Amazon’s Marketing Strategy Essay

AbstractThe pur ready of this stem is to evaluate the selling process of online retailer amazon.com, Inc. Amazon.com provides a publication of retail services as well as web and storage services. The unified strategy framework, as discussed in Cravens & Piercys Strategic Marketing text, ordaining be economic consumptiond to examine the background of the ac corporation and define its electric current billet. The corporal framework overwhelms the future(a) (1) in in bodieddd passel (2) merged objectives toward vision (3) resources (4) caper composition and (5) subscriber line design. The marketing strategy of the confederation will be reviewed using Cravens & Piercys suggested marketing strategy process. To assess the current marketing problems and opportunities, this paper takes a closer look at the unions current SWOT analysis, provided by GlobalData. In addition, strategic recommendations will be made for the ac callers prolonged growth.Amazon Inc.A companys m arket driven strategy mandates more hard-hitting integration of activities and processes that impact customer value (Cravens & Piercy, 2009). As well as a consistent market driven strategy, an organization must be creative and innovative in order to fence in the globular marketplace. Amazon, Inc. has authentic an inventive marketing strategy done the manipulation of the Internet. By becoming pioneers in the e-commerce marketplace, the company has transformed retail. Amazon Inc. should evaluate their corporate and marketing strategies to make use of all available resources. The company has take more or less marketing failures but can thus far take avail of existing marketing opportunities. In the 9th Edition of the text Strategic Marketing, Cravens & Piercy write, corporate strategies are implicated with how the company can achieve its growth objectives in current or new business areas (Cravens & Piercy, 2009). When building the framework for a competitive corporate strat egy, an organization must first decide the corporate vision. During the summer of 1994, Internet usage showed promising growth.A reported statistic of 2,300% one-year growth encouraged Jeff Bezos, then Senior Vice President for D.E. Shaw & Co., to desert his job and concentrate on a way to gainfully use this information. His long term vision for his company was to revolutionize retail by creating theearths biggest online retail store, where everyone could buy anything and everything (Kargar, 2003). To achieve this goal, Bezos conducted market query that led him to Seattle and directed him to choose selling books online as his main focus. The company was launched in 1995 and by the first quarter of 1996 reported sales revenues of $one hundred ten million. The company soon changed from a virtual(prenominal) bookstore into a virtual marketplace by entering new markets that included music, movies, electronics, toys, apparel, grocery and others. solar days afterward in 2006 Amazon. com had become what some called a model of the next-generation Internet-based business (Isckia, 2009).That same year the company introduced their new endeavor, Elastic Compute swarm (EC2), that offered cheap computing power over the Internet. Many believed Bezos unconventional wiseness took the company further away from its core vision. However, a closer testing of Bezos creative mindset reveals more of the organizations well developed corporate philosophy and structure. Moving beyond book selling, the launch of EC2 and unsophisticated Storage Service (S3) are examples of achievements towards the corporate vision. Amazon has been able to impose objectives in the areas of product quality improvement and new-product targets. Cravens and Piercy none that a describe strategy issue is matching capabilities to market opportunities (Cravens & Piercy, 2009). Transforming Amazon.com into more than just a retail operation has given the organization the cap mogul to compete in different markets, provide significant valued to end user customers, and shit barriers to competitor duplication (Cravens & Piercy. 2009).With Bezos continuous investments in new technological initiatives, investors were concerned about Amazons increasing debt and profitability. Kargar reports, the company had a clear balance sheet and massive negative operating cash watercourse (Kargar, 2004). Throughout the companys financial history there catch been many monetary losses. According to Robert D. Hoff and Heather Green, in 2002, the company still carried $2.2 billion in long-term debt (Business Week, 2002). In International Journal of Cases in Electronic Commerce, Pauline Ratnasingham reports that Amazon.com shareholders lost 80% of their value in 2000 (Ratnasingham, 2006). though sales increase rapidly, losses continue to soar as well. disrespect the financial failures, in 2006 Bezos still believed that his investments would yield big payoffs in later years and that Amazon.com would be a meaningful businessone day (Hoff, 2006).As Amazon.com continued to expand, the companys strategic business units (SBU) consisted of 4 key divisions (1) U.S. Books/Music/DVD/Video (2) U.S. Electronics, Tools, and Kitchen (3) Services and (4) International (Ratnasingham, 2006). This business composition makes it easier to focus on separate specific strategies for each unit. The companys business model also provides a competitive advantage. Amazon benefits from being able to maintain a virtual store bowel movement with dispersal centers located in low rent areas. In all, a combination of convenience, speed, reliability, discounted pricing, and a wide selection of merchandise creates a synergetic business design that cannot be easily duplicated. When developing Amazon.coms corporate structure Bezos clearly understood and defined his business strategy. The organization would in a flash need to design and implement a consistent and integrated marketing strategy.An important aspect of Amazon.coms marketing strategy is their customer-centric approach. Amazon offers note prices, free shipping, and customer service available 24/7. Also, the customer experience is enhanced through personalized recommendations and customized web pages. The organizations specialty in customer service has been effective in increasing customer loyalty, website traffic, and repeat purchases. Amazon.com uses various marketing techniques that include online advertising, email campaigns, and their Associates Program. The Associates Program, which allows outside websites the ability to make products available to Amazon customers, has proven to be very successful. In 2001 over 700,000 associates were registered for the program. This marketing tool allowed Amazon.com the ability to expand its market beyond its own website and concentrate on its aptitude of order fulfilment and distribution (Ratnasingham, 2006).Another key aspect of Amazon.coms marketing strategy is their launch strateg ic relationships with various traditional retailers. These bails enhance the value offerings of customers, give the company a competitive advantage, and increase the market share for all companies involved. just about of Amazons partnerships include Toys R Us for toys and video games, the crack for clothing and Drugstore.com for pharmacy items. The company also has third party arrangements with rear Corporation, Borders Group, Expedia, and others. Amazon profits by providing customers with a diverse array of products charm their allies are able to use the engine room, services, andtools of Amazon.com.A significant power point of any organizations marketing strategy is creativity and innovation. In her article for The Learning Organization, Verna Allee suggests that in order to sustain competitive strength and continue growth Western companies need to build innovation into their cultures and structures as an essential condition for value creation (Allee & Taug, 2006). In 2008, Amazon.com was listed as fall 20 in a list of the worlds 25 most innovative companies (Cravens & Piercy, 2009). The new service offering of the EC2 and S3 digital utilities moves the company into competitive opportunities within the software platform marketplace. Bezos innovation strategy for Amazon.com includes these phoebe bird following rules1) Measure everything2) Keep development teams small3) Dont be afraid of weird ideas4) Open up to outsiders5) Watch customers, not competitors (Hoff, 2006)Amazon.coms technological advances and Bezos forward- cerebration has led the company to create ground-breaking products, such as the Kindle and also compete with top online digital music supplier Apple ITunes. By encouraging continued innovation, Amazon can apprehend their place as leaders in Internet-based businesses.Amazon.com is in a position to gain from the various opportunities they have in the e-commerce marketplace. These opportunities include new trends and technological adva nces. Amazon competes well and has growth in the digital e-book market convey to their Kindle product. Amazon can continue to invest in technology to sustain profitability. In general, E-commerce is experiencing growth. Amazon.com is in the position to benefit from this rise. The site shortly offers payment security, one-click payments, user-friendly features, and other technologies that new web-based businesses will have to compete with. The company also has the opportunity to expand through strategic alliances and eruditenesss. For example, GlobalData reports that Amazon.com acquisition of TouchCo earlier this year, is expected to bring about cost reduction in the companys business (GlobalData, 2010).Overall, Amazon.com employs strong marketingstrategies. GlobalData reports that the companys emphasis on marketing can be seen in their change magnitude marketing costs in 2009, in comparison with 2008 and 2007 (GlobalData, 2010). However, Amazon.com is faced with some marketing pr oblems. Because the company has a seasonal nature, more shoppers during the holiday seasons, the number of customers accessing the website at one time could cause system interruptions. This could contribute to fulfillment issues and a delay in deliveries. Also, Amazon.com faces the threat of traditional retail stores alike(p) Wal-Mart or Barnes & Nobles who now have an online component. Amazon.com now has to compete with companies who have great brand recognition and more customers.The partnerships the company has made also pose a problem. For example, in 2004 Toys R Us bought a case against the company because Toys R Us exclusive items were being sold by competitors through Amazons website. Also the company suffered increased costs because of their alliance with Drugstore.com. To offset the problems and threats faced by the company, Amazon can benefit from the following strategic recommendations. First, during the off-season Amazon can do aggressive promotional campaigns to inclu de discounts for students and partnerships with university and college professors to be the exclusive vendor for textbooks and suggested reading materials. Also, Amazons fulfillment processes should be evaluated to determine what issues are prevalent during the holiday season.Those issues should be intercommunicate and fulfillment centers should be restructured accordingly. The company should re-evaluate their alliances by doing a cost assessment. By determining which costs are insignificant, expenses can be reduced or eliminated. Through the leadership of Jeff Bezos, Amazon.com continues to be the best and first by thinking outside the box. The company has changed the way consumers shop, the way they read, and the way entrepreneurs run their businesses. Bezos accepts his failures, focuses on what works and continues to support new ideas and hopeful initiatives. An evaluation of their marketing and corporate strategies to assess their failures can allow them the ability to make app ropriate use of their opportunities.ReferencesCravens, D. W., & Piercy, N. F. (2009). Strategic marketing (9th ed.). New York McGraw-Hill. Hoff, R.D. (2006). Jeff Bezos risky bet.BusinessWeek, 52-58. Retrieved December 14 from ABI/ allege Global. Hoff, R.D., & Green, H. (2002). How amazon cleared that hurdle to earn a profit, it cut costsand started ontogenesis again. BusinessWeek, (3768), 60-61 Retrieved December 14 from ABI/ asseverate Global. Hoff, R.D., Neuborne E., & Green, H. (1998 December). Amazon.com the wild world of e-commerce by pioneering and goddamned near perfecting the art of selling online, amazon is redefining retailing. BusinessWeek (3608), 106 Isckia, T. (2009). Amazons evolving ecosystem a cyber-bookstore and application service provider. Canadian Journal of Administrative Sciences, 26(4), 332-343. Retrieved December 17 from ABI/INFORM Global. Kargar, J. (2004). Amazon.com in 2003. Journal of the International Academy for CaseStudies, 10(1), 33-52. Retrieved December 11, 2010 from ABI/INFORM Global. Ratnasingham, P. (2006). A swot analysis for b2c e-commerce the case of amazon.com. 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