Amazon marketing mix (Amazon 7Ps of marketing) comprises elements of the marketing mix that consists of product, place, price, promotion, process, people and physical evidence. Product Element in Amazon Marketing Mix (AMAZON 7Ps of Marketing) Amazon products can be divided into the following four categories: 1. Amazon websites that enable hundreds of millions of products to be sold by Amazon and by third parties across dozens of product categories. Due to the abundance of ranges of products it sells, Amazon has gained the moniker The Everything Store. In 2020 third party sellers made a profit of minimum USD 25 billion.[1] There are more than 200 million Paid Prime members.[2] 2. Electronic devices such as Kindle e-readers, Fire tablets, Fire TVs, and Echo. In 2020, customers bought tens of millions of Echo devices, and Echo Dot and Fire TV Stick with Alexa.[3] There are more than 100 million smart home devices connected to Alexa.[4] 3. Media content. An extensive range of products and services, including cloud-based services that can be used to produce content. The e-commerce giant is planning to increase the range and variety of its media content products. According to new CEO Andy Jassy it is still early days for Amazon in the media.[5] The company has reached a deal to acquire US historic movie studio MGM for USD 8,5 billion[6], as a sign of increasing focus on the media business. 4. Amazon Web Services (AWS). This segment offers a wide range of global compute, storage, database, and other service offerings. AWS serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions. The e-commerce giant also completed the acquisition of Whole Foods Market in 2017. Place Element in Amazon Marketing Mix (AMAZON 7Ps of Marketing) Traditionally, Amazon didn’t have physical stores and the…
Amazon segmentation, targeting and positioning involves a set of activities aimed at determining specific groups of people as customers and developing products and services attractive to this group. Segmentation involves dividing population into groups according to certain characteristics, whereas targeting implies choosing specific groups identified as a result of segmentation to sell products to. Positioning refers to the selection of the marketing mix the most suitable for the target customer segment. Amazon mainly uses the following two types of positioning: Multi-segment positioning. Amazon offers a wide range of products and services, successfully exploiting more than one segment at the same time. Specifically, the online retail giant sells more than 75 million products, appealing to the needs and wants of a wide range of customer segments.[1] Adaptive positioning. The online retail giant closely monitors changes in external marketplace and addresses increasing customer expectations by periodically repositioning of products and services according to changes in the segment. Anticipatory positioning. This refers to positioning to a market segment that has low turnover with the anticipation that the turnover will increase in the future. Amazon Web Services (AWS) is a stark example for anticipatory positioning. Company’s founder and former CEO Jeff Bezos notes that “no one asked for AWS. No one. Turns out the world was in fact ready and hungry for an offering like AWS but didn’t know it”[2] Additional examples of anticipatory positioning applications by the e-commerce giant include Amazon Sage Maker, Amazon Comprehend and Amazon Rekognition. Stop-gap positioning This strategy involves investing in currently unprofitable brand due to profitability expectations on long-term perspective. The e-commerce giant applied stop-gap positioning strategy in relation to a number its brands such as Core 10, Happy Belly and Vedaka. The following table illustrates Amazon segmentation, targeting and positioning: Type of segmentation Segmentation criteria Amazon target…
PESTEL is a strategic analytical tool and the acronym stands for political, economic, social, technological, environmental and legal factors. Amazon PESTEL analysis involves the analysis of potential impact of these factors on the bottom line and long-term growth prospects of the e-commerce giant. Political Factors in Amazon PESTEL Analysis The range of political factors that affect Amazon include but not limited to the political stability or instability in the country, the influence of home market lobbying and pressure groups and the attitude of the government towards e-commerce and retail industries in particular. Additionally, the freedom of press, trade unions and their activities and the extent of corruption belong to the list of political factors with potential implications on Amazon business practices. Due to the scope and scale of its business operations, Amazon plays an indirect role in politics in USA, Europe and some other regions. In other words, in markets where Amazon has a strong presence, the ruling government usually has a certain stance towards the e-commerce giant in particular among internet retailers. Stance of governments towards Amazon Most people either love or hate Amazon and this extends to politicians and government officials as well. Former US President Donald Trump was vocal in his dislike of the tech giant and sometimes criticised the company and its then CEO Jeff Bezos on Twitter. The current President Joe Biden also criticizes Amazon for paying low taxes and its opposition towards formation of labour unions. In February 2021 Biden “released the 2 ½-minute video. While he omitted the name of the powerful e-commerce giant, his remarks were seen as an unmistakable show of solidarity with a labour movement that failed to secure anything similar from his recent predecessors.”[1] The company has hired the former press secretary of the US President, Jay…
Amazon marketing strategy relies on the following four pillars: 1. Offering the widest range of products. The largest internet retailer in the world by revenue offers hundreds of millions of products. The wide range of product it offers has earned the online retailer the moniker The Everything Store. 2. Using customer-friendly interface. The tech giant has an advanced interface that integrates personalized recommendations and recent browsing history, among others. Ever-improving user interface is the result of the company’s focus to become Earth’s most customer-centric company. 3. Scaling easily from small to large. The e-commerce and cloud computing company has experience and competence in scaling from small to large. This factor plays in instrumental role exploring new business segments. Scaling from small to large has allowed the online retail behemoth do disrupt increasing ranges of industries such as retail, transportation, entertainment and now industrial distribution. 4. Exploiting affiliate products and resources. Up to date, the tech giant has taken a full advantage of affiliate programs, products and resources to contribute to the bottom line of the business. Amazon marketing strategy integrates a number of targeted online marketing channels, such as Associates program, sponsored search, social and online advertising, television advertising, and other initiatives. Generally, Amazon marketing strategy is based on the following principles: Amazon 7ps of marketing mainly focuses on product and place elements of the marketing mix. Offering hundreds of millions of products in the USA alone, Amazon product range is the widest among online and offline retailers. Moreover, the company is able to offer its products for competitive prices due to massive cost savings based on online nature of business operations. Amazon segmentation targeting and positioning practices are associated with targeting the widest customer segment. The retail giant does this with the application of multi-segment, adaptive, anticipatory and stop-gap…
Generally, Amazon organizational culture integrates the following five key elements: 1. Immense performance pressure. Amazon organizational culture has been described as “breakneck-paced, and notoriously cost-conscious, as befits a company that has run only a small profit, or a loss, under generally accepted accounting principles for most of its life as a public company.[1] Amazon organizational culture was fiercely criticized in 2015 in The New York Times article titled “Inside Amazon: Wrestling Big Ideas in a Bruising Workplace”. Specific flaws mentioned in the article include unrealistic performance standards, the work culture based on fear and the lack of recognition of employee contribution. The article caused debates in the media and even prompted a response from Amazon CEO at the time Jeff Bezos. Furthermore, work culture at Amazon has been described as “purposeful Darwinism” approach for employee management.[2] Generally, pushy, combative and ‘bruising’ organizational culture is perceived as outdated. Nowadays, the popular belief is that workplaces need to be nurturing and encouraging, and managers need to be nice and friendly and treat their employees like family in order for a company to succeed. The largest internet retailer in the world by revenue proves this belief wrong. Amazon has a very intense corporate culture with an extensive emotional and even physical pressure to some employees. Nevertheless, Amazon along with Alphabet has been recognized by LinkedIn as the best place to work in US in 2021.[3] This can be explained in a way that Amazon has a unique organizational culture that is not for everyone. Only employees who can thrive under immense pressure and fast-paced environment can survive in this company. 2. Constant reinvention and optimization of organizational culture. Amazon founder and CEO Jeff Bezos “emphasizes the importance of constantly assessing and adjusting Amazon’s culture so it never loses the agility, nimbleness, and hunger for…
Amazon leadership style has been classified as pragmatist. Pragmatist leaders “set high standards and unapologetically expect those standards to be met by themselves and by their employees”[1] The company’s founder and first CEO, Jeff Bezos is an exceptional and proven business leader. Bezos efficiently exercises visionary and servant leadership styles and places exceptional customer service at the core of Amazon’s business practice. Moreover, Jeff Bezos leadership style is unique in several ways. For example, it has been noted that “while you might find other internet firms focusing on a fun, relaxed atmosphere for their employees, no-frills Bezos is proving the potency of another model: coddling his 164 million customers, not his 56,000 employees.”[2] Jeff Bezos’ leadership style can be analysed through the prism of contingency leadership theory. According to contingency leadership theory, “leader’s effectiveness is contingent upon with how his or her leadership style matches to the situation.”[3] Jeff Bezos leadership style has been characterized as harsh, cutthroat and demanding.[4] It can be argued that such a leadership style fitted the situation on the onset of the business, when the company had to strengthen its position on rapidly expanding industry. In July 2021 Jeff Bezos stepped down as CEO and assumed the role of company’s executive chairman. Andy Jassy CEO of Amazon Web Services became the new CEO of the online retail behemoth. At has been noted that although Andy Jassy values Bezos leadership style the new CEO is “more mild-mannered, soft-spoken and less prone to angry outbursts compared to Bezos”[5] Nevertheless, Mr. Bezos will continue to yield an immense influence on the business and Amazon leadership style for the foreseeable future. This is because his new role executive chairman grants his involvement in strategic decision making and Mr. Bezos remains as the largest shareholder of the e-commerce giant. Amazon…
Amazon organizational structure can be classified as hierarchical. Senior management team include three CEOs and three senior vice presidents responsible for various vital aspects of the business reporting directly to CEO Andy Jassy. Amazon organizational structure has the following four key features: 1. Hierarchical corporate structure. Hierarchical structure at Amazon has developed due to the immense size of the business. The largest internet retailer in the world by revenue employs more than 1,3 million people worldwide.[1] 2. Hybrid project groups. Amazon corporate structure integrates hybrid project groups when developing new products and services. Specialists from various departments are attracted according to their skills and competencies required for the project. These employees can be attracted part-time reporting to both, the head of their departments and project leaders, or they can engage in the project full-time reporting to project manager only for the duration of the project. 3. Flexibility of the business. It is important to note that despite its large size, unlike many other companies with hierarchical organizational structure, Amazon remains highly flexible to adapt to frequent changes in the external marketplace. Moreover, the online retail giant leads changes in external business environment; it has caused disruptive innovation in e-commerce and currently it is about to cause a disruptive innovation in global logistics industry. Successful organization of hybrid project groups plays an instrumental role in maintaining flexibility of the business. Amazon organizational structure integrates many small teams that deal with various aspects of the business. Amazon founder and former CEO Jeff Bezos is credited with the introduction of ‘two pizza rule”. According to this rule, meetings should be held in teams small enough that could be all fed with only two pizzas. “Two pizza rule” continues to this day under the new CEO Andy Jassy. 4. Stability in the top management.…
Amazon business strategy can be described as cost leadership taken to the extreme. Range, price and convenience are placed at the core of Amazon competitive advantage. The global online retailer operates with a razor thin profit margin and succeeds due to a combination of economies of scale, innovation of various business processes and a constant business diversification. Founder and first CEO Jeff Bezos believes in focusing as a business strategy on things that do not change. At the outset of the business he reasoned that people always want low prices, selection and fast delivery. Exceeding customer expectations on these points has remained as the core of Amazon business strategy. Innovation and technology the online retail behemoth uses are simply instruments to pursue this core strategy. Moreover, Amazon business strategy is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking.[1] The following four points constitute the cornerstones of Amazon business strategy: 1. Regularly entering into new niches and segments. Started only as an online shop for selling physical books in 1997, today Amazon sells anything that can be sold online in the global scale. Sophisticated global logistics represents one of the solid bases of Amazon competitive advantage. The tech giant has used this advantage extensively to engage in successful business diversification. Recently, the company launched Amazon Home Services, a simple way to buy and schedule local professional services as a continuation of its diversification strategy.[2] Currently, the tech giant operates in increasing range of industries including e-commerce, cloud computing, artificial intelligence, consumer electronics, entertainment, digital distribution, B2B distribution, self-driving cars and supermarkets. As the largest internet company by revenue in the world, Amazon frequently disrupts the industries it chooses to enter. The e-commerce giant occasionally finds new niches and segments accidentally, while…
Amazon Ansoff Matrix is a marketing planning model that helps the e-commerce and cloud computing company to determine its product and market strategy. Ansoff Matrix illustrates four different strategy options available for businesses. These are market penetration, product development, market development and diversification. Amazon Ansoff Matrix Within the scope of Ansoff Matrix, Amazon uses all four growth strategies in an integrated manner: 1. Market penetration. Market penetration refers to selling existing products to existing markets. Amazon uses market penetration strategy aggressively. Sophisticated user experience features in general and recommendations feature on e-retailer’s website in particular play an important role in the application of market penetration strategy. Specifically, Amazon focuses on user experience personalization thanks to efficient application of data science and machine learning. The e-commerce giant collects and possesses a vast amount of data related to customers such as age, sex, lifestyle, habits and preferences. The company uses artificial intelligence (AI) to analyse this data and suggest products that a particular customer is highly likely to buy. 2. Product development. This involves developing new products to sell to existing markets. Product development is one of the core strategies used by Amazon. Started by Jeff Bezos selling only physical books online in 1997, today Amazon sells anything that can be sold online. The largest internet retailer in the world by revenue sells more than 500 million products, including products sold by third parties on Amazon platform. Top product categories include clothing, shoes, jewellery, home and kitchen appliances, books, electronic devices, sports and outdoor items and others. The e-commerce and cloud computing company produces increasing number of products under the private label as well. 3. Market development. Market development strategy is associated with finding new markets for existing products. Amazon is engaged in market development in a systematic manner. Started only in…
Square CSR programs and initiatives mainly focus on four key priority areas – Climate Action, Social Impact, Employees and Culture, and Corporate Governance. These initiatives are led by Neil Jorgensen, Global Environmental, Social, and Governance Lead at Square. Square Supporting Local Communities Square has invested USD 100 million in minority and underserved communities The financial unicorn assists some local communities in the US to preserve their local culture and deal with other most pressing issues. In many offices there are active volunteer communities, referred to volunteams that undertake various projects to support local communities Square and Gender Equality and Minorities Square invests in employee resource groups such as Black Squares Association, LatinX Community, LGBTQ group, and others in order to create an inclusive environment The majority 54,1% of US employees of The fintech are white people, as illustrated in Figure 1 below: Figure 1 Race and ethnicity of Square Inc. employees in US[1] Energy Consumption by Square Square launched Bitcoin Clean Energy Investment Initiative, USD 10 million investment to help accelerate renewable energy adoption in bitcoin mining. The payments company is planning to evaluate and explore clean energy options, working closely with its key provider partners. Carbon Emissions by Square In 2020 the total carbon footprint for Square totalled to 247,900 tCO2e. The Figure 2 below illustrates the share of carbon emissions by operations: Figure 2 Square Inc. total carbon emissions in 2020[2] The financial services and digital payments company has aimed to be zero carbon for operations by 2030. Other CSR Initiatives and Charitable Donations by Square Leads Program offered to managers at all levels is designed to develop leadership skills and competencies The finance sector disruptor fully pays parental leave globally, caregiving leave to US employees In UK Square partnered with The Entrepreneurial…