DIGITAL MARKETING: A CASE STUDY OF AMAZON

Jun 27, 2017 | 0 comments

Jun 27, 2017 | Miscellaneous | 0 comments

 DIGITAL MARKETING: A CASE STUDY OF AMAZON

Table of Contents

DIGITAL MARKETING: A CASE STUDY OF AMAZON.. 1

Introduction. 1

Evaluating Amazon’s communication process. 2

Evaluating the transmission process. 3

Evaluating the message. 3

Customer satisfaction. 4

COMMUNICATION.. 5

COMMUNICATION PLATFORMS EMPLOYED BY AMAZON.. 6

Social media. 6

Emails. 7

In product communication. 7

Branding. 7

COMPETITIVE ADVANTAGE THROUGH TECHNOLOGY.. 8

AMAZON’S CULTURE OF METRICS. 9

CONCLUSION.. 11

REFERENCES. 11

DIGITAL MARKETING: A CASE STUDY OF AMAZON

Introduction

Digital marketing is the system through which companies promote their own products via electronic media. In the past, traditional methods of marketing have only been able to measure and monitor outgoing data only. Through digital marketing however, it is possible for the companies to analyze the impact that the strategies they have elected, the methodologies of communication and the campaigns have on the target market.  Digital marketing gives the consumer the control in terms of information access. While traditionally consumers needed to look for the advertiser or marketer in order to get information; today, consumers can access the information wherever they are. It is not surprising therefore that majority of the companies are modeling and fashioning their digital market in line with campaigns that have been highly successful.

Amazon is the leading company when it comes to digital marketing. The company’s strategy allows for access to information and products when and where the company needs them.  The system also allows for a consolidation of customer preferences and expectations so that the customer needs can be attended to quickly, easily and more conveniently. The ever growing company has expanded into areas of entertainment and even social interaction, a platform that has seen extended growth of the digital forum.  In the past decade many other companies have attempted the same services as amazing. In addition to providing similar services and products, such companies have also attempted to employ the same digital marketing strategy. However, (Ryan and Jones 2009) argue that the uniqueness of this forum is yet to be understood holistically. The unique aspects employed by Amazon are hard and difficult to duplicate without a clear understanding of the same.

Evaluating Amazon’s communication process

The success of any communication process is measured through the transmission of the message. Unlike popular belief the success of the process should be measured at each step. This allows for easy identification of barriers which may hinder the communication process before such barriers begin to multiply.  While the message may leave the company successfully, it may fail to reach the intended target or even become misunderstood and distorted along the way. The Amazon culture has fostered the error identification and correction of the same norm, which then enables constructive feedback from the intended customer and in return improvement of communication channels.

In today’s digital marketing, the most vital stand comes in transparency of the message as received by the consumer. (Bird 2007) indicates that the majority of consumers today are more interested with companies showing transparency that is guiding the consumer or seeming to guide in honesty. For Amazon this has been achieved through proper critique of items under sale, rather than just touting the strengths of the product, the company has tried as much as possible to include true analysis of all aspects of the products. On the side of the company, the concern is directed towards efficiency that is the ease of passing the information from the company to the consumer. Managers are more concerned not with the content but the actual channel used, and the benefits that accrue from the same in terms of audience and cost saving. Therefore, the communication process is two sided that is the effectiveness to the consumer and the efficiency to the company.

Evaluating the transmission process

The first step in evaluating the communication process is understanding the transmission process. Amazon employs various transmission channels to make sure that the message reaches the intended target. From television messages all the way to newspaper ads, these are some of the popular offline campaign transmission of messages. This coupled with the digital transmissions have had a great impact on reaching a wider and greater target. However, it is important to note that each of the channels employed by the company has its own challenges. Amazon for example has relied more on computer based resources for transmission of their own messages. These messages often require accompanying resources such as software and hardware and some degree or level of understanding with regard to the information technology.  The advantage and strength of this transmission is that it is quick and rapid; however, there are many more messages that do not reach the targets. For example when it comes to emails, it is possible that the targeted consumer will not read or access the email. Further, majority of the emails with advertisements are automatically classified as junk, yet the company has no method or means of measuring those emails which indeed were read by the target.

Evaluating the message

(Mathieson 2010) states that the digital message presented by Amazon is easy to understand and often reaches the intended customer as it was expected from the company. This is made possible by continued surveys where consumers are able to relay difficulty or challenges that they are having with understanding the promotions. From these surveys, changes are made and the messages in turn become clearer attracting even more consumers. Amazon has understood that even though much research goes into creating and establishing the initial campaign messages, it is possible that the intended target may not understand and receive the message as it was intended. For this reason, the input of the consumer even during the campaign and promotion is vital towards generating and ideal and proper message for the targeted customers. Failure to take in the input of the consumer may lead to confusion and ambiguous messages which in turn disillusion the intended target.

Customer satisfaction

Perhaps the biggest strength of the communication process by Amazon is that the company focuses and has understood that the message is not intended for the benefit of the company but rather the benefit of the consumer. Therefore, with every communication it is important to measure the level of customer satisfaction so that necessary changes can be made to the same towards achieving higher customer satisfaction, (Wind and Mahajan 2001).  Consumers can give vital information such as whether the message was timely or not, whether the channel used for communication was satisfactory among others in addition to giving suggestions for implementation in the future. Amazon often carried out customer surveys to measure the level of satisfaction, and also to compare new campaign with previous promotions and campaigns. The results are used and employed towards improving the future communication channels and messages for the company.  Customer groups that could be affected by any changes in the communication are considered first in any implementation to ensure that such changes do not translate to loss of the any customer or a portion of the market.  Even though the message is properly transmitted and received, this does not automatically translate to increased customer satisfaction.

COMMUNICATION

While promotions and other marketing strategies are vital towards reaching the consumer, without a proper communication strategy the efforts will bear little if any fruit.  Businesses and companies use marketing communication to make their brand well known among the target market. Amazon has created and often employs several strategies which in turn have created excellent brand awareness for the business.  (Hanlon and Akins 2009) indicate that majority of the companies often focus more on creating a campaign or promotion and in turn ignore the communication process. The result is an excellent campaign and marketing program which fails to reach the consumer as intended. The company spends much with little if any returns from the same. The communication strategy employed by Amazon takes into consideration the five steps in the process of communication that is:

The sender: the strategy understands the basics of the company, taking into consideration exactly what the company intends to communicate to the consumer. By understanding the advantages and strengths of Amazon, the company is able to select an ideal target market.

Encoding transmission: this second step covers the transformation of the creative advertisements and promotional messages into messages that immediately capture the attention of the consumers.

Transmission: this step includes the selection of the communication channel or media, that is the channel through which the consumers will get the message intended for them.

Decoding and receiver: often these stages of communication go hand in hand. They occur when the consumer receives the messages from the company, decodes and then uses the same information to make decisions on purchases, services and other matters as intended by the promotion. Digital marketing allows the company to measure the process of decoding as it is happening.

COMMUNICATION PLATFORMS EMPLOYED BY AMAZON

The main aspect of Amazon’s successful communications strategy is that it does not rely on a single or singular communication platform. Rather, the promotions and campaigns often rely on more than one single communication platform. A combination of the platforms allows for the company to strengthen those which are weak while at the same time doubling on the strength of others. For example, where emails are often recorded as spam, and therefore not read by the targeted consumer, the social media platform allows for messages to be viewed, read and the interest of the consumers to be captured. In digital marketing, barriers often distort or prevent the message from reaching the consumer. Each channel of communication has specific barriers which must be taken into consideration seriously. By employing two or more channels of communication, the company is able to effectively maneuver around major obstacles and barriers.

Social media

Perhaps, the fastest and most effective means of communication today is the social media. With millions of users daily, this platform allows the company to reach more people than ever. Majority of the traffic directed to Amazon has in the recent past been due to the social media communication platform. Here consumers not only have the chance to communicate with the company but also among themselves.  Through this platform Amazon‘s efforts are centered towards creating content, and not just content but content that is appealing and gets the attention of the targeted consumers.  Individual users are also encouraged to share the messages by the company on their own social platforms. This has proved to be quite effective, because the message spreads from one user to another and soon gains momentum. According to (Hermann and Burbary 2013) this platform has the ability to reach millions within the shortest duration possible.

Emails

Before there was social media, there were emails. Amazon has not completely negated the email platform for communication with possible consumers. This channel often works with loyal customers however. Once customers have made a purchase, it is easy to keep them updated on the various other products that are available within a specific duration. However, as Amazon has learnt the hard way, this channel can easily lead to disgruntlement among the targeted consumers especially if the promotional messages are too many.  The idea rests in regulating the number of emails sent to the consumer.

In product communication

This channel has gained popularity with Amazon from the beginning. Through this channel consumers receive advertisements and suggestions for other products that they would like while they are visiting the site. This channel calls for in-depth understanding of consumer needs, hence the need for continued surveys in order to keep in touch with the current market.

Branding

A most recent addition to the Amazon communication channel is branding that is, instead of focusing on the products available within the site, the messages are more and more focusing on the company name. This way, consumer’s think of Amazon before considering any other company and only when the company fails to provide what they need do they move on to another company. Branding begins from the early stages of the marketing communication, and moves on to the end of the consumer experience. With branding, the advertisements and even personal selling have only one aim; to make the company a recognizable name.

COMPETITIVE ADVANTAGE THROUGH TECHNOLOGY

Amazon’s greatest competitive advantage comes in the form of e-commerce. While majority of the competitors have often considered e-commerce as one of the options under their wing, Amazon has used the same platform to scale up the business world. Today, Amazon is renowned as the trusted and most recognized brand name when it comes to e-commerce. There are few companies that have reached this platform. As cited by (Rowan 2002) large companies such as apple have the advantage of not just size but also the technology advancement and resources to grow their own businesses. However, Amazon continues to maintain the lead when it comes to e-commerce with such large companies trailing far behind, and as he points out being far from catching up despite their own resources. By leveraging itself of information technology and further advancements in e-commerce, the company has created a niche which is difficult to duplicate even for the larger multi-national companies with their many resources.

Recent focus of the company on creating better logistics and distribution systems has allowed the growth of the same company to become unequaled. With e-commerce the main advantage lies in ensuring high customer satisfaction. Goods ordered need to be received by the customer as orders, in good time and with as little inconvenience as possible. Unfortunately majority of the companies in the industry often fail when it comes to proper delivery. The result is that they lose a large chunk of the market to competitors. Amazon has understood that consumers are even willing to pay slightly more, if it will mean more convenience in terms of delivery.

Technology and supper systems have further allowed the company to enjoy the advantage of reaching areas which were previously locked out of e-commerce companies. There are markets that have been traditionally difficult to venture in when it comes to e-commerce. In such markets, the convenience of e-commerce often devalues the service that the customer expects. Amazon has however, found ways through technology to breach the barriers and begin making an impact in such markets. With a trustworthy brand name, the entry has not been as challenging as it previously was for other companies in the same field.

AMAZON’S CULTURE OF METRICS

Amazon’s culture of metrics focuses completely on ensuring that the customer is completely satisfied and has no reason or desire to move from the company.  The culture of metrics in Amazon is based on five hundred goals and targets. These targets have been set through serious research into what the consumers expect from the company. The goals often change as per the new trends and culture in the market. It is important to note that while majority of the other companies focus their goals on the company systems, Amazon’s 80% of the metric goals focus on the customer and their satisfaction with the company services.

Like with any other site on the internet, there are chances that new developments which may have seemed like a good idea to the company will become a complete turn off to the consumers. Based on this, Amazon has metrics that measure the turn offs for customers so that they can be moved out. It is important to note that such metrics are often watched in every minute unlike other companies which watch the metrics periodically. In doing so, Amazon is able to identify and rectify the situations as they occur rather than after the fact which could easily lead to loss of customers.

Majority of the metrics in companies today are set on stone. Employees are set on the metrics that must be watched, often ignoring others in favor of others. While this means that the companies can receive highly comparable data, it also means that the companies have a one dimensional look. Much of the data that could be vital towards satisfaction of the customer and growth of the company is ignored and not considered. Amazon’s culture of change and innovation has also influenced the culture of metrics. Employees are often on high alert debating, and exchanging ideas on which metrics to watch with which promotion and campaigns. The result is that the company has enjoyed a wider dimension outlook on what the customer needs and trends are. Based on this, the company is able to increase the level of satisfaction for the current and expected consumers. Further, Amazon is able to know and become aware of the trends that will attract newer customers and markets that are upcoming before competition. The growth of the company in the past decade has been founded on allowing freedom in the culture of metrics.

When one speaks of metrics, it is often misconstrued as a system which measures and avoids risky areas for the business. For some companies, it is exactly that. Using the metrics data, the companies can predict risky products, channels and even markets and therefore avoid them, (Frick 2010). On the other hand, Amazon has taken the risk factor compete opposite. While the metrics measure the risk facing the company, such risk is not just avoided but rather is used to create innovativeness and opportunities for growth. With high risks come even greatest returns. Employees often use the metrics to measure the chances of returns on particular risks, and then translate the same to application. Using this system, Amazon has been able to venture into high return markets which competitors were previously afraid of. In addition, the company has also ventured into new unexplored markets where profits continue to be high.

CONCLUSION

In summary, the customer communications in the digital marketing platform applied by Amazon can be summarized in the acronym RACE. Race stands for the following:

Reach: that is, the target of the digital marketing is to reach more and more consumers. With each of the marketing strategies being measured, SEO and Ad words are employed to ensure that more and more traffic is directed to the site.

Act: the company is directed at making simple experiences for the customer. The actions of the entire company are geared towards convenience and ideal shopping for the customer. This may mean changing the distribution channels or even logistics.

Convert: the company is ready to learn and change their own actions to suit the customer. Often Amazon has been quoted as “customer obsessed”. This means that everyone in the company is ready and willing to learn in order to ensure high customer satisfaction.

Engage: with the focus being the customer, then constant communication needs to be maintained. Through constant communication, the company is able to anticipate and meet the needs of the consumer and therefore consistently remain at the top in the industry.

REFERENCES

Bird, D., & Bird, D. (2007). Commonsense direct & digital marketing. London: Kogan Page.

Frick, T. (2010). Return on engagement: Content, strategy and design techniques for digital marketing. Oxford: Focal.

Hanlon, A., & Akins, J. (2009). Quick win digital marketing: Answers to your top 100 digital marketing questions. Cork: Oak Tree Press

Hemann, C., & Burbary, K. (2013). Digital marketing analytics: Making sense of consumer data in a digital world. Indianapolis, Ind: Que.

Mathieson, R. (2010). The on-demand brand: 10 rules for digital marketing success in an anytime, everywhere world. New York: AMACOM.

Rowan, W. (2002). Digital marketing: Using new technologies to get closer to your customers. London: Kogan Page.

Ryan, D., & Jones, C. (2009). Understanding digital marketing: Marketing strategies for engaging the digital generation. London: Kogan Page.

Wind, Y., & Mahajan, V. (2001). Digital marketing: Global strategies from the world’s leading experts. New York: J. Wiley.