M RahmanMarketing mix of Amazon (7Ps of Amazon)
This is a detailed analysis of the marketing mix of Amazon. It analyses the 7Ps (Product, Price, Place, Promotion, People, Process, and Physical Evidence) of Amazon and explains its business & marketing strategies. Amazon (Amazon.com, Inc.) is an American e-commerce and cloud computing company headquartered in Washington, the USA.
Amazon products
Though Amazon started its journey with books only, it now offers millions of products under different categories. Some of its top product categories are clothing, shoes & jewellery, kitchen & home appliances, books, electronics, sports and outdoors, car accessories & parts, cell phone & accessories, industrial & scientific, tools and home improvement, and collectibles & fine art.
While Amazon sells products from all types of retailers and independent businesses, it aggressively promotes its own private label brand, Amazon Basics. As it continues to grow, more and more products are added to its inventory very regularly. This provides it with a competitive advantage over all of its competitors.
Price and pricing strategies of Amazon
Pricing is a key element in this marketing mix of Amazon (7Ps Amazon). There are many different pricing strategies that a company can use. For example, value pricing, cost-plus pricing, competitor pricing, and price discrimination to name but a few. Amazon usually uses competitive pricing strategy. It regularly evaluates its competitors’ prices as basis for its own pricing.
Amazon focuses on keeping the prices low and offering customers a wide selection. Other pricing strategies it often uses are psychological pricing, and promotional pricing.
It is worth noting that due to its nature of business, Amazon can bring about changes to the prices of millions of its products on a single day. Such a capability is certainly a great strength and makes it extremely difficult for the competitors to keep up with Amazon.
Place/distribution channels of Amazon
Amazon is the biggest online retailer in the world. It is a global brand and has presence around the world. Customers can use its official e-commerce websites and the Amazon App to buy anything from Amazon.
Amazon products can be shipped to over 100 countries and regions (Amazon, 2023). The company ships products internationally with AmazonGlobal. It is worth noting that Amazon’s delivery time is very rapid now-a-days and this has been made possible because of its excellent distribution centres.
However, it should be mentioned that Amazon was accused of forcing its drivers to deliver 200 parcels a day with literally no break and paying them less than the minimum wage. In fact, it has damaged the brand reputation.
Promotional strategies of Amazon
Promotion is also a key element in this marketing mix of Amazon (7Ps Amazon). It is about communication. Amazon communicates with its customers with a variety of tools and methods. For instance, it carries out regular advertising campaigns on television, newspapers, social media, and billboards.
Amazon also advertises through a great number of Amazon affiliate websites. Affiliates advertise its products on their websites and blogs and receive commissions usually per sale made. However, affiliate cookies last for 24 hours only, meaning that they can only earn commission from sales that take place within 24 hours after customers have clicked on the affiliate link. This makes many affiliates unhappy.
Amazon offers sales promotions and discounts regularly. It also uses public relations activities to promote its brand image. Its email marketing campaigns are also very effective. It is worth mentioning that Amazon has a huge marketing budget. In the fiscal year 2022, its marketing spending amounted to roughly 42.2 billion U.S. dollars (Coppola, 2023).
Amazon has used digital marketing very well in its promotional strategy. It uses a variety of digital marketing techniques, such as personalization, content marketing, social media marketing, search engine optimization (SEO), and email marketing.
Personalization is one of Amazon’s most effective digital marketing techniques. The company uses data collected from its customers to personalize their shopping experience. It uses data to recommend products, display targeted ads, and offer customized discounts.
Social media marketing is another important part of Amazon’s digital marketing strategy. The company has an active presence on popular social media platforms, such as Facebook, Twitter, and Instagram. It uses social media to interact with customers, promote its products, and build brand awareness.
Search engine optimization (SEO) is also an important part of Amazon’s digital marketing strategy. The company uses SEO techniques to increase its visibility on search engines, such as Google, Yahoo, Safari, and Bing. It also uses SEO to improve its search engine rankings.
People strategies of Amazon
Amazon’s success is largely due to its people strategies. It has a highly talented and motivated workforce. It has also implemented a variety of strategies to attract and retain talented employees.
Amazon provides employees with a variety of training and development opportunities. It offers employees access to online courses, workshops, and seminars. It has a plan to invest 1.2 billion US dollars to upskills more that 300,000 of its own employees by 2025 (Amazon, 2023).
However, Murphy (2022) reports that around 400 drivers who have delivered parcels for Amazon have joined a legal battle seeking compensation from it over employment rights. This shows that the company needs to do more for its parcel drivers.
Process strategies of Amazon
Amazon has also implemented a variety of process strategies to optimize efficiency and reduce costs. It uses automation to streamline processes and reduce manual labour. It also uses data analytics to optimize processes and improve customer service.
Physical environment of Amazon
Physical environment is the last component in this marketing mix of Amazon (7Ps of Amazon). Amazon uses its physical environment to create an immersive shopping experience. It has a very fast and user-friendly website. Its logo is easily recognisable as well. However, as the website home page contains lots of images of products, it looks congested.
Summary of marketing mix of Amazon (7Ps of Amazon)
In conclusion, Amazon has used a variety of marketing techniques to become the largest online retailer in the world. These techniques are there to acquire and retain customers, attract, and retain talented employees, optimize efficiency, reduce costs, and create an immersive shopping experience for customers.
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Last update: 24 February 2023
References:
Amazon (2023) Amazon global export countries and regions, available at: https://www.amazon.co.uk/gp/help/customer/display.html?nodeId=GCBBSZMUXA6U2P8R (Accessed 24 February 2023)
Coppola, D. (2023) Annual global marketing costs of Amazon, available at: https://www.statista.com/statistics/506535/amazon-marketing-spending/ (accessed 23 February 2023)
Murphy, S. (2023) Almost 400 drivers join employment rights legal battle against Amazon, available at: https://www.independent.co.uk/news/uk/home-news/amazon-driver-legal-rights-fight-b2002897.html (accessed 22 February 2023)
Photo credit: Amazon UK
