Company Overview
A business cannot survive without customers. To get new customer as well as retain old ones, marketing is an inseparable activity in any strategic planning of an organization. People must know about a brand and must be able to identify its products with their needs otherwise they would not simply walk into any business. Also, the product should showcase a value over their competitors so that he may choose it. Marketing plan is hence needed and can only be created with a lot of investment of time, commitment and research. A proper marketing plan would definitely assist in reaching the target audiences, increase the customer base and affect boosting the bottom line.
The organization in question here is Amazon and the services in the discussion is ‘Prime Now’. The report shall be an attempt to showcase Amazon’s ‘Prime Now’ services launch into Singapore and how marketing strategies can be derived for the service product. Prime Now is a fast delivery service which allows customers to place orders for fast delivery. Items could be groceries, milk, eggs, beverages, beer, consumer goods, baby products etc. This service is made available by Amazon in 9 countries and over 50 cities.
Prime Now’s challenge is that Singapore is a very competitive market and Amazon entry is quite late in the competitive market. There is already a giant competitive force in name of Alibaba. It is hence imperative that prime Now makes a competitive marketing plan to counter competition, capture its market share and is able to create a sustainable and later on profitable presence in the South-East Asian market (Izogo and Ozo, 2015. p-33).
It is important to always analyze the environment both internal and external. This is an important step to building strategies. While internal analysis shows us the organization’s capacity which could turn into potential strengths for it to deal with competition and other market factors, external environment analysis sheds light on factors in the existing operational environment which may become favorable or make things challenging for the organization. In this case, Prime Now, an innovative service by Amazon environmental analysis has been conducted.
Internal Analysis – A SWOT analysis was conducted for Prime Now
Strengths – Amazon is a giant retailer and it enjoys a monopoly in its own way. Strengths being:
- Tri-pronged tactical drive from its pillars of cost leadership, focus and delineation. This has eased the chances of it making profit and drive value for organization (Cowles, 2016)
- Leveraging IT has lent it competitive advantage. E-commerce has helped add scalability to its platform and assists in ramping up when required to counter competition
- Highly recognized and favored by customers which make its market penetration easier–even in new markets which are not easy for its competitors (Zhu and Liu, 2016)
- Superior logistics and distribution system which adds satisfaction to its services to customers. Helps it build competitive advantage
Weakness –
- Exploration away from its core competency of selling books
- Shipments are free or competitive in a way which eats away its profit margins
- The services are online only which is a deterrent for all markets except ‘emerging ones’
Opportunities –
- Amazon has its own payment system which is online. This provides it another edge over competitors when scaling up since online security and privacy are topmost issues in minds of consumers. This would ultimately assist it in keeping profit margins
- Amazon has products under its own brand instead of just rolling out 3rdparty products. This provides it with another capitalizing opportunity.
- Power of increasing its own portfolio of products to gain a strong position
- Power of entering new markets using e-commerce platform to expand global footprint
Threats –
- Maintaining customer data security and privacy in wake of recent hack attempts is a challenge
- The pricing strategies adopted are sometimes too aggressive and have attracted lawsuits. Focus on cost leadership has made competitors unhappy that business is driving away from them
- Strong competition from the local market which is much agiler. Equal attention needs to be paid to local market conditions
External Analysis – A PESTEL analysis to check if global expansion could be a successful strategy for global business growth
Environmental Analysis of current situation
Political –
- Singapore is a politically stable country (Brown, 2016). This is a point of opportunity for Prime Now
- The government provides support to e-commerce industry by building on necessary infrastructure. This is a threat as well as an opportunity for Prime Now. It is a threat because it also elevates the competence of its competitors.
- Government is concerned about cybersecurity as well which is an opportunity for Prime Now service
Economic –
- Singapore is economically stable economy which is an opportunity for Amazon
- Disposable Income is on the rise which is also an opportunity
- Global economic slowdown would affect the economy in some way which is a threat
Social –
- Wealth disparity is medium which is a threat to Amazon
- Consumerism is increasing which is an opportunity
- Online buying is increasing in Singapore which is also an opportunity
Technological –
- Efficiency of IT services is increasing which is an opportunity
- IT faces rapid obsolescence which is a threat as well as an opportunity. It pushes the organization to constantly keep its technological infrastructure updated and increases business optimizing opportunities too (Wang and Zhang, 2015. p-73)
- Cybercrime threats are increasing day by day – This situation is a threat to consumer experience and hence to Amazon as well
Environmental factors –
- Government puts special threat on business sustainability which is an opportunity to Amazon
- Rising carbon-free lifestyle choices which is also an opportunity for Amazon as it helps get positive brand image by adoption of low energy consumption tactics (Luger, 2016. p-302)
- Environmental programs are also rising which is an opportunity for Amazon as its own CSR strategy gets improved
Legal –
- Product regulations are on the rise. This is an opportunity for Amazon as it regulates sales of counterfeit goods
- Import and export regulations are eased. This is also an opportunity for Amazon
- Environment protection regulations have increased which is also an opportunity for Amazon (Burri, 2015)
As indicated from above the primary opportunities and threats could be:
Opportunity
- Strong Infrastructure base
- Global presence
- Positive brand image
- Efficient technology platform to take care of e-commerce business
- Strong logistics network and strategy
Threats
- Rapid change in technology field
- Increasing pressure from competitors
- Innovative business ideas
- Competitive pricing
As per Porter’s five forces model, for Prime Now services in Singapore, the below could be deduced:
- Rivalry is strong (Hasan, 2013)
- Bargaining power of suppliers is moderate
- Buying power of customer is strong
- Threat of substitutes is strong
- Threat of new entrants is strong (Snipes and Pitts, 2015)
The current challenges of Amazon are:
- Finding areas of growth
- Maintaining long-term profitability
Prime Now as a service is a niche. It provides customers with an opportunity to order online their daily needs products at a competitive price or free with membership. Prime Now is the fastest logistics service by Amazon. Amazon has collaborated with the local vendors and made available to Singapore all the goods that they love.
The reason for choosing Singapore is this that the market is growing and Singapore people are affluent, westernized and shop abroad already. Along with that, Singapore also enjoys good infrastructure which works in favor of Amazon.
The challenge for amazon is to counter competition and create its space, a repetition of what it did in the US with membership and loyal customers and grow its own market and use it along with strong logistics in improving customer experience and sustain its growth and profitability. Also, it could offer more international products as Singapore already shops internationally with families being affluent.
Product – Prime Now is a service for consumers of Amazon and this is the product. The product needs to be appropriately priced and presented with ‘attraction’ factor for its customers. This is so that prime Now could gain a good number of loyal customer following. Prime Now is poised with all its intangible qualities, the aptitude to encounter or surpass customers’ opportunities constantly. Prime Now has speed on its side in meeting customers’ demands and can also anticipate new demand trends. Such intangible attributes generally make it difficult for competitors to copy ultimately giving the service a competitive edge (Krugman, 2014. p-2014).
Price – Prime Now’s services are of different levels meeting different customers’ needs and hence are differently priced. Each service is customized highly to client’s needs.
Distribution – Prime Now as a service is marketed directly on Amazon’s website or on other websites by Amazon itself. Prime Now has a wide distribution and is a well-connected network of local vendors. This large base and good strong logistics make distribution a strong asset for Prime Now (Welch, 2015).
Promotion – bout 90% of Amazon’s customers reorder. This provides a strong customer base for using Prime Now service. Promotions of Prime Now should be done using direct mailers, customized advertising, specialty publications, website etc. other channels to popularize and make people aware of Prime Now’s competitive service and prices.
Key Issues
Amazon’s strategy is strong because it has a powerful approach in its marketing mix. That helps draw the consumers to its e-commerce website (Cherry, 2013). By using Porter’s five forces model, strategies for intensive growth could be:
Market Development – market development is one of the primary strategies of Amazon. Entrance and progression in the new markets is primary goal using this strategy. For example, Amazon is already operating in almost 10 countries, including Canada, India, and China. They are all new markets for it and it intensifies it business using its platform to gain more customers through its services. To gain entry into new markets, it would adopt the e-commerce site to suit the needs so that it can enter the new market and sustain the business for profitability. Prime Now would be adopting similar strategy game plan to gain more customers online through its e-commerce website (Dalton, 2016)
Market penetration – this is another of strategies of Amazon. Prime Now shall target to gain more customers from the same market it would be operation but this is more of secondary target post-market development. This could be achieved by offering customers new deals, service enhancements etc. (Bakker, 2016. p-135)
Diversification – Amazon in the past has often taken the route of acquisition to set foot into a different product/service products. An example is an acquisition of Audible. This is one of the least important strategy of Amazon. Prime Now could, later on, gain more customers through acquisition of competitors to further intensify and multiply its growth (Zentes, Morschett and Schramm-Klein, 2017. p-300)
To examine the efficiency of Amazon Now’s marketing plan of action, it is essential to associate its authentic functioning with planned aims. To ease this examination, scrutinizing measures should be established for the numerous happenings essential to cause the marketing plan to function well till completion. These events comprise, but are not narrowed to, the following:
- A project management concept could be used to assess the application of the promotion plan by creating time requirements, human resource needs, and financial expenditures (Al Sayyed, 2016).
- A continuous contrast of real and intentional activities could be piloted on a monthly basis for the first year and on a quarterly basis after the early application phase. The commercial examination team, including the advertising director, could report their judgment of actual and planned results straight to the company president.
- Each task team is liable to define what variations must be made in measures, merchandise focus, or processes of operations as an effect of the reports received.
Conclusion
As is evident, the marketing plan for Amazon prime Now service is incomplete without the proper analysis of its environment which is both internal and external environmental analysis. Post analysis Prime Now services’ good point and weaknesses were worked on to build a proper marketing mix strategy and decide on a plan of action. Lastly some recommendations on how the marketing team could improvise on current operations to better the system of operations and build a sustainable business.
References
Books
Dalton, C., 2016. Brilliant Strategy for Business: How to plan, implement and evaluate strategy at any level of management. Pearson UK.
Journals
Snipes, R.L. and Pitts, J., 2015. Running with the Big Dogs (Part A): A Competitive Forces and Strategic Analysis of the Running Specialty Store Industry. Journal of the International Academy for Case Studies, 21(3), p.37.
Hasan, M.R., 2013. Apple Inc.-An Analysis: PESTEL analysis, Porter’s 5 Forces analysis, SWOT analysis, Comprehensive analysis of financial ratios, and Comprehensive analysis of share performance of Apple Inc. GRIN Verlag.
Cherry, K., 2013. Amazon business plan.
Wang, F. and Zhang, X.P.S., 2015. The role of the Internet in changing industry competition. Information & Management, 52(1), pp.71-81.
Welch, A., 2015. A cost-benefit analysis of Amazon Prime Air.
Bakker, E.M., 2016. Open and free datasets for multimedia retrieval. International Journal of Multimedia Information Retrieval, 5(3), pp.135-136.
Luger, J.D., 2016. 16 The living versus the dead in Singapore. Protest and Resistance in the Tourist City, p.302.
Burri, M., 2015. Over the top services: Business trends and regulatory issues.
Brown, C.D., 2016. Democracy in Asia. Education About ASIA, 21(1).
Al Sayyed, S., 2016. Strategic Marketing. A Live Case Study on Amazon Marketing.
Izogo, E.E. and Ozo, J.U., 2015. Critical Evaluation of How Well Placed Amazon is to Sustain its Historical in Online Retailing. British Journal of Marketing Studies, 3(6), pp.31-42.
Cowles, B., 2016. Question Mark Culture: How Culture Affects Entrepreneurship 15 at Amazon .
Zentes, J., Morschett, D. and Schramm-Klein, H., 2017. Pricing. In Strategic Retail Management (pp. 279-306). Springer Fachmedien Wiesbaden.
Krugman, P., 2014. Amazon’s monopsony is not ok. The New York Times, Oct, 19, p.2014.
Zhu, F. and Liu, Q., 2016. Competing with complementors: An empirical look at amazon. com.
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