Introduction to Amazon Inc

Discuss about the Marketing Management Amazon Inc.

Amazon Inc. is a giant business established in 1994 that has changed the shape of the E-commerce industry. The founder of this disruptively innovative business is Jeff Bezos who started the business as an online book store but soon expanded the product line to despicable lengths. The company currently has an active presence in over 18 countries. Amazon continues to enhance its efficacy by introducing a wide variety of products with an aim to cater to a large target market. At present, Amazon’s product line includes fashion apparels, furniture, electronics, groceries, books, beauty products, home and kitchen ware, stationary products and even automobiles. Every product category aims to cater to a different market and every category performs differently. This report highlights upon the sports apparels sold on Amazon Inc. The report aims to identify a different target market for this particular product line and the marketing mix strategies that the brand can use in order to effective promote and position this particular product line.

Amazon’s Clothing line is fairly elaborate and caters to the needs of a wide range of customers. The online store has divided the clothing section for men and women. These sub-sections are further divided into categories including active wear, fashion wear, bottom wear, inner wear, lower wear and accessories. The E-commerce giant stores a wide variety of products from different retailers across the globe. Therefore, the brand caters to a wide range of customers. The apparel section has clothes from a large number of brands and can be filtered across different categories including color, pattern, cloth, sleeve length, fit or fabric.

The active wear segment of Amazon’s clothing line consists of sportswear including shorts, tee-shirts, track pants, track suits, sports inner wear and swim wear. The products are available for men and women under ‘fashion’ segment. Customers can select from over 22 brands. The next part of the report highlights upon introducing new marketing objectives, target market, marketing strategies and marketing mix elements for the ‘Active Wear’ product of Amazon Inc.

In order to understand the exact position of Amazon Inc in the current market scenario, it is important to understand the marketing mix offered by the brand to its customers. This report aims to improve upon the current marketing mix for the ‘Active wear’ product category for Amazon Inc.

Product: The product in reference is Active wear. Currently, Amazon has 3 brands owned by the brand and besides that there are various leading brands including Nike, Adidas, Under Armor and Reebok that are sold by Amazon.

Overview of Clothing Line

Price: The prices are defined by the sellers and for its own brands, Amazon has adopted a penetration pricing strategy to reach out to a wider customer segment.

Place: Amazon has a websites for 18 countries and other countries are currently importing amazon products.

Promotion: Digital marketing tools and social media management strategies are currently adopted by the business.

In order to improve the performance of the product line of ‘active wear’, Amazon must focus on the following objectives:

Identifying the target market for a particular product is highly essential for the success of a business (Wilson & Gilligan, 2012). Therefore, the foremost objective of the brand over the next three years in regards to ‘Active wear’ must be to enhance its target market. At present, the targeted customers for Active wear are relatively few. This is because most people who work out frequently tend to wear their most comfortable clothes. Buying clothes for the purpose of workout has yet not been an entirely acceptable trend in many parts of the world. Enhancing the target market for active wear would eventually lead to increased sales for Amazon.

Amazon must work towards generating awareness about wearing the right kind of clothes for working out in order to increase the efficiency of the workout. This would encourage people to buy active wear that are specifically designed for their body types and work out regimes. In terms of selling active wear, it wouldn’t be sufficient to simply create a buzz for the product. The idea is to create a genuine need for the product and bring about a change in people’s lifestyles by encouraging them to work out and spreading awareness about the importance of a healthier lifestyle.

The second objective for the next three years for Amazon should be to introduce two new Active wear brands. At present the Amazon owns three sportswear brands including Good sport, Rebel Canyon and Peak Velocity. All the three brands have garnered acceptance in the market. Introducing new brands backed by Amazon would automatically garner trust in the market. This is because of the strong brand name and positioning of Amazon across the globe.

The idea behind introducing sportswear brands by Amazon is to enhance their market share and compete with other leading giants like Nike, Puma, Adidas, Reebok and Under Armor. When Amazon launches its own brands, the brand already have a platform to market themselves and hence it would be relatively easier to create brand awareness (González-Benito & Martos-Partal, 2012). Introducing two new brands within the next three years would also help Amazon fulfill its first objective of enhancing its target market.

Active Wear Segment on Amazon

The third objective of Amazon Inc. would be to improve its brand positioning in terms of active wear. There are leading active wear brands currently that are dominating the industry. Moreover, it is a generally adopted trend that people do not prefer to buy active wear from online stores. Owing to the importance of the right size and fit, customers prefer to visit offline stores, try their outfits and then buy the perfect fit.

This is the exact perception that needs to be changed. Therefore the third objective for Amazon would be to position itself in such a manner that encourages people to buy active wear online by establishing trust. This trust about being able to order to a perfect fit active wear needs to be built by Amazon. Once this trend changes, the number of customer buying active wear online through Amazon would automatically shoot up resulting in increased sales.

Target market of a particular brands refers to the set of consumers whose needs the business aims to fulfill. Active wear brands usually target youth between the ages of 20 to 34 since these are the people who are most likely to buy active wear. However, in order to differentiate itself, it is imperative for the brand to target new customers and hence enhance the brand’s reach (Hoberg & Phillips, 2016). One of the new brands launched by Amazon would target these three new customer segments.

The number of children who need active wear are very few and hence none of the leading brands specifically target this group of customers. Therefore, this provides Amazon with an opportunity to target children for its active wear range of products. Targeting customers would be extremely difficult because the idea has not been tested in the market yet. Therefore Amazon would have to adopt strategies to change the mindset of people and encourage a healthier lifestyle among their children. Through all its promotion strategies especially Television marketing and social media marketing, Amazon must lay emphasis upon the importance of leading a healthy lifestyle since a young age.

Amazon can create loyalty among this target market by gaining trust of children’s parents or guardians and curating creative advertisements that encourage young children to lead a healthy lifestyle. Amazon must also consult specialists regarding the most appropriate active wear clothes for children and design these clothes in accordance with the same. These fitness consultants should then also be interviewed and approached for influencer marketing. This would further deepen the trust and encourage customers to buy active wear for children.

Improving Marketing Mix for Active Wear

It is a general perception that most leading active wear brands target high income group customers. This has been the case since long owing to the mindset that active wear is a ‘want’ and not a ‘need’ for consumers. This is where Amazon can come into the picture and design active wear apparels which are priced low. Amazon must adopt a price penetration strategy (Sokhatska & Lahotska, 2013). The mammoth size of the brand can even lead to creation of a price war and if that happens, the massive reach and positioning of the brand will give Amazon a clear advantage. Targeting lower middle class and lower income groups will help amazon create market dominancy in this particular market segment.

In order to build loyalty among this segment, there are two perceptions that need to be addressed. First being that all inexpensive things are bad and second that online shopping is inconvenient and not trustworthy. Amazon can develop loyalty within this segment of consumers by simply offering them good quality products and breaking the stereotype that all inexpensive products are of poor quality. Lower middle income groups need to believe in the fact that online products are also as effective and of an equal quality as offline products. In order to encourage this, Amazon must advertise to this segment using innovative strategies and lay emphasis on their efficient customer service. It is important for customers to realize the ease of ordering as well as returning products off Amazon.

The elder generation of the society especially people above the age of 50 do not work out. Most of them do not have enough energy left and many are suffering from numerous diseases including cholesterol, diabetes, high or low blood pressure and many such issues. Therefore, this becomes a unique segment for Amazon to target in the next three years. The reason this segment has been recommended is because there are numerous elders across the globe who are now following fitness regimes and even participating in national and international level competitions. Mann Kaur, a 101 year old athlete from India recently set a world record to win World Masters gold (Hindustan Times, 2017). She has inspired a large number of elders to take up a sport and work out on a regular basis.

Secondly, old people have a relatively different body type and their fit is not as generic. Therefore, it will be even more tedious for a brand to enter into this segment. However, the reason why it is absolutely necessary for Amazon to enter this segment is because of the changing lifestyles of people and their switch towards healthy eating and daily working out. Soon enough, every section of the society will adopt this lifestyle and by then there will be an increasing number of competitors in the market. Therefore, the next three years would be the right time for Amazon to hit the nail of top and be the first one to target this market.

New Marketing Objectives for Amazon Inc

Loyalty among this particular target market can be developed by running creative marketing campaign targeting the youth to ‘Gift their parents a healthy old age’. This campaign would have a strong emotional appeal and hence it would be easier for Amazon to attract customers. Once an active wear for elderly has been brought, a customized diet chart could also be sent or a small book with ‘Yoga for elderly’ could be given complimentary with the clothes.

Marketing mix of any brand highlights the 4Ps of a brand. This is important to set the right positioning for the brand in the minds of its consumers (Armstrong et. al., 2015). These strategic tools assist marketers to effectively launch new products in the market and set the right expectations from these products. This section of the report highlights about the 4 Ps defined above and how they can be used to position the product in the face of increasing competition. Market positioning for a particular product refers to the image of the product in the minds of its consumers (Kotha & Basu, 2011).

Product

Amazon Inc. sells a sundry variety of products via various sellers. The product in reference here is ‘Active wear’. The basic idea is to sell clothes that people can wear while they are working out. This segment of Amazon would be categorized into men’s and women’s wear. These would be further categorized into inner wear, sportswear, running wear, swim wear, bottom wear, top wear and accessories.

The Core product in this case would be active wear clothing that can be worn by customers during their daily work out regime.

The Actual product would include designs, patters, fit, color and fabric of the clothes. The brand would also sell various specific kinds of clothes especially designed for different kinds of work outs including Yoga, Running, Swimming, dancing or Pilates.

The Augmented product would be the encouragement that the active wear would provide to the customer for following and adopting a healthy lifestyle. The clothes would be designed technically enough to ensure that individual body parts get the required support while work out session in order to prevent injuries. The clothes would also be strong and stretchable enough to face extreme wear movement.

Using the above strategy for the active wear product, Amazon can position its product as high quality, comfortable, trendy and as a work out essential.

Price

Pricing strategy of a particular brand plays a vital role in defining its target market and reach (Nagle et. al., 2016). As a business model, Amazon offers a wide variety of products targeting different income groups. Amazon has always adopted a price penetration strategy in order to beat the competition within the industry. For the Active wear segment and specifically to target the above defined customer market, Amazon would continue to follow price penetration strategy.

Target Market Strategy for Active Wear

Penetration pricing refers to the process of pricing products really low in order to attract customers and gain a differentiation in the market (Spann et. al., 2014). The target market defined in the previous section are unique and hence in order to attract them to buy Active wear, it is imperative that the products are priced low.

Amazon can also adopt a dynamic pricing strategy by strategically understanding consumer needs and demand for products. Dynamic pricing is changing price based on the product’s demand (Abrate et. al., 2012). Pricing strategies like this help the brand is gaining customers as well as generating profits.

The essential idea behind adopting this pricing strategy is to position the product as affordable and inexpensive.

Promotion

Promotion tools are strategies adopted by businesses in order to promote their products to their target market (Huang & Sarigöllü, 2014). Amazon adopts various promotional strategies as below:

Digital marketing: Digital marketing strategies including promoting a particular product or service by the brand through digital platforms (Ryan, 2016). Amazon is an Ecommerce giant and being an online platform, digital marketing plays a significant role in promoting Amazon products. Digital marketing will assist Amazon in enhancing its brand’s reach and awareness.

Social Media marketing: Social media marketing strategies allow brands to target customers through social media platforms like Facebook, Instagram, Twitter, Pinterest or even Snapchat (Tuten & Solomon, 2017). The advent of technology and increasing use of social media allows brands to reach out to a wide customer segment through a single platform.

Television advertisements: Television advertisements are essential to set the right positioning in the minds of consumers. Amazon must curate creative advertisements with the purpose of generating awareness about the brand as well as the importance of leading a healthy lifestyle. Television ads must be broadcasted on leading channels at peak hours to garner more attention.

Influencer marketing: Being an online platform, influencer marketing must be used and leading sports personalities must be hired to promote the product across various platforms (Weiss, 2014).

The above mentioned promotional strategies are aimed at positioning the product effectively in the minds of customers. This will position the brand as quality, active, fit, dynamic, affordable and healthy. Creatively designing promotion strategies of the brand will help Amazon get a competitive advantage.

Place

Amazon is an online platform that provides a platform for buyers and sellers to meet. Amazon currently has a specific customized website for 18 countries. The other countries can have Amazon products exported. Amazon targets customers across 189 countries. Expanding services to such an expansive geographic location makes amazon products available to a large number of customers. At present, Amazon does not deliver to only 5 countries of the world. This includes Cuba, Iran, Sudan, North Korea and Syria.

New Brand Launch for Active Wear by Amazon

This high reach of Amazon helps the brand position itself as easily and widely available. No other E-commerce organization has such a wide reach and hence this gives the brand a major competitive advantage as opposed to its competitors.

Conclusion

Active wear industry is growing leaps and bounds owing to the increasing shift towards a healthy lifestyle of the brand. This report has highlighted upon new markets and customers that can be targeted for this particular product line. Various marketing strategies have also been recommended. Niche markets have been chosen in order to gain a first mover advantage and set a positive positioning of the brand.

Amazon must introduce two new brands in order to target this consumer market and focus upon setting the right positioning for the brand in the minds of its consumers. Amazon has a strong brand name and an effective brand recall value. These attributes must be effectively utilized to venture into these new markets. Effectiveness of Amazon’s promotion strategies would also help the brand in building trust among consumers and hence leading to increased sales and enhanced revenue and reach for the brand

References

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