Discuss about the Marketing strategy of Amazon for Online Retail Business.
In today’s world every sector has become competitive. Starting from a grocer’s store to travel and tourism, everywhere various strategies are used to allure the customers towards it in order to gain more profit out of it and do a long term business in the field. In the similar way, the sector of eCommerce has also grown. Shopping for various items are being done sitting under the roofs of AC rooms. And this leisurely attitude of customers has led to the growth of the eCommerce sector (The Columbia Electronic Encyclopedia, 2012). And in this sector, Amazon has been the most famous site. The strategies that the company Amazon takes on depends on various factors like internal and external environment as without these strategies a successful base would be very difficult to be achieved by a company. Since its initial start in 1994, the company has been able to achieve a turnover of approximately $108 billion in the present times housing around 230000 employees and has also been successful to make it famous not only in its origin Seattle but also in every part of the world.
In this report, the various strategies of Amazon in its origin and in India will be put light on.
A report that projected that the annual web growth would be approximately around 2200% made Jeff Bezos quit his job and formulates a plan to metamorphose the way retailing is done in 1994. In the initial period, Bezos focussed on selling compact discs, computer hardware, computer software, videos, and books. But in the later period, Bezos decided that his start-up would sell books over the web as there is a wide market for literature and the competition in this sector is also very less. Bezos decides that Seattle would be his headquarter as Seattle was near to the largest book centre in Oregon and also Seattle possessed a highly skilled workforce. In the process of raising funds for his company, Bezos initiated his venture in 1995 and rose to become the number one book-related sites in a very short span of time. Initially, all these transactions were taking place in the garage of Bezos until and unless he was satisfied that his venture would give him a profit and after this only he moved to an office in Seattle (STRANGE, 2013). And it was highly surprising that till the end of 1996, Amazon had reached to a turnover of around $15 million, while Amazon’s competitor Barnes and Nobles stores were able to gather only $5 million a year. Moreover, Wall Street also accepted the store in a very warm way leading to a surge in its share from the very initial days.
Despite the company’s success, Bezos had always given high priority to the interests of the customers and left no stone unturned to reach out to various groups of customers. And in this process the target segments of the company grew in a large amount and made Amazon the number one retailing site. The success and popularity for Amazon can be bestowed on one factor that is technology (Rushton, 2015). Amazon created a very powerful search engine that would help customers to choose various books through keywords and also make the content available to the customers so that they would be able to make a smart choice about the book they would be interested in studying. Moreover, the customers were allowed to see the history of their purchase which was new weapons to allure the customers and make them rely on Amazon in a broader sense.
In a very fast manner Amazon grew and became one of the highly successful retail stores. Amazon’s amazing success in retailing can be figured out by the fact the site has accepted its millionth customer in 1997 which is just after the two years of its starting year. And after this achievement, in order to grow more numerously, Amazon started acquisitions. Bookpages of United Kingdom, Telebook of German, etc., made Amazon not an international venture, but variety also attracted a large number of customers. (Pennsylvani, 2014) And these customers affinity improved when amazon acquired Internet movie database. And then gradually, the company was able to put its clutch tight in various sectors of retailing and in various parts of the world. The company markets in Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Spain and the United Kingdom.
Because of less online retail marketing scope in India, amazon entered to the sands of India pretty late rounding off near to 2000s. The economic expectation at that point of time for India was around $1-2 billion and it was not interesting and alluring for a company that earned $79 billion. Moreover, another big factor is that the internet penetration of the country is very less and being the second populous country, it did not prove as a big business for the company. (Bhasin, 2015) And also a technological advance in the country was so poor at that time the company did not pose interest in the country.
Despite the various issues related to country, India because of its market size could not be ignored. And moreover, the success of Filpkart and Snapdeal made Amazon enter the market of India. And then amazon entered the soils of India through a price aggregator Junglee.com that it had acquired in 1998. Though this service did not provide any revenue to the company, but the company was highly successful in finding out the demographic information about the country through it and information regarding the various choices of the people of the country. And this made the company start its venture in India in 2013 with the site www.amazon.in.
The two categories that are books and media sales made Amazon launch its sale over India, but it was able to move at a high speed over the past year to offer over 15 million products in over 20 categories. Amazon in the present era doesn’t sell its products; rather, it acts as third party sellers for the existing sellers in the country. Various facilities like cash-on-delivery payments, liberal return policies, free or subsidized shipping and in-house logistics made the shopping site more famous in India and gave it a very competitive soil (D’ONFRO, 2015). Since amazon is the third party sellers, the company is able to grab a large amount of profit without investing much.
The company has received a large amount of appreciation from the country as it has built highly developed software centres that gave many Indians jobs. Moreover the main strategy of the company has been keeping in touch with the traditional aspects of the country (Dawson, 2015). Moreover the advertisements in the country are very important; Amazon has done its best to reach out to various age groups by advertising through radios, television, net etc. Another factor that has made Amazon very strong in the face of competition is its deep financial pockets which can’t be matched by the local competitors.
The diversified choices of the people of the country must be kept in mind while doing business in India. The traditions and festivities of the country must be put in minds to sustain the development growth in business. The choices of the people and the fashion statement of the country must be noted down too. (Doshi, 2015) Moreover, the various religions of the country and the local costumes of various regions of the country must be considered on priority while choosing online retailing as prior business.
The strengths of the Amazon can be taken as its established model for marketing that provides the company high returns in advent of cost effectiveness. Amazon is considered as one of the top most brands in the world and this image possesses as strength to the company for its growth structure in the Indian market. And also the company’s offerings of around 15 million products hold the key to attract a large amount of customers towards it. The supplier relationships, its deep pockets reach and high experiences in retailing in all over the world makes Amazon stand straight and strong in the line of competition in the eCommerce field in India (Yglesias, 2014).
But with all the advantages, Amazon also possesses various weaknesses that have the capability to destroy its business (Hume, 2012). The most important weakness is the dependence of Amazon on other sellers which can make them use their own retail system to sell their products. Amazon’s lack of relationships with Indian sellers also possesses a threat for the growth of business of amazon. Moreover, because of the low quality of infrastructure in India, Amazon may not be able to maintain its standards of performance as it did in developed countries leading to downfall.
Acquiring various local sellers and business to have its own business grow has been a more striking attitude of the online seller brand. So in order to improve its performance in India, Amazon should intake various local competitors who can enhance the productivity and growth of the company. Flipkart can be taken as an example.
The topography and demography of India are very different than the other developed countries where Amazon has done business. So an effective delivery system is very important for successful growth in the online business. So amazon should prepare a better logistics for India and this logistics can be applied to all developing populous countries making Amazon the ruler of online services.
Moreover, Amazon can prepare the logistics for and selling platform for all the local business makers who are not getting platform to sell their goods so that the traditionalism with indigenous can be given importance and can be used to advertise the company and also the company will get popularity from this.
Conclusion
Amazon has entered the online retail business of India at a very crucial and important time. Though the company has been a huge success in all the countries it had done business in, but in a country like India, Amazon has to spend man force to gather all the logistics and tactics in order to rule in a diversified country like India.
Bhasin, H. (2015). Marketing strategy of Amazon – Amazon marketing strategy. Marketing strategy of Amazon. Retrieved from https://www.marketing91.com/marketing-strategy-of-amazon/
Dawson, J. (2015, May 11). Amazon’s International Growth Challenge. Amazon’s International Growth Challenge. Retrieved from https://recode.net/2015/05/11/amazons-international-growth-challenge/
D’ONFRO, J. (2015, July 25). Amazon’s next big challenge: Winning India. Amazon’s next big challenge. Retrieved from https://www.businessinsider.in/Amazons-next-big-challenge-Winning-India/articleshow/48210306.cms
Doshi, P. (2015, August 07). 10 things I learnt about selling online in India that made me a marketplace millionaire in 2 months. 10 things I learnt about selling online in India that made me a marketplace millionaire in 2 months. Retrieved from https://yourstory.com/2015/08/marketplace-millionaire/
Hume, T. (2012, February 03). The secrets of doing business in India. The secrets of doing business in India. Retrieved from https://edition.cnn.com/2012/02/03/business/doing-business-india/
Pennsylvani, W. U. (2014, June 16). Year One and Counting: Amazon Aims to Strike It Big in India. Amazon Aims to Strike It Big in India. Retrieved from https://knowledge.wharton.upenn.edu/article/year-one-counting-amazon-aims-strike-big-india/
Rushton, C. (2015). The History of Amazon.com. The History of Amazon.com. Retrieved from https://www.ehow.com/about_5377195_history-amazoncom.html
STRANGE, A. (2013, October 16). History of Amazon Reveals Original Name and Jeff Bezos’ Temper. History of Amazon. Retrieved from https://mashable.com/2013/10/15/amazon-jeff-bezos-book/
The Columbia Electronic Encyclopedia. (2012). Amazon: Introduction. (Columbia University Press) Retrieved from https://www.infoplease.com: https://www.infoplease.com/encyclopedia/world/amazon-river-peru-brazil.html
Yglesias, M. (2014, January). The Prophet of No Profit. How Jeff Bezos won the faith of Wall Street. Retrieved from https://www.slate.com/articles/business/moneybox/2014/01/amazon_earnings_how_jeff_bezos_gets_investors_to_believe_in_him.html
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