STP and Marketing Mix: How Amazon Achieved Market Dominance

This report provides a comprehensive analysis of Amazon's marketing strategies, focusing on the STP (Segmentation, Targeting, Positioning) framework and the marketing mix (Product, Place, Price, Promotion). It details how Amazon segments its customer base using demographic, geographic, psycho-graphic, and behavioral factors, and how it targets a broad audience with tailored products and services. The report also examines Amazon's positioning strategies, highlighting its strong online and offline presence and successful distribution channels. Furthermore, it explores Amazon's product range, place strategies, pricing tactics (including market-oriented, price discrimination, and value-based pricing), and promotional efforts (advertising, sales promotion, public relations, and direct marketing). The analysis concludes that Amazon's effective implementation of these strategies has contributed significantly to its competitive advantage and market dominance, solidifying its position as a leading e-commerce platform.

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Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
STP.........................................................................................................................................1
Marketing Mix strategies........................................................................................................4
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Marketing is described as an action which different companies implement so that they
could promote and sell their products or services among potential customer base. Marketing
activities require a lot of market research in order to understand trends and needs along with
promotional strategies to reach large customers. These activities help organisations in increasing
profitability and growth as well provide them competitive advantage over others in the market
(Lit, Kim and Sy, 2021). For implementing effective marketing strategies companies are
requiring to execute plans and tactics. The following blog contains market positioning of
Amazon which was founded by Jeff Bezos on July 5 in the year 1994 (A Brief History Of Amazon,
2019.). The company operates its business operations across the world through its online e-
commerce websites. The blog mainly focuses on explanation about marketing-mix of the
respective firm which describes how it has achieved competitive advantage in the market
through offering range of goods at affordable prices. Furthermore, it has also been evaluated in
this blog report that how firm has segmented its customers base through segregating them
according to preferences and what position it holds within the market.
MAIN BODY
STP
Market segmentation of Amazon
This is a marketing framework which helps companies in segmenting, targeting and positioning
themselves in the market in order to enhance their growth as well as reach maximum number of
people. The three basic steps of this analysis dictate about how organisations could identify their
right customer base, serve them effectively and provide them information they require for
successful targeting (Longo and et. al., 2020). This approach helps firms in determining their
most valuable market segment and then trade them efficiently with carefully targeted goods and
marketing. This assist companies in developing products according to the preferences of their
potential customer base which could enhance their market position. This framework allows them
to engage with each segment, personalize their message and trade more products or services. In
context to Amazon, the segmentation, targeting and positioning includes various activities that
aim at finding certain group of people as consumers and developing goods or services that could
attract these segmented audiences.
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Segmentation strategies of Amazon
This component of the STP framework helps companies in dividing their market into distinct and
identifiable groups. Each of these groups possess similar interest, requirements and represent
similar response to marketing actions. Segmentation criteria could be used to divide market
which include demographic, geographic, psycho-graphic and behavioural. In case of Amazon,
is has divided its market segment according to components of segmentation factors. Under
demographic segmentation, the respective company divide group of people who have internet
access, various countries and age group of 25 to 50 years (Blut, Teller and Floh, 2018).
Figure 1. Market segmentation. 2021.
In situational segmentation those people are categorised who mainly focus on online purchasing,
have interest in new products, new deals every day or every hour and low pricing factor for
buying online. Furthermore, under psycho-graphic segmentation, consumers are segmented by
their loyalty, customers who like innovation, those who value client care and people who click
on suggested and recommended goods. Lastly, under geographic segmentation, the company has
included international appeal, developed areas, digital sales, rural areas where smartphone is
required.
Targeting approaches of Amazon
This is the second component of STP framework which explains which segment of the audience
companies should target so that they could focus on providing best services to them. In case of
Amazon, the company targets a large customer base and tries to offer goods or services
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according to their needs and demands. For instance, under geographic conditions the respective
company targets more than 100 countries including their rural and urban regions. In demographic
segmentation, the company targets people aged between 18 to 60 years including both male and
female. The life cycle stage of people includes full-nest, single, married, empty nest and solitary
survivor. The occupation of people according to which company targets its audience includes
students, professionals and specialists.
Figure 2. Targeting. 2021.
The behavioural targeted customer base of company involves on the basis of loyalty that has
hard-core, switchers and soft-core. Benefit sought includes product assortment and convenience
competitive prices (Jones, 2017). User status involves potential users, ex-user, regular users or
first-time users and personality target includes easy-going, ambitious as well as determined. The
psycho-graphic targeted audience is related to social class which have middle, upper and
working. Whereas lifestyle customer base includes mainstream, struggler, explorer, resigned,
aspire and reformer.
Positioning strategies of Amazon
This factor helps company in determining that they occupy right position in the market among
their targeted audience. In context to Amazon, it has positioned itself in the market effectively
through its strong online and offline presence (Grewal and et. al., 2020).
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Figure 3. Brand Positioning. 2021.
The company has successful distribution channels which help it in delivering products easily to
customers. The website and applications also help company in setting a positive image in the
mind of its targeted customer base.
Marketing Mix strategies
Product range of Amazon
This is the component in marketing mix tool which is used to provide description about the
products that a particular company offers in the market. In case of Amazon, it is considered as
the top retailer organisation in the market which offers a wide range of products. It is also a
leading e-commerce platform in the world and trade its products through online and offline
platforms. The products that organisation offers in the market includes Retail services, retail
goods, Amazon Prime, consumer electronics, Amazon Video, Amazon Fresh and many more.
The respective company primarily deals in online retail products and this is its main service. The
Amazon Prime is a membership product that also involves shipping services to customers on its
online website (Fathi and et. al., 2021). The electronic products of the company include Amazon
Kindle e-book reader and Kinder Fire Tablet.
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Figure 4. Amazon Prime Subscription. 2021.
Furthermore, the products marketing-mix of the company also involves distribution of digital
content such as music and e-books. Amazon Video is an on-demand services which is offered in
the UK, United States and Japan.
Figure 5. Amazon Kindle. 2021
Through Amazon Fresh and Amazon Pantry, the company delivers grocery products in the
market.
Figure 6. Amazon Fresh. 2021.
The company has expanded its product range by investing in technology in shopping procedure
for its customers. For instance, Amazon Dash includes a device that provide customer a facility
to buy households goods by clicking a button that directly connects them to internet. Amazon
Web Services offers a broad range of services such as storage, global compute, database and
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other facilities. The organisation has also acquired various firms which includes IMDb, Twitch,
Ring, Whole Food Market, etc. that has helped respective firm in strengthening its position in the
market.
Figure 7. Amazon Web Services. 2021.
Place in market of Amazon
This component of the marketing tool helps in explaining from where companies operate their business
in order to reach maximum number of people. In context to Amazon, it mainly operates its business
operations through online platforms. The company uses its website and mobile applications of
Amazon.com to reach its targeted audience from where they purchase products. Once customers place
their order the distribution channel of company takes responsibility where goods are procured and
stored at its fulfilment centre. The company also holds large warehouses in strategic locations in order
to reach remotest of areas (Lorenzo, 2017). These warehouses are categorised into various fulfilment
centres which includes non-sortable, speciality product centres and customer return. From these centres
products are trade to distribution channels and then delivered to customers. The respective firm utilises
local courier and postal services to transport packages. The company also operates through its e-
commerce website which includes Amazon.com, Audible.com (a subsidiary) and many other online
platforms.
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Figure 8. Amazon website. 2021.
It also has various physical stores in the UK such as Amazon Fresh in London, Amazon 4-star at
Bluewater Shopping Centre, Amazon Locker-Jonhs and many more in order to reach potential
customers.
Figure 9. Amazon Fresh. 2021.
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Furthermore, the respective organisation utilises other venues to temporarily negotiate with consumers.
For instance, the annual Amazon Web Service Summit held in several places which helps company in
reaching to its potential customer base and influence them to pay for its e-commerce facilities.
Figure 10. Amazon 4-star. 2021.
Price strategies of Amazon
This factor of the marketing-mix mainly focusses on pricing strategies and levels that companies
execute to sell their goods or services in the market. In case of Amazon, it generally uses low
pricing strategies in order to attract large customers base towards its products offerings and e-
commerce websites. The respective company also execute other pricing strategies which includes
Market-oriented, Price discrimination and Value based pricing methods (Jarek and Mazurek,
2019). The primary strategy that company uses is market-oriented pricing strategy. For instance,
the firm analyse prices of its competitors so that it could price AmazonBasics products. The main
benefit that this pricing strategy provides to the company is that it makes selling price more
affordable, attractive and competitive to potential customers.
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Figure 11. Amazon.com, Inc. 2021.
Whereas under the Price discrimination strategy, the company sets different prices for similar
goods. For instance, the prices of the company for same goods are different between the United
Kingdom and the United States. The benefit that this pricing strategy provides to the company is
that it helps the firm in adjusting products' prices according to national market conditions,
preferences of customers and perceived value of products.
Figure 12. Price Discrimination. 2021.
Furthermore, Amazon.com Inc. implements value-based pricing strategy which includes pricing
level accordant to value of goods and considering customers' perception of value.
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Figure 13. Value Based Pricing. 2021.
Promotion tactics of Amazon
This element of marketing-mix determines what strategies and tactics organisations execute to
build communication pathway with their targeted audience. In case of Amazon, it uses various
online and offline channels in order to promote its wide product range to potential customers.
The respective firm execute several promotional strategies which includes Advertising, Sales
Promotion, Public relation and Direct marketing (Arnett, Goldfinch and Chinta, 2018).
Figure 14. Amazon campaign. 2021.
As a primary marketing tactic the company uses advertising strategy so that it could reach large
customer base. For instance, the selected company has an affiliate program for many online
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