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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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mazon Prime Marketing in Singapore

Amazon, the most valuable retailer in the world as well as one of the most valuable corporations globally, has a global market reach through its websites and through the deliveries it makes to customers across the world. The company's products include jewelry, toys, food, furniture, apparel, electronics, video games, and software, as well as streaming and download services for video, audiobooks, and music. Also, Amazon produces Echo, Fire, AmazonBasics and Kindle-brandedconsumer electronics, as well as being the largest PaaS and IaaS cloud infrastructure services in the world. In support of its products and services, Amazon offers Amazon Prime, which is a subscription service that enables customers to access one day or two to day delivery, and music and video streaming among other benefits for a monthly or annual subscription fee. By April 2018, Amazon indicated that it had more than 100 million subscribers including normal subscribers and those with Prime student privileges because their email addresses have an academic domain (Alvarez, 2018). Upon entering the Singapore market in 2017, albeit later than other market players, Amazon launched Amazon Prime in Singapore 5 months later as a means of encouraging its target market in Singapore to adopt Amazon products and services (Lim, 2017). Although there are many e-commerce retailers in Singapore, Amazon aims at increasing its market share by using Amazon Prime in its market segmentation, market targeting, and market positioning.

The company's approach to market segmentation, targeting and positioning is structured in a manner that enables the company to have as wide a market range as possible to which it can sell its vast inventory. In its marketing strategy, Amazon does identify specific groups of customers by developing and selling products and services for these groups, but the company takes a holistic approach to appeal to as many customer groups possible (Camilleri, 2018). The company divides the population according to various characteristics in its segmentation strategyand develops products for them. In addition to its segmentation and targeting strategy, Amazon uses a multifaceted positioning strategy to adopt the marketing mix that is most suitable for its target customer segment.

Market Segmentation

Amazon's market segmentation strategy includes geographic segmentation, demographic segmentation, behavioral segmentation and psychographic segmentation depending on the characteristics of its target customers. In geographic segmentation for its Amazon Prime service, Amazontargets both urban and rural area customers across Singapore as long as they purchase or intend to purchase items online. By offering free two-day delivery, Amazon offers the same convenience for all its customers regardless of where they live in Singapore (Farah & Ramadan, 2017). With shorter delivery times, Amazon should offer online shoppers the associated convenience of a larger selection of products with minimal waiting periods when compared to conventional shopping. In demographic segmentation, Amazon targets all males and females aged 18 years and older regardless of their life cycle stage including married or unmarried. Since customers need to be 18 years of age to have a credit card, the target market for Amazon includes those who have reached this age. Also, the Prime membership can be used with family members, which means that amazon's target customer segment includes all people regardless of if they have families, such that one subscription can be used by parents and their dependents. In addition, demographic segmentation includes amazon's targeting of customers depending on their occupation including students, employees, and professionals (Dablanc et al., 2017). Although the appeal of Amazon Prime to professionals and employees is obvious, Amazon Prime has some benefits specifically targeted to students including discounts that are not accessible to other Prime subscribers.

In addition to geography and demography, Amazon also applies behavioral properties and psychographic characteristics of the customers in its target market as a means of subdividing its market. Behavioral segmentation is based on the customer'sdegree of loyalty, the benefits being sought by customers, the personality of customers, and the user status of users as a means of covering as wide a market range as possible. While Amazontargets loyal customers and switchers for its products, the benefits offered by its Amazon Prime service are aimed at converting all customers to loyal customers (Perrey, Freundt, & Spillecke, 2015). The benefits customers seek from Amazonproducts include the widest possible product range, the convenience of online shopping, and highly competitive prices. Considering the novelty of online shopping, Amazon targets customers that are determined, easy going and ambitious who have the interest and drive to use an unconventional approach to shopping. Since the company entered the Singapore market after other e-commerce retailers, it aimed at appealing to potential users, nonusers, first-time users, excusers and regular users of its Amazon Prime service (Kooti et al., 2016). In its psychographic approach to segmentation, Amazon uses the social class of its target market whereby its wide range of products at multiple price points appeals to all social classes including working, lower, middle and upper class. Also, in psychographic segmentation, Amazon does not discriminate the lifestyles of potential customers and appeals to explorers, succeeders, aspirers, mainstreamers, strugglers and the resigned.

Market Target

The most important benefit offered by Amazon in its Amazon Prime Service is the quick delivery of items purchased from its online marketplace, whereby the company offers its Prime subscribers 1-day to 2-day free shipping. Since Amazon Prime is a subscription service, customers who use it must be frequent shoppers so that the cost of the subscription is covered by the benefits to be had regarding the time saved in waiting for purchases to be fulfilled. Therefore, based on the quick deliveryoffered by the subscription, Amazon targets the service to frequent shoppers; hence the reason there are many Prime exclusive discounts. The company also targets Amazon Prime to people who own Amazon streaming devices for use in listening to music and watching videos. Since this service requires an internet subscription, target customers who want to enjoy the full benefits of Amazon Prime need to have a fast internet connection through which they can stream their favorite music, television music, and films without incurring any extra costs(Piercy, 2016). Although Amazon Prime is targeted to studentsas indicated above, it is also targeted to families, whereby Amazon has implemented a system in which a single subscription can be used by multiple family members so that each can enjoy the benefits to be had from being a member of the Amazon Prime program. In the same way it targets as many customer segments as possible in its marketing strategy, Amazon does not discriminate customer groups in its Amazon Prime marketing because the service can be handy for people of various characteristics.

Market Positioning

Amazon employs a multifaceted approach to market positioning for its Amazon Prime Service in Singapore, whereby it uses both multi-segment positioning and adaptive positioning to appeal to as many customer groups as possible. In multi-segment positioning, being a member of Amazon Prime gives the customer a wide range of benefits, such that it appeals to more than a single market segment. For instance, even if a customer does not stream videos and music through the internet, the other benefits of being a Prime member like discounts and free quick delivery justify a subscription. In adaptive positioning, Amazon monitors the offerings of competing companies and customer expectations and adjusts its discounts and product offerings accordingly. For instance, for maximum benefit to its Prime customers, Amazon always ensure that the items on offer in its marketplace are priced lower than the prices offered by other retailers in the market (Franco, 2018). By taking an adaptive approach to positioning, Amazon ensures that having an Amazon Prime subscription is beneficial customers of all segments regardless of their specific characteristics.

Conclusion

Amazon's approach to market targeting, segmentation, andpositioning for its Amazon Prime subscription service is tailoredin a manner that appeals to as wide a market segment as possible. Marketing of Amazon Prime ensures that the product is accessible to all people in Singapore regardless of their geographic, demographic, behavioral and psychographiccharacteristics. By taking such a holistic approach to marketing, Amazon increases its chance of outcompeting other market players that were already in the Singapore market before its entry in 2017.

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