Marketing Management Analysis: Amazon's Australian Market Entry

This report examines Amazon's strategic approach to establishing and enhancing its brand value within the Australian retail market. The study begins with an executive summary and background, highlighting the opportunities present in the fast-growing Australian retail sector and Amazon's goal of competing with existing players like Woolworths and Wesfarmers. The research methodology employs the marketing mix (4Ps) and value comparison to analyze Amazon's current standing and develop a marketing promotion plan. The current value analysis compares Amazon's market share, market capitalization, and diverse product portfolio against competitors. The marketing promotion plan details objectives, goals, timeframes, resource budgets, and promotional activities. The report concludes with an overall analysis, emphasizing the significance of Amazon's strong value in capturing the Australian market, supported by insights from the various study sections.

Marketing Managementwin

Marketing Management 1
Executive Summary
The purpose of this study is to understand the way Amazon can gain better brand value in the
Australian retail market. Amazon is one of the most popular name in the online retailing but in
terms of retailing and competing with the physical retail stores there is a need to develop the
brand. Australia is one of the fastest growing retail markets of the world and thus there are
immense opportunities for the retail companies to establish, grow and develop. The paper will
present the case of Amazon being dominating in the Australian retail markets through its unique
products and services. There will be highlighted the current value analysis of the company and
the significance of the value analysis in capturing the Australian market. The next part of the
report will present the marketing promotion plan highlighting the marketing mix of the company.
The paper will conclude with an overall analysis by taking insights from eth various section of
the study.

Marketing Management 2
Contents
Background......................................................................................................................................2
Research Methods............................................................................................................................2
Current Value Analysis....................................................................................................................3
Marketing Promotion Plan...............................................................................................................6
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

Marketing Management 3
Background
Amazon is one of the globally renowned organisations which have attained huge success and
growth in last few years. The key aim of the company is to develop strong brand value in the
Australian market. Amazon offers online retail services to the customers but the company is
planning to establish itself in the Australian market and give a tough competition to the existing
players of Australia such as Woolworths, Wesfarmers, etc. (Minifie, 2017). In present time
Amazon possess high value and holds a strong position in the global market in comparison with
its competitors. Amazon enjoys the position of a market leader but the goal is to enhance and
develop the brand value with an upsurge rate. The company can gain better value as in present
time there is a huge customer base and demand for the supermarkets as people want to save their
time by purchasing products from such supermarkets rather than from different stores. Australia
is one of the key target markets for Amazon as people have a good purchasing power with high
spending rate at the supermarkets (Adhikari, 2016). Being one of the biggest online retail stores,
Amazon have developed a strong customer base and renowned brand visibility which can help
the company in achieving growth and success in establishing a venture in Australia and giving
tough competition to the existing players of the Australian market (Industry, 2011).
Research Methods
In performing any study there is a need to take use of several tools and resources. For this study,
there will also be taken use of a number of tools, techniques and resources so that there can be
gathered adequate and significant information. The study will take use of firstly the marketing
mix tool which will comprise of the 4Ps of marketing i.e. Product, price, place and promotion.
The primary reason behind taking sue of this tool is to understand the marketing and promotions
strategies of Amazon and they way in which the brand value of the company can be developed
(Reid, 2015). From the tool there will be gathered data that what promotional tools will be the
most beneficial for the company to fetch the attention of the target customers. In order to have
current value analysis of Amazon there wild be used the comparison chart so that there can be
compared the value of Amazon with other existing players in the Australian market (Singh, Jain
and Madan, 2016). The next resource which will be used by the company will be the promotional

Marketing Management 4
plan so that there can be analysed the objective, budget, goal and time frame of the marketing
promotional plan. All these tools, techniques and resources are beneficial for taking use in the
study because these tools help in getting a correct set of data and also helpful from future
perspectives as these are the guidelines which help in strategically develop the report.
Current Value Analysis
Analysing the current value of any company is one of the major and vital task for the, long term
growth and sustainability of the company. The current value is the company is required to be
analysed because of the reason that it helps in understanding how competitive an organisation is
and in what manner the company can make huge profits through various strategies and pricing
techniques. Amazon is a well-known name in the international markets and almost maximum of
the potential customers of Australia are aware of the company and its services and products
(Capital Cube, 2017). To analyse the current value of Amazon thee has been compared the
results with other companies comprising Woolworths, Myer, Coles, etc. In comparison with all
these companies and their supermarkets, the supermarkets of Amazon are initially smaller in size
(Gielens and Dekimpe, 2009). There are supermarkets and there stores in Australia which offer
great services to the customers but in terms of values analysis on the basis of home delivery, it
has been analysed that Amazon possess huge competitive benefits as it offer improved service of
delivery to the customers so that there can be extended customer base. Following is the chart
presenting the current value of the various renowned retail organisations of Australia.
Amazon Coles Woolworths Bunnings Big W Myer Super Cheap
Auto JB HiFi
0
5
10
15
20
25 Sales and cash costs per square meter ($'000) - FY 2016 (Letts,
S.2017)
Sales/sqm( $'000) Costs/sqm ($'000)

Marketing Management 5
In comparison with big players of Australia such as JB HiFi, Coles, Woolworths, etc. it has been
analysed and evaluated that Amazon holds a much larger market share with increased sales in the
Australian markets. it shows the enhanced visibility of the brand that support the development of
Amazon brand in Australia (Singh, Jain and Madan, 2016). Thus, from the analysis and the
comparison, it is clearly evident that Amazon is making huge profits because of the vast
difference existing between the cost and the sales (Johnston, 2017). It is crucial to understand
that the improved brand value and the organisational performance are the key reflection of the
enhanced market share and value of the company (The Conversation, 2017). The strong value of
Amazon not only helps the company in remaining competitive but also support in capturing the
new markets with a higher pace (Smith, Rupp and Offodile, 2017).
(Source: The Australian, 2017)
Another major factor which can help in analysing the current value of Amazon in the Australian
market is the market capitalisation. The term market capitalisation can be explained as the total
valuation of the organisation on the current market share price as well as the total number of the
unpaid stocks (Tyagi, Singh and Agarwal, n.d.) The market capitalisation can be intended by
having a multiplication of the total unpaid shares or the outstanding shares of the organisation
with the current market price of the organisational share. It is one of the most significant features

Marketing Management 6
which can help the investors in analysing the risks and the returns associated with the company
(Singh, Jain and Madan, 2016). In terms of market capitalization, Amazon is at the top position
in comparison with other retailers of Australia (Cloutman, 2017). To analyse the current value of
Amazon there has been compared the results with other companies such as Woolworths, Myer,
Coles, etc. In comparison with all these companies and their supermarkets, Amazon is very much
high in market capitalisation which depicts the threat imposed by Amazon on the existing
supermarkets of the country (Capital Cube, 2017).
The current value analysis of Amazon can also be measured in terms of the diverse product
portfolio. The supermarkets of Australia such as Wesfarmers, Myer, etc. generates revenues from
purchasing and reselling the products but in case of Amazon, the organisation also has a lot of
other service which are being offered by the company in various segments (Aversa, Haefliger
and Reza, 2017). It also includes the revenue generated from the third-party seller fees. There are
companies which pay Amazon the third party fees for selling their products at the Amazon store
so that there can be a better access by the customers (Smith, Rupp and Offodile, 2017). The
annual reports of the company show the increased revenues, enhanced market capitalisation and
robust market share as the key signs of strong current value of the company and the higher
chances of improved brand value and success in the Australian market (Pash, 2017).

Marketing Management 7
Marketing Promotion Plan
Objective Goals Time Frame Resource Budget/Requirement
To establish
Amazon stores at
various locations
of Australia
The key goal behind the
marketing activity is to
enhance the reach to the
customers. The more
number of stores will help
to get increased number of
customers (Rosenbloom,
2012).
The time
frame will be
from March
2018 to
December
2018
There will be requiring high
budget for the establishment of
the stores i.e. approximately for
registration $7,050, for legal
expenses $30,300, for rent and
property $105,600, for start-up
inventory $1,000,000 and for
other expenses $200,000.
To promote the
brand
The key goal behind the
marketing activity is to
enhance the visibility of
the brand and to have huge
customer base. The higher
the promotional activities
takes pace, the better is the
brand visibility
The time
frame will be
from October
2018 to
January 2019
Budget for various marketing and
promotional activities:
Building & hosting website:
$8,000
Flyer Printing: $20,500
Marketing promotion expenses:
$30,500
Advertisements
and Campaigns
The key goal behind the
marketing activity is to
make the brand popular
among the masses so that
sales can be increased
(OLŠANOVÁ, 2012).
The time
frame will be
from January
2019 to
March 2019
Budget required:
For all advertisements and
campaigns across the country
there will be required initially a
budget of $150,000.
Product
Amazon is ranked as one of the best online retailer across the world. There are several customers
which came from various regions of the world. In Australia also there is a vast demand for such

Marketing Management 8
store which can offer multiple products at a single store. In the Supermarket to be launched by
Amazon, there will be offering a number of products that comprises of different types of goods
for diverse set of customers. The retail division of Amazon will include all the things ranging
from the auto parts to apparels, electronic gadgets to toys, gardening equipment to jewellery,
beauty-health utilities to home decor, veggies to other kitchenware. Amazon will also comprise
of those products which will include the third party products too (Reid, 2015). Being a renowned
brand Amazon will also offer the customers with products like mobile phones, kindle, books etc.
There will be a separate section of groceries in the section of Amazon Fresh so that customers
can easily have ac access to the required stuff (Nizam and Hoshino, 2016). The products in the
Amazon’s marketing mix will have an extended and diverse portfolio with also the facility of
home delivery. The company will keep on expanding its product portfolio so that there can be
satisfied the needs of enhanced customer base (Weber and Badenhorst-Weiss, 2016). The main
marketing promotion objective of the product mix is to reach to an extended customer base by
offering them diverse set of products and fulfilling their needs if different products available
under one roof (Armstrong, et al., 2014).
Price
Amazon always offers competitive prices so that the company can remain as the market leader.
While establishing stores in Australia, the company will take use competition based pricing
strategy only in the marketing mix. There are offered diverse set of products by Amazon so the
pricing strategies will also be varied. For the grocery products, the prices will be highly
competitive so that the company can capture the market and have an improved market share in
the Australian market. The prices will also be adjusted according to the demand, competition and
availability. There will also be offered prime services on the stores if the customers want the
delivery in next few hours or want customized products. Such kinds of services are the value
added services so the customers will get them on a bit high price range (Reid, 2015). To establish
a strong market in Australia there is a need to give tough competition to the existing players,
thus, the key pricing strategy will be low cost strategy so that the attention of the potential
customers can be fetched and can be retained for a longer time period (Singh, 2017). The main
marketing promotion objective of the price mix is to reach to an extended customer base by
making the products available at low and competitive prices so that the customer can switch to

Marketing Management 9
Amazon from other competitors. Once the market can be captured, then Amazon can take use of
differential and competitive pricing (Simgh. 2012).
Place
The place in the marketing mix is of high significance as it is the key location where the store or
the supermarket will be established and it is required to be strategically analyse that which
location will suit best for improving they brand and increasing the sales. The place is considered
as a distribution channel for the company from where the sales begin (Armstrong, et al., 2014).
Amazon will open at a number of locations as the supermarkets and the convenience stores such
as in the prime locations like Victoria, Melbourne and various other parts of Australia. There will
also be developed the mobile application for the customers so that they can purchase and can
directly pick the stuff from the store. To have extended distribution channel, it is highly essential
to locate the supermarket at the most crowded areas of the country. The locations where the
company will establish its stores will also be placed in accordance with the target market such as
where there are high chances of visit of high and medium class people who possess good
purchasing power. Thus the key locations for the supermarket will also be the malls and crowded
building such s shopping centres (Bashar, Ahmad and Wasiq, 2012).
Promotion
Amazon always take sue of aggressive and sound promotional strategies and advertising for the
promotion of the brand. When it comes to the marketing of the products there is no stone left
unturned in the complete promotional mix. The key focus is upon the advertisements i.e. in
newspapers, prints and television. Similarly it is also significant for Amazon to have high
promotion of the brand in order to develop the brand and enhance the customer base
(OLŠANOVÁ, 2012). Amazon will take use of social media marketing and creative television
commercials for targeting the customer. There will be extensive and vital use of sales promotion
where the products will be offered on the discounted prices at the time of festivals, occasions and
holidays (Rosenbloom, 2012). For improving the brand image, the company will also take use of
the public relations as the launching of the Amazon smile for donating funds to the charitable
organisations. As well as serving to various NGOs is also one of the public relation marketing
activity of Amazon with the help of which it can promote itself and the brand in Australia

Marketing Management 10
(Singh, 2012). Amazon will also take use of various loyalty schemes to retain the customers
which can benefit the customers with several discounts and offers on various other things. For
the efficient promotion of the brand, the company will take use of newsletters and magazines so
that a larger range of customers can be targeted. The online media will be one of the best sources
of promoting the stores established in Australia as on various social media platforms, Amazon
can have its advertisements and make the people aware about the new supermarkets. Television
commercials and web based advertising will be the key promotional strategies for the company
inn order to improve the visibility of the brand (Bashar, Ahmad and Wasiq, 2012).
Conclusion
Being one of the biggest online retail stores, Amazon has developed a strong customer base and
renowned brand visibility which can help the company in achieving growth and success in
establishing a venture and improving the brand value in Australia. From the various research
methods used and analysis performed, it can be concluded that Amazon gives intense and tough
competition to the existing supermarkets of Australia. There are vast chances that in the coming
time, there will be a great threat to the sustainability and existence of these supermarkets.
Summing up, it can be stated that there are immense opportunities for Amazon to grow and set a
benchmark in the Australian retail industry by expanding its reach to each and every household
of the county. This will help the company in improving the brand value and so the revenues of
the organisation. It can also be conclude that the current value of Amazon is the biggest strength
of the company which shows the competitive advantage gained by the company over its
competitors. The strong current value is a threat to other companies and also a factor of
improved brand value. For performing this, there is also a need to analyse he marketing and
promotional activities of the company by having an adequate budget and timeframe. The
marketing mix of Amazon will support the company in developing the brand value by having
effective promotions of the brand through number of channels. Thus, it can be concluded that it
is the prime time when Amazon can win the Australian retail market and achieve sound brand
visibility and value through its unique way of offering products and services to the customers.

Marketing Management 11
References
Adhikari, S. (2016). Amazon targets Aussie market, Retrieved on: 25th January, 2018, Retrieved
from: https://www.theaustralian.com.au/business/technology/amazon-targets-aussie-
market/news-story/ca333f66565e7c07c31d827edff2e35b
Armstrong, G., Adam, S., Denize, S., & Kotler, P. (2014). Principles of marketing. Pearson
Australia.
Aversa, P., Haefliger, S., & Reza, D. G. (2017). Building a winning business model
portfolio. MIT Sloan Management Review, 58(4), 49.
Bashar, A., Ahmad, I., & Wasiq, M. (2012). Effectiveness of social media as a marketing tool:
An empirical study. International Journal of Marketing, Financial Services &
Management Research, 1(11), 88-99.
Capital Cube, (2017). Amazon.com, Inc. – Value Analysis (NASDAQ:AMZN) : July 4, 2017,
Retrieved on: 25th January, 2018, Retrieved from:
http://www.capitalcube.com/blog/index.php/amazon-com-inc-value-analysis-
nasdaqamzn-july-4-2017/
Cloutman, N., (2017). Here's how Australian supermarkets are preparing for the arrival of
AmazonFresh, Retrieved on: 25th January, 2018, Retrieved from:
https://www.businessinsider.com.au/heres-how-australian-supermarkets-are-preparing-
for-the-arrival-of-amazonfresh-2017-9
Gielens, K., & Dekimpe, M. G. (2009). Global trends in grocery retailing (pp. 413-28). London:
Sage Publications.
Industry, A. R. (2011). Economic Structure and Performance of the Australian Retail Industry.
Johnston, R., (2017). Experts Believe Amazon Will Destroy Australian Retail, Retrieved on: 25th
January, 2018, Retrieved from: https://www.gizmodo.com.au/2017/03/experts-believe-
amazon-will-destroy-australian-retail/

Marketing Management 12
Minifie, J. (2017). Competition in Australia.
Nizam, N. Z., & Hoshino, Y. (2016). Corporate Characteristics of Retail Industry among 11
Asian and American Countries. Journal of Management Research, 8(1), 224-247.
OLŠANOVÁ, K. (2012). Brand Positioning as an Element Setting Directions and Creating
Synergies in Marketing Mix. Trends in International Business 2012, 188.
Pash, C., (2017). Hot competition is back in Australian supermarkets, Retrieved on: 25th January,
2018, Retrieved from: https://www.businessinsider.com.au/hot-competition-is-back-in-
australian-supermarkets-2017-10
Reid, S. (2015). A Critique on the Multinational Marketing Strategies. Scholedge International
Journal of Business Policy & Governance ISSN 2394-3351, 2(3), 1-5.
Rosenbloom, B. (2012). Marketing channels. Cengage Learning.
Singh, M. (2012). Marketing mix of 4P’s for competitive advantage. Journal of Business and
Management, 3(6), 40-45.
Singh, N. (2017). The Transformation of Retailing.
Singh, S., Jain, E., & Madan, M. (2016). Impact of Value Creation on Stock Prices: A Study of
Amazon. Com, Inc. Middle East Journal of Business, 11(2), 3-11.
Smith, A. D., Rupp, W. T., & Offodile, O. F. (2017). Amazon. com, Inc.: Retailing Giant to
High-Tech Player?.
The Australian, (2017). Amazon: retail raider at the gate, , Retrieved on: 25th January, 2018,
Retrieved from: https://myaccount.news.com.au/sites/theaustralian/subscribe.html?
sourceCode=TAWEB_WRE170_a_GGL&mode=premium&dest=https://
www.theaustralian.com.au/business/amazon-retail-raider-at-the-gate/news-story/
68a34778ac8ac319647c25e77f0c2458&memtype=anonymous
The Conversation, (2017). Amazon poses a double threat to Australian retailers, Retrieved on:
25th January, 2018, Retrieved from: https://theconversation.com/amazon-poses-a-double-
threat-to-australian-retailers-78534

Marketing Management 13
Tyagi, M. S., Singh, G., & Agarwal, M. T. COMPARATIVE ANALYSIS OF RETAIL
SECTOR OF INDIA AND AUSTRALIA.
Weber, A. N., & Badenhorst-Weiss, J. A. (2016). Time-based competition as a competitive
strategy for online grocery retailers. Journal of Contemporary Management, 13(1), 433-
460.