Introduction
The emergence of Amazon into the novice market of online shopping has helped to fulfill the demands of many customers. It has also presented an opportunity for both local and global retailers to tap into new profit potentials. However, countless factors should be considered when expanding a business into international markets. Several factors, such as trade, social and cultural, economic, and regulatory, affect the impact of Amazon in the market. A proper marketing strategy has the potential of increasing the profit gains for any e-commerce business.
Amazon’s Global Marketing Strategy
Amazon is a booming enticing platform for online shopping that reaches lucrative and vast audiences. Jeff Bezos founded the leading retail shop, and it started business as an online book store (Farooq, 2019). Amazon is renowned for its customer-centric reputation and logistics operations. The company has achieved many milestones since its founding, and this can be attributed to its tenacious, focused strategies for meeting customers’ demands.
One of the marketing strategies is that Amazon is offering sellers and brands a global selling program. The plan gives sellers the ability to expand across borders and sell their products across the globe. This helps them combat competition by leveraging the trusted brand and take advantage of peak selling seasons in countries (Farooq, 2019). Although when such an taking opportunity arises, expanding their business is not straightforward as there are challenges.
Amazon also uses the high runner strategy to market its products and adjust prices to capture a broad customer base. Customer data is one of the valuable assets of any company as it enables them to learn from their consumer shopping habits and deliver a personalized experience to them. The strategy uses big data to uncover trends and patterns of the products that are high in demand. Besides, it uses the pricing algorithm that prices products competitively to attract customers.
Lastly, its global marketing strategy relies on offering a wide range of products to meet customers’ preferences. It also has an interface that is user-friendly and is integrated with personalized recommendations and customer browsing history. Amazon also optimizes the use of affiliate products and resources to boost the business (Farooq, 2019). It targets online marketing channels such as Google search engines, television, and online advertising to increase its annual profits effectively.
Environmental Analysis of Amazon
Amazon, being a multinational organization, operates in several worldwide marketplaces. For this reason, it is affected by some political storms in the global arena (Dahir, 2019). For any e-commerce business, political stability affects the company either positively or negatively. In a politically stable country, Amazon is more likely to receive government support. However, this political tension can provide Amazon with opportunities to boost its growth positively.
Moreover, Amazon’s economy seems to have positive results as customers’ needs are on the rise. Trade factors such as inflation rates, taxation, and changes in currency have directly affected the growth prospects for Amazon. Taxation, such as internet taxes, influences the profitability of the company. Also, changes in taxation across countries can jeopardize the profits of the company. Consecutively, this will have a direct implication on the long-term growth of the venture. A flourishing retail industry also poses a threat to Amazon’s economy as it means it faces more competition.
As consumer behavior changes rapidly across the globe, they are more inclined to buy products from the internet. Amazon delivers products to the customers, thus, making their lives easier (Dahir, 2019). On the cultural impact, younger generations are enthusiasts of online shopping, which has changed their lifestyles and culture. However, Amazon has its way of making people lazy, and this has health and social consequences.
Lastly, as Amazon operates in many countries, it must abide by the legal regulations of each country that it operates in, and failure to do this, it faces lawsuits and fines. There are various factors, such as consumer and data protection laws, that Amazon must comply with. Additionally, there are regulations against counterfeiting in the business sector, and Amazon must be keen to enforce them.
General Marketing Strategy of Amazon in Kenya
Amazon’s expansion in Africa, more specifically to Kenya, has been attributed to the strategy of embracing cash-on-delivery payment. For any other e-commerce business, customer insistence on paying in cash has become a significant barrier as the digital economy picks up. One way of satisfying customer needs is to favor some money on delivery (Farooq, 2019). Amazon aims to adopt a new scheme to embrace cash on delivery as a platform in Kenya. The strategy, although risky, will help Amazon reap the benefits of a broader customer base.
To address the problem, Amazon offers a pay code service that will enable their customers to make payments to Western Union agents upon collecting their products. Additionally, this serves to instill confidence in Kenyan customers who are wary of making online payments (Dahir, 2019). This strategy also allows Kenyan customers to make purchases from Amazon when their mode of payment is not accepted by the sites or whereby the company does not have any fulfillment centers nearby.
However, the strategy does not overcome challenges such as difficulty accessing remote areas in Kenya and a proper mapping system. Also, the banking systems are not yet accessible to many Kenyan consumers. To combat the challenge, the company can partner with MPesa, a popular Kenyan wallet service, to enable customers to make online payments (Dahir, 2019). The strategy will allow Amazon to provide branded products that are not available through local providers to Kenyans.
Amazon expanded its operation into Kenya as it has a market-based economy and is generally considered the economic and commercial hub of East Africa. With the most substantial economic base, it has attracted private equity capital (Farooq, 2019). Because of its strategic location, Amazon established its operations to take advantage of its status as a regional finance center. Furthermore, the partnership with Western Union allowed Kenyans to make payments for their products on delivery.
Moreover, Amazon expanded into Kenya to leverage a large number of customers outside its local operation. With a global selling strategy, non-prime customers in Kenya can purchase products from the company. The popularity of Amazon has favored a massive demand for its high-quality products in the market. These factors all together favor the expansion of Amazon and widen its consumer base in the country.
Conclusion
In conclusion, Amazon is a leading global retailer, and it derives its strengths primarily from its global marketing strategy. The strategy has resulted in the company boosting its sales and helping customers get value for their products. The future of Amazon looks bright, and if it focuses on strengthening its global marketing strategy, there is no reason why it cannot retain its position as the most coveted retail shop. Although factors such as politics, legal, social, and economic factors pose a threat to the growth plans, the company should work on ways to mitigate the risks.
References
Dahir, A. L. (2019). Amazon and Western Union let customers buy in Kenya shillings. Quartz. Web.
Farooq, U. (2019). Pestle analysis of Amazon. Marketing Tutor. Web.