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Introduction

        Amazon was founded by Jeff Bezos in
1995 and it started out as being the “world’s largest bookstore” even though it
owned no books (Kotler
& Keller, 2012). He promised to revolutionize retailing
and over the years that is exactly what has happened. In the 1990’s, they added
the platform service, which is now known as Amazon Marketplace, where buyers
could purchase less-popular books from third-party sellers that possessed those
items (Cusumano, 2017). In the beginning, Amazon was never a
virtual business because Bezos worked out of a warehouse that diverted shipments
from distribution and delivered them to customers (Cusumano, 2017). Amazon started by
selling books and now they sell everything that you can think of including
food.

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Amazon’s Success

      Amazon success can be contributed to the
fact that they continuously invest in the latest technology faster than anyone
else. Amazon pays attention to their customers by saving your searches and
orders that you have placed to give you recommendations on other things to buy.
Amazon takes their customers happiness very seriously by offering products at a
lower cost compared to their competitors. They are willing to substitute long
lasting customer loyalty for a short period of profits.

         Amazon has succeeded where other
companies have failed because they are willing to deliver products to anywhere
in the world. Amazon also succeeds because they have acquired companies such as
Pets.com, IMBD.com, CDnow.com, Whole Food Market, Zappos, Kiva Systems,
Elemental Technologies, Lovefilm, Souq.com, Quidsi, Audible, Twitch and
Annapurna Labs (Desjardins, 2017). Amazon bought these companies to tap
into other markets and to offer new products that most companies would not
dream of trying to do.

   Amazon’s pricing model is a very different
because it’s a mixture of dynamic and customer value-based pricing strategies.
Dynamic Price strategy allows retailers the opportunities to change their
prices based on changes in the market (i.e. demand from consumers and/or their competitor’s
prices).  They use a customer value-based
pricing strategy by adjusting the prices of products to the point that they
know customers are willing to pay for a product. It’s effective because
customers are benefitting from the low prices that Amazon has to offer them
based upon the changes in the market and how much the consumer is willing to
pay for an item.

Differentiation
& Positioning

   
 Amazon sets its self apart from their
competition through offering products at prices lower than the competition,
subscription membership services, tv streaming services. With the Amazon Prime
membership, you pay $99 a year and with that comes the free 2-day shipping
guarantee. You can track the status of your order after you place it up until
it’s delivered to you. Some other services that are available with the Amazon
Prime membership are: music, movies, television, an hour restaurant delivery
depending on where you live, unlimited amount of cloud storage space, Amazon
Elements (organic product), Twitch Prime, Prime Now, Amazon Household, Amazon
Dash, Access to Prime Early, comparison of outfits, Prime Pantry, a discount at
Whole Foods and Prime Wardrobe (Hartmans, 2017). With all of these different services
that is offered to you with an Amazon Prime membership, it’s no wonder why
Amazon is crushing their competitions. 

    Amazon is aware on the importance of
customer feedback and customer service. Any item that you buy from Amazon, they
make sure to get your feedback on that item. Feedback is very important aspect
of maintaining a competitive edge because if your customers are happy they will
spread the word about you, be loyal, continue to purchase more items from you
and make sure to tell everyone about their experiences. The thing that can make
or break a company is the customer’s experiences and happiness. Without it how
are they going to spread it and get other people to go to that company or their
website?

     With the services that Amazon provides
through Amazon Prime there is an unlimited amount of areas they can tap into.
Amazon can venture into many things such as Insurance (Auto, Life, Homeowner’s
or Renter’s), selling cars or telecommunication services. There is an endless
amount of opportunities for Amazon as they continue to dominate in the
E-commerce sector. 

 

 

 

 

 

 

 

 

 

 

 

References

Cusumano, M. A. (2017, October). Amazon and Whole
Foods: Follow the Strategy (and the Money). Communications of The ACM, 60(10),
pp. 24-26. doi:10.1145/3132722
Desjardins, J. (2017, 09 12). Infographic: Amazon’s
Biggest Acquisitions. Retrieved from
http://www.businessinsider.de/amazon-stock-price-biggest-acquisitions-infographic-2017-9?r=US&IR=T
Hartmans, A. (2017, 08 24). 18 of the Best Perks you get
with an Amazon Prime Membership. Retrieved from
http://www.businessinsider.de/amazon-prime-membership-features-programs-perks-2017-6?r=US&IR=T
Kotler, P. T., & Keller, K. L. (2012). Marketing
Management. Upper Saddle River , NJ: Pearson.

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