1. link to the article
http://www.businessweek.com/magazine/content/09_39/b4148053513145.htm?chan=rss_topStories_ssi_5
2. summary
The giant online retailer Amazon.com has created one of the world's strongest brands by avoiding conventional tactics of marketing. While other retailers have been battered and pushed into bankruptcy by spending hundreds of millions of dollars a year on advertising and marketing to build their brands, Amazon spends the money into technology for its website, distribution capability and shipping deals. Amazon also thrived during the recession period because of the company's reputation for for offering low prices, broad selection, and quality services. From this method, Amazon achieved 16% revenue growth. However Amazon have not established a firm customer base for the luxury items. So Amazon started a contest in which everyone can create their own commercial, and the company picks 5 finalist and asks the customers to pick their favourite, in this way there is no need for Amazon to hire advertisement agency.
3 Identify topics from the syllabus
1.5 External environment , 1.4 Stakeholders, 4.1 role of marketing , 4.2 marketing planning, 4.5 promotion,
4. Applies one business tool/theory/technique to the organization
4.2 marketing planning
Amazon's way of establishing a loyal customer base is not through spending hundreds of millions of dollars on marketing, in the contrary, Amazon started the contest in which everyone can create their own commercial. In this way, Amazon can not only save the unnecessary money spent on marketing and other expensive ways of promotion, the new contest way is also more efficient in terms of getting more understanding of what is an effective marketing from the customer's point of view. This form of primary research is appropriate and beneficial to Amazon, since up to date and objectivity helps the company to differentiate its self from other online retailers. By having a low and competitive price during the recession period, Amazon achieved the equilibrium price in the marketing mix with the correct adjustment of price in different financial period. However, Amazon is not successful at selling luxury items, in other words, they might not have a wide range of product mix. Amazon also spend part of the money on distribution capability and shipping which can grant more customer satisfaction. Although the ethics of marketing must also be considered, since the new method of marketing introduced by Amazon is a contest and public based, the aspect of unethical marketing can also be avoided.
However, since Amazon declined to participate in the report, there's a possiblity that the report is biased by reporting too in favor of Amazon.
Hi Randy. Amazon has implemented interesting marketing strategies over the last few years, and continues to thrive despite the decline in the economy. They must be doing something right! Thanks for sharing the article and your insights.
回覆刪除Hey Randy! Since my article is about Amazon.com as well, I feel like they are getting enough promotion, without having to do anything. Their increase in revenue seems to be enough to be mentioned in the news. Of course, in the times of an economic recession this really is great news. I really like their idea of organising a promotion-contest. This not only saves money for their marketing department, it also gives them great mouth-to-mouth publicity. Very smart!!
回覆刪除Juls =)
yap~!
回覆刪除Also after reading all the articles about Amazon on everyone's blog, Amazon is surely doing well comparing to the other online retailer companies. Its unique promotion method, also the beneficial management method can increases its cash flow ability as well as establish more firm customer base. Since Amazon has been attracting customers from eBay, those promotional method is proven to be working well.
Randy
Hi Randy,
回覆刪除COOL ARTICLE:)
Amazon is a supermarket retailer on internet and a strong leader in e-commerce. I think it is brilliant for Amazon to continue its efforts on upgrading its web technology and distribution infrastructure, while keeping shopping costs low. These are service enhancements for providing best buying experiences to customers. Amazon’s brand name is more effectively advertised through public relations events such as the commercial contest mentioned in the article and word of mouth. On-line shopping is normally considered riskier than in-store shopping. Hence, consumers go for internet buying as they are more interested in getting products/brands well known to them. I fully endorsed that Amazon is not for all product categories, definitely not for big ticket items such as luxury brand products. Shoppers who go for a Cartier watches or Gucci stores would like to buy at the boutique stores. They want to be served to enjoy a taste of the luxury shopping experience.
Agree to Randy and other classmates, I certainly think that Amazon has been utterly successful in their marketing strategy. They used the cost of below the line promotion to achieve the affect of the above the line promotion is really a achievement. Additionally, Amazon had also succeed in “hitting a two birds with one rock”, meaning on how Amazon used the opportunity of the competition to not only help themselves promote and have a great advertisement, but to do a primary research in customer’s choice. Adding to the point Randy mentioned, Amazon’s product mix is certainly in a growth and star in the Boston matrix since it has yet so much potential for its market growth and share to increase. As a monopoly in the industry, Amazon has continuously increased their net profit for themselves.
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