The Marketing Mix of Amazon

Marketing is an important aspect of business management.

Marketing mix can be defined as the utilization of a given group of marketing tools by a business enterprise to influence customers to buy from them. The principles of the marketing mix are enshrined into four components which are commonly referred to as 4 Ps of marketing. The 4 P’s of marketing are; product, price, place, and promotion. Amazon is a leader in online retailing through the use of smart marketing and pricing strategies that should be studied by small retailers to compete successfully.

Discussion

It is considered that Amazon online retail offers the lowest prices for its products. However, according to D’Onfro (2015), this is not entirely true. It is claimed that Amazon implements a clever pricing strategy and thus always gets away with the cheapest online retailer tag. Amazon always tweaks its prices to appear as if they are offering the best prices in the market.

Amazon always gets the tag of having the lowest prices through a pricing strategy of offering the lowest prices on the best-selling products in the market. They further move on to place higher price tags on commodities that are not very popular with the consumers. Therefore, the consumers will always look at Amazon as the cheapest retailer if they consider the prices of their best-selling products. Consequently, Amazon will get lower profit margins from their best sellers but get very high profits on the overpriced commodities without the consumer ever noticing it. This is because they have already created a notion that they offer the lowest prices in the market.

To compete with Amazon small retailers, need to comprehend and implement a few things. Small retailers should avoid competing with Amazon’s infrastructure. Amazon is an online retailer that has heavily invested in their infrastructure making it a humongous task for small retailers to compete regarding infrastructure. Instead, small retailers should focus on improving the utilization of their infrastructure. Another consideration by small retailers while competing with Amazon is that they should avoid competing through price wars or selection, as Amazon will always win in this (Lamb, Hair, & McDaniel, 1992). While undertaking its clever pricing strategies, Amazon incurs high costs of management that cannot be managed by small retailers. Instead, small retailers should focus on a static but flexible pricing strategy that favors them in their niche.

Amazon is perceived as impersonal while dealing with their clients. Therefore, small retailers should take advantage of this and provide a tailored customer experience that resonates with them. This does not necessarily imply that the consumer experience will be convenient. Amazon has already won in that. Small retailers should focus on making the experience feel personal to each customer. Last but not least, small retailers should work hard to provide the customer experience that lives up to the expectation of the customers. The place remains an important marketing mix principle. Small retailers should thrive on their store locations instead of online presence.

Conclusion

In conclusion, Amazon has remained an online retailing leader through the use of clever marketing and pricing strategies that should be studied by small retailers to compete successfully. Amazon has used the pricing strategy of offering discounts on their best sellers and increasing the prices of other items to create the notion that they are cheaper. Small retailers need to take advantage of their infrastructure and marketing strategy if they are to compete favorably with Amazon.

References

D’Onfro, J. (2015). The clever way amazon gets away with not always offering the lowest prices. Retrieved http://www.businessinsider.com/how-amazon-adjusts-its-prices-2015-1?IR=T

Lamb, C., Hair, J., & McDaniel, C. (1992). Principles of marketing. Mason, OH: Thomson South-Western.