Marketing Strategies of Amazon Australia: A Theoretical Approach

The paper provided a comprehensive understanding of the attributes of Amazon Australia as marketing strategy by highlighting its brand equity in the Australian Marketplace as a theoretical approach. In addition to this it has also evaluated the strategic marketing options for the company in order to progress and expand its strategies in the Australian retail sector for future developments.

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MARKETING
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Executive Summary
In global society era, market competitiveness assumes significant role in expecting sustainable
development of the business enterprises with the basis on strategic management business process
efficacy along with organisational capital. Global organisations executing their operations in a
modern market domain to enhance organisational outcomes must constantly evaluate the external
as well as internal environment and competitive action and for the investigate consumers
preferences and developments for its continuous improvement of marketing strategies. The paper
provided a comprehensive understanding of the attributes of Amazon Australia as marketing
strategy by highlighting its brand equity in the Australian Marketplace as a theoretical approach.
In addition to this it has also evaluated the strategic marketing options for the company in order
to progress and expand its strategies in the Australian retail sector for future developments.

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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Background to the Company.......................................................................................................3
Marketing Analysis......................................................................................................................5
The nature of Amazon Australia’s Marketing Strategy or Strategies since its commencement. 5
Strategic Marketing Options for Amazon Australia moving forward.........................................6
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

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Introduction
In the global market, rapid access of new markets with increasing level of
competitiveness are identified to be fundamental determinants which stimulate organizations to
seek highly efficient ways to conquer international marketplaces and further develop the internal
market. For business enterprises willing to engage successfully in market, it is highly expedient
for these firms to efficiently organise their marketing activities thus resulting a need for distinct
marketing strategy (Lovelock and Patterson 2015). Appropriate selection of marketing strategy
however does not end within the company as it is highly essential to analyse as well as regulate
the selected marketing strategies in a constant manner. Marketing strategy planning evaluation
and control are typically position among the most critical areas of concern in business
enterprises. However in order to attain marketing objectives in successful manner companies
must establish itself in a systematic and more purposeful way to solve and adjust issues and
achieve expected business outcomes (Datta, Ailawadi and van Heerde 2017). The following
paper evaluates the marketing strategies of Amazon Australia by shedding light on theoretical
approaches and also the way it has been effective for the successful expansion of the company.
Discussion
Background to the Company
Amazon, American e-commerce business enterprise, founded in the year 1994 initiated
its business as a digital bookstore but later expanded its business operation to treat a wide range
of products through multilevel e commerce platform (Amazon.com.au 2018). The company’s
statistical data till 2016 reveal that Amazon has employed approximately over 350,400 full time
as well as part time employees at the global level. However the company recorded gross sales of
over 120 billion dollars having grown by 27% from 2015 which includes the impact of foreign

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exchange rates (Amazon.com.au 2018). Amazon currently comprises an employee base of over
1000 for its Australian business domain. The company's first line of business primarily engages
in selling goods directly to consumer base through its Web Services. Furthermore Amazon owns
as well as executes its operation named the Amazon Marketplace which enables third party
traders to sell new and used products (Xu, Gao and Hammond 2017). There are over 11
marketplaces across North America, Europe and Asia under the trademark of Amazon. However
while Amazon Marketplace does not currently operating Australia it has been reported that over
thousand of Australians trade and commerce has been currently trading their products on current
overseas market places. Mortimer and Grimmer (2017) revealed that after an extensive rate of
conjecture and speculation in 2017 the company has announced that it will be expanding its wide
range of retail products and services in Australia in the prospective years. Australians have been
spending over $20 billion on digital platforms which signifies over 7% of what have been spent
in Brick and Mortar shops. Naamanzhou (2018) indicate that approximately 80% of financial
resources spent on digital platform are through domestic retailers. However evaluating
Australia's Marketplace scenario with the US and the UK, the e-commerce market has been
considered to be considerable undersized in the former country.
However statistics imply that in the recent years with heightening growth of around 10%
Australian Marketplace has been bombarding with homeware, small appliances groceries media
whereby major proportion of digital e-commerce retailing has been spent by the Australians
(Pash 2018). As a result online retailing is expected to expand in order to grow alongside
Amazon's business expansion into the Australian market. It has been expected that the Amazon
Marketplace will initially emphasize on general merchandise such as electrical goods and toys
and will further expand its business to seek its marks in the Australian marketplace. The

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company at its first public forum in Australia last year had posed indications that it would be
expanding its market domain in order to entail both its proprietary goods along with the ones
from third party traders (Haucap and Heimeshoff 2014).
Marketing Analysis
The nature of Amazon Australia’s Marketing Strategy or Strategies since its
commencement
Marketing analysts Mortimer and Grimmer (2017) have been of the perspective that the
company might be encountering certain challenges from the dominant market players of the
Australian business sector. Bricks and mortar retailers being one of the major players in the
Australian Marketplace with an exclusive digital presence will have to shift its consumer
preferences as well as perceptions. It is important to note that the success of Amazon as an e-
commerce business relies greatly on the degree of consumers’ inclination towards online
shopping in Australia (Naamanzhou 2018). Several Australian consumers still exhibit the
propensity to avoid e-commerce shopping as they still pertain to develop concern about credit
card frauds and the quality of products as well as return policies offered by the companies.
Haucap and Heimeshoff (2014) reveal that Amazon pays a minimum tax in the relevant policies
and jurisdictions because of its business model of supplying count revenue of investment in for
the Global Business Ventures. As per the evaluation of Financial Review Retail Summit, the
Federal government has been proficiently regulating any indications which the company might
be intentionally executing its operation at a diminutive rate and seeking higher level of sales
growth along with market share in order to maximize its market status as a top global brand (Xu,
Gao and Hammond 2017).
Amazon as an established brand possesses a distinct understanding of its brand equity. As

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a prominent global brand Amazon has been influencing the preferences of Australian consumer
base and further provides sustained revenues for the organisation. As a result brand equity as an
important market strategic theoretical approach has been considered as an added value attributed
to the e-commerce services by Amazon consumers. Avramova, De Pelsmacker and Dens (2017)
stated that Amazon successfully established and unprecedented undertone during its initial
launch into the Australian Marketplace.
Gill-Simmen et al. (2018) record as one brand equity factors whereby channels of
Amazon has played a significant role in expanding into the Australian Marketplace. These
networks have further facilitated several brand activities of Amazon by proficiently providing
additional data sources, entertainment as well as experience is related to the trademark of the
company (Pash 2018). Thus Amazon primarily supplements its products which they sell in the
Australian market with detailed reviews and additional information. Such comprehensive brand
equity has enhanced the awareness level of the company in order to uphold some favourable and
exceptional relation with the Australian consumer segment and further have assertive judgements
and perceptions towards the company. Amazon.com.au (2018) has intensified its market size
within two months and is expected to expand its domain to over 50,000 traders by the end of
2018. This forceful marketing environment has posed critical challenges to establish a successful
product catalogue as products with diminutive competitiveness and high profit margins can be
highly competitive in recent days.
Strategic Marketing Options for Amazon Australia moving forward
As per the current market position of Amazon Australia it is expected that the company
will significantly disrupt the retail sector of Australia through various marketing strategies.
Firstly as Amazon significantly lifts the market share incumbent Australian traders will not be

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able to intensifying their sales growth even might face severe decline (Insideretail 2018).
Amazon has been offering considerable economic prices for similar product range which
consequently forces the Australian retailers to minimize their price range. Amazon has further
been forcing its Australian market competitors to extensively invest in the stores, the e-
commerce services as well as their delivery services in order to sustain any type of competitive
advantage over Amazon (Lovelock and Patterson 2015).
Though Amazon has attained a substantial degree of prominence of being an extensively
large business enterprise it has shown lean impression on the profit margin in retail sector. In
2016 the company's net profit margin has been around 7% in comparison to some of the major
retailers of Australia who comprised of gross revenue margin of 20% or as an elevation around
45% (Masters 2018). Meanwhile Naamanzhou (2018) observed that Australian retailers will
experience extensive operating costs which include wages and marketing lease and advertising.
For example, renowned business firms like Wesfarmers and Woolworths both have been
successfully executing their business at a greater rate of over 25% of sales revenue while Harvey
Norman along with super retail group comprised an approximate level of 40%. Amazon has
remained high confidentiality about the services they have been intending to offer to the
Australian consumer base but however has posed implication that the Melbourne Market Sector
would be intensifying with wide range of service offerings (Xu, Gao and Hammond 2017).
However the recent purchase of whole foods by Amazon for over 15 billion Australian dollars as
also amplifiers certain speculation that the company will employ relative approach for its
Australian Marketplace and will potentially purchase smaller grocery outlets in order to use them
as a distribution sector for the grocery delivery service known as Amazon fresh. Currently
prevailing in US and UK markets Amazon fresh is identified as same day fresh food delivery

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service that is typically considered to be a competitive retail service in comparison to non
consumables such as digital goods specifically in Australia with its low population density and
high wages (Pash 2018). Though Amazon's purchase of whole foods in the marketplace of the
United States has signified renewed emphasis on fresh produce it has been expected that Amazon
has been projecting to use Australia as a vital test market for its pressure range within few years
(Insideretail 2018).
Conclusion
To conclude it can be stated that marketing strategy implemented by Amazon Australia
has been one of the functional strategies for the company which cumulatively created and overall
business strategy. The vitality of Amazon’s marketing strategy in its overall business approaches
has been extensively high because of its regulation of key marketing associations with the
Australian retailers outside of the support functions that is the delivery of products to the
Marketplace and sales. Thus its entry into the Australian Marketplace have been considered as an
assertive one in regards to the economical price range and swift delivery services it has offered to
the Australian consumers. However the people has also considered the critical areas of concern
which bricks and mortar retailers would undergo due to the long-term significance of Amazon in
the Australian retail market.

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References
Amazon.com.au 2018. Amazon.com.au: Shop online for Electronics, Apparel, Toys, Books,
DVDs & more. [online] Amazon.com.au. Available at: https://www.amazon.com.au/ [Accessed
21 Sep. 2018].
Avramova, Y.R., De Pelsmacker, P. and Dens, N., 2017. Brand placement repetition in a
fictional text. International Journal of Advertising, 36(1), pp.38-59.
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.
Gill-Simmen, L., MacInnis, D.J., Eisingerich, A.B. and Park, C.W., 2018. Brand-self
connections and brand prominence as drivers of employee brand attachment. AMS Review, pp.1-
19.
Haucap, J. and Heimeshoff, U., 2014. Google, Facebook, Amazon, eBay: Is the Internet driving
competition or market monopolization?. International Economics and Economic Policy, 11(1-2),
pp.49-61.
Insideretail, 2018. Amazon to push Australian retailers into ‘segment-specific’ focus. Available
from https://www.insideretail.com.au/news/amazon-to-push-australian-retailers-into-segment-
specific-focus-201801 Accessed on 21 September 2018.
Lovelock, C. and Patterson, P., 2015. Services marketing. Pearson Australia.
Masters, K. 2018. Amazon's Slow Burn In Australia Is Still On Pace To Heat Up. Available from
https://www.forbes.com/sites/kirimasters/2018/08/07/amazons-slow-burn-in-australia-is-still-on-
pace-to-heat-up/#122cc57d67d0 Accessed on 21 September 2018.
Mortimer, G. and Grimmer, L., 2017. Why retailers want you to ‘click and collect'. The

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Conversation, (30).
Naamanzhou, 2018. Australian retailers resilient as they face down 'Amazon effect'. Available
from https://www.theguardian.com/technology/2018/feb/14/australian-retailers-resilient-as-they-
face-down-amazon-effect Accessed on 21 September 2018.
Pash, C. 2018. A new wave of threats points to another supermarket price war primed to break
out in Australia. Available from https://www.businessinsider.com.au/australian-supermarkets-
kaufland-threats-ibisworld-analysts-2018-9 Accessed on 21 September 2018.
Xu, J., Gao, X. and Hammond, J., 2017. E-tailing in Australia: A preliminary analysis of David
Jones. International Technology Management Review, 6(4), p.149.

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Appendices
Percentage share of Australian’s Annual Spend by Category
Source: (Insideretail 2018)

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Amazon Australia’s Marketing Strategy Outline
Source: (Amazon.com.au 2018)