Amazon's Marketing Strategy: STP Analysis and Marketing Mix (7Ps)

This report provides an in-depth analysis of Amazon's marketing strategy, focusing on its Segmentation, Targeting, and Positioning (STP) process and the marketing mix (7Ps). It highlights how Amazon utilizes demographic and psychographic segmentation, targets a wide audience, and employs multi-segment and adaptive positioning strategies. The report also examines Amazon's product, pricing, place, promotion, people, process, partnership and physical evidence strategies, emphasizing its competitive pricing, extensive distribution network, and rigorous promotional activities. The analysis showcases how these elements contribute to Amazon's success as a leading e-commerce giant, maintaining a loyal customer base through innovative services and effective marketing plans.

Running head: PART 2
PART 2
Name of the student:
Name of the university:
Author note:

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Executive summary:
Amazon is one of the leading giants in the e-commerce industry and is growing at a very
fast pace. With its leading business technologies and innovative services and offerings to the
consumers, it had been successful in developing a loyal consume base. Individuals ranging from
young ages to that of the old - all can found their necessary requirements and commodities on the
website and can order their favorites in few easy clicks.
The segmentation, targeting and positioning (STP) process can be defined as the effective
strategy by which Amazon can develop effective marketing plans that would help them to gain
competitive advantage over other competitors in the same market. This would help the
organization to be able to identify the most effective marketing strategies by which more
consumers can be attracted and this will help Amazon to define and understand the
characteristics of different customers.
Since the time of its conception in 1995, Amazon had outgrown several competitors in
the fields and had gone to become the market leader. It has around 240 million customer
accounts worldwide. They had planned their marketing components with much care and details
after thorough researches. They have used careful investment and acquisition to keep it to stay
the leader in its fields. It continues to expand its product whilst offering competitive prices to the
customers. This assignment will therefore look into the marketing mix that had enabled them to
stay ahead in the competition.

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Contents
Introduction and recap of the company:..........................................................................................3
Segmentation, targeting and positioning:........................................................................................3
Segmentation:..................................................................................................................................4
Targeting:.........................................................................................................................................4
Positioning:......................................................................................................................................5
Marketing mix:................................................................................................................................6
Product:............................................................................................................................................6
Price:................................................................................................................................................6
Place:................................................................................................................................................7
Promotion:.......................................................................................................................................8
People:.............................................................................................................................................8
Process:............................................................................................................................................9
Partnership:......................................................................................................................................9
Physical evidences:..........................................................................................................................9
Conclusion and recommendation:.................................................................................................10
References:....................................................................................................................................11

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Introduction and recap of the company:
Amazon is the company, which had been founded in Seattle in the year 1994 by Jeff-
Bezos. It initially began as an online book store but it rapidly diversified to selling various of
commodities and services on the internet. This had made Amazon one of the largest online
retailers. In the present generation, it had been seen to segment in the online retails, internet
services as well as the kindle ecosystems (B.G, 2018). The present day figures show Amazon is
the leading e-retailer in the united states with close to about 178 billion U.S. dollars in 2017 net
sales. Researchers are of the opinion that majority of the revenues of the company are generated
through the e-retail sales of the electronics as well as other products. This aspect is then followed
by the third-party seller revenues, subscription services and AWS activities (Clauser, 2018). As
Amazon has a global scope and reach, it is often called one of the most valuable brands
worldwide. This assignment would mainly conduct a market positioning analysis and marketing
mix analysis to shed more light on different aspects of the brand.
Segmentation, targeting and positioning:
Amazon segmentation, targeting and positioning mainly involve a set of activities that are
aimed as determination of specific groups of people as customers. Accordingly, they had
developed products as well as services that are attractive to the groups.

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Segmentation:
Market segmentation is the first step of the process of the Segmentation, targeting and
positioning. It can be described as the process that involves entailing division of the customers
into different groups that harbor unique characteristics. Customers who have similar
characteristics are often placed in the similar groups. Marketing segmentation mainly helps the
organizations in understanding their consumers. It helps organizations to define as well as
understand the characteristics of the clients and accordingly develop marketing strategy for them
(Schneider, 2018). Amazon utilizes demographic as well as psychographic segmentation for
segmenting its market. Close analysis had shown that Amazon’s segmentation is actually based
on the actual purchase behaviors of the clients. Their segmentation does not depend on what
might people have expressed their interests for but rather what they have already purchased. It is
also seen that that the organization’s micro-level segmentation had targeted each customer
individually. This had helped them to convert visitors into ling-term as well as high value
customers. Researchers are of the opinion that E-commerce segmentation mainly includes
creation of personas who buy in particular ways and certain products (Falk & Hagsten, 2015).
Similarly, the organization had also targeted the middle class and upper classes people who have
hands on experience on the basic technologies but do not have enough time or do not prefer
convenience over shopping from physical outlets.
Targeting:
This process involves selecting market segments that will finally become the focus of the
marketing programs of the organization. The segmentation procedures mainly help in
identification of the target market segments and accordingly in this step, the organization needs
to select few market segments that will form the foundation of the marketing campaigns. The

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organization had aimed at a wide variety of audience in the present generation who are interested
in internet shopping. From the different ranges of articles that are found in the website, suggest
that it targets customers who are of all the ages ranging from young to old (Torres et al., 2018).
The site has been developed in ways by which it even the technologically backward individuals
can also able to handle the site successfully. It has been seen that the website is not developed
targeting a “type” of cohort as it has been seen to offer items to consumers who come from all
walks of life as well as interests. However, it is seen that the organization mainly tries to target
people who have access to internet and have financial paying tools mostly like through credit
card, debit card, PayPal and others (Kim et al., 2017). However, the audience for the Prime
program is mainly seen to appeal to older shoppers than the younger ones as data shows that
individuals who are above the age 40 are more loyal to the service than people who are less than
40 years of age.
Positioning:
This process involves the tailoring of the offers of the firms so that it can stand out from
that of the competitors and thereby attracts consumers who can buy this offer. The organization
is operating in an industry where it is highly competitive. Therefore, Amazon needs to standout
from the rest of the competitors in order to survive in the market. Amazon is mainly seen to
provide two types of positioning. One of them is the multi-segment positioning. The organization
provides a wide range of products as well as services that have successfully exploiting more than
one segment at the time (Kozareva, 2015). Data has shown that specifically, the online retail
giant sells more than 562 million products that have already appealed to the needs and wants of
the wide range of the customer segments. It is also seen to undertake adaptive positioning where
the organization closely monitors the changes in the external market place and can thereby

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address customer expectations. This is mainly done by periodically repositioning of the products
and services according to the changes in the segments. Their activities also reveal that they
follow another form of positioning called the anticipatory positioning. They have developed
services like Amazon Sage Maker, Amazon Comprehend and Amazon Rekognition. These have
low turnover currentky but they have the anticipation that their demands will increase in the
future resulting in greater outcomes.
Marketing mix:
Product:
Amazon had become an international e-commerce company. By the use of connections to
the internet through different types of gadgets like that of phones and tablets for allowing
customers for browsing and purchasing important products immediately. With the help of
delivery service companies, they deliver the products to the customers (Zhao et al., 2015). They
had successfully built up a huge product base which are seen to sell almost every important
things like Kindle, Books, DVDs, Clothes for men/women and children, Mobile phones/tablets,
Jewellery, Gardening equipment, Gaming consoles and games. Initially, they had started with
books but as the organization contributed to grow, more and more different products were
introduced for selling.
Price:
Amazon is seen to follow the market leader as well as the competition based pricing
strategies. The pricing strategies are different for the different kinds of services that are offered
by the organization. The firm is mainly seen to use technology to its advantage for setting the

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prices and set tge price of the products using the competitive pricing strategies. The organization
is seen to offer the lowest of the prices and this is made possible by the efficiency of the
operations and according to its web-based business models. The prices are adjusted according to
the category of the product as well as the time of the day and the season (Sorokina et al., 2016).
They are also seen to provide value added services like that of Prime where the consumers have
to pay certain subscription charges for one day delivery as well as early access to the different
deals.
Place:
Amazon has become one of the global brands, which is experiencing demands for
services from across all places in the world. Not only consumers from America, people from
various parts of the world can easily access the website and the application for amazon.com.
Once, the customer had placed an order, the distribution channel of the Amazon takes the
responsibility. Here the products are procured and stored at the Amazon’s fulfillment centers
that are actually huge warehouses that are constructed by Amazon in strategic locations for
reaching out to the remotest of the places. They are seen to use the local postal and courier
services for the transportation of the packages (Einav et al., 2014). However, in the year 2015,
the organization had been seen to open round about 6 to 7 bookstores that are physical retails.
They also have alternative store format that are seen to operate in a cost effective manner,
students are seen to order books online and form furnishings online. They then come to the
centralized pick-up location for picking them up. It actually helps in reduction of the shipping
expenses. They are now preparing to launch grocery pickup service at two locations in Seattle.
This will help the prime members to order groceries online and then visits the stress for picking

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up. They have also introduced Prime Free Same Day and Prime Free One Day services which are
available for more than 8000 cities and towns.
Promotion:
Amazon is seen to undertake committed rigorous promotional strategies for promoting its
brands. Amazon mainly focuses on advertising and this is done through print ads in the
newspapers. Amazon is also seen to use creative television commercials as well as undertake
rigorous social media marketing. This is done through search engine optimization and customers
are targeted according to their searching patterns (Bogue, 2016). Moreover, Amazon had also
mastered the art and give effective sales promotions and discounts during holiday seasons and
festivals resulting in high visits to the websites. Public relation exercises are also seen to improve
brand image and was seen to include Amazon smile that donates to the charity organizations.
People:
Amazon is seen to provide huge importance to its employees in the workplace.
Irrespective of the positions where the employees are working, they are seen to get huge number
of benefits from amazon, which makes it a desirable employer. These benefits that are provided
to the employees are seen to include the health, financial, assistance programs and might also
involve the vacations and even the equity programs (Lin, 2014). Around 2,30,800 employees are
seen to work across the globes all around the clock which help in ensuring best experiences by
the customers. It is also seen to provide its employees with various raining and even
developmental activities.

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Process:
Amazon is the world leader in the e-commerce as well as in the web-based services. It is
the strong process oriented business. The organization had already divided the warehouses and
its fulfillment centers for operational efficiency. It is also seen to use the best in the business
technologies for supporting the daily activities as well as manage its advertisements and serving
the customer like providing detailed information about the location of the packages (Currim et
al., 2015). The customer relationship department and the information management are mainly the
cores of the business strategies.
Partnership:
Amazon has partnered with more or less every brands that it promotes and sells on tits websites.
Apart from that they have also partnered with DC comics, united states postal services, Nike,
Amazon fresh, and many others.
Physical evidences:
Researchers state that the biggest physical presence of the Amazon is its websites. It is
mainly the online retailer and therefore the place of service is the website and the apps that are
very user-friendly and are also built with great designs and styles. Moreover, the warehouses and
its fulfillment centers of Amazon present all over the countries are the largest that anyone can
find. The packages are also seen to sport their logo that shows an arrow from A to Z meaning
that all commodities of use can be found on the websites (Wittig & Wittig, 2016).

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Conclusion and recommendation:
From the above discussion, it becomes clear that Amazon had emerged as one of the most
valuable e-retailer company not only in United States but also all over the world. They have
developed modern business technologies by which they have set the pricing strategies that help
in developing lucrative pricing options for the consumers. They have attracted consumers that
range from young to even the old clients and have kept products that attract all consumers of all
cohorts. Apart from the online selling strategies, they are also establishing physical outlets for
books and even pick-up points for many consumers. However, they are into a rigorous
competitive zones with similar other successful competitors like Alibaba, Ebay and many others.
Therefore, they have to continuously come up with new strategies that are not only innovative
but also attracts the consumers either by being of reasonable prices or due to variety of products
or due to easy convenience in getting them as fast as possible. A strong research team needs to
be be employed who would work on the marketing analysis and identify the demands and needs
and accordingly position the marketing strategies accordingly. This would be of high advantage
to the brand in the competitive market.

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References:
B. G. (2018). Amazon Business Strategy: Insights Of Its Operation And Investment Plan To
Become A Trillion Dollar Corporation. Retrieved from https://www.greyb.com/amazon-
business-strategy/.
Bogue, R. (2016). Growth in e-commerce boosts innovation in the warehouse robot
market. Industrial Robot: An International Journal, 43(6), 583-587.
Clauser. G. (2018). What Is Alexa? What Is the Amazon Echo, and Should You Get One?.
Retrieved from https://thewirecutter.com/reviews/what-is-alexa-what-is-the-amazon-
echo-and-should-you-get-one/.
Currim, I. S., Mintz, O., & Siddarth, S. (2015). Information accessed or information available?
The impact on consumer preferences inferred at a durable product E-commerce
website. Journal of Interactive Marketing, 29, 11-25.
Einav, L., Levin, J., Popov, I., & Sundaresan, N. (2014). Growth, adoption, and use of mobile E-
commerce. American Economic Review, 104(5), 489-94.
Falk, M., & Hagsten, E. (2015). E-commerce trends and impacts across Europe. International
Journal of Production Economics, 170, 357-369.