Amazon marketing mix (how it is used to succeed)

Amazon uses online and off line marketing strategies to promote their brand and their original products, e.g.Amazon Prime Video or Amazon Music. The offline promotion consists mostly of broadcast television commercials and billboards advertising.

Online promotion is a very important part of Amazon´s advertising and consists mostly of the search engine optimization and paid advertising in Google and another search engines, social media activity and advertising (https://www.semrush.com/).

The biggest source of their online traffic is direct traffic (https://pro.similarweb.com/), it represents almost 60 % of the total amount of traffic, which means that their brand recognition level is strong and users mostly come to the web directly and not via search queries. In fact, Amazon´s brand is valued at 315.5 billion dollars according to BrandZ Top 100 Most Valuable Global Brand ranking 2019. Apple comes second at $309.5 billion, and Google is third at $309 billion. (BrandZ Top, June 2019)

Amazon’s online customer reach is based on detailed approach to SEO and AdWords targeting millions of keywords. They perform a great SEO strategy which covers almost 100 millions keywords, and with 740.000 advertising keywords. (https://www.semrush.com/).  The organic traffic represents  around 25 % of the total traffic. In paid search Amazon displays relevant Google text ads and banner ads from brands, especially in electronics, which helps them to be shown in first places on a search results page when users carry out a query for some brand and model.

“Amazon, like many other ecommerce powerhouses, relies on both demographic and psychographic segmentation of the markets. They focus directly on the behavior of customers with regards to purchasing: this is not specifically what customers show interest in rather, what the customers did (buying or not buying).This approach to segmentation (micro-level segmentation) is aimed at individual buyers, giving Amazon the opportunity to turn casual buyers into loyal, big money buyers. Amazon target audience is middle and upper-class customers who possess a basic understanding of technology but lack the time and are not fans of physical shopping.” (BusinessArticles Hub, 2019)

Amazon has reached its success because of their ability to be flexible and to adopt to the changes, that´s why they prioritized a video content promotion among another social media channels. Almost 60 % of all their social media traffic comes from YouTube (Similar Web, Worldwide, Dec.2019 – Feb.2020). Amazon tries to simplify an access for users to their Youtube content by creating different accounts in different countries, e.g. Amazon.es in Spanish language, Amazon.it in Italian language and etc; and also different account for different departments, e.g. Amazon Fullfilment, Amazon AWS, Amazon Prime video.

From the point of view of ecommerce global platform Amazon´s recognition is far beyond their competitors, such as Ebay for example. The only exception make local e-commerce platforms in some countries, I believe this is to be improved soon.  However, Amazon is so much more than only an e-commerce platform and they put all the advertising efforts on the promotion of another their products, such as Amazon AWS or Amazon Prime videos.

In conclusion, I believe Amazon are successful in promotion and in online marketing strategy in particular, as they use both outbound and inbound channels to communicate to a wide audience, online and offline marketing strategies in order to attract more potential customers and to retain the existing customers via massive and personalized email marketing campaigns. Amazon goes up to date with the latest advertising trends and I personally believe that this company will continue constantly growing.

Amazon effectively uses the extended 7p marketing mix such as: product, price, promotion, place, process, physical evidence and people.

  1. Product

Amazon provides a wide range of different products which include: the world biggest online market place  – Amazon shop, which is the core product of the company; Music service for Prime members – Amazon music; Amazon´s voice control system – Alexa; Web services which include Analytics, app intergation,  AR& VR,  AWS cost management and Blockchain;  Fire Tablets; Kindle e-readers and books; Prime video, Fire TV.

Amazon Product. Fabian Hurnaus, (2018) Black Amazon Echo On Table [Photograph]

2. Price

In one of his interviews, the CEO of Amazon said:

‘There are two kinds of companies: those that try to charge more and those that work to charge less. We will be the second.’  

The cheapest Amazon Kindle being sold for 139 AUD., which is a very affordable price for built-in light E-reader:

Kindle E- reader with a built-in front light in white colour, with a 167 ppi glare-free display that reads like real paper, even in direct sunlight, with a single battery charge that lasts weeks.

3. Promotion

  •  In the fiscal year 2019, Amazon’s marketing spending amounted to almost 18.88 billion U.S. dollars, up from 13.8 billion U.S. dollars in the previous year.
Amazon annual worldwide global marketing costs of Amazon from 2010 to 2019 (in million U.S. dollars), Statista
  • The following video demonstrates one of the most successful commercials of Amazon for Super Bowl 2020:
Amazon Super Bowl commercial 2020

4. Place

  • Amazon didn’t have physical stores and the company relied on online sales channel due to e-commerce nature of its business operations. Starting from 2015, the online retail giant has been concentrating in physical retail “during which time it’s opened half-dozen bookstores that double as gadget emporium, a score of campus bookstores that don’t sell books and a convenience store without cashiers.” (John Dudovskiy, August 3, 2018)
Amazon first physical bookstore, in Seattle

5. Process

  • Amazon is a world leader in eCommerce and web services and has got a strong process oriented business. Amazon aims to provide the great customer eCommerce experience strategically dividing its warehouses and fulfillment centers for operational efficiency.
  • Fulfillment by Amazon is a way for sellers to ship their products directly to an Amazon warehouse. Amazon will handle the sale, picking the product from inventory, shipping, customer service, and returns. Fulfillment by Amazon provides a higher accessibility to goods for clients(users), as retailers who don´t have logistics for  warehouse or delivery can handle it through Amazon; and higher speed of process of delivery of the goods to a customer. In some countries Amazon Primes provides the delivery service to the client just in 1 day.
  • The video below demonstrates Amazon Fulfillment Center:
Fulfillment Center Tour 2015

6. Physical evidence

  • Amazon’s biggest physical presence is its website. As it is an online retailer the place of service is its website and apps, which are user-friendly and built with great design. The key of success in website interface and  in UX – user experience, is in the Amazon search algorithm and additional functions such as: the search autocomplete, filtering, and guidance functionality excels at finding what visitors want. “The algorithm also personalizes the homepage content to the user’s search interactions in order to better enable future purchases. As seen below, various visual homepage elements are influenced by the search function, including: personalized recommendations, recent browsing history, new products, shopping cart “(The Manifest, February 6, 2019)
Amazon website, main page, an example of user friendly website interface where we can see lot’s of sections that facilitate the product search process, the recently viewed section, the recommendations for you section, shopping cart, today’s deals and etc.

7. People

  • “Amazon had 653,300 employees around the world at the end of June, not including temporary workers and contractors. Just fewer than half of those are in the United States” (The New York Times, by Karen Weise, Sept. 2019)
  • Amazon gives a great importance to its workforce. Amazon is recently named No.1 on LinkedIn’s 2018 Top Companies list, No. 1 on the Harris Poll’s Corporate Reputation survey, and No. 2 in Fortune’s World’s Most Admired Companies list. (Compensation and benefits by Amazon Staff)
  • Amazon pays attention to the employees safety in Amazon warehouse.
Training process in fulfillment center of Amazon, Jordan Srtead

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