How Amazon is Changing the World around us
Introduction
Amazon was founded on July 5, 1994 with its Headquarters located in Seattle, Washington Before the company was renamed Amazon it was called Cadabra, Inc. Amazon offers different types of electronics, music, DVDs, books, videos, video games and various software as well. Amazon has its presence in various countries of the world like US, Japan and Germany and now looking to found its basis in new target market such as India. Amazon has seen marvelous development since its commencement. Jeff Bezos was the founder of he company and now considered as a richest man on the planet. Amazon was developed by him and two associates in a garage which was later transformed into a shop. Amazon started retailing to the public in July 1995 and it went public with a price of $18 per share. In order to challenge e-bay, Amazon bought 46% shares of drugstore.com and tossed it’s own auction site in 1999. This huge progress and development of Amazon has come with a price. Nowadays, Amazon is currently facing huge pressure from shareholders to achieve even more profit. Amazon has produced a customer base and platform, that new companies are jealous of and could only dream of, and that’s why they have achieved such huge profitability.
Discussion
Amazon introduced a new product refered to as “Amazon Fire Tablet” to the electronics market. The New target markets for their flagship tablet is India and United Kingdom. India has always been a huge marketing challenging but rewarding and enjoyable as well. The Population of India is close to 1.3 Billion which shows its potential as a new market, but income of people is low compared to other developed countries of the world. United kingdom is a well developed country with high GDP and buying power of people is immense. UK could be an easy market to market the new Amazon fire Tablet as compared to India. The main reason behind huge success of Amazon is that, Whenever they launched new products, They always had their focus on the myriad issues such as timing, Market Research, Market penetration and planning and that really helped them increase their probability of success. The market research identifies the product features needed to be launched along with the distribution channels and adequate pricing. and that’s why they are so successful. Market penetration is a process by which a company can increase its market share for products and Amazon has really been focused on Market penetration. Targeting the marketing campaign would be vital for penetration in any new market.
To launch a new successful new product in new market it should have following phases:
Market Targeting is used to attract new buyers in buying the newly launched product. Market Segmentation to used to classify bases for segmenting the new target market. Product Positioning to advance positioning of each market for specific market. Whenever Amazon launches a flagship product, the first thing they did was Market research, which is the key in any successful business idea. Market research provides important information and direction to target a specific market. It identifies product features with proper pricing catering to the market needs. Market research also gives an idea on distribution channels which are used to sell the product. Other Aspect that Amazon is good at is “Timing” . the question you need to ask before penetrating a new market is that All elements of the marketing process should be coordinated and the company would be able to provide the product in a good time. Whenever a new product is launched timing should b taken into account for example launching a new line of sweaters in summers would be a bad idea. So company has to take timing into account and also have to know that they can manufacture and market their product in right time
The main thing to decide on penetration in new market is the Distribution of the new launched product. Who’s going to sell the product? Amazon has an well trained sales organization and distribution channels and they can certainly use them in India and UK. so they are well trained about the new product and how to let the customers know about it. Finally, Amazon is really good at Promotion as well, they have the promotional program needed to support their flagship fire tablet.
Market segmentation is the process of dividing the market into subgroups of people. An example would be individuals wanting watches, but different type of watches like analog or digital watch or even smartwatch. To determine a market segmentation policy, two points should be looked upon. First, on what basis will the market be segmented and secondly the method used for segmentation, and company has to focus on different behaviours of people. The general bases segmenting a new target market are unlimited. Three types of segmentation in which a company can segment the newly targeted market include:
Benefit Segmentation – This type of segmentation of users is based on benefits the consumer hopes to have from using the newly launched product. In case of Amazon Fire Tablet, one can easily realize that It’s expandable. It includes all the Amazon goodies. It’s more like a real Android tablet. And it is priced very competently in both target Markets on India and UK.
Usage Segmentation – This type of segmentation is generally based on the usage time of that specific product by customer. Some people are considered as a heavy user of that product or some might use it less often. Segmentation should be done on how to target heavy users. In case of Amazon Fire Tablet, users in both India and UK one can easily use it in their leisure time
Behavioral Segmentation – This type of segmentation is specially targeted to users based on their behavioral and social traits. In case of Behavioral segmentation we need to focus on the advantages that our customers want from new product. In this case, Indians want a product in less money but with more features that would help them do many of their daily tasks with a single product and Amazon Fire Tablet would help them achieve this by doing tasks of both PC and Smartphone while paying a small price. In case of other target market, UK people want product for their leisure time only and the product they can safely give to their kids and Amazon Fire Tablet would suit them. Market segmentation is a very influential and well-built marketing tool catered to provide a general idea to the company about how to target specific group of people based on their needs . Segmentation would eventually help make additional revenue by making marketing and distribution of the product easily.
While analyzing the product launch in new Markets of UK and India, External driving forces are Economy, Political Influence and new competitors. These drive of external change occurred from outside of the company or organisation. And now we can discuss about, what are the external driving forces of a company. In case of UK and India one of the major Competitors could be Ebay and Flipkart they are known for providing cheap stuff with relatively good quality. Economy of India is booming but it is still ot on par with developed countries like UK and US and buying power of people is less so profit margin for Amazon would be low when they launch Amazon Fire Tablet in India. But in case of UK, people are rich and one can sell slightly expensive things and a result profit margin would be high. Political Influence plays a key role in deicide the growth of Amazon in India, as some people in India are religious fanatics so one has to be cautions about certain marketing companions.
Conclusions
Successful product launches result from an integrated process that depends heavily on solving up-front issues and complete market research and and that’s where Amazon has to put even more focus. Amazon is hoping to expand its reach even further to new markets which have not been explored earlier. Amazon want to gradually increase their marketing expenses from 2% of net sales to 3%. This will give them more advertising and brand recognition. While Amazon has created its name in Buisness world in a huge way but there are still Challenges for Amazon including tough competation from Ebay and Walmart, Large sales-tax debate between Amazon and many state legislators, and Worker conditions aren’t so good. They need to focus even more to solidfy there position in buuisness world for the coming years.
End Notes
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