Answer To: Southern Cross Business School MKT00720 – Marketing Session 2, 2018 Assignment 2: Report (on Amazon...
Soumi answered on Sep 22 2020
MKT00720 – Marketing
Session 2, 2018
Assignment 2: Report (on Amazon Australia)
Table of Contents
a. Executive Summary 3
b. Introduction 4
c. Company background 4
d. Marketing Analysis 4
i. Nature of Amazon Australia’s marketing strategies since its inception 4
ii. Strategic Marketing Options for Amazon Australia to move forward 6
e. Conclusion 7
f. References 9
a. Executive Summary
Amazon entered the Australian Market in December 2017. Australian Retail industry was already in a phase of transition, which was accelerated with Amazon’s entry. There were many hindrances that came into its way of expansion like highly dispersed population in the country, which made it difficult to deliver things on time economically. This further added on to the problem of Competitive Pricing. This was solved through ‘Amazon Fulfilment Program’, which acted as a give and take relationship for both Amazon as well as small retailers. Making use of collaborative ventures and seasonal shopping periods helped Amazon set its foot in the market. A well-formulated Omni-channel strategy making use of both online and physical infrastructure will help it attain success in Australia. In addition, acquiring Whole Foods, services like Amazon Prime, Alexa, Amazon Fresh, and different kind of stores targeted at various customer segments will play a crucial role in Amazon’s development plan in Australia.
b. Introduction
The retail industry in Australia is facing huge disruption as being faced by conventional retail chains all over the world. The rapid influx on online e-commerce channel of retail in almost all product categories has forced traditional retailers to adapt to the changing business scenario and many upcoming small, medium and large-scale retail stores to shut down. The Australian retail industry generates close to $ 311 billion in annual sales with over 30% industry wise annual growth percentage (Business Insider Australia, 2018).
Along with multinational retailers, that are pressurising local businesses with advanced business practices, this disruption is majorly caused by the changing consumer buying behaviour. With the consumer becoming more tech savvy, cosmopolitan and wants constant enhancement in the user experience, Amazon is set to replicate its success in the Australian market as well, yet the future lies with the fact that Amazon needs to display agility in their business practices, a well formulated Omni channel approach and take into account the changes in the consumer household fundamental economies and buying patterns across multiple product categories for its continued success in the Australian retail industry (KPMG, 2018).
c. Company background
Before entering the Australian online retail industry in December 2017 virtually dominated every market, it chose to enter with its perfect combination of product choice, price and speed. Amazon, which started as a bookstore, has always focussed on providing the largest pool of products to its customers while continuously reducing the prices, as part of its global strategy. However, its efforts in the overseas markets still long to see the massive success the company generated in the United States (KPMG, 2018). While the company faces intensified competition in the global markets from the local online commerce players, its strategy of moving closer to the customer faces even tougher competition from the well-established Australian retail chains and highly penetrated small retailers in their respective areas.
d. Marketing Analysis
i. Nature of Amazon Australia’s marketing strategies since its inception
As stated by Kalia, Law and Arora (2018), the online retail channel has surely been the cause of large-scale disruption in the retail industry as a whole and Amazon has remain the pioneer of this disruption. With its foray in the Australian market, Amazon aimed to increase the low online retail-shopping share in Australia, which stands at roughly 10% of the total sales. The strategy had impediments like the highly spread out population of Australia and absence of proper inland transportation services, hampering the promise of fast and easy availability of products to the masses, which has been the primary concern of other online retailers in the Australian market for years (ABC News, 2018).
As mentioned by Verhoef, Kannan, and Inman (2015), the key to success in retail in the changing global scenario lies in understanding what the customer wants and working backwards from thereon, which is exactly what amazon Australia seemed to work on in its early days on inception. With a fulfilled centre just outside Melbourne and head office in Sydney, the first part of strategy was to get the local sellers on board as part of the “Amazon fulfilment program”, where small retailers make use of Amazon’s end-to-end services including listing the products on its website, packaging and eventually shipping to the respective customers....