Marketing Report: Amazon's Marketing Strategies and Market Analysis

This report provides a comprehensive analysis of Amazon's marketing strategies, examining its approach to the marketing process, including segmentation, targeting, and positioning. The report delves into the macro and micro environmental factors influencing Amazon's marketing decisions, proposing segmentation criteria for different markets and analyzing buyer behavior. It explores the elements of the extended marketing mix, including product development, distribution, pricing, and promotion, while also considering the additional elements relevant to Amazon's service perspective. The report further analyzes the marketing mix in different contexts, including consumer and business markets, and compares Amazon's strategies with those of competitors like Argos. It also discusses the benefits and costs associated with Amazon's marketing orientation and concludes with insights into Amazon's international marketing strategies and areas for improvement.

Contents
Introduction......................................................................................................................................4
TASK 1 Understand the concept and process of marketing ...........................................................5
(a) What is marketing? You are required to produce a diagram and explain the five steps in a
simple model of the marketing process. You should label your diagram and reference where
you obtained it from.....................................................................................................................5
Marketing: Marketing is the process of promoting the goods and services to make sales and
earn revenues. With the help of efficient and effective marketing organizations can easily
capture the market........................................................................................................................5
b) There are five possible marketing orientations under which an organisation can design and
carry out their marketing strategies, these are; the production concept, the product concept, the
selling concept, the marketing concept, and the societal marketing concept...............................7
You are required to discuss the approach that Amazon appears to embrace, you should identify
the potential benefits and cost to their approach and offer evidence from your research of the
company to support your argument..............................................................................................7
TASK 2- Be able to use the concepts of segmentation, targeting and positioning..........................9
(a) Show macro and micro environmental factors which influence marketing decisions...........9
(b) Propose segmentation criteria to be used for products in different markets........................10
(c) Choose a targeting strategy for a selected product/service..................................................11
(d) Demonstrate how buyer behaviour affects marketing activities in different buying
situations.....................................................................................................................................11
(e) Explain new positioning for a selected product/service......................................................12
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Task 3 - Understand the individual elements of the extended marketing mix...............................13
You should now extend your thinking beyond the 4 P’s to include a service perspective........13
(a) Product – How are products developed to sustain competitive advantage.......................13
(b) Place – Explain how distribution is arranged to provide customer convenience.............14
(c) Price – Explain how prices are set to reflect the organization’s objectives and market
conditions................................................................................................................................14
(d) Promotion – Illustrate how promotional activity is integrated to achieve marketing
objectives................................................................................................................................15
(e) Analyze the additional elements of extended marketing mix for your company.................15
Task 4 - Be able to use the marketing mix in different contexts...................................................17
(a) Plan marketing mixes for two different segments in consumer markets..............................17
(b) Decide on a product that both Amazon and Argos could target to a business market, and
discuss what the differences in marketing products and services might be to businesses rather
than consumers...........................................................................................................................18
(c) What could Argos learn from Amazon’s experience as an international marketer?...........18
Conclusion.....................................................................................................................................21
REFERENCE.................................................................................................................................22
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Introduction
The process of marketing has been discussed here where the process of marketing has been
clearly defined with the example of Amazon. Coming to the point directly, Amazon will be
considered as the most appropriate depiction of the changing trend of global marketing. Here,
everything from the process of marketing to the components in the process will be explained.
Marketing is never to be termed as one-way process; hence, the whole system will be defined in
a multi-dimensional mannerism that would also take into account the customer’s perspectives.
Why Amazon? This company has stood out to be a leader in modern day trade that too through
electronic medium i.e. Internet.
The portions would be concluded by a comparison between Amazon and its fellow competitor,
Argos, which would further depict the ways a leader differ from any ordinary business venture.
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TASK 1 Understand the concept and process of marketing
(a) What is marketing? You are required to produce a diagram
and explain the five steps in a simple model of the
marketing process. You should label your diagram and
reference where you obtained it from.
Marketing: Marketing is the process of promoting the goods and services to make sales and
earn revenues. With the help of efficient and effective marketing organizations can easily
capture the market.
(Shirky, 2008)
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These steps of marketing process when implemented strategically bring in more effectiveness in
the prepared strategy. The given diagram depicts the steps or stages which are involved in the
marketing process of every organisation.
Five steps of marketing process are as follows:
Research: It is the first and the foremost important step of marketing. Without research we are
not able to perform the marketing in an efficient manner. With the help of the research
organisation is able to find out the need and wants of their respective customers. Research helps
in getting the information about the market trend, customer’s needs and wants and also about the
activities of the competitors so that Amazon can make their strategies in an effective manner so
that they can compete with their competitors in an effective manner.
Plan: After research planning becomes the most important step of marketing because in the
absence of the planning things get mismanaged. With the help of the planning Amazon can target
the customer and prepare their goods and services in respect to satisfy the customer’s needs and
wants. Planning also include the quality and the price estimation so that they can prepare their
product or service accordingly.
Implement: It is very necessary to implement the planning in an effective manner to achieve the
desired results in an effective manner. So that implementation is also an important factor in
respect to marketing. It is very important to implement the plans and research in an effective
manner so that Amazon can achieve the desired goals in an effective manner.
Measure: After implementing the market research and planning it is very important to measure
the results which they get after implementing the market research and planning. With the help of
this we can say that measuring the results become important because while measuring the results
if they found that results are not effective then Amazon can again make effective plans and
implement them to get the effective results.
Optimize: It is a last step but with this it is also an equally important in comparison to all other
four steps. While marketing Amazon has use their available resources in an effective manner. If
Amazon didn’t optimize the available resources in an effective manner then the marketing of
their products and services get affected badly (Shirky, 2008).
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b) There are five possible marketing orientations under which
an organisation can design and carry out their marketing
strategies, these are; the production concept, the product
concept, the selling concept, the marketing concept, and
the societal marketing concept.
You are required to discuss the approach that Amazon appears
to embrace, you should identify the potential benefits and
cost to their approach and offer evidence from your
research of the company to support your argument.
Marketing orientation means using available theories, approaches and the philosophies by the
organisations so that they can perform their marketing activities. The marketing orientation is
further classified into five different orientations such as: Production orientation, Product
orientation, Sales orientation, Market orientation and societal orientation.
There are lots of benefits in respect to marketing orientation such as: It helps the organisation in
creating responsiveness so that they get an edge over their competitors. With the help of this
there is a continuous improvement in the products and services with this it also improve the
business process and system so that they can adapt the needs and wants of their respective
customers. The foremost objective of Amazon is to satisfy the needs and wants of the customers
in an effective manner and with the help of marketing orientation they get focused on their
objective. With this effect the motive of earning profit goes on second preference. With this
effect customer feels that their needs and wants are valued by Amazon and in return they give
reward to Amazon by becoming loyal customers with the help of regular purchases and
suggesting others to make purchases from the Amazon(Kotler, 2005).
Significant cost is required for the purpose of the strong marketing orientation. To get the
adequate market report (customers’ needs and wants) huge investment can be made in market
research. Amazon can perform deep research in respect to find out the accurate need of customer
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which requires huge cost. The cost incurred on the research can get lowered with lots of benefits
like increase in brand image, increase in profits, increase in market share, competitive advantage,
etc. if Amazon can satisfy the need of customers in an effective manner.
For Amazon the most suitable orientation is market orientation. With the help of the market
orientation Amazon can effectively understand the need of the customers. To develop their
product and services they can take full use of their market research in an effective manner. They
will consider marketing as an important factor in comparison to others. With the help of market
orientation Amazon focus on the needs and wants of the customers so that they get better market
information in comparison to their competitors and get an edge over them (Kotler, 2005).
The approach which is adopted by Amazon in developing its marketing strategies is the
production concept. The company aims to gain high figures of repeat purchase. This will help in
estimating the number of brand loyal customers. The organisation can achieve its goals and
objectives when quality of products and services provided by the company is exemplary and
meet the customer expectations. The benefits of production concept are realised in the form of
better market share and helps in increasing the brand loyalty of consumers towards Amazon.
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TASK 2- Be able to use the concepts of segmentation, targeting and positioning
(a) Show macro and micro environmental factors which influence marketing decisions.
Marketing environment: The ability of maintaining the relationship with the target market get
affected due to market factors known as Marketing environment.
PESTLE Analysis (Macro Environment)
Political Factor: Business of Amazon gets highly influenced by the political factors. Stability of
political parties plays an important role because if the political parties are not stable then the
policies are also not stable which affects the business.
Economic Factor: Such countries are preferred by the Amazon who has sound economy so that
their residents can make purchases easily.
Social Factor: It includes type of population, income level, level of education, etc. These factors
should be considered by Amazon before starting their business.
Technological factor: Amazon use latest technology and try to keep updated on regular basis so
that they can provide effective product and services to their customers effectively (Colborn,
2001).
Environmental Factor: Amazon has to follow the environmental laws, rules and regulations
while making deliveries and production and helps the society in getting pollution free.
Legal factors: Amazon performs his business activities in different countries and it is very
necessary for Amazon to follow the laws so that they can run their business in an effective
manner.
The PESTLE analysis is performed for developing an understanding about the organisation’s
working in the external business environment. These factors and their influence over the business
operations of Amazon have been depicted above. From this analysis, it has been evaluated that
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Amazon is volatile towards economic changes but it is capable of tackling the technological
developments.
SWOT analysis
(Colborn, 2001).
SWOT analysis is conducted to identify the factors that are influencing internal environment of
the company. The activities and decisions of the firm affect not only the consumers and clients
but also its employees and the entire group of individuals that are linked internally. Through
SWOT analysis, it is realised that Amazon has strong market position but it is facing immense
competition in the operational markets. There is continuous threat of new entries and judicial
proceedings if lawsuits are filed for ineffective pricing strategy.
(b) Propose segmentation criteria to be used for products in different markets.
Market Segmentation: It means dividing the market into various identifiable groups so that they
can satisfy customer’s needs in an effective manner. It is a marketing concept helps in targeting
the market. There are various market segmentation concepts such as: geographic segmentation,
lifestyle segmentation, demographic segmentation and behavioural segmentation.
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Strength
 World’s leading online retailer.
 Easy entry in new markets due to
globally reputation.
 With the use of superior logistics and
distribution system they can easily
fulfil the customer needs.
Weakness
 Free shipping facility reduces their
profit margin.
 Amazon operates near to zero margin
means they didn’t turn the huge
revenues into proper profits.
Opportunity
 Provide safe and secure payment
methods which can earn the trust of
customers.
 Roll out the more owned products
instead of third parties.
 Increase the portfolios of its offerings.
 Expand globally, open more sites in the
emerging markets.
Threat
 Theft and hacking threaten the
customers in respect to making
purchases online.
 Due to Aggressive pricing strategies
they face lawsuits from rivals and
publishers.
 Getting competitions from local online
retailers.

Geographic Segmentation: As per this segmentation market is divided on the basis geographic
ground. Like in USA Amazon has to sell winter products on the other hand in South Africa they
focus on such products related to summers.
Lifestyle Segmentation: As per this segmentation market is divided on the basis of the lifestyle
of population whether they prefer traditional or trending products.
Demographic segmentation: As per this segmentation market is divided on the basis of age,
gender, income level, education level, etc.
Behavioural Segmentation: As per this segmentation market is divided on the basis of the buying
behaviour of the customer whether they prefer online shopping or offline shopping.
Amazon can choose the demographic segmentation for the purpose of targeting their market in
an effective manner. Sometimes they can prefer other market segmentation concepts also as per
their need but the most effective concept is demographic segmentation (Colborn, 2001).
(c) Choose a targeting strategy for a selected product/service.
Targeting Strategy: It involves making decision for such markets on which organisation priorities
their efforts of sales and marketing. There are various targeting strategies such as:
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Amazon can choose differentiated targeting strategies for the purpose of targeting. With the help
of variety of products Amazon can target the different segments of customers. These activities
help in increasing the market share as well as the ratio of profit (Colborn, 2001).
The use of segmentation, targeting and positioning strategies helps in applying the marketing
strategy effectively. Complete idea regarding the target customers and their characteristic
demands is acquired when this tool is used and implemented strategically.
(d) Demonstrate how buyer behaviour affects marketing activities in different buying
situations.
Buyer behaviour: It is a process of selecting and purchasing a product by consumer. The
marketing activities of Amazon get affected due to the buyer’s behaviour in various ways such
as: whether customer prefer online purchasing in respect to their product Fire Phone, if consumer
didn’t prefer online shopping in case of mobiles affects the marketing of Amazon. In this
situation they should provide information on site regarding Fire phone and make it available on
the local stores so that customers can get the reviews about it (Eisenberg, 2009).
The behaviour of a buyer is completely dependent on the personal traits and preferences. If a
person is comfortable in purchasing with Amazon then he will buy the products and become
brand loyal if the effective prices and quality of products is maintained. There are cases when
prices are hiked and quality is maintained at the same level. Then in such situations buyer
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Targeting Strategies Basis
Undifferentiated Targeting Different customers have same needs and
wants.
Helps in covering mass market.
For whole market they use one marketing mix
Differentiated Targeting Various types of customers get targeted.
With the increase in sales they generate huge
profits.
Concentrated Targeting For one segment they concentrate on one
marketing mix.
Effectively understand the needs and wants.
Customized Targeting It includes demand of celebrities.
For unique customers need they separate
marketing mix to satisfy his needs and for this
they can pay easily.