Amazon Marketing Mix (4Ps) A Fortune 500 Company Analysis Essay

Amazon Marketing Mix (4Ps)

Amazon is among the world’s leading companies in e-commerce activities due to the efficiency of its product marketing mix. The company uses advanced online tools that allow users to log in to their accounts through their official website or application, thus allowing them to place orders while indicating their delivery point. Over the years, the product portfolio of Amazon has undergone drastic diversification, thus increasing its product marketing mix. Similarly, Amazon offers a wide range of products ranging from beauty utilities, electronics, home décor, gadgets, and auto parts, thus enhancing consumer satisfaction. Therefore, the diversification of Amazon’s portfolio to provide additional services such as web hosting, database services, and digital services has adjusted the existing market mix to satisfactory levels.

Amazon has adopted an excellent pricing strategy, such as applying technology to complement its marketing mix, thus gaining a significant competitive edge and market leadership. Mostly, prices are determined through a competitive pricing strategy, which employs prevailing market rates, legal obligations, and marketing risk factors (Ferguson, 2017). However, despite the existence of numerous factors affecting price, prices offered by the company are lower than the prevailing market prices due to the presence of operational efficiency and a web-based business model (Kucuk, 2016). Therefore, the pricing model used by Amazon enables consumers to access products at lower prices, thus making the company reputable.

Consumers worldwide use Amazon services to place orders for different products easily. Similarly, the company has a unique distribution channel located in strategic places such as Amazon fulfillment centers for easy access; thus, consumers in remote areas are adequately served. According to Ferguson (2017), the company incurs high charges when transporting packages using a courier and postal services to remote areas, thus raising the need for conceptualizing an efficient distribution channel. Therefore, the company is still straggling to attain a cost-effective model, thus increasing its marketing mix.

Amazon employs an aggressive marketing strategy, such as using print and online ads to promote its products. Similarly, the company employs creative television commercials and social media tools, which target consumers using their browsing patterns, thus gaining large market command (Ferguson, 2017). Also, Kucuk (2016) claims that Amazon uses affiliate programs such as blogging and YouTube to promote its products to potential buyers. Mostly, the company develops its brand and products through sales promotion facilities, such as offering discounts and gifts during festive seasons, thus increasing traffic on its website, which may translate into sales.

Amazons Source of Competitive Advantage

The reputable brand built by Amazon made Forbes rank it at the 6^th position on the most valuable brands list, thus gaining a competitive advantage over other online retail brands. Similarly, Pratap (2018) adds that the company draws its massive competitive advantage from the efficient application of technological tools, which are useful in clouting finance and attaining a notable global presence, thus creating a high level of consumer convenience. Additionally, web services offered by Amazon, such as web hosting, are highly effective for both small and large-scale developers, thus being preferred (Pratap, 2018). Therefore, the popularity of products such as the Echo and Kindle is an essential source of the company’s competitive advantage.

In the modern world, cost reduction is no longer useful in gaining a competitive advantage; thus, companies must employ leadership elements. By applying practical leadership skills, Amazon commands the e-retail business with a boom (Boss, 2017). Boss (2017) adds that Amazon began as an online bookselling store, implying its low market leadership level, which raised the need to diversify its products to attain a sizeable competitive advantage. Therefore, to gain a substantial competitive advantage, Amazon adopted a new product portfolio in product portfolio, thus increasing market leadership.

BCG Matrix of Amazon

The management uses the Boston matrix to examine the company’s product portfolio as it consists of 4 quadrants, stars, cash cows, dogs, and question marks, thus useful in determining the profitability of different business units. Products are classified into different groups based on the company’s overall growth; therefore, products such as audiobooks, Kindles, and e-books generate a high amount of revenue (Amazon, 2016). Miller and Bosman (2011) observe that the increasing number of consumers using Kindle has significantly increased the number of e-books sold over the past year, thus indicating their contribution to the company’s total revenue. Other products, such as audiobooks, music, and movies, hold a significant percentage of the market share, thus generating sufficient income for the company (Kasi, 2017). According to Grisworld (2016), Cloud and electronic products are stars because their demand is increasing. Therefore, the BCG matrix of Amazon is an essential tool for analyzing and classifying different products based on their market performance.

How Amazon Fits Into the Industry

The company has a unique brand image that determines the growth of market leadership, thus used strategically to acquire new customers and retain old ones. Similarly, the company has a well-developed website that allows users to post comments and reviews about their experience with the company, thus maintaining consumer trust. According to Pratap (2018), Amazon is developing new marketing strategies to explore different market segments, especially in remote areas, thus increasing its market command. Due to the increasing international demand for Amazon services, the company is introducing regional marketplaces in Japan, Asia, Europe, and North America, thus increasing its competitive advantage through the growth of its international clout (Amazon, 2016). Additionally, the market structure is favorable for the company despite the existence of stiff competition from Alibaba, eBay, and Flipkart (Amazon, 2016). Therefore, Amazon focuses on pacesetting its competitors by acquiring and developing new strategic plans that will aid the company in dominating the market.

References

Amazon. (2016). Annual Report. Retrieved from http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-reportsannual

Boss, J. (2017, June 20). Amazon’s competitive advantage isn’t cost or convenience, it’s this. Retrieved from https://www.forbes.com/sites/jeffboss/2017/06/20/amazons-competitive-advantage-isnt-cost-or-convenience-its-this/.

Ferguson, E. (2017, February 20). Amazon.com inc.’s marketing mix (4ps) analysis. Retrieved from http://panmore.com/amazon-com-inc-marketing-mix-4ps-analysis.

Grisworld, A. (2016, June 21). Amazon will soon dethrone best buy as the top seller of consumer electronics. Quartz Media. Retrieved from https://qz.com/712709/amazon-will-soon-dethrone-best-buy-as-the-top-seller-of-consumer-electronics/

Kasi, A. (2017, April 27). BCG matrix of Amazon. Retrieved from However, despite the existence of numerous factors affecting price, prices offered by the company are lower than the prevailing market prices due to the presence of operational efficiency and a web-based business model.

Kucuk, S. U. (2016). Marketing and marketing mix. Visualizing Marketing, 3–7. doi: 10.1007/978-3-319-48027-5_2

Miller, C. C & Bosman, J. (2011, May 19). E-books outsell print books at amazon. The New York Times. Retrieved from http://www.nytimes.com/2011/05/20/technology/20amazon.html

Pratap, A. (2018, October 8). Amazon Sources of Competitive Advantage. Retrieved from https://notesmatic.com/Amazon-Sources-of-Competitive-Advantage.