Strategic Marketing in Zappos: A Marketing Management Case Study

This report provides a comprehensive analysis of Zappos' marketing management. It begins by discussing the role of strategic marketing within the organization, emphasizing its importance in creating customer value and building relationships. The report then delves into the processes involved in strategic marketing, including planning, implementation, and evaluation, with a specific focus on SWOT analysis. It examines Zappos' marketing strategies, including its customer-centric approach, focus on excellent customer service, and market positioning, highlighting how these strategies contribute to its success. The report also mentions Zappos' use of marketing techniques and its ability to adapt to changes in the external environment. Overall, the report provides a detailed overview of Zappos' marketing practices and their impact on the company's performance, offering insights into how Zappos has established and maintained a strong position in the online retail market.

NAME OF STUDENT
ASSIGNMENT ISSUE DATE 10 July, 2020
REGISTRATION NO. MAR704
UNIT TITLE Marketing Management
ASSIGNMENT TITLE Zappos
ASSIGNMENT NO Whole (W)
NAME OF ASSESSOR
SUBMISSION DEADLINE 10 August, 2020
TO BE FILLED BY STUDENTS
Please complete in full all categories neatly before submitting the work for assessment
NUMBER OF PAGES SUBMITTED
ASSESSMENT TITLE (A Copy of the assessment
brief MUST be attached together with this work)
DATE ASSESSMENT BRIEF IS RECEIVED
SUBMISSION DATE 10 August, 2020
I, __ hereby confirm that this assignment is my own work and not the product of plagiarism,
collusion or other academic irregularity. I have referenced the sources from which information is
obtained by me for this assignment.
……………………………….. …….
SIGNATURE OF STUDENT DATE
FOR OFFICIAL USE
Assignment Received By: Date
FTU BTEC L7 SMM ‘Zappos’ Jul 2021 Page 1
BTEC LEVEL 7 EXTENDED DIPLOMA IN
STRATEGIC MANAGEMENT AND
LEADERSHIP
Assignment Cover Sheet

TO BE FILLED BY STUDENTS
Please list the evidence submitted for each task. Indicate the page numbers where the
evidence can be found or describe the nature of the evidence (e.g. video, illustration).
Task Ref Evidence Submitted Page Number or
Description
1.1 Discuss the role of strategic marketing in an organisation.
1.2 Explain the processes involved in strategic marketing.
1.3 Evaluate the links between strategic marketing and
corporate strategy.
2.1 Assess the value of models used in strategic marketing
planning.
2.2 Discuss the links between strategic positioning and
marketing tactics.
2.3 Analyse the merits of relationship marketing in a given
strategic marketing strategy.
3.1 Use appropriate marketing techniques to ascertain growth
opportunities in a market.
3.2 Plan how to use marketing strategy options in a market.
3.3 Create appropriate strategic marketing objectives for a
market.
4.1 Report on the impact of changes in the external
environment on a marketing strategy.
4.2 Conduct an internal analysis to identify current strengths
and weaknesses in a marketing strategy
4.3 Propose strategic marketing responses to key emerging
themes in a marketing strategy
Additional comments to the Assessor:
FTU BTEC L7 SMM ‘Zappos’ Jul 2021 Page 2

Coursework Policies
1. All coursework submitted must include
a. A copy of the full brief given by the assessor (with the signed coversheet)
b. All source material must be cited in the text and a full bibliography of source
material (including author, title, publisher and date) listed at the end of the
submission.
2. All work must be submitted in the mode instructed by the assessor.
3. Work submitted under the student’s name must only be the work of that student. All
information sources must be acknowledged. Plagiarism is a serious offence and will
render offenders liable to disciplinary action as set out in the Foreign Trade University
rules and regulation.
4. Students MUST keep a copy of all submitted work for reference purposes prior to the
original being handed in and returned. This will provide proof that the work was
completed, in the event that the work goes astray.
5. Whenever a candidate submits work after two weeks without an authorised extension, a
Referral grade will be awarded. Assessors may comment on the quality of the work for
learning purposes.
6. Requests for extensions of submission deadlines must be made in writing prior to the
submission deadline to the appropriate Course Administrator or Programme Leader and
must be supported by documentary evidence.
FTU BTEC L7 SMM ‘Zappos’ Jul 2021 Page 3

TO BE FILLED BY ASSESSOR AND INTERNAL VERIFIER
Outcome Evidence for the
criteria Feedback
Assessor’s decision Internal
Verification
Task First
attempt
Re-
work
Understand
the
principles of
strategic
marketing
managemen
t
LO1
Discuss the role of
strategic marketing
in an organisation.
1.1
Explain the
processes involved
in strategic
marketing.
1.2
Evaluate the links
between strategic
marketing and
corporate strategy.
1.3
Understand
the tools
used to
develop
a strategic
marketing
strategy
LO2
Assess the value of
models used in
strategic marketing
planning.
2.1
Discuss the links
between strategic
positioning and
marketing tactics.
2.2
Analyse the merits
of relationship
marketing in a given
strategic marketing
strategy.
2.3
FTU BTEC L7 SMM ‘Zappos’ Jul 2021 Page 4

Outcome Evidence for the
criteria Feedback
Assessor’s decision Internal
Verification
Task First
attempt
Re-
work
Be able to
use strategic
marketing
techniques
LO3
Use appropriate
marketing
techniques to
ascertain growth
opportunities in a
market.
3.1
Plan how to use
marketing
strategy options in
a market.
3.2
Create
appropriate
strategic
marketing
objectives for a
market.
3.3
Be able to
respond to
changes in
the
marketing
environment
LO4
Report on the
impact of changes
in the external
environment on a
marketing
strategy.
4.1
Conduct an
internal analysis
to identify current
strengths and
weaknesses in a
marketing
strategy
4.2
Propose strategic
marketing
responses to key
emerging themes
in a marketing
strategy
4.3
FTU BTEC L7 SMM ‘Zappos’ Jul 2021 Page 5

Assignment
( ) Well-structured; Reference is done properly / should be done (if any)
Areas for improvement:
Figures should go with nessary information to make it more academic, for example:
figure number, figure title, sources of information…
ASSESSOR SIGNATURE DATE / /
NAME:.........................................................................................
(Oral feedback was also provided)
STUDENT SIGNATURE DATE / /
NAME :..............................................................................
FOR INTERNAL USE ONLY
VERIFIED YES NO
DATE : ..........................................................................
VERIFIED BY : ...........................................................................
NAME : ...........................................................................
FTU BTEC L7 SMM ‘Zappos’ Jul 2021 Page 6

MARKETING MANAGEMENT
CASE STUDY: ZAPPOS
Zappos, based in Las Vegas, is an online retailer. Zappos was founded in 1999. It has
since expanded its product offerings to clothing, accessories, and even various overstocked
merchandise through its subsidiary companies. Zappos started as a shoe retailer, and today their
daily customer interaction is around 6,500 inbound calls, 1,500 online chats, 1,300 emails and
300 tweets. Despite its young age, online shoe retailer Zappos has received a seemingly
disproportionate amount of media attention regarding its unique corporate culture (O‘Brien,
2009). However, this attention is well deserved, as Zappos is considered by many to be a shining
example of customer service, culture, and ethics. The company has appeared on several
prestigious lists including Fortune’s “Best Companies to Work For,” Fast Company’s “50 Most
Innovative Companies,” BusinessWeek’s “Top 25 Customer Service Champs,” and Ethisphere’s
“World’s Most Ethical Companies.” (Chafkin, 2009).
1.1 Discuss the role of strategic marketing in the organisation.
Marketing—The process by which companies create value for customers and build
strong customer relationships in order to capture value from customers in return. (Kotler,
Armstrong, Harris, & Piercy, 2017).
Marketing plays a key role in the company’s strategic planning in several ways. First,
marketing provides a guiding philosophy – the marketing concept – that suggests the company
strategy should revolve around creating customer value and building profitable relationships
with important consumer groups. Second, marketing provides inputs to strategic planners by
helping to identify attractive market opportunities and assessing the firm’s potential to take
advantage of them. Finally, within individual business units, marketing designs strategies for
reaching the unit’s objectives. Once the unit’s objectives are set, marketing’s task is to help carry
them out profitably (Kotler et al., 2017).
Lambin (1977) identified that the role of strategic marketing is to “lead the firm towards
attractive economic opportunities; that is, opportunities that are adapted to its resources and
know-how and offer a potential for growth and profitability”.
Strategic marketing is a method through which an organisation differentiates itself from
its competition by focusing on its strengths to provide better service and value to its customers.
It helps in evaluating the current environment, establishing achievable marketing objectives and
streamlines product development. Armed with a thorough understanding of the company’s
FTU BTEC L7 SMM ‘Zappos’ Jul 2021 Page 7

capabilities and aspirations, the customer market and the competitive landscape, the goal of
strategic marketing is to maximize a company’s positive differentiation over competitors in the
eyes of its target market. It is concerned with defining what the business needs to become to beat
the competitors by consistently delivering greater value to its customers. Strategic marketing
also decides which markets the company is going to target and where these markets will be. It
will also decide when and how the company will enter each market. Strategic marketing plays a
major role in forming the base of a company’s competitive advantage and deciding how is it
going to compete in market in order to stay ahead of its competitors.
Zappos, started as a online retailer specializing in footwear, has maintained its strong
market position as the number-one online shoe store. Much of Zappos’ success can be attributed
to terrific marketing strategies, led by CEO Tony Hsieh. Strategic marketing helps Zappos focus
on the market and products and feel more responsible to execute the marketing philosophy
throughout. The company has stayed focused exclusively on e-commerce, competing on those
who prefer excellent customer service. One could say they set the mark for everyone to target in
customer service, and they make it the core of their marketing strategy. Zappos’ long-term
strategy is based on the idea that great customer service will help them expand into other
categories. Zappos continues to focus on its original product bundle that includes shoes and
continues to add new products slowly, ensuring it can maintain its quality service.
In addition, strategic marketing helps Zappos understand the needs and wants of target
markets to deliver the desired satisfaction better than competitors and build strong customer
relationships, in order to capture value from customers to create profits and customer equity. The
Zappos business model is built around developing long-term customer relationships. The
company believes that customers will want to buy from the store with the best service and
selection. Zappos also maintains telephone support and actively uses social media. Through
these communications, Zappos learns about its customers' needs and preferences to maximize
customer experience as well as develop relationships with its customers.
Strategic marketing also plays a key role in strategic decision making that helps Zappos
increase the profitability and stay ahead of its competitors. From the start, Zappos main goal has
been to satisfy their consumers by providing exceptional customer experience for them. Zappos
wants their customers to say “Wow” after interacting with them, which indicates customer
satisfaction. Therefore, the company strives to create a unique and addicting shopping
experience, offering a wide selection of shoes, apparel, accessories, and home products, free
shipping to the customer, free shipping and full refunds on returns, and great customer service.
FTU BTEC L7 SMM ‘Zappos’ Jul 2021 Page 8

This is the basis for Zappos to differentiate - a priority commitment to making customers happy-
and this helps Zappos remain a frontrunner in the online retail space.
In conclusion, strategic marketing plays a crucial role in an organisation, as it helps the
company focus energies and resources on a course of action that can lead to increased sales and
dominance of a targeted market. Without a strategic marketing plan, the organisation can waste
resources, miss opportunities or, in a worse case scenario, threaten its own survival.
1.2 Explain the processes involved in strategic marketing in the organisation.
The strategic marketing process involves an organization allocating its marketing mix
resources to reach its target markets using three phases: planning, implementation, and
evaluation (Kerin & Hartley, 2016). Figure 1 shows the processes involved in strategic
marketing in the organisation.
Figure 1: The processes involved in strategic marketing in the organisation
(Source: Roger A. Kerin, Steven W. Hartley (2016) Marketing: The Core 5th Edition, Boston:
Irwin/McGraw-Hill)
The planning phase is the most important as it analyzes internal strengths and
weaknesses, external competition, changes in technology, industry culture shifts and provides an
overall picture of the state of the organization (Kerin & Hartley, 2016).
FTU BTEC L7 SMM ‘Zappos’ Jul 2021 Page 9

This phase of the strategic marketing process has three steps, each with more specific
elements: situation (SWOT) analysis, market-product focus and goal setting, and marketing
program (Kerin & Hartley, 2016).
Step 1: Situation Analysis
An effective summary of a situation analysis is a SWOT analysis, an acronym describing
an organization’s appraisal of its internal Strengths and Weaknesses and its external
Opportunities and Threats. The ultimate goal is to identify the critical strategy-related factors
that impact the firm and then build on vital strengths, correct glaring weaknesses, exploit
significant opportunities, and avoid disaster-laden threats (Kerin & Hartley, 2016).
The SWOT analysis is based on an exhaustive study of four areas that form the
foundation upon which the firm builds its marketing program:
● Identify trends in the organization’s industry.
● Analyze the organization’s competitors.
● Assess the organization itself.
● Research the organization’s present and prospective customers (Kerin & Hartley,
2016).
Step 2: Market-product focus and Goal Setting
Determining which products will be directed toward which customers is essential for
developing an effective marketing program (step 3). This decision is often based on market
segmentation, which involves aggregating prospective buyers into groups, or segments, that have
common needs and will respond similarly to a marketing action. This enables an organization to
focus specific marketing programs on its target market segments. In this step the organization
shall set marketing and product goals, select target markets, determine competitive advantages
and position the product (Kerin & Hartley, 2016).
Step 3: Marketing Program
After determining which customers to target and which customer needs the firm’s
product offerings can satisfy—the who and what aspects of the strategic marketing process.
The how aspect—step 3 in the planning phase—involves developing the program’s marketing
mix and its budget. This step includes developing the program's marketing mix by determining
the product strategy, price strategy, promotion strategy and place (distribution) strategy in order
to produce a cohesive marketing program (Kerin & Hartley, 2016).
The implementation phase
Implementation, the second phase of the strategic marketing process, involves carrying
out the marketing plan that emerges from the planning phase. If the firm cannot execute the
FTU BTEC L7 SMM ‘Zappos’ Jul 2021 Page 10

marketing plan—in the implementation phase—the planning phase wasted time and resources.
The implementation phase is the part of the process that executes the individual tactics that
support the marketing strategy. There are four components of the implementation phase:
Obtaining Resources, Designing the Marketing Organization, Developing Schedules and
Executing the Marketing Program designed in the planning phase (Kerin & Hartley, 2016).
The Evaluation Phase of the Strategic Marketing Process
The evaluation phase of the strategic marketing process seeks to keep the marketing
program moving in the direction set for it. Accomplishing this requires the marketing manager to
compare the results of the marketing program with the goals in the written plans to identify
deviations and act on these deviations—exploiting positive deviations and correcting negative
ones (Kerin & Hartley, 2016).
Strategic marketing is a process of planning, developing and implementing maneuvers to
obtain a competitive edge in the chosen niche. This process is necessary to outline and simplify a
direct map of the company’s objectives and how to achieve them. A company wanting to secure
a certain share of the market, should ensure they clearly identify their mission, survey the
industry situation, define specific objectives and develop, implement and evaluate a plan to
guarantee they can provide their customers with the products they need, when they need them.
The central objective of any company will be customer satisfaction so they may dominate the
market and become leaders in their industry and thus providing substantial business satisfaction.
In order to do that, three phases of marketing strategy must be perfected to create delight in their
customers and beat out the competition.
In the case study, Zappos has conducted the strategic marketing plan to support its
mission - “provide the best customer service possible. Deliver WOW through service.” Zappos
has analysed the situation, including both internal and external factors. The company knows its
competitive advantage - its commitment to provide customer superior services, focusing on
developing long-term customer relationships, which is the core to its mission, and creating a
vibrant and transparent corporate culture and business model. Zappos’ target customer segment
originally consisted of people who wanted to have a wide selection of shoes or other apparel,
shop online in the convenience of their own homes, and receive quick delivery and free returns.
The company’s goal is to increase its market share by being the company that provides
the best service online, period—not just in shoes, but in any category. After determining which
customers to target and the needs and wants of them, Zappos constructs a marketing mix
program to reach its goal.
FTU BTEC L7 SMM ‘Zappos’ Jul 2021 Page 11

Product strategy: The company strives to create a unique and addicting shopping
experience, offering a wide selection of shoes, apparel,accessories, and home products.
Price strategy: Zappos does not compete on price because it believes that customers will
want to buy from the store with the best service and selection. Zappos has focused on creating a
“wow” customer-service experience that not only exceeds customers’ expectations but brings
people back again and again.
Promotion strategy: The company considers word-of-mouth marketing to be the best way
to reach new customers. CFO/COO Alfred Lin says, “The customer is more powerful than paid
advertising.”
Place (distribution) strategy: When customers buy shoes or other apparel online they
expect the product to be accurately presented. They expect to receive what they order in a timely
fashion, receive help with any questions and have any problems with orders resolved. These are
fairly standard customer-service features that customers expect along with the delivery of their
shoes or clothes. Zappos goes a step further, though, to provide an even higher level of service to
all its customers—at no extra charge. For example, Zappos creates the Fit and the Return policy
that allowed customers free returns, frequently upgrades orders from valued clients to one-day
shipping to create an instant gratification that is similar to shopping in a physical store.
Zappos also posts a support phone number on every page of its Website. The company
has found that only 5 percent of sales come through the phone, but when customers do call, there
is an opportunity to create a deeper relationship (Solomon, 2017).
As a result of these strategies, Zappos’ product is significantly more valuable and more
differentiated, and Zappos achieves strong positioning as a company that offered the best
selection and best service. In addition, positive feedback from its current customers results in
free marketing by “Word of mouth” and helps Zappos reach new customers. With over 75
percent of purchases made by repeat customers, it is evident that Zappos’ mission to “provide
the best customer service possible” is working well for the company.
1.3 Evaluate the links between Strategic Marketing and Corporate Strategy in the
organisation.
Corporate strategy is concerned with an organization’s basic direction for the
future. Its purpose, its ambitions, its resources and how interacts with the world in which it
operates. Every aspect of the organization plays a role in this strategy , its people, its finances,
its production methods and its environment, including its customers (Lynch, 2000).
FTU BTEC L7 SMM ‘Zappos’ Jul 2021 Page 12