Company Overview

Amazon.com is a multinational tech company that focuses on e-commerce, cloud computing, digital
streaming, and AI. It was founded in 1994 by Jeff Bezos and began as an online bookstore that has
developed into a multi-service/product e-commerce platform. Amazon is best known for offering
millions of products at the best price available. Currently, the company strives to be an innovative
force and explore new ideas to allow them to expand into different untapped markets. The core of
the company is strong leadership principles. This involves being owners of the short-term sacrifices
for long-term results and learning to be curious by always self-improving themselves and others
around them.

Mission and vision

Overall Amazon has an extremely effective mission and vision statements. Amazon pushes itself
every day to make sure these statements are fulfilled which has led to the high success of the
company. The current mission statement of “We strive to offer our customers the lowest possible
prices, the best available selection, and the utmost convenience.” (Amazon's global career site)
touches on the basic wants and needs of its customer base and covers all of their target markets. In
a high context overview the mission statement proves that Amazon provides varied product
selection, competitive pricing, and convenience.

Amazon follows up their mission statement with an equally strong vision statement. “Our mission is
to be Earth's most customer-centric company. This is what unites Amazonians across teams and
geographies as we are all striving to delight our customers and make their lives easier, one
innovative product, service, and idea at a time.” (Amazon's global career site) This vision statement
addresses Amazon’s biggest stakeholder, its customers, stating they want to be Earth's most
customer-centric company. They state the term “Amazonians” that creates a tribe that their
customers are a part of and instils a feeling of belonging. The vision statement clearly points out
Amazon’s goal of becoming the best company in the e commerce industry. It prioritizes 5 customers,
product selection, and the large reach out into the world markets. Both the mission and vision
statements hold longevity and the pursuit for the best for their customers.

The Marketing Strategy of Amazon

Amazon marketing strategy relies on the following four pillars:

1. Offering the widest range of products. The largest internet retailer in the world by revenue
offers hundreds of millions of products. The majority, 58% of products offered in Amazon
platform are from third-party sellers.
2. Using customer-friendly interface. The tech giant has an advanced interface that integrates
personalized recommendations and recent browsing history, among others.
3. Scaling easily from small to large. The e-commerce and cloud computing company has
experience and competence in scaling from small to large. This factor plays in instrumental
role exploring new business segments.
4. Exploiting affiliate products and resources. Up to date, the tech giant has taken a full
advantage of affiliate products and resources to contribute to the bottom line of the
business.

Amazon’s marketing mix (or 4Ps) is created to take advantage of its e-commerce operations. Its four
components enable international growth and competitiveness while Amazon.com innovates its
other services.
Popularly known as the “Marketing Mix,” Amazon analyzes a company or a brand that covers 4Ps,
which include:

1. Product

Though Amazon began its e-commerce journey with just books, today, it sells millions of products –
grouped under various categories.

The best-selling product categories include shoes, jewellery, clothing, toys, home & kitchen
appliances, electronics, books, outdoors, sports, car accessories, fine arts, etc.

Though Amazon offers items from independent businesses and retailers, it also promotes its private
label products, more commonly known as Amazon Basics.

As this e-commerce giant continues to expand, more products are appended to its inventory
regularly. So, diversity in products is the key reason why it stays ahead of its competitors.

2. Price

A company can use various pricing strategies to sell its products. Here are a few to make a note of:

 Cost-plus pricing
 Value pricing
 Competitor pricing
 Price discrimination

Amazon typically utilizes a competitive pricing strategy where it consistently assesses its
competitors’ price lists, serving as a base for its product pricing. It ensures that its prices are kept low
while giving customers a broad range of selection.

3. Place

In recent years, Amazon has expanded its online retail business in different parts of the world. This
presence has made it convenient for customers across the globe to have access to millions of
products.

Even shipments from the farthest locations reach to you in a minimum time with Amazon Global. Its
fulfilment centres and fast delivery time are yet other great reasons for its success.

4. Promotion

Promotion is all about communication and Amazon understands this. It communicates with potential
buyers and customers through ads with the help of various tools.

For example, it executes regular ad campaigns on websites, newspapers, television, billboards, and
social media. It also promotes via Amazon affiliate websites. Besides these, Amazon frequently offers
discounts and sales promotions, which is a great way of branding.

Revenue model of Amazon

With a market capital of $1.7 trillion, Amazon is currently the most valuable retailer in the world. By
the end of 2020, the company will account 4.6% of the total US retail sales. The online stores of
Amazon bring in high margins, while the other parts of the Amazon business model, like Amazon
advertising services, Amazon Prime and Amazon AWS run with much higher margins.

Thus, Amazon’s online stores are the foundation for those other businesses that make the overall
company more profitable in the long run. The product sales from Amazon website generated $163
billion from 2019 to 2020. A significant day for online sales is the Prime Day, which has grown into a
major shopping event comparable to Black Friday and Cyber Monday.

Here is the breakdown of the Amazon revenue mix:

1. Online stores – Includes product sales and digital media content where we record revenue
gross. Amazon leverage our retail infrastructure to offer a wide selection of consumable and
durable goods that includes media products available in both a physical and digital format,
such as books, videos, games, music and software. The digital product subscriptions that
provide unlimited viewing or usage rights are included in the Subscription services.
2. Physical stores – This includes product sales where our customers physically select items in a
store. The sales from a customer who order goods online for delivery or pick up at our
physical stores are included in online stores.
3. Third party seller services – The commissions and any related fulfilment and shipping fees
and other third-party seller services, the company benefits a lot of revenue from third party
sellers.
4. Subscriptions – Amazon Prime memberships gives out annual and monthly fees. Amazon
also gives out subscription services for audiobook, digital video services, digital music,
eBooks and other non-AWS services. Amazon’s standard Prime subscription rate is $119 per
year, which would translate into revenue of more than $17.8 billion, although the company
offers discounted memberships for students and others.
5. AWS – The AWS includes global sales of computing, storage, database and other services.
6. Other services – These can include sales of advertising services, as well as sales related to
our other service offerings.

Conclusion

Amazon makes the lowest prices possible by leveraging technology, in such a way that it does not
have to stock inventory of any kind. While other stores have the burden of spending money on
stocking inventory, Amazon can afford to cut the competition on this. It is a mix of a retail company
as well as a technology company. Unlike retail companies, Amazon seldom hires stock clerks and
floor managers and has employees with high technological skills.