Marketing Analysis of Amazon

This report analyzes the market structure and strategies of Amazon, including marketing mix, differentiation, segmentation, targeting, and positioning. It also discusses internet marketing, pricing, branding, and stakeholder management.

Running head: MARKETING ANALYSIS
MARKETING ANALYSIS
Name of the Student
Name of the University
Author Note

MARKETING ANALYSIS
Executive Summary
The purpose of this report is to analyse the detailed market structure and pattern of Amazon,
which is an e-commerce giant. The market analysis that has been conducted consists the
concepts of the marketing mix, the differentiation of the product, segmentation, targeting and
positioning of a product and several other pricing, costing and branding strategies. The
internet marketing tools, supply chain management and customer relationship of the company
has also been assessed. The important stakeholders of the organisation has been identified
and how the company can benefit them has been discussed in this report. The project is
concluded by analysis of the marketing structure that has inferred the strong customer centric
approach and the competitive advantage of the company in today’s complex competitive
market.

MARKETING ANALYSIS
Table of Contents
Introduction................................................................................................................................4
Discussion..................................................................................................................................4
Marketing mix........................................................................................................................5
The P’s of marketing mix...................................................................................................5
The C’s of marketing mix..................................................................................................6
Differentiation and competitive advantage............................................................................8
Commoditisation and Total Product & Solution Offering.....................................................8
Segmentation, targeting and positioning................................................................................9
Managing the service element..............................................................................................11
Experiential Marketing, Customer Relations and Experience Management.......................11
Use of internet marketing.....................................................................................................12
Pricing and cost structure.....................................................................................................12
Branding...............................................................................................................................13
Sustainability, TBL and stakeholders..................................................................................13
Conclusion................................................................................................................................14
References................................................................................................................................16

MARKETING ANALYSIS
Introduction
The dynamic structure of the market is assessed through the market analysis process.
It is an assessment procedure that helps an organisation understand its suitability in a
particular type of an industry. It also helps in the analysis of new market opportunities for
growth and expansion. The attractiveness of the market, the strengths, weakness,
opportunities and threats of a particular market can be determined through market analysis
(Armstrong et al. 2015). It can also be referred to as a documented analysis or investigation
of the market that helps the organisation in maintaining a proper plan of actions and other
marketing decisions.
The marketing analysis is a broad term and includes several analysis under it, which
are the SWOT analysis, the PESTEL analysis, the segmentation, targeting and positioning
strategies of the market and the pricing and costing strategies (Kotler et al. 2015). Apart from
this it also includes how the organisation handles its clients, details about the product to be
offered and any solutions or after sales service provided for that product. It also includes
strategies related to E-marketing and the usage of internet in the marketing process.
The marketing analysis helps the companies in understanding the internal and the
external factors (Kotler and Armstrong 2015). Thereafter corrective measures are needed to
be formulated when there is any deviation in the results. This report discusses about the
marketing analysis of Amazon. The various reports of the company are analysed. The
relevant marketing concepts that Amazon uses has been properly discussed in the following
paragraphs.
Discussion
Amazon is one of the largest e-commerce platform that has gained a huge importance
and is dominating the market. The company is headquartered at Washington and was founded

MARKETING ANALYSIS
in the year 1994 by Jeff Bezos. It started its operation as a music and video seller and
thereafter in the later period it acquired the online book market that became a huge success
(Amazon 2019).
Marketing mix
Marketing mix is a marketing tool setup that helps the organisation reach its objective
in a better and smooth way. The marketing mix is a combination of the concept of the P’s and
the C’s (Londhe 2014). The marketing mix of Amazon is analysed in the following
paragraphs.
The P’s of marketing mix
Product – The product must be fitting the desired features and the advantages that the
customer wants (Bocken et al. 2016). In case of Amazon, the company has a diversified
product range. The product range can be diversified into websites, electronic devices, web
services and media content. This range can be divided into kindle, books, equipment,
jewelleries, DVDs, clothes, video games, consoles, mobile phones and tablets. It has also
entered the smart phone market and launched its own smart phone, it has also launched its
own set top box system, which is the Amazon Fire TV that streams various channels and
supports speech recognition system.
Price – The product should be a value for money. The customers will always prefer to
get a quality product at a cheap price (Khan 2014). A pricing strategy of a company helps in
attracting the customers and retain its competitive advantage. The pricing strategy of the
company can be stated as the cost leadership pricing strategy in general although in some
cases it uses some alternative pricing strategies. The company also uses premium pricing in
case of the products and the services that enjoys a competitive advantage in the market. The
amazon kindle is an exclusive product that enjoys an advantage over all the other competitors

MARKETING ANALYSIS
and hence premium pricing is applicable for those companies. The publishers are provided
with around 70% royalties for their works. Some additional pricing strategies that the
company uses are skimming pricing, psychological pricing, penetration pricing, geographical
pricing strategies and promotional pricing.
Place – This is where the products are made available and are distributed to the
ultimate consumers (Wu and Li 2018). Amazon initially did not use to have physical stores
and the company performed its business online as the nature of this organisation was e-
commerce only. It started to concentrate on the physical stores since the year 2015. It is at
that time that the company opened a large number of book stores of different types. The
campus bookstore was started by amazon where the books were not being sold but were
available for studies. Convenience stores were built where there were no cashiers and the
transactions were done automatically. The company opened a pick up store, where the
students order the books online but the books are delivered to those stores, from where the
students pick up the books at their convenient time.
Promotion – Promotional activities are required to make the customers aware of the
products and the services that the companies are offering (Gilaninia, Taleghani and Azizi
2013). Amazon is a company that is very advanced in its promotion. It uses social media
marketing. It is also involved into search engine marketing where by the name of Amazon
comes on the top of the search list. It is also involved into television advertisements and
billboard advertisements. It offers a variety of sales promotion technique by providing
attractive discount schemes and coupons online.
The C’s of marketing mix
All the internet marketers take advantage of the 4 C’s in order to gain an early
success. The C’s of the marketing helps the organisation think from the customer perspective.

MARKETING ANALYSIS
The 4C’s is usually a derivation of the 4P’s but on a customer centric approach. The four C’s
of Amazon is discussed as below:
Clients’ needs and preferences – The marketing techniques must create a value to the
customers. The client’s needs and preferences are to be determined and accordingly the
products are required to be prepared. Amazon already have a wide variety of products and it
is focusing more on the products that the customers require and make the necessary changes
and innovations accordingly. It has fulfilled the brand promise of “Earth’s most customer
centric company.”
Cost – From the customer view point the price of the customers becomes the cost. It
refers to the amount that the customers are required to pay in order to buy the products.
Amazon has different pricing strategies for different products, which has already been
discussed above. It can be therefore said that it uses high prices for its premium products and
uses penetration prices for those products that requires to attract customers (Nagle and Muller
2017). It has designed several products at cheap prices in order to attract the customers and
increase the customer value.
Convenience – Convenience refers to the easy availability of the products. People
decide their buying strategy on the basis of the convenience. Amazon is globally accessible
via internet and it has also made several other stores for its customers as discussed previously
also. The customers can have a centralised access to the stores form where they can pick up
the books. It has also planned to open the grocery pick up stores also.
Communication – This concept states that the organisations must not promote its
business but it must communicate the value and the understanding of the business to its
prospective customers. The customers are made aware of the products and services being
offered and a rapport is being built to increase the value of the customers. Amazon has also

MARKETING ANALYSIS
spared its shipping charges in case of many products and up to a certain amount. It has also
created a one click checkout option rather than a complicated checkout system that requires
feeding of a lot of information every time.
Differentiation and competitive advantage
Differentiation refers to how a company’s product or service is different and unique
from those of its competitors. Competitive advantage is a situation that allows a firm to stay
ahead of its competitors (Namada 2018). In the current situation any one can go for price
cutting techniques and sales promotion techniques but the basic advantage remains upon how
easily the company can adapt to the changes. The more the adaptability of the company, the
more is the advantage for the company to gain over its competitors. Amazon originally
focused on online selling of book and they adapted to the environment so fast that this
different concept became a huge success. The concept of Amazon Kindle is unique and
captured a lot of customers. It is the first online stores that allowed the customers to access to
a range of products and buy it from home in a blink of their eyes. It was also the first mover
in case of selling of books. Jeff Bezos analysed that many people were buying through mails
and postal services and hence he arrived at this concept of delivery of books through online,
which is actually a unique concept that anyone can think about. Many competitors like eBay,
Alibaba, Walmart, Priceline tried to compete with Amazon but cannot capture the market as
much as Amazon just because Amazon made the first move and captured the customer
loyalty and because it has always been trying to win over the customers’ heart by providing
them with unique innovations and services.
Commoditisation and Total Product & Solution Offering
Commoditisation refers to the process of converting something into a particular
product. In case of commoditisation the goods and the services become indistinguishable
from the rest of the companies (Coltman and Devinney 2013).

MARKETING ANALYSIS
Amazon is an online market that shows a wide variety of products in its portal. This
has led to the commoditisation of products. There are several similar kind of products that
remain with different types of sellers and Amazon makes this listed on its portal because of
which same kind of products are available to a large number of customers at the same time.
The products thus does not remain unique anymore and the customers get a wide variety of
choices to choose one and reject the rest.
Amazon has around 3 billion products and it is still expanding its product range.
There are about more than 261 million products in UK only. The product catalogue of
Amazon has been grouped into a number of departments. The clothing, shoes and the
jewellery sector has more than 30 million products, the home and kitchen sector has 60
million items and there are 24 million items in the sports and the outdoor sector. The office
product segments have around 6.7 million items and the electronic segment has around 96
million items, 1.7 million items are there in the beauty department, the baby products
segment has 1.2 million items and around 900 thousand items are there in the grocery
segment.
Amazon also offers a wide variety of solution services like Amazon Elastic Cloud
Compute, Amazon Virtual Private Cloud, Amazon S3, Amazon Cloud Font and Amazon
Relational Database Services (Amazon 2015). These are all the web services that are being
provided by Amazon. These services are also related to cloud computing, data storage
services and unique virtual network provider.
Segmentation, targeting and positioning
Segmentation refers to the different groups of customers with different kind of needs
(Camilleri 2018). In case of Amazon, the segmentation is on the basis of geographical region,
demographic structure, behavioural structures and psychographic structure. Geographically

MARKETING ANALYSIS
Amazon spread over 100 countries including both urban and rural regions. It mostly classifies
the customers and makes the products on the basis of different age groups and the product
also varies as per the different stages of the life of the human being. Amazon also classifies
the product on the basis of the degree of loyalty of the customers.
Targeting refers to the choice of specific customer base to whom the products or the
services are to be ultimately sold. Amazon targets both male and females form the age group
of 18 years and more. There are different stages of the life cycle and Amazon targets the
products as per respective age groups. The smartphone by Amazon for example, is targeted to
the young age groups who are bachelors or newly married. The products are targeted to those
who like to continuously nurture their lifestyles, who are determined, ambitious and free
minded.
Positioning refers to how the product or the service is being presented in front of its
clients. It refers to selecting all those steps that will help the organisation capture their target
market smoothly. Amazon uses several positioning styles - multi segment positioning,
anticipatory positioning and adaptive positioning. Amazon provides a wide variety of
products and services for different types of customers and therefore it can be said that it tries
to access more than one segment at the same time and hence the company is using multi
segment positioning strategy in this case (Klaus 2013). The e –commerce segments develops
the services on the basis of demand future demand anticipation and hence it is using the
anticipatory positioning strategy in certain cases. The company always keeps on monitoring
the changes and adapts accordingly and thereafter it repositions itself to the customers in the
new way it has adapted, which means that it is also involved in adaptive positioning strategy.
It has a very unique strategic positioning because of its low cost of operations, customer
differentiation and the continuous focus on the needs and the changes.

MARKETING ANALYSIS
Managing the service element
Managing the service can also be stated as supply chain management (Yu et al. 2016).
Amazon has an efficient and advanced supply chain management system. The company has
shaped its supply chain in such a manner that the competitors are unable to catch up with
Amazon even after a lot of hurdles. The innovative strategy of Amazon Prime service has
turned the tables for the company. It guarantees a speedy two days delivery of the products at
any place, if the members pay an annual membership fee, which is very minimum. It has also
made a free two hours delivery for customers who use the Amazon Prime Now.
Amazon uses a combination of several sophisticated tools. It has a wide network of
warehouses, an integrated information technology system, multi-level management of
inventory and a super-fast transport and communication system. It provides with several
delivery options as well as different payment options to the customers. Amazon has its own
warehouses in most of the places, which makes it easier for them to keep a track of the
inventory. It also has a warehouse solution that is fully automated and robotic and is called as
Kiva Systems. The cost of managing the supply chain is also minimum because of its huge
economies of scale and the strong supply chain strategy. The customers receive their orders
through central servers and the company is also having some fulfilment centres that is
required for merchandise stocking (Monczka et al. 2015).
Experiential Marketing, Customer Relations and Experience Management
Amazon tries to create value and importance in the mind of the customers that will
make the customer experiences better and will increase the customer loyalty. It designs the
products as per the specifications of the customers and innovates it as per the customer
specifications. It also creates several such arrangements so that the customers can get their
required products and services at a very smooth and flexible manner.

MARKETING ANALYSIS
Amazon has unique customer relationship management system. It follows four steps -
the needs for the customer service is limited, an efficient and real time human support is
provided, certain types of loyalty incentives are being given to the customers and last but not
the least it tries to protect its customers. The smooth operation of the company attracts the
customers in large and the support activities by the companies help them in retaining the
same. The easy interface with attractive contents, the help centre and the tracking system,
providing offers for certain value customers are certain customer relationship management
done by Amazon.
Use of internet marketing
Amazon services are basically internet based. It uses techniques like searches that are
sponsored, campaigns through email, portal advertising and to some extents social media
marketing. The company is basically customer centric and advertising is not one of the prime
concern of Amazon. It has prepared its own user friendly platform, which can be said as one
click and one tracking technology under one platform. Amazon uses a special algorithm that
ranks their products high in the internet. It also uses the concepts of SEO and the web
analytics. It uses a variety of keywords that brings their product at the top of the list.
Through web analytics it can also track the types of the customers clicking on the different
types of products, which enables them to know in details about the customers’ needs and
preferences just by their clicks (Gangeshwar 2013).
Pricing and cost structure
Jeff Bezos stated that he did not want to repeat the mistakes of Steve Jobs and he
believed that setting up high margins of profit will only attract more competitors whereas low
profit margins attracts customers The pricing strategy of Amazon is highly competitive and
it creates a pressure on the competitors. It changed the price of around 40 million products in
just one day. The company is so flexible that it can fluctuate it rates in such a manner that

MARKETING ANALYSIS
even the competitors like Walmart, Best Buy and eBay cannot compete with it. The company
generally focuses on keeping its prices low and lower than the competitors (Reimers and
Waldfogel 2017). Apart from this in certain cases the company also uses pricing strategies
like the penetrating marketing strategies, skimming pricing, psychological pricing,
promotional pricing and geographical pricing.
Amazon enjoys a cost advantage over all the other companies. It always try to reduce
its operational costs by increasing its operational efficiency. It has its own retail analytics and
marketing services. The company owns its own warehousing stores and it has its own
distribution channel and stores. This strong forward and backward integration of the company
helps them in proper management of the inventories as well as the supply chain (David
2013). The companies also opened quick pick up stores that has helped them in reducing the
distribution cost.
Branding
Branding gives a meaningful and specific identity to a company and its products and
services. Amazon is an exotic place with a variety of plants and animals and the river is and
hence Bezos wanted his company to be named so because of the uniqueness of the company
and the wide variety of products and services it offers. Bezos thought about what an
individual person does in order to earn fame and reputation and he acted accordingly for this
company. Amazon is therefore branded as one of the most customer friendly organisation
with innovation and uniqueness loaded in it.
Sustainability, TBL and stakeholders
Amazon values the customers and are committed in maintaining the sustainability in
order to win over all the communities. A large number of datasets are available and
accessible by many researchers and other people. It helps in the reduction of the costs, any

MARKETING ANALYSIS
technical obstacles and increases precision with the analysis of the large datasets that helps in
creating sustainability. The company is trying to be the best company when it comes to
serving the customers and hence invests in worldwide sustainability – social responsibilities,
the packaging experience, sustainable technology, services and research and development as
well as energy and development.
Amazon’s most important stakeholders are its customers, employees and its
communities. The company is very much customer centric. Customers are an integral part of
the company and it makes all the necessary innovations on the basis of the customers’ needs
and preferences. Employees are also an important stakeholder of the company that affects the
company in a lot of ways. They are important because they affect the competitive advantage
that is based upon the organisational culture of Amazon. Amazon provides several
compensations and incentive schemes in order to protect the interest of these stakeholders.
Communities can affect the perceptions of the customers. Amazon therefore supports the
communities by providing them with education, health care facilities and environmental
facilities.
Conclusion
It can be concluded form the above paragraph that Amazon is highly customer centric
company. The company proclaims itself to be as the Earth’s most customer centric company.
The company is highly innovative and have its own resources that allows it to decrease its
operational cost. It has been therefore concluded that the firm also enjoys a cost advantage
over all the other companies. The company is able to change its price in a very flexible way
that makes its competitors very weak in front of it. Moreover it has also been analysed that
the company has a wide range of products that has led the company structure different pricing
strategies. No matter whatever pricing strategies the company uses it always focuses on
keeping its price below the price of the competitors. The company has different positioning

MARKETING ANALYSIS
strategies as well because of the variations in the products and because the company wants to
attract a wide range of products. It is also involved in providing a great customer interface
and support facilities that has increased the loyalty of the customers. The promotional
strategies as analysed shows that the company does not need to focus more in advertisements
because it has already win over the hearts of the customers because of its efficiency and the
services. It is also involved in providing the maximum satisfaction to its stakeholders and is
also involved in the sustainable development programs.

MARKETING ANALYSIS
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