Marketing mix of Amazon (4Ps of Amazon)
This is a detailed analysis of the marketing mix of Amazon. It analyses the 4Ps (Product, Price,Place, and Promotion) of Amazon and explains the company’s business & marketing strategies. Amazon (Amazon.com, Inc.) is an American e-commerce and cloud computing company headquartered in Washington, the USA. It was founded by Jeff Bezos in 1994.
Though Amazon started its journey with books only, it now offers millions of products under different categories. Some of the top Amazon 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 offers products from all types of retailers and independent businesses, it aggressively promotes its own private label brand, Amazon Basics (Chen, 2018). As the company continues to grow, more and more products are added to the Amazon inventory very regularly. This provides Amazon with a competitive advantage over some of its competitors.
Price and pricing strategies of 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. It focuses on keeping the prices low and offering customers a wide selection. Other pricing strategies Amazon 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 of Amazon 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 Amazon’s official e-commerce websites and the Amazon App to buy anything from Amazon. Amazon products can be shipped to over 100countries and regions (Amazon, 2020). 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.
Promotional strategies of Amazon
Promotion 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.It also advertises through a great number of Amazon affiliate websites. Affiliates advertise Amazon products on their websites and blogs, and receive commissions usually per sale made.
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. It spent $7.2billion on marketing in 2016 alone (Green, 2017). Its marketing spending in 2019 was almost $18.80 billion (Clement, 2020).
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Last update: 12 September 2020
Amazon (2020) Amazon global export countries and regions, available at: https://www.amazon.com/gp/help/customer/display.html?nodeId=201910800 (Accessed 12 September 2020)
Chen, C. (2018) Amazon now sells 76 of its own private-label brands — from clothes to baby wipes, available at: https://www.businessinsider.com/amazon-private-label-brands-list-2018-4?r=UK&IR=T (Accessed 10 December 2018)
Clement, J. (2020) Annual global marketing costs of Amazon from 2010 to 2019, available at: https://www.statista.com/statistics/506535/amazon-marketing-spending/ (accessed 11 September 2020)
Green, T. (2017) Amazonspends more on advertising than Walmart, Target, Best Buy, Home Depot, andKroger combined, available at: https://www.businessinsider.com/amazon-stock-price-advertising-spending-compared-competitors-2017-6?r=US&IR=T(Accessed 05 December 2018)