Strategic Marketing of Amazon in Romania

This report discusses the strategic marketing of Amazon Grocery in Romania, focusing on the market entry strategy, segmentation, targeting, and competitive advantage. It includes a PESTLE analysis of the Romanian online retail sector and recommendations for launching sweets and biscuits in the market.

Strategic marketing of Amazon in Romania

Executive summary
Strategic marketing is all assessing the consumer needs and requirements so as to find out what
is important for them and why a particular brand is purchased. The present study is about
strategic marketing of sweets and biscuits to be sold by Amazon grocery in Romania market.
Hence a PESLTE analysis of online retail market of Romania has been carried out. This is
followed by discussing the market entry strategy, segmentation, targeting, 7ps theory and porters
generic strategy to gain competitive advantage in the nation. The study reveals that the company
should launch its sweets and biscuits in Romania on account of good market share of the product
and need for consumers to have some healthy food options. But it is also true that the product
may face competition from other brands that have a established presence in Romania. The
company is thus required to target all consumers (male or female) in the range of 4 to 60 years.
The need is to focus on reasonable pricing and promoting it as a healthy product.

Table of Contents
INTRODUCTION.......................................................................................................................................4
PESTLE ANALYSIS OF ROMANIAN ONLINE RETAIL SECTOR.......................................................4
DESCRIBE THE MODES OF MARKET ENTRY FOR AMAZON GROCERY IN ROMANIA AND
RECOMMEND THE MOST APPROPRIATE STRATEGY......................................................................6
APPLY CONCEPT OF MARKET SEGMENTATION AND TARGETING AND CRITICALLY
EVALUATE POTENTIAL TARGET MARKET FOR SWEETS AND BISCUITS OF AMAZON
GROCERY..................................................................................................................................................8
INSERT DIAGRAM OF PORTER’S COMPETITIVE ADVANTAGE AND EXPLAIN COST
DIFFERENTIATION, COST LEADERSHIP AND FOCUS STRATEGY................................................8
RECOMMENDATIONS...........................................................................................................................10
CONCLUSION.........................................................................................................................................11
REFERENCES..........................................................................................................................................12

INTRODUCTION
Strategic marketing is a method by which a company differentiates itself from rivals by
capitalizing on strengths so as to provide better product and service value. The aim of present
report is to make the readers understand about how strategic marketing tactics can be applied
when a firm is planning to make an entry into a new nation with a new product (Choksi and
et.al., 2016). This can be done by focusing on objectives being analyzing the internal and
external environment of company; developing a strategic marketing plan and managing
resources so that objectives of company are attended (Ododo, Mulholland and Turner, 2015).
As a marketing consultant of Ashanti Marketing Solution an attempt has been made to
study strategic marketing of Amazon Grocery as it is planning to launch sweets and biscuits in
Romania. Focus will be given on carrying out PESTLE analysis of Romanian online retail sector
so as to assess opportunities and threats. Emphasis will then be given on segmentation and
targeting; recommending one out of Porter’s generic strategy and deciding the suitable entry
mode for the company in the nation.
PESTLE ANALYSIS OF ROMANIAN ONLINE RETAIL SECTOR
Pestle analysis can be defined as a framework to assess macro environmental factors that put
an impact on any organization. These include political, sociocultural, legal, environmental,
technological and economic factors (Lillqvist and Louhiala, 2014). A proper introduction of
Amazon with its product being books in Romanian market can only be done when the company
is aware of the PESTLE factors that it may face in the nation. This will help to find out overall
success rate of the product in market.
 Political – This includes all the government policies that are present in any nation and
how it puts an impact on working of organization. Romania has got the presence of a
stable political system that is beneficial for growth of Amazon in the nation. However the
country suffers from high rates of corruption and bribery which may negatively impact
working of Amazon. But the recent changes in EU have ensured that government is in a
process of creating a more honest nation (Palmetier and et.al., 2016).
 Economic – these are those policies of a nation that determine its economic performance
and thus impact working of company. The present economic conditions of Romania are
quite stable one. This has been fuelled by an increase in minimum wage rate from

RON1,250 to RON1,450 which has aided in increasing consumption patterns (Choksi
and et.al., 2016). This factor is most likely to increase the sales and revenue figures of
Amazon in Romania. But along with this, Amazon will have to increase its overall wages
given to employees so as to attract good talent towards company.
 Social – these factors include cultural trends and population demographics of a nation. In
this respect, there is a presence of high disposable income in the Romanian population
that has increased consumption of products (Shukla and Sanghavi, 2017). Moreover
presence of fast paced lifestyle specifically in urban areas has made the consumers get
comfortable with the concept of online shopping. These factors can ensure towards
success of sweets and biscuit segment launched by Amazon in Romania.
 Technology – These include all kind of technological inventions that may impact
working of any industry. In this respect, Romania has a presence of good internet
availability at less rates even in one of the most secluded areas. This is very essential for
growth of online retail sector and overall sustainability of Amazon in the nation. In this
context, Romania has a presence of more than 11 million internet users followed by a
mobile internet penetration rate of 85 percent. It has further been found that Romanian
people purchased 2.8 billion euros of online product during the year 2017 (Vigneron and
Johnson, 2017). Other than this, there has been an advent of digital technology in
Romania as well which has changed the attitude and behavior of consumers towards
online retail. The presence of social media sites, mobile apps etc. have made sure that
consumers spend more time to browse for products and brands.
 Environmental – the presence of environmental sustainability is a very essential for
overall survival of business. This is on account of issues such as global warming, ozone
depletion that are affecting global atmposhere. The Romanian government is particularly
concerned about reducing environmental pollution to a great extent. Hence Amazon
should invest in CSR policies and focus on key areas such as packaging, waste reduction
etc in its biscuit and sweet section in Romania (Stierand, DÃrfler and MacBryde, 2014).
It can also adhere with the concept of go green concept so as to portray an image of being
a sustainable firm. The company can also increase its use of biodegradable packaging for
bringing a reduction in wastage. The company must also adhere with all the legal

commitments set by government of Romania in the area of environment and also
involve itself in voluntary activities.
 Legal – it focuses on the legal changes and new laws that can impact working of a firm.
As per legal norms, Amazon needs to provide all the needed information to the
consumers so that they are aware from whom are they buying. Amazon is required to
develop trust factor with the consumers while setting there online store. Else they can be
subjected to penalties and fines (Vilkey and Dehbid, 2016).
Opportunities and threats to be faced by Amazon grocery in Romania market along with
possible solutions
As per the above PESTLE analysis, the opportunity that is present in front of Amazon
grocery is to launch different flavors of sweets and biscuits so as to lure the consumers in each
and every segment. It can also focus on launching sugar free or less sugary biscuits for health
conscious segment. The company can also take full advantage of Social Media in Romania and
try to generate awareness among the consumers. On a positive note, the Romanian population is
quite active on social media such as Facebook with a presence of 9.6 million accounts.
The threats can be in form of other companies such as Alka group, Bio shop, Romania Food &
Beverage Ltd all of whom have an established presence in the nation (Vigneron and Johnson,
2017). The solution to the issue is that Amazon should make the price less than that offered by
competitors and also focus on quality along with taste. This will make its product better than
rival firms. The other threat can be rising prices of raw materials such as cocoa which can led to
increase in overall price of product (Choksi and et.al., 2016). In this regard, the company must
focus on other ingredients to make its products such as sugar, jiggery, wheat flour etc. These are
a lot healthier than chocolate and cocoa hence consumers can get attracted towards the offerings
of the company.
DESCRIBE THE MODES OF MARKET ENTRY FOR AMAZON
GROCERY IN ROMANIA AND RECOMMEND THE MOST
APPROPRIATE STRATEGY
Market entry can be defined as a planned distribution of products and service to a new target
market (Boelsen-Robinson, Backholer and Peeters, 2015). In order to make sure that Amazon

grocery through its product range in sweets and biscuits makes a successful entry into Romanian
market the need is to focus on various entry modes. These are as follows;
Franchise – A method for business expansion in a foreign nation by distributing products and
services via a licensing relationship (Shree, Gupta and Sagar, 2017). In present case, Amazon
can allow other firms in Romania to it’s utilize name, trademark, product label etc. and allow
distribution of its sweets and biscuits. Amazon will further charge a royalty fee from the
company. This is most likely to bring a reduction in the risks associated for making an entry into
a new nation.
Joint venture – This is the entry mode where 2 or more independent firms join with each other to
achieve a strong position in the market (Son, Lee and Kim, 2015). The newly formed firm can
have a control over expense, revenues as well as assets. In present case, Amazon grocery can
enter into joint venture with sweet and biscuit seller in Romania to assess local market and
understand taste and preference of consumers. Entering into a joint venture can also play a key
role in reducing all kinds of political and legal tensions as local firm will have a good know how
of the market. If local food chain is a successful one then brand image can be gained in a short
span of time. However, the company should enter into joint venture only with those firms that
have same kind of objectives/value set.
Strategic alliance - Strategic alliance can be defined as a partnership agreement between two or
more parties for pursing the agreed set of objectives while being independent as an organization
(Choksi and et.al., 2016). Amazon can enter into strategic alliance with small companies that are
selling sweets and biscuits all over Romania. This technique will help the management have an
exact idea about the taste and preference of Romanian consumers when vegetarian food is
concerned.
The best possible strategy for Amazon grocery in Romania market is to use franchisee mode of
entry. The company will allow only selling it brand as well as labeling and it will also get fees
for the same. There are less chances of market failure on account of market knowhow by the
company. This will further aid in increasing market share and brand value within the nation.

APPLY CONCEPT OF MARKET SEGMENTATION AND TARGETING
AND CRITICALLY EVALUATE POTENTIAL TARGET MARKET FOR
SWEETS AND BISCUITS OF AMAZON GROCERY
Market segmentation is the technique of dividing heterogeneous and large markets into small
segments. This technique is required to be utilized for sweets and biscuits to be sold by Amazon
so as to serve the consumers in a better manner and generate profit figures for the company. In
present scenario, the company can make use of many segmentation techniques for its sweets and
biscuit segment. First is the pshycograpgic segmentation which is segmenting the consumers on
the basis of personality type, lifestyle, attitude, value set as well as interest. In this regard, the
product segmentation can be done on basis of size being small, medium and family sized
packets. Next is the behavioral segmentation that groups the consumers on the basis of a specific
behavioral pattern when the purchase decision is made. Small packets can be manufactured for
the consumers who wish to eat the sweets and biscuits in the shop or after going to home. On the
other hand, it can also manufacture celebration packets in order to gift someone.
Targeting can be defined as the technique of choosing a potential consumer group who can be
offered product and services of a company (Choksi and et.al., 2016). In present case there can be
a use of multi-segment targeting strategy so as to serve all the potential segments in a profitable
manner. Amazon can further develop specific marketing mixes that can appeal to some or all of
the segments
In this regard, the population to be targeted for sweets and biscuit section of amazon grocery is
all consumers in the age group of 4 to 60 years. This is as sweets and biscuits are liked by all.
Morever, statistical figures further suggest that Romanian biscuit industry is one of the most
dynamic one. The total biscuit and sweet market share is of 350 cores per month. From this, only
toasts, crackers etc. form 250 crore of market share (Sarker, 2017).
INSERT DIAGRAM OF PORTER’S COMPETITIVE ADVANTAGE AND
EXPLAIN COST DIFFERENTIATION, COST LEADERSHIP AND FOCUS
STRATEGY
Porter’s generic strategy can be defined as the technique used to gain competitive advantage in
the market. These are of three main types being cost differentiation, cost leadership and focus
strategy.

Figure 1 Porter’s competitive advantage
(Source: Lee and Vachon, 2016)
Cost leadership – it can be defined as the strategy for gaining competitive advantage over rival
firms on account lower cost involved in producing product and services (Vigneron and Johnson,
2017). The low cost may not just mean low price but also applies to other functions such as
production, promotion, sales etc. In this respect, the product can still be priced at competitor
rates but on account of low production cost the company is in a better position to sustain even in
lean times. It can also invest more into business for further expansion.
Differentiation – This can be defined as the technique for bringing uniqueness and attractive in
product so that more consumers can be engaged (Choksi and et.al., 2016). This strategy typically
involves for focusing on its features, functionality, and durability as well as consumer support.
Differentiation strategy adopted by any company can attain success only when it offers product
and services after good research and innovation. It should also make its sales and marketing team
strong one so that the market is able to assess benefits offered by the products.

Focus strategy – This strategy can be defined as the one that focuses on a niche market.
Emphasis is given on assessing dynamics of that market and unique consumer needs so as to
develop low cost products accordingly. By the use of this strategy, any company can serve the
consumer in a unique manner that can led to development of brand loyalty among consumers.
This can further make a particular market segment less attractive to rival firms. The focus
strategy furthers has a presence of two variants being cost focus where a firm seeks to attain cost
advantage in the target market. Then is the differentiation focus where products and service
offerings are provided as per special needs of buyers in a segment.
As per the discussion about all the above strategies, it can be recommended to Amazon grocery
that the company should use differentiation strategy. In this concept, the sweet and biscuit
offerings of company in Romanian market can be differentiate its products from rival firms by
utilizing many approaches. The company can provide a small toy with any family pack of biscuit
and sweet. This will help to lure the kids towards the product range of company. Other than this,
the firm can launch healthy variants of biscuits that are made from oats, rage and wheat rather
than refined flour. Baked versions with less sugar can also be launched by company in Romanian
market. This is required as according to a research study carried out by iSense Solutions 9n out
of 10 Romanian citizens have taken an action plan for a healthy lifestyle. They have also started
focusing on those brands that are linked with healthy eating. Hence this strategy can provide a
good amount of differentiation to the firm that rivals and also lure consumers towards the
company. An another source of differentiation can be to carry out market research activities so as
to bring more variations in sweets and biscuits so as to suit the taste buds of consumers. This
area will require a thorough study of consumer needs and preferences so that best type of product
can be offered to them.
RECOMMENDATIONS
It is being recommended to the company that Amazon grocery should launch its sweets and
biscuits in Romanian market and also introduce some healthy variants of it to grab more
consumers. It can be recommended that Amazon grocery should adopt franchise as the mode of
entry into the market of Romania as the company will get a royalty fee and only sell its brand
name and label. This will also reduce various kinds of risks associated to the set up in a new
country. This also reduces the risk of market failure and company can focus on increasing market

share and brand value. This will also help in gaining customer value in new country which will
further help in expanding the business. It is also recommended that the company should focus on
both cost leadership and differentiation strategy within Romania. This can be easily achievable
because both strategies were tried and tested in other markets and had resulted in creation of a
good consumer base for the company.
CONCLUSION
From the above report a conclusion can be drawn that sweets and biscuits can be introduced by
Amazon grocery in Romanian market. This is on account of high market share and demand for
good taste good but healthy option amongst the consumers. However the company can face
competition from other brands who are selling similar kinds of sweets and biscuits in Romanian
market. But still there is enough room to accommodate the products to be launched by Amazon
in Romania as there is an ongoing trend of adopting a healthy lifestyle amongst the consumers.
The company is thus required to target all age groups as well as genders to capture a greater
market share in a short span of time. Reasonable pricing can be kept for the product followed by
promoting it as a healthier food item than other rival firms. The company already has franchising
within Romania which should be maintained followed by adhering with low cost and
differentiation strategy.

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