Marketing Strategy Amazon com
... 4 THREATS 6 5 FINANCIAL OBJECTIVES 7 6 MARKETING OBJECTIVES 7 7 MARKETING BUDGET 8 8 TARGET MARKET 8 9 POSITIONING 8 10 MARKETING STRATEGY 9 10. ... 4 PROMOTION 11 11 CONCLUSION 13 12 APPENDICES 14 13 BIBLIOGRAPHY 14 1 EXECUTIVE SUMMARY Like many Internet companies that place market share ahead of profits and make acquisitions funded by meteoric market capitalization, Amazon is now forced to change its strategy and focus on profitability. Jeff Bezos (Amazon’s CEO) wondered how to balance Amazons aggressive pricing against the need to preserve margins, and how to balance marketing investments against the need to become profitable. ... Now more than ever, Amazon should tweak its business design to improve its structural gross margin advantages and to achieve profitability. Amazon’s financial success will depend upon two key metrics: revenue growth and gross margin. In this document, I will analyze Amazon’s SWOT position and provide recommendations for an effective marketing strategy that will lead Amazon to profitability by 2004 and at the same year to reach sales of $3. ... Amazon designed its business to take advantage of the Internet, offering a vast array of products, a friendly shopping experience, a tightly managed supply chain, a responsive customer support organization, and strong investments in brand and traffic building. ... Amazon’s six core values includes customer obsession, ownership, bias for action, frugality, high hiring bar and innovation. What stands out is the strength and value of Amazon’s customer franchise. Amazon estimates that it has penetrated eight percent of U. ... From the very beginning, Amazon’s operating expenses have yielded the company an annual net loss instead of net profits. ... The large growth of eCommerce continue to provide an opportunity for Amazon to increase its revenue. However, as Amazon expands its product offerings and barriers to entry into the on-line selling business is low, Amazon had watched several competitors enter the business by copying its successful processes and services, and undercutting it on price. The following are major competing categories to Amazon: · Brick-and-Mortar: Unlike Amazon, many click-and-mortar companies leverage its store and online presence, enabling cross promotion between the physical store and the on-line site. ... com). The "clicks-and-mortar" strategy provides a tremendous competitive advantage over exclusive Internet companies and exclusive retailers. Examples of Amazon’s competitors in limited categories are Barnes &Noble, Cdnow and eBay 4 SWOT ANALYSIS Amazon illustrates some problems with SWOT analysis. After six years of trading, it is still not clear whether Amazon has any enduring strengths. ... Therefore, I am trying to assess as best as possible, which of its (still unproven) strategic resources have some enduring value and am basing its strategy upon them. ... 1 Strengths · First Mover Advantage Amazon benefited from being the first in the industry. ... · Outstanding Customer Service From its inception, Amazon strongly emphasized customer service. The company has realized that the price advantage offered by Amazon would eventually be eroded by on-line competitors, and customer service would become Amazons key competitive advantage. Achieving truly world-class customer service would separate Amazon from the crowd. · Rich and entertaining on-line shopping experience Amazon created a rich, entertaining Web site that encouraged clients to return to the site on a regular basis. ... Also, the search capability utilized by Amazon is a strong differentiator for on-line stores. ... By creating a positive shopping experience, Amazon has established an excellent personal relationship with its consumers that promises to bring them back to their web site again. · Advanced Technological capabilities Amazon’s superior technological advantages make it a leader in the marketplace. ... In addition, Amazon records customer purchase histories and preferences and utilizes this data to create personalized recommendations that could be dispatched via email, or displayed when visited the site in a very sophisticated manner. Also, Amazon offers impressive search and index capabilities, as well as enhanced features such as chats and profiling and filtering technology. ... These characteristics keeps consumers returning to Amazon because they have built better systems as compare to other online competitors in the market today. ... 2 Weaknesses · High customer acquisition costs Large advertising and marketing expenses are necessary for e-tailers to attract "eyeballs" of customers and to build traffic, which is of paramount importance. ... All the above, together with educational and promotional activities, dramatically increases Amazon’s costs. · Does not have a brick-and-mortar group of stores Since Amazon does not have internal click-and-mortar strategy, it cannot take advantage and leverage presence of physical stores with its online presence. At the same time Amazon cannot utilize cross promotional activities. · Offers too many product lines Amazon is currently selling many categories of merchandise. Even though sales have increased dramatically, Amazon has lost money. ... In addition, many niche players focus their sales in one specific field and many of these sites have become successful in creating a real threat to Amazon. ... To successfully establish international expansion, Amazon needs to overcome language and cultural barriers as well as building a logistics and warehousing infrastructure. ... This fact, coupled with the strong international sales that Amazon had seen in its last few years (last year the number of international customers grow from 800,000 to 3 million) is an attractive path for growth.