Amazon Marketing Plan

[pic 1]

Summary

Amazon was incorporated on May 28, 1996(in Delaware) and its headquarters remains in Seattle, Washington. The online giant was founded and is still headed by Jeff Bezos in the position of C.E.O. Bezos is currently the 2nd richest man in the world according to Forbes Magazine with a net worth of 85.6 billion U.S. dollars (Vinton).The company operates 3 distinct segments, namely North America, International and Amazon Web Services. Amazon is best known as an online retailer, though in years of late it has started offering digital content including eBooks and streaming videos through Amazon Video and Amazon Prime. It’s North American and International segments are those we are most familiar with and can be found at sites like amazon.com, amazon.ca and amazon.uk. They operate warehouse terminals and strategic locations across the globe. The Amazon Web Services segment offers data and storage, computations, and services for start-ups, enterprises, government agencies and academic institutions. The company also manufactures and sells hardware such as the Fire and Kindle and operates a publishing segment for Authors of written materials and production for video content (Reuters). The company’s net revenue for the fiscal year 2016 was an astonishing 136 billion U.S. dollars (Statista).

Corporate Plan

Amazon’s vision statement is “To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online” (Gregory). It is a clear and succinct statement about a global presence with a marketing orientation that has expanded into social media and socially conscientious orientation. The statement in and of itself is a direct nod to the first step in the marketing process: Assessing Customer Needs. They are guided by 4 distinct principles namely: Customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking (Amazon.com, Inc).

Amazon’s mission statement is “We strive to offer our customers the lowest possible prices, the best available selection, and the utmost convenience.” (Gregory).

Amazon’s primary source of revenue is the sale of a variety of products and services. Its focus is on long-term and sustainable growth in free cash flows. They will reduce the variable cost per unit and leverage fixed costs. They can turn inventory rapidly with a cash-generating operating cycle. Amazon is investing in computer scientists and designers as well as software and hardware engineers. They invest in a wide range of products and services and they intend to continue expansion into new territories and markets through capital spending projects that include a heavy focus on technology infrastructure and marketing programs. They are deliberating in managing shareholder dilution to maintain the flexibility needed to issue shares for strategic purposes that would include financings and acquisitions (Amazon.com, Inc).

The company is currently looking to expand its retail operations into Australia. It has operated its Web Services and Kindle divisions in the country since 2012 but it now has plans to open fulfilment centres in Brisbane, Sydney or Melbourne (Trefis Team). It is noted that Amazon’s counterpart Alibaba also has planned expansion into the region.

Amazon has plans to open 100 retail pop-up stores in the U.S.A. (Kim). These small retail outlets will exist inside shopping malls and primarily sell its hardware offerings such as it’s Kindle, Fire and Echo products. These products are designed simply to make it easier to purchase items on the online store and the purpose of these store-fronts is to drive more traffic to the online retail store.

Amazon is also opening a series of convenience stores in the United States to act as pick-up locations to add convenience to it’s Amazon Fresh Segment. Amazon Fresh is currently an online grocery store. The pick-up locations will have no front of store employees and instead be outfitted with sensors that work with a mobile phone-app that understands what the customer has selected and charges their Amazon account automatically upon leaving the store (Stevens).

Amazon also has deals with several of the largest auto parts manufacturers in the world to begin selling their products on the online store (B.I. Intelligence).This puts them in direct competition with O’Reilly, Advanced Auto Parts and AutoZone as well as a new initiative through Wal-Marts CarServer and it is thought that Amazon will use data from this auto parts initiative to gather marketing information for an online car dealer segment.

Clearly Amazon intends to live up to it’s vision, both in reach and variety of products. Amazon has a strong focus on first-to-market strategies and innovation and to list al of its plans here would take a considerable amount of time and space.

Marketing Plan

Amazon uses a variety of strategies to find new customers and maintain interest from current users.

Amazon maintains a sophisticated Customer Relationship Management system. The company encourages account creation to speed up the purchasing process in the future and allows for storage of information over long periods. Amazon offers recommendations based on previous purchases and a section titled “Customers Who Viewed This Item Also Viewed...”  to ensure that the customer has easy access to things that interest them. The company sends recommendations straight to your email inbox and they provide easy access to order history and tracking as well as an automated return process. Amazon also allows customers to review and recommend products to one another.

Amazon Prime is a membership loyalty program that comes at a monthly fee. Membership offers a variety of benefits to the subscriber including free shipping from 1 hour to 2 days depending on location, access to streaming music and video, Amazon Twitch, grocery, household and pet food delivery discounts, access to the Kindle borrowing library, access to member deals and discounts as well as a variety of other benefits (Amazon.com, Inc).

In relation to new customer acquisition Amazon uses both demographic and psychographic segmentation. The company’s segmentation largely focuses on purchases made rather than purchases that may be made or the things consumers may be interested in (Bhasin). Amazon uses data collected on previous purchases to make decisions on products and locations.