This research work will focus on identifying and analyzing the digital marketing strategy of Amazon. It is a much known fact that Amazon is the largest online seller of products to the consumers across the globe. The company has gained immense success in the online marketing industry because of its effective strategic management. This research work will focus on comprehending the digital marketing strategies of Amazon in comparison to its competing brands. In addition, the researcher will also provide several recommendations to the company to further improve its digital marketing initiatives. During the course of this research work, the researcher will focus on secondary research. This is a form of research under which secondary data would be collected through books, journals, magazines etc. This will assist the researcher in conducting a credible and comprehensive research on the subject matter.
Marketing and promotions have gained a lot of significance in the last few years. This is primarily because all the organizations focus on spreading awareness about their products and services, remind the target audience about its offerings and thereby ensure that the customers are persuaded to make a purchase decision (Ellwood, 2002). Thus, every organization focuses on undertaking promotional activities in the contemporary world. Traditionally, there have been five key tools of promotion mix i.e. advertising, sales promotion, public relations, personal selling and direct marketing. The organizations have used these tools and ensured that an effective marketing campaign is created that helps in reaching out to the target audience.
In the contemporary world, the organizations have also opted for the contemporary tools of communication. This implies that modern tools of promotions such as events, out of home media and many more are being utilized by the company. One such tool of contemporary promotions that has assisted the organizations in reaching out to the target audience and maintaining a communication is digital marketing. Over the past five years, it has been observed that a huge majority of organizations are focusing on digital marketing strategies to attract and retain the customers. By using digital marketing, an organization can easily reach out to the target audience and spread awareness about its offerings. According to Azad (2009), digital marketing can be defined as a set of all those strategies and tactics that helps an organization to undertake promotional activities through digital tools such as internet, search engine optimization social media websites, mobile apps, email marketing etc.
Digital Marketing strategies of Amazon
Incorporated in the year 1994 by Jeff Bezos, Amazon has now become one of the highly renowned brands in the global markets. The organization sells a huge assortment of products through its website Amazon.com and has its strong presence in the e – commerce industry. By establishing a strong supply chain network and logistics chain, the company has been able to serve to the target audience in an effective manner. According to Hubbard, Rice and Galvin (2015), Amazon invests heavily in marketing and promotions. The company management believes that marketing and promotional activities may assist the brand in creating a unique image and perception in consumer’s mind. This in turn will assist the company in gaining an edge over the competing brands. Digital marketing has been one of the strong areas of promotions for the company. Following are some of the key digital marketing strategies that the company has undertaken in the recent past.
Firstly, it is a much evident fact that the company operates in the online retailing or e – tailing industry and hence it obviously has a strong presence on the internet. In the last one decade, it has been observed that Amazon is very active on internet. This is being done with the help of an effective search engine optimization or SEO strategy. This implies that the company uses popular search engine platforms such as Google, Yahoo and many more to ensure that they appear on the top slots of a search. Effective use of keywords, implementation of paid search and utilization of software such as Feedster has enabled the company to gain the top slots of every search engine. Thus, if any individual search with keywords like ‘online retailer’, ‘e – commerce’ and any such word then Amazon will have the top slot in the search. This strategy has really assisted the company in attaining an edge over the competitors. It should also be noted here that by using SEO in an effective manner, the company has been able to create a positive brand image in the minds and hearts of the target audience. This is because the customers find the name of Amazon on all the search engines and hence are able to recognize it at the time of purchase decision. This positive branding of the company enables it to gain a competitive advantage over the competing brands.
Secondly, the organization has heavily relied upon online advertising. According to Azad (2011), advertising is the paid form of non – personal communication that helps an organization in reaching out to the target audience and spreading awareness. Traditionally, Amazon focused mainly on television or print media advertising. However, in the contemporary world, the company has focused on digital advertising. The company has tied up with different online websites for their promotional activities. Amazon has its banner advertisement and pop up and pop under advertisement on these online websites that helps the company in reaching out to the customers (Sharma 2016). There are different benefits of online advertising. The company can easily reach out to a huge number of customers and communicate its differentiating elements. In addition, internet advertising allows the company to use audio visual tools and create attractive promotional campaigns. Although this tool of digital marketing may prove to be a little costly for Amazon but it fetches a great return on investment in terms of sales and profits.
Thirdly, the organization has really been a revolution on the social media. It is a much known fact that social media marketing has been one of the most effective forms of communication in the contemporary world. Social media comprises of several successful platforms such as Facebook, Twitter and many more that are assisting the companies in maintaining regular communication with the target audience. Amazon has created its community on social media. The company regularly updates its information regarding new products, services, prices, offers, discounts and many more that helps the target audience to understand the company and its business format. In addition, the company also uploaded photographs and videos of its internal operations. This keeps the visitors engaged with its business. A great initiative that the company has undertaken on social media websites is consumer feedback and complaint handling. According to Kotler (2012), Amazon was one of the first companies that initiated taking the feedback of the customers through the social media. While many other companies were afraid of the negative feedbacks from the consumers, Amazon wanted to know its actual feedback. A huge majority of customers gave positive feedback publicly and talked high of the brand. However, a few customers also filed complaints about late order delivery, defective products etc. The company management then took the necessary initiatives to resolve their issues and satisfy them thereby setting a great example in front of the competitors and customers as well. Hence, the social media initiatives of the company have been highly successful.
Lastly, mobile app has been a successful tool of digital marketing recently. Amazon has its mobile app as well. The customers sitting in any part of the world can download the app using their phones and start using the same by creating an account. This mobile app has assisted the company in staying in regular touch with the customers. In fact, the customers can know about each and every product, offers or discounts on the same, return or refund policies, delivery dates and can also check the delivery status. The company also offers attractive discounts to the new users of this app. Moreover, the company regularly gives bonus points and cash backs to the users of this app. This acts as a purchase incentive to the customers and hence they are attracted towards making purchase decisions in high volumes from the company.
The above mentioned points clearly show that Amazon uses digital marketing in an effective manner. The organization has ensured that it maintains a constant communication with the target audience and also maintains a positive relationship with them. This strategy of the company has enabled it to attain an edge over the competing brands as well. E-bay, Alibaba and Wal-Mart.com are three main competitors of Amazon in the international markets. The digital marketing strategy of Amazon has enabled the company to gain an advantage over these competing brands. According to Needham (2012), these competing brands mainly focus on advertising through television or print media. They have huge marketing budgets and hence such ‘above the line’ tools of communication are being preferred by the companies. In reference to the digital marketing campaigns, these companies are not so proficient in undertaking such customized marketing campaigns and hence Amazon has an edge over the competitors (Baker, 2010).
The online consumer
According to Blythe & Megicks (2010), the consumer behavior has completely transformed in the last one decade. Today, the consumers are highly focused on making their purchase decisions through the online means. This behavior will further see a positive trend in the next one decade (Blythe & Megicks, 2010). It is a much known fact that making a purchase decision through the online means is time and cost effective for the consumers (Fill 2002). The companies give exciting discount offers online that enables a consumer to take the benefit and purchase at low prices. Thus, a huge majority of consumers are now inclined towards making their purchase decisions through the e – commerce formats (Morgan, 2011). Amazon.com is the most renowned e – commerce websites operating in global markets and hence the consumers buy their products from it.
Consumer Demographics – Amazon.com has always focused on positioning itself as a company that offers a huge assortment of products. In addition, the company also promises lowest prices to the customers. This attracts a huge number of customers to make a purchase decision from the company. According to Frost (2015), the primary target audience for the company is the middle class people between the age group of 30 years – 50 years. It has been observed that this income and age class is the main customers of company. Most of the marketing and promotional strategies of the company are directed towards this segment of society.
It is necessary for the organization to undertake effective digital marketing strategies to ensure that this target segment is loyal to the company. The next section of the research work will focus on recommending several interesting digital marketing strategies for the company that may further assist in enhancing the market share.
Objective – To increase the market share of the company by 10 percent on 6 months’ time
Before recommending the strategies, it is crucial to understand the business environment. According to Solis (2011), business environment is a set of all those factors that may have a direct or indirect impact on the functioning of an organization. By comprehending the business environment, an organization can be in a position to create better business strategies and gain a competitive edge over the competitors. The researcher will use Porter’s five forces model for analyzing the environment. This model was introduced by Michael Porter in the year 1979 and is highly used in global markets. Following is the analysis of Amazon’s business environment through Porter’s five forces model –
Bargaining power of the customers – This force has a high impact on the company because the customers have an upper hand. The customers of the contemporary world are highly aware of their rights and understand the concept of consumerism. Hence, they can dictate terms on the company in an indirect manner. Amazon should properly understand the consumer needs and then provide its products and services to maintain a relationship with them.
Bargaining power of the suppliers – This force may not have a major impact on the company because Amazon is a renowned e – commerce website across the globe. The company creates huge volumes for its suppliers (who are the multination manufacturing companies). Thus, these companies are dependent on Amazon for their sales volume.
Threat of substitutes – This force has a huge impact on the company because a lot many competing brands are also selling the same product categories to the customers. Hence, the customers have a lot many alternatives to select from and make their purchase decision.
Competitive rivalry – Amazon has a lot many direct and indirect competitors in the market. As already mentioned e – bay, Alibaba and Wal-Mart.com are some of the key direct competitors in the global markets. Apart from these, the company also faces a stiff competition from the unorganized sector.
Threat of new entrants – The government has not imposed many restrictions on the new companies entering the e – commerce segment. Hence, the competing brands are entering this industry and are further intensifying the business structure (Mooij, 2003).
From the above analysis, it is quite evident that Amazon operates in a stringent business environment and hence an effective digital marketing strategy may further assist the company to become more resilient in the near future. Following are some of the recommendations for the same –
Firstly, the organization should use the concept of content marketing. In the recent past, it has been observed that a lot many companies have focused on creating a lot of positive and attractive content that may entice the customers. For instance, Amazon can direct its employees to write positive articles and posts about the company, its working environment, policies, operational procedures and many more. These posts can be posted on free websites or social networking sites to create positive comments. According to Frost (2012), an attractive content marketing strategy can help a company to increase its customer base by 4 – 5 percent. Hence, this should be utilized by the company.
Secondly, ‘Mobilfication’ is a strategy that the company should focus on to enhance its market share. Mobile phones are here to stay and all the customer segments use mobile phones for their purchase decision. The company already has a mobile app through which it maintains a proper communication with the target audience. However, this initiative needs a lot of momentum. The company should also create a mobile website that can also attract the customers who do not have their mobile app. In addition, the company should use business analytics to further enhance the market share (Okumus, Altinay and Chathoth, 2010).
Thirdly, the company should use Chatbots to ensure that its present digital marketing strategy is effective. This implies that the company should send messages through the Chatbots on its company website and social media websites. So if the company sends 100 messages through chatbots, there is a huge probability that 80 percent of the customers may read the message (Hubbard, Rice and Galvin 2015). This will ensure that the company further spreads its awareness amongst the customers.
Fourthly, the company should focus on undertaking a comprehensive direct marketing strategy. According to Assael (2002), direct marketing is a personal form of communication where the seller interacts with the target audience and prospects through mediums such as message, phone call, email and many more. This enables the company to reach out to the customers and spreads awareness about its products and services. The company can arrange databases of the middle class customers between the age group of 30 – 50 years and send message and mails to them regularly. The company can also give them some discounts on their first purchase so that they are motivated to purchase their products from the company. It is usually observed that an effective direct marketing strategy may enhance a company’s market share by 8 – 10 percent in one year time (Slater, Hult and Olson, 2010).
Lastly, the company should use positive reviews and testimonials to further strengthen its SEO strategy. At present, the company uses paid search to ensure that it name appears on the top slots of the search engines. Positive reviews and testimonials may further energize the search engine optimization strategy of the company.
It should be mentioned here that the above mentioned a strategy is not very expensive for the company to undertake and in addition it may further help the company to strengthen its digital marketing strategy. If these recommendations are implemented in an effective manner then the company may enhance its market share.
From the above discussion, it is very much evident that Amazon is one of the most dominating organizations operating in the e – commerce industry. The company has always positioned itself as a low cost player in the market and hence has attracted the global consumers. In the past, the company has undertaken attractive marketing and promotional strategy. During the course of this research work, it was found that the company has already undertaken an attractive digital marketing strategy. The company uses different tools to ensure that it reaches out to the customers and maintains a proper communication with them. However, the augmenting competition and stringent business environment are creating a lot many hassles for the company. The researcher conducted a Porter’s five forces model that clearly reflects that the customers and competitors are posing many problems for the company. Taking this into consideration, the researcher has given a lot many recommendations to further improve the company’s digital marketing strategy. These strategies can help the company in enhancing the market share by 10 percent in the next few months.
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