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Amazon’s Marketing Plan MKT/571

Amazon’s Marketing Plan

Jeff Bezos originally established as an online bookstore in Bellevue, Washington, in May 1994 and reincorporated the company in Delaware in 1996 [ CITATION Ama18 \l 1033 ]. The main headquarters is located in Seattle, Washington. Today, Amazon offers millions of unique products to be sold by third parties and through Amazon themselves across millions of different product categories. Customers access the products through Amazon websites, mobile apps, Alexa, and physically visiting the stores. It is important to understand the buying influence and behaviors of the customers to create effective relationship marketing, especially with Amazon’s goal of becoming the world’s most customer-centric company

[ CITATION Ama18 \l 1033 ]. Jeff Bezos had a great point when he said, “Our customers are loyal to us right up until the second somebody offers them a better service. I love it. It’s super motivating for us” [ CITATION Rob17 \l 1033 ]. The following marketing plan is intended to provide Amazon with guidance and an outline of the required steps to sufficiently market its’ products and services to the appropriate audience.

Executive Summary is currently the leading retailer in the world, with a strong globally recognized brand, but competition has been on the rise with brick and mortar stores creating online shopping websites and other online retailers increasing its product and geographical scope.

Strategic Objective

Amazon’s strategic objective goes along with the company’s mission and vision statements. Amazon seeks to offer the largest number of products, at low prices, with the convenience of offering same-day delivery or next-day delivery for Prime members. Of course,

achieving customer loyalty and repeat purchases has always been key to Amazon’s success as it continues to focus on innovations and customer satisfaction.

Products or Services

Amazon product lines include almost anything that a consumer wants or needs, such as apparel, electronics, beauty products, furniture, kitchen items, car parts and other automotive items, several media (books, music CDS, DVDs, games, and software), sporting goods, baby products, groceries, gourmet food, health and personal care items, jewelry, industrial supplies, scientific supplies, lawn and garden items, musical instruments, tools, toys, games, and much more. Amazon also offers services such as allowing third-party sellers to sell on and services to the consumer. For example, Home Services allows consumers to set up an appointment with vetted professionals for issues such as plumbing or lawn care [ CITATION Har191 \l 1033 ].

Resources Needed

Establishing a branding strategy and a marketing communication plan can help organizations communicate with and send messages to its’ consumers. Amazon’s marketing communication plan outlines the company’s marketing goals and initiatives for a specific time period. Amazon has been successful at marketing its’ services and products through traditional and new media marketing. Being that Amazon is the world’s largest retailer [ CITATION Deb191

\l 1033 ], that alone makes it a well-branded company. The support of Amazon’s vision statement, mission statement, and core values will continue being the backbone of Amazon’s success.

Projected Outcome

Figure 5 reports the projected net revenue of’s e-commerce and service from 2002 to 2022, in billion United States dollars. Amazon’s net revenue is expected to continuously show more signs of growth. As seen in Figure 5, Amazon’s projected net revenue is expected to climb to 356 billion dollars by 2022 [ CITATION Cle191 \l 1033 ].

Situational Analysis

It can be nearly impossible to make the right decisions for every aspect of an organization without having a structured input to assist in making the decisions. A situational analysis will allow Amazon to use marketing research and other observations to drive its’ decision-making process by structuring a strategic marketing plan [ CITATION Lor19 \l 1033 ].

Mission, Vision, Strategic Objectives, Values

Since Amazon was founded in 1995, it has had the same vision and mission “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices”

[ CITATION Ama1912 \l 1033 ]. Amazon uses cost leadership, with the objective of minimizing operational costs, as a strategic objective to build a competitive advantage through continuous improvements in information technology infrastructure. The cost leadership strategy pushes Inc. to minimize its price levels, which impacts Amazon’s marketing mix. The lower prices attract and create loyal consumers [ CITATION Smi17 \l 1033 ].

Amazon’s Strengths and Weaknesses

As shown in Table 1: Amazon’s Strengths and Weaknesses, Amazon is a global customer- oriented company with a strong brand name that focuses on cost leadership and innovation

[ CITATION Ama1911 \l 1033 ]. Amazon is now the world’s largest retailer [ CITATION

Deb191 \l 1033 ], which, as of 2018, has sold 562.3 million products in its’ marketplace. The company is well-known for its innovations and creative ideas. Table 1 reports Amazon of having weaknesses in employee treatment, losing margins in a few areas, imitable business model, tax avoidance, and having a limited amount of brick and mortar stores

[ CITATION Ama1911 \l 1033 ].

Walmart’s Strengths and Weaknesses

As shown in Table 2: Walmart’s Strengths and Weaknesses, Walmart shares some of the same strengths and weaknesses as Amazon. Walmart is a global strong-branded company, which also focuses on cost leadership. Millions of customers visit Walmart every day because of the millions of items sold at Walmart and, all at low everyday prices [ CITATION Wal19 \l 1033 ]. Walmart is currently the second-largest retailer in the world [ CITATION Deb191 \l 1033 ]. Table 2 reports Walmart’s weaknesses as poor working conditions, employee treatment, thin profit margins, gender discrimination, a large span of control, and imitation.

Walmart has received several lawsuits and a lot of criticism regarding its poor working conditions, low wages, and inadequate healthcare. In 2007, Walmart also received a lawsuit for gender discrimination because female employees were being discriminated against in regard to pay and promotions [ CITATION Wal19 \l 1033 ].

Customer Loyalty and Retention

Customer retention is one of the many factors that contribute to Amazon’s success.

According to the United States Census Bureau’s 2018 data, there are approximately 325 million Americans in 127 million households. eMarketer estimates 51.3 percent of American households will be Prime members in 2019. Amazon’s prime retention rate would then be 51.3 percent of all American households have actually tried it, but knowing that not all households have used

Amazon Prime, the retention rate is higher [ CITATION Rog19 \l 1033 ]. Also shown in Figure 2, in 2019, 63.9 million households have Prime memberships; and are expected to rise to an estimate of 71.7 million members in 2021 [ CITATION Cle19 \l 1033 ].


Market Research is basically a company trying to learn more about the company’s target customers [ CITATION Roq18 \l 1033 ]. Market research can help the company notice business opportunities, create new promotions, lower business risks, outsell competitors, know where to advertise, set business goals, and make decision-making a little simpler.

Primary Research

Amazon occasionally sends customers an email requesting the customer to complete an online survey that takes the customer about fifteen minutes to complete. The online surveys provide Amazon with information about the customer’s experience with Amazon’s products, services, and third-party sellers [ CITATION Abo19 \l 1033 ]. Occasionally, the surveys will offer the customer a gift card for taking the time to complete the survey. A customer’s experience can change a customer’s mind if they are going to make a purchase or choose a company’s services. The better the customer experience, the more likely the customer will continue to make purchases or use the company’s services.

Secondary Research

A study of 40,000 shoppers was surveyed to rate 50 leading retailers, known as FXI Scores. The FXI Score is a composite customer experience metric based on shopper interactions with each brand’s store, web, and mobile channel on a 0-100 scale. In 2014, Amazon dropped five points from a customer satisfaction score of 88 points to 83. In 2015, Amazon started climbing back up to 86, which is where it was in 2010 [ CITATION Fei15 \l 1033 ]. As shown in

Table 3: The FXI Score and Figure 1, Amazon Inc. was still rated as the best leading retailer but at a lower score of 79.1, after the study was completed in the fourth quarter of 2017[ CITATION Eri18 \l 1033 ].

Customer Profile

Figure 2 reports Amazon Prime Memberships to continue to climb. As of 2016, there were 43.6 million households with Prime membership, 52.1 million in 2017, 58.7 in 2018, and

63.9 households in 2019. Prime memberships are expected to continue to rise, with an estimate of 71.7 million members in 2021 [ CITATION Cle19 \l 1033 ].

Consumer Analysis

Amazon has changed the way consumers shop for their everyday to unique products. It is also known for where consumers begin their search for a new product and to read product reviews. A study of 2000 consumers was conducted by Foresee, which found that 89 percent of consumers are more likely to make purchases on rather than other e-commerce sites. 96 percent of the prime members agree, especially with their loyalty to the company.

Figure 4 reports that 37 percent of non-prime members shop on Amazon only once in every few months; whereas, 48 percent of prime members shop on Amazon at least every few weeks if not daily [ CITATION Mas19 \l 1033 ].

Amazon SWOT Analysis

Table 4: Amazon SWOT Analysis is a SWOT analysis of Amazon’s current standings as a company. The analysis reveals strengths such as Amazon’s strong brand image in the market, creativity and innovation additions to its product line and service offerings, the highest annual revenue in the industry, which was reported at $232 billion in 2018, very customer-oriented, largest market selection, cost leadership, the large number of third party sellers (which adds more

traffic to the Amazon website), and that Amazon is involved in three key businesses (Amazon Web Services AWS, Amazon Prime, and Amazon Marketplace). The weaknesses reported in the analysis include products that flop and fail, how easy Amazon is today to imitate, the limited amount of brick and mortar stores, negative reports about employee treatment and workplace environment, and the margin loss in a few areas. Amazon has the opportunities of expanding operations in developing markets, improving technological measures and organizational policies, expanding more brick and mortar stores, making more acquisitions, and possibly creating their own store brand products to improve profit margins. Amazon faces a few threats, such as government regulations, aggressive competition from companies such as Walmart, controversies, cybercrime, and imitation [ CITATION Ama1911 \l 1033 ]. In all, Amazon needs to focus on its key strengths, take advantage of opportunities, and minimize weaknesses and threats.

Target Market

Amazon’s target market is aimed at a large audience who is interested in shopping on the Internet. The variety of products offered on the website suggests that Amazon targets everybody of all ages from birth to old age. Demographics

The demographic segmentation of Amazon’s Target market includes male and female consumers from the age range of eighteen and older, at any life cycle stage in their lives, and includes professionals, students, and specialists. As seen in Figure 3, Amazon targets the younger generation more than, the older generations [ CITATION Cle17 \l 1033 ]. Amazon’s target market also includes individuals with internet access.


According to research from Epsilon, Amazon shoppers in the United States tend to be more educated and wealthier than the general population. The analysis found that more than half

of Amazon shoppers have a college education and a net worth of over $500,000. The research also found that most consumers make purchases on Amazon because of how innovative they are and because of the free shipping [ CITATION Nan18 \l 1033 ]. Amazon’s psychographic audience includes working, middle, and upper class who like innovations and changes to the website.


Amazon should consider creating name-brand products to increase profit and brand recognition. Continue building long-lasting relationships with consumers with innovations and creative ideas. For Amazon Prime memberships and customer loyalty to continue to increase, remain focusing on the younger generation but also focus a little more on the middle-aged generation.

Ethical, Legal, and Social Issues

Amazon ranks high in areas like growth, products, and services; but struggles in areas of ethics and culture. The Axios Harris Poll results reveal forty-one percent of the poll respondents feel that Amazon shares their values, thirty-nine percent felt that Amazon treats its employees fairly, and only nineteen percent believe that Amazon speaks out about important social issues

[ CITATION Con19 \l 1033 ]. Amazon warehouse workers in Minnesota protested in March and on July’s Amazon Prime Days, holding signs stating that they are human, not robots [ CITATION Gue19 \l 1033 ]. In June 2018, a Seattle Times’ article exposed the poor treatment of some of Amazon’s Chinese workers [ CITATION Ama1913 \l 1033 ]. Eight-thousand Amazon employees asked the company to do more on climate change, including setting emissions-cut goals, transitioning away from fossil fuels, and prioritizing climate impact in business decisions, but the shareholders said no [ CITATION Ste19 \l 1033 ]. Amazon also receives a lot of criticism

for avoiding taxes in the United States and internationally. Amazon generates huge revenues in the United Kingdom, but yet, it pays very little corporation tax, by funneling money through a holding company in Luxembourg [ CITATION Ama1913 \l 1033 ].

Product, Place, Promotion, and Price Strategies

Product, place, promotion, and price strategies are often referred to as the four Ps of marketing or the marketing mix. They are the key factors of marketing a service or product and are forced by external and internal factors in the overall business environment. Each segment of the marketing mix interacts significantly with each other [ CITATION Twi19 \l 1033 ].

Customer Service Product Strategy

Jeff Bezos once said that he likes “to define Amazon by their big ideas, which are customer centricity, by putting the customer at the center of everything they do, and invention” [ CITATION 8cu19 \l 1033 ]. Amazon thrives on customer satisfaction because it leads to

customer loyalty and repeats business. But like any business that works with the public, Amazon must be willing to accept and address complaints and criticism, along with accepting praise

[ CITATION Tho19 \l 1033 ]. For this reason, in 1995, Amazon was one of the first companies to post a review system on its website for the customers to post reviews. Amazon’s email marketers also send emails to customers who make a purchase, with a specific product the customer purchased in the subject line. If a customer really likes or dislikes a specific product, they will be more likely to open the email, instead of a generic customer satisfaction email [CITATION Mil \l 1033 ].

Media Strategy

One of Amazon’s media strategies includes promoting Amazon products on other platforms, such as Twitter and Instagram. The promotions leverage or lead the consumer back to

Amazon product pages. One of Amazon’s greatest strengths is that the website is a one-stop-shop for whatever product the consumer wants or needs. Consumers were already enjoying the benefits of Amazon Prime’s two-day delivery system but are now being offered next-day delivery on certain products.

Positioning Strategy

An effective positioning strategy considers the position of competitors, the needs of the customers, and the strengths and weaknesses of the organization, which are shown in Table 1: Amazon SWOT Analysis. A positioning strategy will allow Amazon to spotlight specific areas where they can stay ahead of their competition. For example, Walmart is one of Amazon’s top competitors. Amazon dominates online, but Walmart dominates in physical store space. Both stores have been concentrating on increasing in the areas they were lacking and remained in constant competition with each other.

Advertising Strategy/Objectives

Amazon’s main form of marketing is through media by focusing on online marketing channels and using Amazon Prime and free same-day delivery as its’ primary marketing tool. Advertisements are designed with unique techniques for color psychology, persuasion, and brand communication. Real customer experiences are used to inform their custom display advertising solutions [ CITATION Ben18 \l 1033 ].

Promotion/Integrated Marketing Communication

As a technology company, Amazon is strong in public relations and in using integrated marketing communications. Each consumer has their own personalized homepage on the webpage, which promotes similar products relevant to previous purchases.

Consumers are encouraged to post reviews about the products which they purchase and the

service they received while making the purchase. The review database, in return, helps boost Amazon’s credibility [CITATION Ben18 \l 1033 ].

Public Relations

Public relations is all about creating goodwill, building authority and trust, and managing reputation around a brand. Studies have shown that Americans actually trust Amazon more than they trust newspapers or the government. Consumers use Amazon for more than just shopping; they also use it as a search engine dedicated to all products. This gives Amazon an advantage over Google and other social networks because consumers visit Amazon with the intent to make a purchase. The website is like a twenty-four hour, seven days a week, sales representative that provides pictures, descriptions, ratings, and also displays similar products to compare prices and ratings of the product and third-party sellers [ CITATION Bow19 \l 1033 ].


Amazon’s new distribution strategy demands rapid turnaround times for orders within all major United States’ cities. The objective is to offer same-day delivery for at least half of consumers in the United States. Amazon has more than seventy-five fulfillment centers in North America, positioned in proximity to local urban markets to attempt to fulfill its promises for fast delivery [ CITATION Leb19 \l 1033 ]. Amazon makes it simple for consumers to purchase almost anything they are looking for, whether it be electronics, apparel, or groceries; Amazon has it. With a simple click of a button, customers can purchase almost anything they are looking for at a reasonable price. This offers the consumers the luxury and convenience of shopping from home or work and having it delivered straight to their door, still at discounted prices. This strategy creates loyal customers and keeps Amazon ahead of its’ competition.

Channel Tactics

Out of the 4Ps of marketing, pricing is the one element that produces profit; the other elements produce cost. The price of the product also communicates the value the company places on its product (Kotter & Keller, 2016). There are multiple factors to consider when deciding on the prices for the product or service, such as prices offered by competitors, costs for production and distribution, product image positioning in the minds of consumers, and determining the demographics of potential buyers. Amazon has an advantage over most of its competitors, with being mainly an e-commerce company. They do not have to have as many employees or physical locations, which saves Amazon money and gives them the opportunity to charge less for its products.

Pricing Strategy

During a single day, Amazon is known for changing prices on about 80 million products, which makes it very difficult for competition, such as Walmart, Target, and Best Buy, to keep up [ CITATION Sha17 \l 1033 ]. Amazon will fluctuate prices multiple times an hour to take advantage of the psychology of price perception [ CITATION DOn15 \l 1033 ]. Many consumers believe that Amazon offers products at the lowest prices, but this is not always true. Studies have shown Amazon to reduce prices on popular items but raise the prices on the secondary products to make more profit. For example, Amazon can reduce the price of a Samsung television but raise the prices on the accessories, such as an HDMI cable.

Monitor and Control Marketing Performance

A key element of marketing is evaluation because it helps eliminate ineffective strategies and helps build a development plan for the business. Figure 6 represents a flowchart for different methods and the steps for each method for Amazon to monitor and control its’ marketing

performance. Amazon should always watch and review any changes in sales by looking at the sales performance before marketing the product or service, then look at the sales during the rollout, and again six months later, while keeping track of the long-term response. Amazon can also monitor feedback by continuing to send email questionnaires to random consumers about various products and services and by continuing to allow consumers to post online reviews about the products and services they received while shopping on Amazon should also pay attention to competitors’ strategies to find any differences in frequency, quality, content, and response [ CITATION Smi19 \l 1033 ]. There are also various tests that Amazon can use to measure advertising effectiveness, such as sales effect tests, communication tests, and through the Google Display Network.

Sales Effect Test

Amazon can use sales effect tests to measure an advertisement’s impact on sales volume.

Past sales are compared to past advertising expenditures. The results can determine how effectively the advertisement generated or increased sales [ CITATION SJand \l 1033 ]. Communication Tests

Communication tests measure whether the advertisement has the capability of communicating effectively. There are various techniques to conduct communication tests, such as giving consumers an unlimited amount of time to view or listen to a portfolio of advertisements. The consumer is then asked to recall all the ads and their contents. The amount the consumer recalls indicates an advertisement’s ability to affect consumers’ knowledge and arouse interest [ CITATION SJand \l 1033 ].

Google Display Network

The Google Display Network allows the company to view which webpages are running the ads and a view of which sites give the company the most value at the lowest cost. On the display network, Amazon can see which ads deliver the most clicks, and measure how well the company is reaching its goals [ CITATION Abo \l 1033 ].

Conclusion started as an online book store but is now the largest retailer in the world, and is expected to continue to climb. The company strives to be the Earth’s most customer- centric company, where consumers can find nearly anything they are looking for and offer these products at the lowest possible prices. Marketing research can provide the company with the opportunity to learn more about its’ consumers and its’ services. The marketing plan is intended to provide Amazon with guidance and an outline of the required steps to sufficiently market its’ products and services to the appropriate audience. Amazon’s target market is aimed at a large audience from the age of birth to old age, basically anyone interested in shopping on the Internet. Even though Amazon ranks high in areas like growth, products, and services, it struggles in areas of ethics and culture. Amazon’s main form of marketing is through media by focusing on online marketing channels and using Amazon Prime and free same-day delivery as its’ primary marketing tool. As a technology company, it is strong in public relations and in using integrated marketing communications. Each consumer has their own personalized homepage on the webpage, which promotes similar products relevant to previous purchases and offers the convenience of same-day or next-day deliveries.


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