Amazon's Marketing Mix: How Amazon Became The One Click Shop For all Our Consumer Needs.

Amazon.com’s successful marketing mix has seen it grow from a one man start up, to a hugely successful FORBES 500 company. Jeff Bezos began the now iconic company at the beginning of the ecommerce revolution. Today, Amazon.com accounts for almost 60% of all US ecommerce sales and is positioned as the ‘world’s largest online retailer’.

Online Bookstore:

Amazon has grown to offer a complex product offering. It began as an online book store, in 1996 at the start of the ecommerce revolution. They had a unique and eclectic range of titles which they sold online. Besoz promised “We will have more books than anyone else”.

They were not the only company to recognise the potential of new e-commerce. At the same time, the company ‘Computer Literacy’ began their own online bookstore. However, Amazon's promise to deliver to your door, saw the competition overwhelmed.

Amazon sellers:

Amazon soon grew its product offering from books, entering into the computer gaming and music markets. By 2006 consumers could purchase anything from dog food to mobile phones on the site. In 2000, Amazon offered the opportunity for third party sellers to sell on their site. This enabled their product offering to grow exponentially with great depth of stock. Third party sellers now account for 60% of sales made.

Amazon Web Services: In 2001 Amazon launched AWS, a wide range of global compute, storage, database, and other service offerings. AWS serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions. Web services now account for 13% of Amazon’s profit and Amazon.com controls over a third of the current day web service market.

Electronic Devices:

Amazon’s core USP is its customer centricity. Bezos recognised early on that data collection allows him to build a picture of his customer and better suggest and develop products for their individual needs. Amazon.com has developed a range of electronics and Artificial Intelligence that is designed to work alongside the individual in their day to day life. The Kindle revolutionised reading, with customers using to access books personalised to their reading habits. The ubiquitous Alexa is now a feature in many homes and allows people to remotely control their home. With Alexa, Amazon.com becomes omnipresent in the home and is therefore the first place a consumer turns to when they need something.

Branding and Logo:

Bezos originally named his company ‘Cadabra’. However, comments from his peers resulted in him changing the name to Amazon. The original logo featured the Amazon river, the largest in the world, representing the largest selection of products in the world. However, in 1999 Bezos commissioned Turner Duckworth to redesign the logo reflecting the customer centric brand.

The current amazon logo has two notable design features which reflect the brand’s ‘obsession with the customer needs.’ First the arrow linking the ‘a’ to the ‘z’. This represents that Amazon sells everything from A-Z. Second, the arrow’s design can be interpreted as a friendly smile. This draws on Amazon’s relentless focus and USP of providing the customer with consistent friendly and reliable service.

PRICE

Amazon's early pricing strategy was highly competitive. Not only did they aim to undercut the competition, but they were also prepared to lose money for nearly 20 years in order to gain market share. (“Its hard competing with someone who does not want to make money” MIckey Drexler CEO, J Crew) They began to limit customer choice by buying the competition in what is infamously known as the ‘Gazelle project’. In 2020 Stacey Mitchell claimed Bezos ‘is all about monopoly’ of the market (Frontline Doc, 2020 )

With the introduction of third party sellers in 2006, Amazon.Com wanted to maintain its pricing model in order to keep prices as low as possible for the customer. This means third party sellers are in an ongoing competition for the ‘Buy Box.’ They use undercutting and penetration pricing strategies to win the customer. Often psychological pricing is used to make the buyer click the ‘buy now’ link.

In addition Amazon also has its own algorithm which constantly reviews competitor prices. This means the prices of products can change numerous times, even during a single day. Keeping prices low drives loyalty within their customer ranks.

The introduction of Prime saw Amazon. Com create the worlds most successful loyalty program aimed at driving further conversion and retention.

PLACE

“Anything, anytime, anywhere”: Ultimately Amazon.com is an online marketplace. The concept was what originally set it apart from competitors, with products conveniently delivered to the door step of its customer. Now Amazon has a number of distribution channels, in 189 countries, including: Amazon.com, mobile apps, Affiliates, Kindle, Streaming services, Alexa/Echo.

Distribution:

Bezos began by storing and posting the books himself. However, as Amazon grew, the need arose for distribution centres, first across America and then across the world. Amazon began to contract third party delivery services, employed huge workforces in its ‘fulfilment centres’, and now is exploring the possibility of drone delivery.

Physical Store Fronts:

Throughout its history Amazon has experimented with a number of physical shop fronts, with varying success. Currently shopfronts include Amazon Fresh (a UK grocery store) and Amazon G (US). Uniquely, customers simply scan their phones on entry to the store. It is a cashier free system, all linked to the amazon.com account of the customer. The store is served by Alexa, whom customers can ask for help.

PROMOTION

Amazon.com uses a mixture of both traditional and digital channels to form its outbound marketing campaigns. TV commercials are used heavily in the US, where Amazon buys ad slots in big events such as the Superbowl. Digital channels including their social media, their Kindle services (such as good reads), and their Prime channels form Amazon’s inbound marketing campaigns. These campaigns generally work by collecting user data based on habits and purchases, then suggesting relevant products to the user.

The style and tone of the communication has always been informal and customer centric. The motto ‘Delivering smiles’ has featured heavily in the marketing campaigns, which often feature singing boxes, and happy delivery drivers. The videos below demonstrate a few of Amazon’s successful campaigns.

Green Marketing:

In response to the climate crisis and the Cop21 agreement, Green marketing has become a huge part of Amazon’s promotional focus. In 2022 they promised to customers to become climate neutral by 2040, and will be successfully running their factories, delivery operations and data centers on 100%renewable energy by 2025.

Corporate Social Responsibility:

There is also an element of cooperate social responsibility to Amazon.com’s promotional campaigns. They have made a marketing partnership with a number of registered charities. Around festive periods they will advertise their website smile.amazon.com, which allows 0.5 % of your purchase price to be donated to the charity.

PEOPLE

Amazon’s unique marketing mix is wholly customer-centric. “Our core values and approach remain unchanged. We continue to aspire to be Earth’s most customer-centric company" (Bezos, 1997).

In 2018, amazon CEO Wilke explained Amazon's customer centric approach known as ‘The Virtuous Cycle’ (Wilke 2018). Anything that the company does, must close its loop with better customer experience. For example, instead of paying profit to staff as dividends, Amazon reinvests profit which enables it to lower its prices. Therefore offering a better customer experience. When buying from Amazon, the customer will encounter a fully customer centric business model. This increases customer loyalty and satisfaction.

Customers can always reach a friendly, personalised, helper whether that be via their Alexa device, the customer service chatbox or hotline. Alternatively AWS hosts a number of online chat centres where consumers can interact with each other and help solve problems.

Amazon is committed to inclusivity and diversity within its staff. It offers a number of career advancement programmes. Including opportunities for fulfilment centre associates to access higher education funded by Amazon.

What is core to each employee is that they have “heart, intuition, curiosity, play, guts, and taste” (Bezos, 2016). When the customer encounters, (whether by video, marketing or in the help centre), an employee with these qualities, it leads to a ‘A remarkable customer experience.’

PROCESS

Amazon Web Services (2021) Amazon maintains hugely complex processes in order to deliver the end result to its consumer. The video above explains the process, from customer order to delivery . It also demonstrates the processes and interaction between, robots, computers and associates within the Amazon fulfilment centres. This is central to the customer order and fulfilment process.

The process of customers ordering and receiving their orders is made easier and easier by Amazon’s relentless drive for improvement. We “believe in building a culture of high standards. Naturally and most obviously, because we’ll build better products and services for customers” (Bezos 2015). Now customers can make orders by asking Alexa in their home and receiving it as soon as one hour later. No competitor can match this offer.

PHYSICAL EVIDENCE

Amazon offers its customers the opportunity to rate all of its products and services. Third party sellers with poor ratings achieve fewer sales on the Amazon platform. In this way, Amazon maintains its high standards even across its third party sellers, amd maintains great customer satisfaction.

Amazon is at the leading edge of warehouse storage and delivery systems. It has developed its own software and robotics to ensure that ‘fulfilment canters' can meet the demand (and expectation) of the customer for next day deliveries.

Amazon Sustainability (2022) In order to Beat COP21 targets Amazon is buying and building wind and solar farms across the Globe.

Conclusion

Bezos' relentless 'customer obsession' has led to him developing a complex Marketing Mix. Differently to other platforms, his whole initiative focuses on making innovations for the customer, not to beat the competition. By being prepared to run at a loss for almost 20 years, Bezos gained huge market share. He reinvested profits into innovation, ensuring his company is the most convenient, the most friendly, the most ethical when a consumer wants to buy something. Whilst many law suits have been brought against him, from workers rights, to tax avoidance, her has ensured the high quality of his service and monopoly of the e-commerce means consumers have not drifted from his site.

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