Different companies have different marketing concepts. Marketing is known as managing gainful customer relationships such as attracting new customers and keeping current customers by giving satisfactions. Amazon.com is one of the famous websites in the e-commerce world today. It has a strong competitive advantage. However, there are certain views of conducting business over the internet which creates difficulties and the demand of marketing planning as with many other retailers. Amazon.com is what started as a world's biggest bookstore and become a world's biggest anything store. It has guessed into many areas to increase profitability and enhance its products and services with up-to-date goods. Amazon started out as an online bookstore, constantly making news with the number of titles it offered for sale. In the late 1990s, Amazon had more than four million titles after adding CDs, videos, DVDs and games. It continued to add new lines of business including toys, consumer electronics, software, power tools, home improvement products and online auctions (Haines, 1998).
As the title of article "Amazon is selling designs of its own", amazon.com is trying to expand its private-label business in a bid to diversify away from its online bookstore roots and become more like a general retailer. Moreover, Amazon has added its own house wares, such as steamers, frying pans and chopping blocks after starting with private-label patio furniture in 2004. (Geoffrey A. Flower, The Wall Street Journal, 2009). Amazon doesn't say what percentage of its $19 billion in annual sales are from its private-label business, but it already sells more than 1,000 products that are manufactured at its request. While that's a small number compared with the millions of other listings on the site, it underscores how far the company has moved beyond books, CDs and DVDs. For the first time ever, Amazon's second-quarter North American sales of "general merchandise" -- which includes everything from patio furniture to TVs -- were larger than its sales of media, such as books, movies and videogames. (Geoffrey A. Flower, The Wall Street Journal, 2009. par.7) Private labels are popular with many traditional retailers because they can provide higher profit margins by cutting out the middleman in the supply chain. Some, such as Best Buy Co., have reported a big boost in private-label sales during the recession as consumer's trade down. But online-only retailers have been slower to adopt private-label brands because they lack the expertise to design products, and lack a physical store presence to introduce a new brand. (Geoffrey A. Flower, The Wall Street Journal, 2009 par.15) Zappos.com Inc., recently acquired by Amazon, launched private-label products in 2003, and they now account for about 5% of the company's $1 billion in gross merchandise volume. The company sells 2,500 different products across 10 in-house brand names... (Geoffrey A. Flower, The Wall Street Journal, 2009 par.16) Amazon says that many of the private-label goods that it offers come from suppliers who also sell branded goods through the site. "They view this as a natural extension of their business models," the company says. (Geoffrey A. Flower, The Wall Street Journal, 2009 par.19) Amazon's latest private-label product is that $24.99 Pinzon bamboo cutting board and being sold as Amazon's own kitchen products on its website. It features two surfaces, one flat and the other curved. A curved blade, designed for chopping herbs, is stored inside the block. (Geoffrey A. Flower, The Wall Street Journal, 2009)
The vision of Amazon.com is to "restlessly focus on customer experience by offering our customers low prices, convenience and a wide selection of merchandise" (Chaffey, Ellis-Chadwick, Johnston, Mayer, 2006). Information system is used by amazon.com to collect data in three ways. It collects tactical data, operational data and strategic data (a diagram of this data can be found in figure 9.6 of 'Internet Marketing' (Third Edition) by Chaffey, Johnston, Ellis-Chadwick and Mayer). It is integrated to help the company make the decisions once data is collected. Operational data is the basic data which is collected from day by day operations. Amazon.com collects this data from automatic program which is built into the website. This program collects data such as number of clicks per visitor, conversion rates and every other thing the customers make on the website. Tactical data is collected from the operational data. This type of data helps to group into different segments. In everyday operations, the strategic data is used. Amazon.com uses it to decide which products are profitable and which products should be discounted. In theory, Catskill's sales and marketing director says, Amazon could "hamper competition" on its site with stronger push into private labels. But "thankfully there are plenty of dot-com's selling competitive products that I don't think it will really have a major impact." (Geoffrey A. Fowler, The Wall Street Journal, 2009) Overall, the corporate goals of low prices, convenience and a wide selection of merchandise are being met. The marketing team is also doing an exceptional job of reaching, growing and retaining customers. Amazon's excellent service and customer focus is seen in their American Customer Satisfaction Index, a score of 88, giving them the highest customer satisfaction score ever recorded in a service industry (Chaffey et al, 2006).
The Wall Street Journal 18th September 2009 Geoffrey A. Flower
Chaffey, Ellis-Chadwick, Johnston, and Mayer, 2006. Internet Marketing. Harlow: Prentice Hall.
Haines, Thomas. (1998). "Amazon.com Sales Grow While Loss Widens," Seattle Times.