TO WHAT EXTENT IS DIGITAL

MARKETING AN EFFICIENT METHOD OF

PROMOTION - AMAZON CASE STUDY

GROUP 2: Kim, Queena, Kris, Jeremy

December 04. 2020

1 DIGITAL MARKETING | AMAZON CASE STUDY

 Definition of Digital Marketing
The Practice of Using Digital Communication Channels to Promote Products and Services for Consumers

01 Lower Cost

02 Faster & wider propagation speed

More accurate (more relevant and

03
customized towards consumers)

“More Efficient & Target Oriented”

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 Amazon overview
“To be Earth’s most customer-centric company, where customers can find and discover anything they
might want to buy online, and endeavors to offer its customers the lowest possible prices”

Jeff Bezos

Amazon started off selling books in 1995 and now

prides itself on offering the ‘Earth’s biggest selection’.

Amazon = “exotic and different”

- Amazon prime
- Amazon go (Just in the USA)
- Whole Foods (Just in the USA)

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 Amazon Competitors
Amazon is at War with Everyone

Amazon has competitors in many different industries.

Main revenue streams

● E-commerce (Approx. 50%)
● Web services (Approx. 12%)
● Third party selling services (Approx. 20%)
● Physical stores (Approx. 5%)
● Subscription (Approx. 7%)

Biggest competitors: Alibaba, Walmart & ebay

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 Amazon Financial Overview
One of the most rapidly growing company in the world

Annual Net Revenue of Amazon from 2004 to 2019 (in billion U.S. dollars)
Sales turnover (2019): $280.5 billion 300 280.52

Net profit (2019): $11.6 billion 250 232.89

200
Net profit margin = 4% 177.87

150 135.99
Global market share (2019): 14%
107.01
100 88.99
Digital marketing expenditure (2019): 61.09
74.45

$11 billion 50 34.2

48.08

19.17 24.51
6.92 8.49 10.71 14.84
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

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 How Amazon Use Digital Marketing to Promote Their Business

1 Social Media 2 Website

- Facebook - Promotion Events

- Twitter - Customized Recommendation
- Instagram

3 M-Commerce 4 Big Data Collection

- Same feature to web. - Recommendation System

- Personalized Usage - Alexa

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 1 Social Media in Amazon : Twitter
Amazon allows its Twitter followers to send Amazon items they see on Twitter directly to their Amazon
basket.

Pros
Convenient for consumers

Cons

Does not motivate users to go visit the Amazon

website, as they can just buy their products on
Twitter.

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 1 Social Media in Amazon : Facebook
Lists new and relevant products on its main facebook page depending on current events (e.g. during
Oktoberfest they list their beer products).

Pros
Convenient for consumers

Cons

Products offered might not be relevant to all

users.

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 1 Social Media in Amazon : Instagram
Uses Instagram stories to share relevant and important news with its 2.9 million followers (e.g. events &
new releases).

Pros
Make consumers more wonder their products
& builds relationship with users.

Cons

There’s little promotion of products on the

page - it’s more about news of the company.

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 2 Website in Amazon : Sales Promotion with Events
Uses sales promotion to promote current events (e.g. Black Friday)

Pros
Attractive prices for consumers

Cons
May be tricking consumers to buying products
they do not need (impulse buying).

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 2 Website in Amazon : Customized Offer
Promote relevant & popular products at the moment

Pros
Consumer is able to save time from looking for
the product

Cons
Product being offered might not be relevant to
the interests of consumer

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 3 M-Commerce in Amazon : Convenient & Personalized
• Mobile app is more personalized to the consumer using it
• Amazon mobile app offers consumers the same features as the normal website

Pros
• Can be used anywhere , anytime
• Can scan the barcode using the phone

Cons
• Notifications can be annoying
• More complex than website

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 4 Big Data Collection
Big Data Collection does not only lead customers to shop more convenient, but also providing more values
to customers’ life & experience.

Pros

• Recommendation system - Big data allows Amazon to make personalised and

accurate recommendations for its customers

• Alexa recordings - Collects big data to then personalise offerings on different Amazon
platforms  Increases customer experience

Cons
• People might feel fear of their personal data is being monitored

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 Conclusion
Digital marketing has been very beneficial for Amazon as it has helped them
increase their sales over the years.

Biggest opportunity of DM - Maximising convenience and customer experience

Biggest issue with DM - Users and consumers might be getting deprived of their
privacy.

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 Recommendations analysis

Innovation: Adaptation to trends: Privacy:

Amazon should continue their Knowledge is power and Amazon needs Amazon should be looking to find a
innovative journey with the mission to to be aware of all the options at their balance between maximising the
improve customer experience to the disposal for the execution of their digital experience of its customers and not
customer. marketing strategy. violating their privacy.

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 How will these recommendations help Amazon?
“To be Earth’s most customer-centric company, where customers can find and discover anything they
might want to buy online, and endeavors to offer its customers the lowest possible prices”

01 02 03
Innovation - Will allow Amazon to Adaptation to trends - Will allow the Privacy - By considering and taking
increase its customer-centric company to improve its relationship action to protect the privacy of its
approach, as innovation is likely to with consumers (emphasizing its users, Amazon would be increasing
lead to better products and a faster customer-centric objectives), customer satisfaction, as well as
service, maximising customer therefore becoming more relevant to differentiating themselves from other
experience and satisfaction. them. competitors that do not take this into
consideration.

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 Factors to Consider
“To be Earth’s most customer-centric company, where customers can find and discover anything they
might want to buy online, and endeavors to offer its customers the lowest possible prices”

01 02 03
Innovation - The extent to which Adaptation to trends - This will be Privacy - The extent to which privacy
Amazon is able to implement its highly dependent on the skill set of the features can be included in the process
innovative products and services will employees at Amazon and how of machine learning (i.e. would it be
depend on the laws of the adaptable/flexible they are to possible to limit the capability of Alexa
governments of the countries in which implement and act upon these new collecting information?).
they operate (e.g. is drone delivery trends. INTERNAL EXTERNAL/INTERNAL
allowed or not?). EXTERNAL

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 References

https://www.statista.com/topics/846/amazon/
https://www.amazon.jobs/en/working/working-amazon
https://www.statista.com/statistics/266288/annual-et-income-of-amazoncom/
https://pattern.com/blog/amazons-ad-sales-and-ad-spend-are-growing-why-it-matters/
https://www.visualcapitalist.com/amazon-revenue-model-2020/
https://www.giraffesocialmedia.co.uk/how-do-amazon-use-social-media/
https://www.investopedia.com/articles/insights/090716/7-ways-amazon-uses-big-data-stalk-you-
amzn.asp#3-personalized-recommendation-system
https://aws.amazon.com/ko/personalize/ https://www.investopedia.com/articles/insights/090716/7-
ways-amazon-uses-big-data-stalk-you-amzn.asp#3-personalized-recommendation-system
https://www.techinasia.com/amazons-oneclick-purchase-feature-order-changed-game

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