its offers lighting fast delivery of its product at a
reasonable price. Amazon through its Prime model assures guaranteed delivery of products to
customers in less than 48 hours. Amazon is working on improving its delivery services and
ensuring the quality of products to serve the customers in an excellent manner.
SWOT Analysis of Amazon
SWOT analysis of Amazon helps in understanding the strength and weakness of the
organization which is internal to the organization, and helps in leveraging the opportunity and
stay away from threats posed due to the micro environmental forces.
Strength
 Globally present strong brand image of the organization.
 Experience of over a decade in the industry.
 Fast home delivery and quality of products.
 The product offering of the company is extremely exhaustive.
 Strong relationships with the sellers.
 Leverage of technology to add innovation in its business practices.
 Plethora of home grown products such as Alexa, Fire TV stick.
 Strong presence in US, UK, Europe, Mexico, Japan and India.
 Works on minimum profits and passes down the cost benefit to the consumers.
Weakness
 Strong flak due to its organizational culture.
 Works on lower operating margin.
 Some of the products lines have been dead and not showing any signs of growth.
 Failure of Fire TV stick.
Opportunity
 Projection of the e-commerce industry is far than overwhelming.
 Growth in the online consumers.

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 Growth of other consumer segments.
 Opening up of retail stores to provide better experience to the consumers.
 Tie ups with major player and acquisition and merger strategy.
 Growth of the emerging economies.
Threats
 Online security theft.
 Strong competition from local manufacturers and retailers.
 Growth of Walmart and expansion in the e-commerce sector.
 Threat from FDI and other legal regulation
 Threat due to increasing concerns of the environment.
Target Market, Positioning and Branding analysis
Targeting Strategy- Amazon targeting strategy is through the usage of consumer profiling on
social media. Moreover the company targets consumers through affiliate marketing and makes
customers click on the product link. The profile of the target market comprises both of urban
and rural customers (Kolb, 2016).
Positioning Strategy- Amazon is positioned as the low cost, quality product supplier with fast
delivery. An extension of Amazon’s positioning strategy is its customer centric policies which
make it one of the largest customer focussed company on the planet earth. Thus it can be said
that Amazon is positioned as the reliable quality products provider with great appreciation for
fast deliveries and highest quality of its products (Madsen & Walker, 2015).
Summary of Brand Strategies
Amazon branding strategy is focussed on the pillars of:
 Customer centricity-Jeff Bezos has a vision for the company, to be the most customer
centric company in the world. The company brands its product and the company itself
by revolving
 Wide range of offering- Amazon has millions of products listed on its website, there is
no doubt that Amazon has the largest product offering in comparison to all its
competitors.

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 Sustained innovation- Amazon is an extremely innovative company, it believes in
consistent innovation to push the envelope of its services and business practices to
provide better experience to the customers.
 Faster deliveries-Through the usage of Amazon prime it ensures faster delivery of its
products, which become the focus of its branding strategy.
 Fulfilment centres-In order to give an impetus to its faster delivery, the company is
opening up plethora of Fulfilment centres to ensure the timely delivery of its product.
Company is spending billions of dollars for the same (Rothermel, 2016).
Marketing Mix
Product Strategy
Amazon product strategy is to offer anything to everything a consumer might look to buy from
the portal. Amazon has millions of products on its platform.
Three levels of Products- Core product offering of Amazon is its consumer durable, consumer
electronics, home care products and lifestyle products. Augmented product categories include
Alexa and its Fire TV stick.
Identification of Product Mix- Amazon has high depth and a good width in its product offering.
The company provides almost all the product in a product line of the product and the width
encompasses all the products.
Pricing Strategy
Amazon pricing strategy is low cost leadership. The company here uses penetration pricing
strategy to make it products accessible to a large segment of the population. Amazon ensures
that its prices are lowest in the market in comparison to its competitors. It is due to this cost
leadership Amazon has created a strong global presence in the e-commerce category (Ritala,
Golnam & Wegmann, 2014).
Placement
Amazon sells its goods through its web platform; the company ensures a good traffic on its
website by its excellent promotional strategies. The company has recently opened up one of its
kind Amazon go store, which is a high tech store and does not need the check in and check out

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process. Amazon has a large number of sellers on the platform to which the company charges a
low commission and passes the benefits to its consumers (Balle et. al., 2017).
Promotion
Advertising- Amazon is a market leader when it comes to create interactive and engaging
marketing campaigns o social media, print and TV. The company uses innovative ways to ensure
better engagement on its post creating a good conversion. The company believes in generating a
good Return on Investment on its advertising strategies. The company’s advertising is a highly
dependent on its target market, and the content is in sync with the taste and preference of its
target audience.
Personal Selling & Direct marketing-Amazon does not go forward with the approach of
personnel selling owing to its business model. The company though is partnering with major
corporate house to build its gifting platform in the coming few years.
Sales Promotion-Advertising, event, huge scale sponsorship, billboard, digital marketing and
discount coupons falls into the category of Amazon sales promotion strategy. Doing this Amazon
is able to get a strong traffic on its website and its customer indulges into impulse and careful
buying.
Public Relations- Amazon has a clean reputation in the market, barring a few incidents of tax
evasion and other environmental issues. The company on a regular basis shares through events
communicates its future business strategy and how will it help in the development of the global
economy. Strong PR has helped Amazon in driving a good brand image.
Digital marketing- Also called as affiliate marketing and Amazon through Google search engine
platform ties up with plethora of networks to display its advertisement on their webpage. The
webpage is chosen according to the profiling of its customer audience which is a reflection of its
programmatic buying.
Relevant Marketing Metrics
CPM-Cost Per Impressions – This is one of the most useful metric used by Amazon. It is
measured by number of times the ad is shown to the consumer on the digital and social media
platforms.

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CPC-Cost per click, it is another useful digital media metric which helps in finding the actual
cost incurred by Amazon in its marketing effort to get a click from the consumers (Zhu & Furr,
2016).
Reach- This is the metric which helps in finding the reach of the advertising campaign, it
demonstrates to how many people the advertisement or the marketing campaign have been
reached.
Conclusion
Marketing has evolved over the last decade; the use and growth of immersive media have made
it easier for the marketers to achieve a deeper penetration of its marketing campaign as well to
achieve a good return on the Investment. Amazon which is the e-commerce behemoth uses both
the web 2.0 technology and traditional advertising to increase the brand awareness and push
the sales of its products. Amazon uses PESTLE framework to assess its macro environment and
uses competitive landscape to understand the strategies and focus of its competitors. The
company no doubt plays its cards really well when it comes to assessing its market and creating
marketing strategies.
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