Amazon Marketing Strategy & Marketing Mix (4Ps)
Marketing Strategy of Amazon analyzes the brand with the marketing mix framework which covers the 4Ps (Product, Price, Place, Promotion). These business strategies, based on Amazon marketing mix, help the brand succeed in the market. Let us start the Amazon Marketing Strategy & Mix to understand its product, pricing, advertising & distribution strategies:
Quick Glance:
Amazon Product Strategy:
The product strategy and mix in Amazon marketing strategy can be explained as follows:
Amazon is one of the leading ecommerce platforms in the world, and is recognized as one of the top five IT companies globally. Amazon sells all its products online where the users login to Amazon through website or App and place orders. These are then delivered to the consumers through its distribution channels. Although Amazon started as an online book seller, it diversified its product portfolio by leaps and bounds. Amazon has a huge offering in its product portfolio in its marketing mix. The ‘product’ Amazon is the website and the apps which offers different types of goods for consumers. Its retail division include everything from apparels to auto parts, toys to electronic gadgets, home décor to health/beauty utilities. These products are not only sold by Amazon but also by 3rd party sellers listed with Amazon.
This market place model of business is bringing huge profits to Amazon. It also started selling gadgets like e-book reader, Kindle and Fire tablets and phones. Amazon’s digital services like on demand music, video and e-books is also one of the major contributor in its sales. The company is also providing a host of web services like cloud storage, database services to budding start-ups and other organizations. Grocery items are also being delivered to consumers by Amazon through its services like Amazon Prime Pantry and Amazon Fresh. It is also providing publishing services to the business and individuals. Amazon’s AWS services, which provides web hosting services for customers and clients, is also a strong product in its portfolio. The company has acquired some companies like IMDb, Ring, Twitch, Whole Foods Market etc, which has strengthened its position.
Image: flickr-photos/mstable/
Amazon Price/Pricing Strategy:
Below is the pricing strategy in Amazon marketing strategy:
Amazon has got a market leader and competition based pricing strategy in its marketing mix. As the different kinds of services are offered by Amazon its pricing strategies are also varied.
It uses technology to its advantage in setting the prices. Most of the time the price of products is set following the competitive pricing strategy. Amazon offers the lowest of prices and this is made possible by the efficiency of its operations and also its web-based business model. It adjusts the prices frequently based on the category of product, time of the day and season. Amazon also provides value added services like Prime where users pay subscription charges for one-day delivery and early access to the deals. Amazon also follows differential pricing, for the same product it charges different price depending in the place of consumer as it is having different websites in each country it operates. AWS is also a market leader in offering high quality low priced web hosting solutions.
Read more about Amazon
Amazon Place & Distribution Strategy:
Following is the distribution strategy in the Amazon marketing mix:
Amazon is a global brand and has its presence all across the world. All the consumers buy products and services from the website and Apps of Amazon.com to buy. Once a customer places the order the distribution channel of Amazon comes into picture where the products are procured and stored at Amazon’s fulfilment centres. These are huge warehouses constructed by Amazon in strategic locations to reach even the remotest of places. These are categorized into sortable fulfilment centres (large and small goods), non-sortable, customer return and speciality items warehouses. From these fulfilment centres the goods are transferred to distribution centres and then to customers. Amazon uses the local postal and courier services for the transportation of packages. But recently few experts are claiming that Amazon is conceptualizing for its own distribution network for delivery of packages. This will bring the costs even down for the company.
Hence, this gives an overview in the place & distribution strategy in the marketing mix of Amazon.
Amazon Promotion & Advertising Strategy:
The promotional and advertising strategy in the Amazon marketing strategy is as follows:
Amazon uses aggressive marketing campaigns to promote its brand. When it comes to promotion Amazon leaves no stone unturned in its marketing mix promotional strategy. Its major focus is on advertising – through print ads in newspapers have increased exponentially of late. Amazon uses creative television commercials and social media marketing through SEO and targeting customers through their browsing patterns. Amazon also have affiliate programs where website and blog owners advertise Amazon product links in their platforms. Next important thing is sales promotion – Amazon has mastered this art and give effective sales promotions and discounts during holiday seasons and festivals resulting in high visits to the website. Public relations exercises to improve brand image like launching Amazon Smile which donates to charity organizations. ‘Gift a Smile’ in India is an initiative where people can send their gifts directly through Amazon to NGO’s that are partnered with the company. Direct marketing to companies for providing its web services is also performed by Amazon.
Since this is a service marketing brand, here are the other three Ps to make it the 7Ps marketing mix of Amazon.
People:
Amazon gives a great importance to its workforce. Irrespective of what level and domain of the organization they are working people get benefits from Amazon which makes it a desirable employer. These benefits include health, financial, assistance programs, some time off like vacations and equity plans. There are nearly 2,30,800 employees working across the globe round the clock to ensure best customer experience and as Amazon is the most visited website in retail space (1.27 billion/year) it offers its employees a great deal of training and development activities.
Process:
Amazon is a world leader in ecommerce and web services and has got a strong process oriented business. As we have seen earlier that Amazon strategically divided its warehouses and fulfilment centres for operational efficiency, it also uses the best in the business technology to support its daily activities and also in its advertisements, serving the customer like providing the information about the location of his package. Also its association with websites like Twitter, where by reacting to any tweet from Amazon people can add any product to their cart. Its customer relationship and information management are core to its business strategy. Amazon Robotics has also been developed, which is used at the company warehouses for inventory management.
Physical Evidence:
Amazon’s biggest physical presence is its website. As it is an online retailer the place of service is its website and apps which very user-friendly and built with great design. Amazon’s warehouses and fulfilment centres present in all countries of its operations are the largest one can ever find. It has logo which is very well resembling what Amazon stands for, i.e. an arrow from a to z which implies one can buy anything on Amazon. Its packages also sport this logo. Amazon releases its financial reports also for its investors and users yearly providing information about where company stands and where it aspires to go. Hence, this summarizes the Amazon marketing mix.
About Amazon:
Having started its journey as online book seller, Amazon.com now can be called as global giant in online retail business. The founder of Amazon.com, Jeff Bezos attracted towards growth of internet reach in early 1990s and started this business in Seattle in 1995. Amazon is now a fortune five hundred company offering ecommerce, Prime Video, Amazon Music, AWS, Amazon Pay etc. The success of Amazon can be attributed to its obsession for customer satisfaction. This success has inspired many people in a sense that they have started businesses with same model as that of Amazon in several countries across the world. Amazon is one such company which embraces the technology like none.
Having started a business entirely based on purchases online to the recent developments where it is delivering the packages via drones and its plans to launch physical stores where customers can walk in, buy the goods and walk out without any need for direct payment and checkout lines it has come a long way. Amazon.com a pioneer in e-commerce world in every aspect of the business, is now having three main business units North America, International and Amazon web services (AWS).
This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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