MKT00720 | Marketing Strategies of Amazon Australia

In increasingly competitive markets, consumers have a greater choice over where they buy their goods and services. For an organisation to meet its business objectives, it has to find out what consumers require and then identify the best way in which it can satisfy these needs and wants. Creating a competitive advantage can be difficult. A unique marketing strategy with clear objectives is vital to ensure effective promotional activity.

Your task in this case analysis is to answer two questions by critically analysing Amazon Australia’s market situation. Please do not just describe events, although you should read Amazon Australia’s history to understand the background to your analysis. You should use the principles and concepts that you have learned throughout the unit to answer the following two questions:

1. What marketing strategy or strategies has Amazon Australia has adopted since it was created? Answer this question by applying one or more of the theoretical approaches discussed in the course.


What marketing options can you describe for Amazon Australia if it wishes to remain a successful organisation throughout the next decade? Answer this question based on the circumstances that exist in 2018 and your best forecasts of relevant future industry factors.

Answer:

Introduction

It is extremely necessary on part of a company to effectively marketize its products for maximum customer outreach, in order to keep on expanding its business. Increasing the marketability of products has witnessed a revolutionary turn with the world wide web being chosen as the medium to be accessible to the customers (Lovelock and Patterson 2015. Today when one shall be surfing the internet to search for some desired product and place an order for its purchase, one can witness a plethora of suggestions at a wide range of prices from various online shopping websites waiting to cater to the demands of the customers. However, only few are renowned worldwide and acknowledged as dependable in terms of the goods and services that they deliver. Amazon is one such electronic shopping site where one can get almost everything, from A to Z, as the nomenclature and the motto of the company suggests (Stadler 2017). Of all the countries across the world where Amazon functions, Australia shall be taken up for analysis for the present purpose. The subject matter of concern herein shall be the marketing strategies that has been adopted by the company for surviving in the country and recommendations on how shall the company prosper in future operations.

Background to the study

The entry of Amazon into Australia happened in the year 2017 (Gummesson 2014). It was welcomed amidst a lot of festivities and inhibitions in the country. Thousands of customers flocked to surf the site in search of their sought after products. Unfortunately to their dismay they found out that most of the electronic products available in the site was way costlier than the ones put up for sale in local departmental stores or other shopping websites typical to the country. Alarmed by the initial saga of customers getting repelled, Amazon introduced predatory prices to attract customers and has been ever since then successful in the ventures in the country (Schwarzl and Grabowska 2015). The goods offered were definitely not cheap and no intention of bringing the price down had been conveyed. Rather, the focus was on manipulating with the price ranges by offering fascinating discounts on some chosen products while maintaining the high price for the rest. Such a strategy was planned to put pressure on the existing retail chains, forcing them to develop and innovate their ways (Chong et al. 2016). The entry of Amazon has been a cause of immense worry to the small scale retailers of Australia as they had to compete with a company with a huge share of capital in the international market space. The logistical support base which Amazon was equipped with for transportation of goods by land routes, waterways and by air was quite good. It was unimaginable by other retail firms in the country. Having more money power, and a strong and influential brand identity, Amazon had shown signs of generating a price control effect in Australia by reducing the levels substantially (Stadler 2017). It was however seen as a good opportunity by extremely small scale sellers as they got an opportunity to sell their products through Amazon and earn more profits. Huge expanse of the newly chosen location to proliferate, with a very less population, similar to the situational aspect faced with the Canadian market was a prime challenge to the e-retail giant for which it had strategized the marketing mechanism accordingly (Stadler 2017).

Marketing Analysis

Whether a big company like Amazon, or a small scale business, none can ignore the seven Ps of marketing. They include the following aspects. The product has to be in tandem with the expectations of the clients. A propituous place has to be chosen where it would be easy to sell the product. Sale Price should be fixed at a level that not just suits the budget but at the same time manipulative enough to catch the fancy of the client. The effectiveness of Promotion must drive people to buy immediately. It must be having the right People with whom business shall be a smooth ride. The role of the Processes involved in making the product reach the customer must be efficient and quick, and finally, the efficient usage of the Physical Evidences in form of images or advertisements so that customers can at least know by seeing what they are buying (Schwarzl and Grabowska 2015). Having talked about the basic theoretical proposition related to marketing, the background for taking up the further discussions has been prepared.

An Analysis of the Nature of Amazon Australia’s Marketing Strategies

This section of the report shall be following the 8 P rule of marketing. The wide range of Products offered by Amazon provides the customers with an equally wide choice enabling them to revisit the site for almost each and every requirement. Home Appliances, Electronic Gadgets, Books and Clothings are the most sought after products among Australians for which Amazon is taken resort to, and their desires are being fulfilled expectedly (Stadler 2017).

Australia was chosen by chosen by Amazon to fan its global expansionist ambitions for several technical advantages. Amazon knew that the competition it was likely to face from the e-commerce retailers in Australia was next to nothing as none had the capability to stand up to the challenges Amazon was likely to pose for them. Amazon has a superior logistical system for efficient transportation of goods and services which made meeting the demands of the customers easier and faster. The availability of high speed internet in the country with good connectivity made conducting business very easy and hassle free (Chong et al. 2016). Naturally, Amazon could capture the market without much trouble at all. In fact small businesses welcomed Amazon as through it they could sell their goods and earn higher amounts of revenue than what they could without.

It is commonsensical to assume that an organization shall keep the level of prices low in order to attract customers, but it was not an option that Amazon wanted to try out to control the market price initially. When Amazon had just entered the Australian market, it was offering some electronic goods at a higher price than most other sellers. On the contrary, some other products were tagged with exciting offer price. It was a wise strategy to allow the masses to get familiar with the presence of the company in the country. The move had proven that sensation creation is necessary as an alternative and innovative marketing strategy, beyond the mainstream tactics of attracting customers with low price (Belleflamme and Peitz 2015).

The tactics adopted by Amazon for the Promotion of the products is also quite effective. Flashy advertisements, use of high definition images to make the bill-boards look attractive, judicious use of words to win over the fancies of the customers, updating of the webpages at regular intervals with eye appealing graphics and landscaping, are the ways in which Amazon promotes its offers (Kumar et al. 2016).. The company even takes advantages of the cultural metaphors to promote the products. For example, the festive bonus offers especially on Christmas and New Year, and even launching of typical ethnic items to show respect towards a particular ethnic minority, does aid to an increase in the rate of sales of the items (Sinha and Sheth 2018).

With regard to the factor of correct people, Amazon finds no dearth of support base. There are numerous small companies who sell their items through e-commerce websites. Amazon has co-opted them, and that has proven to be mutually beneficial for both Amazon and the smaller online sellers of goods and services (Kohtamäki et al. 2013).

The Processes involved in the entire transaction has by and large been very smooth. Amazon gets products delivered at the cities of Melbourne, Brisbane and Sydney within a short span of time, while residents living in the areas away from the city centre in the remote parts of the country can receive their products within a span of ten days (Kindström and Kowalkowski 2014). Customers can also opt for early delivery at very nominal rates. Easy return policy and provisions for replacement of disputed products are also provided by the company.

Amazon believes in a strict policy of transparency, hence customers can find Physical Evidences of the products in form of pictures from all angles, and relevant information about the products, such as size dimensions, warranty period, discount percentage et cetera (Barquet et al. 2013). Customers can check all the necessary information before buying the product. They quality of pictures come with a disclaimer that the colour of the product might as well vary, but not to a very large extent, which proves the fact that the company gives priorities to the desires and demands of the customers (Truong 2014).

These are the marketing strategies which has earned Amazon a predominant position in the Australian market. However, the scenario is not as rosy in all aspects. There are definitely certain problem areas which if addressed can work wonders for the company.

Suggestive Marketing Options for Amazon to perform better in 2018

One of the biggest challenges that Amazon faces being a US based company, functioning in various countries of the world is that the limited availability of choices the company is able to offer to Australia compared to its country of domicile. The difference between the range of products offered to choose from, to the clientele base in Australia, and to that of the US, is in the ratio of 4 million and 500 million respectively. Australians could however avail of those products through the Amazon website relevant for USA (Balmer and Wang 2016). Unfortunately the new Goods and Service Tax regimen in Australia has raised the tariff percentage on overseas trade to 10 percentage in the year 2018 by the Turnbull administration (Gummesson 2014). This move has deterred Amazon from delivering the shipments to Australian locations purchased from the website for USA. Such a move was deemed necessary by the Australian Government to cater to the grieveances of the existing online dealers of Australia, who were pressing a level playing field (Miguel and Casado 2016). Thus in order to hold on to the clients of Australia, Amazon has to give up on the favouritism it has been cherishing with regard to its dealings with USA. Amazon could extend a wider range of choice to the Australian customers in comparison to what they are extending currently, which need not necessarily as large as the range offered to US based clients. In this way, Amazon can pigeon-hole the legal scenario prevailing in Australia. As it is that Amazon is better equipped than most other companies of the country logistically, it shall have no problem in tackling the crisis situation.

Conclusion

Thus it becomes very evident that there are no dearth of opportunities for Amazon to continue prospering in Australia. The share of advantages weigh more than the disadvantages for Amazon Australia. The disadvantages are however not unsurmountable, and with the necessary steps, Amazon shall successfully be able to overcome them. An efficient company always perseveres through the challenges and the risks never bring them down. No matter what, the organization shall swim through the adversities and that determination Amazon has exhibited time and again, with the pledge of never going back on it.

References

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Belleflamme, P. and Peitz, M., 2015. Industrial organization: markets and strategies. Cambridge University Press.

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