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ICT3715
ZA
University of South Africa
Digital marketing or online marketing indicates the promotion of brands and establishment of the connections with the customers through the use of internet and other forms of digital communication (Chaffey and Ellis-Chadwick 2019). The different medium of digital communication might not include only email or social media, but also includes several other forms of digital communication through web-based advertising, text and multimedia messages.
In this report, the digital marketing strategy of Amazon will be reviewed to understand their strategies and the reason behind their deliberate development of the new processes. Amazon is known for its effective technological usage to improve the business processes and maximize the internal and external capabilities.
In the following section a detailed discussion on the digital marketing strategy of Amazon is presented to understand and analyze the Amazon’s deliberate development of the new processes, use of technology and strategic partnerships with Amazon.
In the times of pandemic, every business suffered a lot in terms of maintaining their business continuity while working from home. However, in the first quarter of 2021, Amazon reported a net sale of $108.518 billion which is almost 43.8% increase in comparison to the last quarter. Along with that, there has been an increase in the Net services sales which include fulfilment of the Amazon’s services for seller on its marketplace (Smart Insights 2021). The success of Amazon and enhancement of its business processes even in this pandemic is a result of its marketing strategy that has evolved since 1994 and is still evolving. The following figure, presents the growth of Amazon amid the pandemic-
As per the image above, there has been a steady growth in the business of Amazon amid pandemic. The secret behind the steady business growth and lack of any business disruption of Amazon is mostly because of its effective marketing strategy. Apart from that Amazon’s response towards pandemic has been quite satisfactory. There are much to be learnt from the digital marketing strategy of Amazon that helped the company to strive and improve even in this pandemic.
Amazon is a brand that is considered to be customer obsessed and it considers and prioritizes the requirement of the customers. Their strategy of customers’ obsession has consistently helped Amazon to be one of the largest e-commerce brands.
RACE framework can be used to understand and analyze the digital marketing strategy of Amazon. A discussion on the efficient use of digital marketing strategy on Amazon is discussed as follows-
The digital marketing strategies that are undertaken by Amazon are always changing and this contributes in developing an agile and strategic approach to digital marketing. Their agile approach to digital marketing and handling the customers’ queries contribute in developing a customer centric approach to business which also gives them competitive advantages.
The main strategy of digital marketing that is used by Amazon is all about focus. Its Effective focus on the customers’ needs makes Amazon incredible to stand out against their competitors. This strategy helps Amazon to fulfill its mission and vision of becoming the biggest selection and to be the most customer centric company. Amazon had been a customer-centric company from the very beginning and through their strategic marketing, Amazon has been able to reach millions of customers worldwide.
Amazon is the best strategic player in the eCommerce business sector and the main reason behind the same is its deliberate and fruitful attempt of developing new processes that caters the needs and the requirements of the customers. The appropriate use of technology has enabled Amazon to understand their customers’ need by directly communicating with the customers. Amazon’s strategy is to leverage technological capabilities for business success and following this cost leadership strategy (Smart Insights 2021). The rapid upgrade in technology and technological offerings helps Amazon to change their business processes aligning with the requirements of the customers. Once Amazon sense a change in the trends and customers’ demand, they change their existing business processes and deliberately develop new business processes to improve it further so that it matches with the needs and the requirements of the customers. Therefore, the deliberate development of the new business processes contributes in maximization of the value of its customers and this is the primary reason why the business of Amazon could be able to fetch a maximum profit even in the pandemic.
The business processes of Amazon are coordinated with the changing needs and requirements of the customers, which makes sense to the deliberate development of the new process model. The change in the business processes is directly coordinated with the change in the requirements of the customers since in this organization, the requirements of the customers are always prioritized. Now, the digital marketing strategy and the digital marketing processes that are considered by Amazon is customer centric as well and it aims in getting a maximum customers’ reach. Amazon invest in making investment decisions in light of a long-term market leadership considerations and hence it is more focused in the business innovations. The efficiency of the business innovation can be judged through their analytical investment decisions which although tends to be customer centric, is quite effective in providing the necessary acceptable returns. One of the latest examples of the business innovation models of Amazon include the decision of investing in Amazon Go (Bala and Verma 2018). It is the project which is also considered on basis of the customers’ requirements and the customers’ needs and aims in increasing customers’ comfort in shopping and enhances the customers’ profit as well. There has been a significant range of business model innovation which is focused on hardware and new services.
The strategic partnership or strategic alliance at Amazon is formed between Amazon and its suppliers. The suppliers of Amazon are not its competitors and therefore, they maintain a symbiosis relationship, which is more durable than any type of strategic alliance. Therefore, it can be said that Amazon invests in a partnership that is a win-win situation for Amazon (Kingsnorth 2019). It is observed that Amazon has mostly invested in their trusted partners that include FedEx, UPS and USPS. The engage with a trusted partnership deal mostly because this strategy ensures a completed customers’ satisfaction (Kingsnorth 2019).
The effective use of technology is one of the main reasons of Amazon’s success. The organization has invested on effective technologies such as Artificial Intelligence and Machine Learning to make a correct usage of technology to improve the customers’ service. The Amazon’s team believes in effective collaboration and hence even in the situation of pandemic, Amazon invested in latest technology to ensure that their team remains connected and provide the needed support to the customers through the use of advanced technology (Vieira et al. 2019). Advanced technology is infused in all the team and processes that enhances the overall decision-making process.
Thus, it can be said that through effective digital marketing and deliberate development of the new processes, it is possible to manage the expectations of the customers (Lee, Trimi and Yang 2018.). Through an intelligent use of the technology, all the staffs and employees of Amazon can effectively coordinate and collaborate with each other, which contributes in providing better services to the clients, thus increasing the customers’ satisfaction (Galloway 2017). The digital marketing strategy of Amazon proves that e-commerce marketing should always be related to the customers and this is the main reason that Amazon has been able to become one of the leaders in the ecommerce market field (Ramadan, Farah and El Essrawi 2021).
The marketing strategy of Amazon has developed the necessary internal tools that support the “culture of metrics” and this experimentation contributes in understanding how the product listing works. Through an internal audit in Amazon, it is found out that majority of the visitors in Amazon used the search tools than reading any editorial and hence the technology of matching and personalized recommendations came into existence (Smart Insights 2021). Thus, it can e concluded that all these factors along with strategic partnership and use of technology has contributed in the bottom-line growth of Amazon along with improvement in internal and external capabilities of Amazon.
Amazon relentlessly focuses on the experiences of the customers and their aim of offering lowest prices and convenience to the customers. The digital marketing strategy of Amazon is largely based on the same principle as well (Tou et al. 2019). There is no denying the fact that achieving customers’ loyalty and repeat purchases has been a key to Amazon’s success, but their strategic business process and effective digital marketing process has contributed in steady business growth even in this pandemic.
The technology of Machine Learning is found to drive the algorithms and demand forecasting. This further contributes in increasing the demand forecasting and product search ranking, thus providing the customers, their exact requirements (Kannan 2017). Though the use of machine learning in Amazon is less visible, there are significant impact of the machine leaning in improving the core business operations of Amazon (Garner 2018). The use of latest technology is found to improve the core operations of the business in Amazon.
Amazon has got the most efficient and necessary marketing tools and template that will contribute in competing in a challenging environment in order to grow a market share (Berg and Knights 2019). Smart business insights and use of AI and Machine learning have contributed in understanding the need of the customers and also provided a way for thriving in a challenging environment even in times of pandemic (Smart Insights 2021). Since ecommerce marketing is mostly about the customers, Amazon has hit the right spot with in efficient digital marketing that enables the customers to remain connected with the company and make repeated purchases, which has contributed in a steady increase in profit margin (Wells, Danskin and Ellsworth 2018).
The analysis of the marketing strategy of Amazon from its annual report indicates that it mainly focuses on the online marketing channels as it helps in establishing a direct relationship with the customers. Amazon has taken several initiatives to remain in touch with the customers, which includes sponsored search, portal advertising, email, marketing campaigns and other initiatives, which include outdoor and TV advertising as well (Hahn, Kim and Youn 2018.). For example, although Amazon does not consider the cost of free shipping as their marketing expense, the free shipping offers provided through Amazon Prime indeed act as an effective marketing tool for them and hence they aim in continuing the same (de Ruyter, Keeling and Ngo 2018). Therefore, one thing is quite clear that Amazon mostly invest in innovative approaches in marketing and to ensue customers; satisfaction, which provide them the needed competitive advantage as well. Thus, it can be said that there are several underlying reasons behind following innovative digital marketing strategy at Amazon and it is the reason that drives business efficiency and business growth at Amazon.
The report provides a detailed discussion on the digital marketing strategy followed by Amazon which helps in enhancing the business benefit and competitive advantage of the organization. The organization make use of advanced technologies which helps in increasing the collaboration among the employees of the organization, thus, enabling the organization to easily manage the requirements of the customers. In the above section a detailed discussion on the reason behind Amazon’s deliberate development of new processes and its effect on the overall business profit of the Amazon is discussed.
Bala, M. and Verma, D., 2018. A critical review of digital marketing. M. Bala, D. Verma (2018). A Critical Review of Digital Marketing. International Journal of Management, IT & Engineering, 8(10), pp.321-339.
Berg, N. and Knights, M., 2019. Amazon: how the world’s most relentless retailer will continue to revolutionize commerce. Kogan Page Publishers.
Chaffey, D. and Ellis-Chadwick, F., 2019. Digital marketing. Pearson UK.
de Ruyter, K., Keeling, D.I. and Ngo, L.V., 2018. When nothing is what it seems: A digital marketing research agenda. Australasian Marketing Journal (AMJ), 26(3), pp.199-203.
Galloway, S., 2017. The four: the hidden DNA of Amazon, Apple, Facebook and Google. Random House.
Garner, B.A., 2018. Amazon in the global market. Journal of Marketing and Management, 9(2), pp.63-73.
Hahn, Y., Kim, D. and Youn, M.K., 2018. A Brief Analysis of Amazon and Distribution Strategy. The Journal of Distribution Science, 16(4), pp.17-20.
Kannan, P.K., 2017. Digital marketing: A framework, review and research agenda. International Journal of Research in Marketing, 34(1), pp.22-45.
Kingsnorth, S., 2019. Digital marketing strategy: an integrated approach to online marketing. Kogan Page Publishers.
Kingsnorth, S., 2019. Digital marketing strategy: an integrated approach to online marketing. Kogan Page Publishers.
Lee, S.G., Trimi, S. and Yang, C.G., 2018. Perceived usefulness factors of online reviews: a study of Amazon. com. Journal of computer information systems, 58(4), pp.344-352.
Ramadan, Z., F Farah, M. and El Essrawi, L., 2021. From Amazon. com to Amazon. love: How Alexa is redefining companionship and interdependence for people with special needs. Psychology & Marketing, 38(4), pp.596-609.
Smart Insights. 2021. Amazon marketing strategy business case study | Smart Insights. [online] Available at: <https://www.smartinsights.com/digital-marketing-strategy/online-business-revenue-models/amazon-case-study/> [Accessed 24 May 2021].
Tou, Y., Watanabe, C., Moriya, K., Naveed, N., Vurpillat, V. and Neittaanmäki, P., 2019. The transformation of R&D into neo open innovation-a new concept in R&D endeavor triggered by amazon. Technology in Society, 58, p.101141.
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Wells, J.R., Danskin, G. and Ellsworth, G., 2018. Amazon. com, 2018. Harvard Business School Case Study, (716-402).
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