Running Head: WALMART’S STUDY OF AMAZON’S DISRUPTIVE TECHNOLOGY 1
Part 2: Marketing plant
Komal Rana (1918691)
Amit Saini (1919417)
Shaina Gopal (1916455)
MRKT 201: Marketing Management
University Canada West
Dr. Bearss, Erica
September 6, 2021
For a company to be successful, it has to identify its target market. From the target market identified, a company must come up with consumer segments for it to make the most sales possible. Consumer segmentation makes it possible for companies to design effective marketing strategies that yield the highest returns. Amazon has four consumer segments for its products.
The first consumer segmentation that Amazon employees is demographic segmentation. Over the company’s years of existence, Amazon has identified that the youth are the most likely people to buy its products. Amazon primarily target individuals aged between twenty-five and fifty years of age. The identified target customers have the financial capability to purchase Amazon’s products and services. Amazon’s demographic segmentation is in line with the types of products and services that Amazon offers. According to Blackwood (2021), almost half of online buyers, 45%, belong to the age group of individuals who are between thirty-five and forty-nine years.
Amazon’s second segment is geographic segmentation. Amazon primarily sells its products and services in developed nations. Amazon has a huge customer base in the United States, Canada and Europe (Pallant, Sands & Karpen, 2020). Developed nations are more receptive of digital sales over real world sales. Furthermore, developed nations have the infrastructure and capability to support online sales. Amazon targets developed nations over developing nations as they consider developed nations easier targets and areas that are likely to bring more profit. In developed nations, Amazon targets urban centers over rural areas; urban areas are more receptive of the digital space. By targeting developed nations, Amazon gets to have an international appeal. Nations that are not classified as developed are more likely to purchase amazon’s services and products if they are endorsed or accepted by developed nations compared to third world nations.
The third consumer segmentation for Amazon Inc. is psychographic segmentation. Over the years, Amazon has identified that buyers are more aware of customer satisfaction and relationship management unlike before. Buyers are likely to make repeat purchases if they receive excellent customer service and if their experiences are friendly. In targeting its customers, Amazon has come up with features in its platform that supports customer loyalty, and grouping of products and services according to preferences, and identification of items that are in high demand. Consequentially Amazon has products that are fast moving and are technology based and this is because majority of people that visit the company’s website like innovations.
The last consumer segment that Amazon has is the situational segment. Majority of purchases made to amazon are convenience purchases. Amazon offers an opportunity for customers to order their products online and have their orders delivered to where they are or where they desire the products to be delivered (Jindal et al., 2021). In addition, Amazon has customers that are always looking for deals; products at significantly lower prices than conventional shops. Furthermore, Amazon Inc. has customers who are interested in new categories. Consequentially, the company has a huge customer base on individuals that purchase their products based on diverse situations. As a result, the company has adopted several marketing schemes targeting situational customers. Some of the strategies adopted are having flash sales, introduction of new categories, offering products cheaper than majority of physical shops and retailers.
Of all the customer segments, the segments that I would target is the demographic customer segment. Amazon’s target audience is individuals aged between twenty-five and fifty years of age. The targeted population has financial capability and the time to enjoy the products and services it gets from Amazon. In addition, the target group are the largest consumers of digital platforms and online products. Social media platforms such as Facebook, Instagram, YouTube report that their primary users are individuals between twenty and forty-five years of age. Furthermore, the younger generation is more receptive of technology than the older generation.
By targeting the younger generation, Amazon is likely to have a huge customer base and as a result have high revenue collections from its sales. Approximately 1.9 billion people in the world are youth (United Nations, 2019). Tapping into such a marketing can grow the company’s brand and yield reliable returns. Of all the ages, the ages that are likely to purchase Amazon’s products and services are the younger generation; young adults and middle aged adults. The identified age groups are the most receptive to technology. Considering that Amazon operates in the digital space, the company needs to continuously target those that are receptive of digital transformation and innovation all together.
Amazon needs to continuously grow its customer base amongst individuals aged between twenty-five and fifty years. Such individuals love convenience and for that reason are more likely to employ all the features of the company’s services. The younger generation does not like spending time and energy visiting mortar and brick stores; they believe that the energy and time should be spend on other things such as making new connects and visiting new places. By offering an online platform, Amazon offers the younger generation the capability to do shopping at the comfort of their homes and offices. By also offering delivery services, Amazon offers convenience that the younger generation desires. Furthermore, by offering convenience, Amazon redirects a lot of customer traffic to its platforms and considerably increases its chances of making more profit.
Amazon has the likely to make huge profits by targeting the younger generation globally. In the last twenty years, the world has become more intertwined than it was before. Social media platforms have made it easier for people to maintain relationships regardless of distance constraints (Marlowe, Bartley & Collins, 2017). Furthermore, it has become significantly easier for a company to acquire a huge customer base. Through good reviews, Amazon can find itself as the leading household supplier globally. By leveraging social media platforms to reach its target consumers, Amazon can grow its customer base, improve its brand awareness and make high returns in the process.
The company can target the younger generation by not only using channels that speak to them most but by also speaking the language that appeals to them. According to Critical (2016), the younger generation is keen on healthy living and saving the planet. By offering products and services that are in line with healthy living and environment preservation, Amazon can increase its customer base and increase its profit margins. The younger population is the most likely age group that can bring in the most profits for the giant retailer.
A reliable positioning statement for Amazon Inc. can read “our mission is to offer convenience to people all over the world through partnering with environmental conscience partners in the delivery of timely and needed products and services.
Blackwood. A (2021). Amazon’s approach to audience segmentation. Retrieved from https://blog.iotechnologies.com/as-amazon/
Critical, V. (2016). The everything guide to Generation Z. Retrieved from https://www. visioncritical. com/resources/the-everything-guide-to-gen-z.
Jindal, R. P., Gauri, D. K., Li, W., & Ma, Y. (2021). Omnichannel battle between Amazon and Walmart: Is the focus on delivery the best strategy? Journal of business research, 122, 270-280.
Marlowe, J. M., Bartley, A., & Collins, F. (2017). Digital belongings: The intersections of social cohesion, connectivity and digital media. Ethnicities, 17(1), 85-102.
Pallant, J., Sands, S., & Karpen, I. (2020). Product customization: A profile of consumer demand. Journal of Retailing and Consumer Services, 54, 102030.
United Nations, (2019). International Youth Day, 12 August 2019. Retrieved from https://www.un.org/development/desa/youth/wp-content/uploads/sites/21/2019/08/WYP2019_10-Key-Messages_GZ_8AUG19.pdf