Marketing Strategies and Analysis for Amazon Go Supermarkets

This report provides a detailed marketing analysis of Amazon Go, the cashier-less supermarket. It begins with an introduction to the concept and its innovative "Just Walk Out Technology." The report is structured to cover key aspects of a marketing plan, including an executive summary highlighting the importance of branding and marketing models. It then delves into a PESTLE analysis, examining the political, economic, social, technological, legal, and environmental factors influencing Amazon Go's operations, particularly in the UK market. Following this, a Porter's Five Forces analysis assesses the competitive landscape. The report also includes a SWOT analysis to evaluate the company's strengths, weaknesses, opportunities, and threats, along with a stakeholder analysis. Finally, the significance of the marketing mix is discussed, providing a comprehensive overview of the marketing strategies employed by Amazon Go.

Marketing

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
Executive summary......................................................................................................................1
MARKETING PLAN......................................................................................................................2
1. PESTLE Analysis and Porter's five forces..............................................................................2
2. SWOT Analysis and stakeholder analysis..............................................................................5
3. SMART strategic objectives of Amazon Go...........................................................................7
4. Market Segment.......................................................................................................................7
5. Significance of Marketing Mix................................................................................................8
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Marketing referred as an activity that the firm undertakes in promoting selling and the
buying of product or the service. It includes selling, advertising & delivering the products to the
consumers or the other types of the businesses. The present report is based on Amazon Go, the
cashier less supermarket that allows the customer in picking the items and walking out with
those items in order to take care that they do not have to stand in the checkout queue.
Furthermore, the report highlights the significance of branding and the different marketing
models. Moreover, the reports presents a marketing plan for the firm in which PESTLE, SWOT
and marketing mix analysis is been stated.
PART 1
(Enclosed in ppt)
Executive summary
The present study throws a deeper insights with regard to the different marketing
concepts and its importance for Amazon Go. The study reflects that for successfully executing
the strategic change that is been initiated through the process of strategic thinking, it is essential
for all level of the employees in fully incorporating change. This could be done by establishing
& identifying the principles and values for ensuring an achievement of the goals effectively. The
3 main marketing models that are been used in the marketing planning process as the strategic
tool assessing the external and the internal factors that influences the smooth functioning of the
company.
Moreover, it has been represented that investors always opt for making investment in the
reputed and well-known brand. Thus, branding plays a critical role for the firm in increasing its
productivity, market share and the customer base effectively and efficiently. It also helps in
creating brand awareness across the world and also assist in increasing the growth opportunities
that leads the company towards growing success within the market. Further, Brand positioning is
the marketing concept that designs the offerings of the firm and an image in occupying a
distinctive place among the target audience or in minds of the customers.
Brand pyramid is the another main concept of marketing that answers to the fundamental
questions in relation to brand and its related operations in market. It is found as the most
significant and integral aspect at the time when the brand is on verge to embark journey in
market. It helps an entity in identifying the place where its target customers are present and in
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developing the effective marketing strategy that leads attainment of the goals in effective way.
Developing the strategic plan for maintaining the brand equity and gaining brand value needs a
comprehensive knowledge of target market, brand and overall vision of the company. Thus,
brand management helps in building, controlling and measuring the brand equity of an
enterprise.
MARKETING PLAN
1. PESTLE Analysis and Porter's five forces
PESTLE analysis is conducted for analysing the external factors influencing the business.
Political Factors
Political factor refers to the influence of the different laws and legislations of the country
in which they are operating. Since Amazon is planning to start a new marketing plan with no
scanning it has to comply with the rules and regulations of the country. Political environment of
the London is stable and would not affect the business. The present government policies and
stability are beneficial for the business helping it to grow successfully in the market. Trade and
fiscal policies of the country are stable which will not impact the business and its operations.
Economic Factor
Economic factor refers to the economic forces influencing the business. It identifies the
impact of economy and performance which will influence the profitability and operations of the
organisation. Economic environment of the county is stable which is the main attraction of
number of investors in the country. Opening will create new employment in the region that will
promote the business (Piercy and Morgan, 2018). Also purchasing power is high of the
consumers in London which will be driving profits for the Amazon. Steady economic growth
will help the business in growing smoothly and quickly achieving the goals and objectives.
Social Factor
Social factor focus over the social environment & emerging trends in the society. It is
carried for understanding the needs and demands of customers. The concept of Amazon is new
and innovative which will be getting acceptance in the market. The new trend will save the time
of consumers and give new shopping experience which will be drive profits in the company.
Business will be promoted on social platforms which will be attracting new customers creating
new customer base experiencing new shopping methods.
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Technological Factors
Technical factor have to consider the innovation and development n the technological
fields. The idea of shopping without a cash counter is a innovative concept. The idea is based on
application software that monitors all the purchases of the customers and makes payment from
the Amazon account directly. This reflects the technological innovation and development
achieved by the company that will help the company to serve successfully in the country. The
technological advancement in shopping has not yet launched by any other company which is a
competitive advantage that will help to attract new customer base. Technological advancement
will enable the company to grow successfully in the market. However company is required to be
updated with the new developments and innovations in the sector to remain competitive in the
market.
Legal Factors
Organisation starting business in new regions are required to identify all the legal
compliances of the territory. It is essential for the business to be aware of changes taking place in
the legislations and the rules prevailing in the areas that might impact the business (Magalhães
and et.al., 2020). Company is required to be updated with the different legislations such as
employment legislations, consumer laws, health & safety and such other statutory laws and
compliances. Legal forces if not identified and complied appropriately on time can significantly
influence the business, therefore it is essential to analyse all the laws and legislations of the
region in which company is planning to operate.
Environmental Factors
This factors is concerned with environmental factors and effect of ecological aspects.
People have now become active and vigilant about the organisations that are complying with
environmental factors. Awareness about the importance of environment in society requires the
company to undertake their responsibilities towards society. Resources used by the company are
scarce and it is the responsibility of the companies to preserve and protect the resources.
Company is required to undertake the CSR practices for complying with the requirements of
environment responsibilities. It will create a new image of the business attracting new customer
base of the company.
Porter's five forces model
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It is the tool used by the company for analysing competitiveness of the business
environment and identifying the potential profitability of the strategy. It enables the company to
understand forces that could influence the business and it could frame its strategies accordingly.
Competitive Rivalry
The factor identifies the competitiveness of the environment. Amazon is operating in the
retail industry and there are strong competitors in the retail sector that could influence the
business. Major competitors in the region are Marks & Spencer and Sainsbury. Company for
attracting the customers of the competitors will be required to give high price cuts and offers. It
will be require to lay strategies that will attract new customers with high impact marketing
campaigns. However the new idea of shopping will attract customers saving their time in the
busy life.
Supplier Power
Company has to identify the power of suppliers to rise the prices. Amazon being a large
retailer will be making bulk purchases from the market that give it cash and price benefits. The
products and supplies will be made at lower costs (Deshpande and et.al., 2017). There are
number of suppliers in the region and company can keep alternatives in situations where the
prices are raised by the suppliers. Company does not operate in a monopoly market which do not
give the suppliers with the power of raising prices.
Buyer Power
Power of the buyers to influence the prices is to be assessed by the company. Amazon
has large number of consumers which and there are number of alternative available in the market
of the products of Amazon. This gives the buyers with the power to influence the prices and
policies of company. However the new marketing strategy of Amazon go will provide the
customers with time saving shopping opportunities which is an advantage which will help
company to charge for saving their time. This technology is not yet available that do not hive
power to the buyers to influence the prices.
Threat of Substitution
Threat of substitution could affect the business as market is always creating the ways of
producing substitutes. Development of software similar to Amazon go by other competitors will
be affecting the business and its profitability. Availability of substitutes weakens the ability of
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company to charge high prices of their product. Company is required to make continuous up-
gradation and development in the software for reducing the threat of substitution.
Threat of New Entrants
Entry of the new entities in the market affect the profitability of the company. The entry
to the industry does not have strong barriers that could restrict new entrants. New entrants makes
sharing in the profits in the industry. However Amazon is a large sized well established company
and due to which major impacts are not seen from the new entrants (Kreutzer, 2019). Entrance
requires heavy investments in the business which is strong barriers restricting new entrance in
the market.
2. SWOT Analysis and stakeholder analysis
SWOT Analysis
SWOT analysis provides the internal strengths and weaknesses and the external
opportunities and threats that are to be analysed by company for achieving the growth and
success.
Strengths
 Being the largest online retailer have large customer base.
 New Technological advancement is the competitive advantage for the business .
 It will be providing the most convenient shopping experience with no check outs.
 It has strong loyal customers which will be getting easy market acceptance.
 The innovative culture gives customers with new insights of shopping. Easy and time saving nature is a strong advantage in the busy schedules of people.
Weakness
 Maintenance cost of the software and technological equipments is very high.
 It will be difficult for Amazon Go to providing and weighing the produce and meat.
 This requires the company to monitor the operations very closely. Loss of margins in few of the products that will affect the profitability of the business.
Opportunities
 The new business environment provide Amazon with the opportunities for penetrating
and expanding the operations in the developing markets.
 Improvement in the technological measures & organisational policies will help the
company in counterfeiting sales.
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 There are opportunities for the backward integrations through expanding the production
of the in-house brands that differentiate the offerings and improves the profit margin
(Maldonado, and et.al., 2020). The new investments policies of the government will provide the company to establish its
business effectively and achieved the desires profit margins.
Threats
 Some of the statutory compliances may affect the business of the company that are
required to be handled with legal measures.
 Aggressive competition in the industry is concerning factor of the company.
 There are many entrance coming in the industry with similar model which could affect
the profitability.
Stakeholder Analysis
Stakeholders are the group of individuals having interest in the organisation and the
outcomes of the actions.
Customers
Customers are the main stakeholder of business and have the most influence in business.
Customers will be provided with new experiences which will help the company in creating new
customer and retaining the existing ones. Time saving will drive the customer towards the
amazon stores.
Investors
Amazon Go's shareholders expects a high rate of return as are provided in Amazon.
There are concerned with the increase in the value and returns over their investment (Zhang, and
et.al.,2019). This requires the company to ensure that required rate of returns are earned from the
business for attracting new investments and increasing wealth of existing shareholders.
Employees
As the new business is completely based on the technical software there is least human
involvement. This will save the cost of company and employees will be required for monitoring
the operations. Company has to ensure that the goals and objectives the employees are aligned
with that of company.
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3. SMART strategic objectives of Amazon Go
 To achieve the sales target of 20 million in its first year.
 To create a customer base of more than 5 million satisfied customer.
 To achieve the profit margin of 7% by the end of year one.
 Being recognised as the most advanced company with technological innovations.
4. Market Segment
Use of market Segments
Market segmentation is practice of dividing the consumers into different groups based
over the shared desires, needs and preferences. This helps the business to adjust the product line
and the marketing techniques for appealing to every customer group more effectively to address
the specific needs. This is used by the company for more clearly understanding the target
audience and idea consumers. Market segmentation allows the company to identify the needs and
demands of customers so that they could make strategies for the business accordingly.
Market Segment of the business
Company will be serve the business and service people that are having busy work
schedules. The new business is focused over the customers segment that are having shortage of
time in their busy schedules. These people are working professionals, employees and business
class people who are occupied whole day. The business of Amazon Go Will save considerable
time of the people as they will not be required to wait for the billing their shopping. The time
save here could be utilised elsewhere (Kreutzer, 2019). People belonging to this working age
group are always in search of ways of doing thing that could save their time considerably. This
will be a new idea for saving the time of consumers and giving them new shopping experience. It
will be helping the company to increase its market share and get higher acceptance.
Brand Positioning of the target market.
Brand positioning refers to conceptual place of the that the business wants to own in mid
of target customer. Brand positioning strategy helps in maximising the customer relevance and
the competitive distinctiveness for maximising the brand value. Amazon Go will positioning its
products as the qualitative and easy to go. The products of customer will be recognised for its
quality and easy availability. The shopping will be easiest and fastest as compared with other
competitors. This will create strong brand positioning of Amazon Go for the products and
services. This will enable company to create separate status in the market.
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5. Significance of Marketing Mix
Marketing mix is generally define as different element of the marketing which can be
used to market the product of the company in front of the consumer using different marketing
techniques. There are four different element which was given by E. Jerome McCarthy's i.e.
Product, Price, Promotion and Place which generally refers to 4 p's of marketing. After that 3
more P's were included in the marketing mix that is people, process and Physical (Blut, Teller
and Floh, 2018).
Marketing mix used to bring the variety of the different type of significance for the
organization in the long run. Marketing mix in the organization used to help the company in
building a clear guidelines for the different department in the organization and on the basis of the
same all the employee in the organization used to perform the variety of the different type of the
activity in the organization, it used to help in increasing efficiency of different activity.
Marketing mix generally help the organization in product development in the organization
(Išoraitė, 2016). As marketing mix generally help the organization in getting information about
the current position and trend prevailing in the market. This eventually help the company in
developing the different product more accurately to attract the eye of the consumer in the market.
Also, marketing mix in the organization used to help the company in increasing and representing
the product portfolio more clearly in the market.
Pricing, promotion and Distribution Strategy
Pricing Strategy
In regards of food category in the store, organization will be selecting the penetration
pricing method, reason behind the same is that food category is one of the category which is
capable of attracting the large number of customer toward the company product. For the same
reason organization will be lowering down the profit margin of all the food product in the
market, so that most number of the customer are attracted toward the product of the company in
the market. After monitoring the progress of the different product in the market organization
will be reviewing and updating the price of the different product accordingly in the market.
Another benefit which will be offered by the penetration pricing strategy in the market will be
the competition advantage, as organization has to see variety of the competition in the initial
stage corporation. So, it is very much important for the business to keep the price of different
product very low so that large number of the customer are attracted and after sometime can
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increase a bit of price of the product which has seen good response in the market.
Promotional Strategy
There will be the mixture of promotional strategy which will be used by the organization
to promote the product of the company in the market. Reason behind the same is identified that it
is very difficult to attract the eye of all the category consumer by using just one promotional
platform in firm. So, for the same reason organization will be using both social media platform
as well as local platform in the nation to promote the product of the company in the market. In
the local channel organization will be taking help of newspaper advertisement as a promotional
tool to promote the product of the company In the market. Social media platform in the
organization will help the company in attracting the teenager consumer toward the product of the
company (Wu and Li, 2018). Also, it will help the company in increasing the customer base of
the company in the long as social media platform generally used to see the large number of the
user in the market. At the same time newspaper advertisement in the market used to help the
company attracting more consumer in the market. Using both of the promotional platform will
eventually help the company in increasing the customer base and will also open up the
opportunity to retain the customer base of the company in the long run.
Distribution Channel
In the initial stage the organization will be selling the product of the company with the
help of direct distribution channel, using there store to sell the product of the company. After
looking the response of customer toward the product of the company in the market organization
will look to enter into packed food product also and will eventually will also take the help of
other store to sell the product of the company in the market as a indirect distribution channel.
Reason behind not using indirect channel from the initial stage itself is that it may increase the
cost of the company and will create the variety of the issue to manage the same (Stead and
Hastings, 2018).
CONCLUSION
From the above report it has been summarized that marketing plays an important role in
informing the customers regarding services and the product that is offered by the business. By
preparing for the marketing plan, company could be able to set up its business successfully as it
helps in making proper scanning or internal and the external environment which in turn assist in
dealing with uncertainties that might arise in future and also helps the firm in achieving growing
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success within overall industry.
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REFERENCES
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