Marketing Writing Assignment - Amazon Echo Dot

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Running head: STRATEGIC MARKETING FOR AMAZON ECHO DOT 1

Strategic Marketing for Amazon Echo Dot

Kyami Clarke

University of Maryland University College

Writing Assignment Part 1

MRKT 310 7983 Marketing Principles (2188)

Professor Melissa Daston

Fall 2018

STRATEGIC MARKETING FOR AMAZON ECHO DOT 2

Strategic Marketing for Amazon Echo Dot

The Amazon company’s reputation for attracting and retaining loyal consumers comes

from their customer-centric attitude and their ability to be everything their customers need, when

they need it, all available in one convenient place. Amazon’s 2017 fourth-quarter revenue was

listed at $117.9 billion. Their revenue from third to fourth quarter increased by 38% mainly due

to the expansion to the Echo line (Enright, 2018). The Amazon Fire TV Stick and Echo Dot are

the company’s best-selling products. In such a competitive market, how is Amazon and the

Amazon Echo Dot so successful?

Creating Value for Customers

One of the four major components of marketing, as defined by the American Marketing

Association, is creating value for customers. The creation component is the first stage, which is

where a business collaborates with suppliers and customers to create an offering of value

(Chapter 1: What Is Marketing?, 2012). The term value does not merely refer to product pricing

or a monetary amount. In the context of marketing, value equates to the benefits the consumer

receives over the hassle and costs of the product.

The Echo Dot is Amazon’s most popular smart home product. The Echo Dot utilizes

Artificial Intelligence (AI) technology, Wi-Fi, and Bluetooth to allow customers to ask questions,

make calls, check the news, play music, and control their home with smart home devices.

Automatically bundled with the Echo Dot is the cloud-based Alexa virtual assistant service, also

developed by Amazon. Plus, it can sync with an infinite number of other external products and

suppliers. A few of their significant partnerships includes other popular brands such as Google,

Nest, Phillips, and the Marriot (DeGeurin, 2018). Each of these characteristics adds value to the

product and benefits the customers.

STRATEGIC MARKETING FOR AMAZON ECHO DOT 3

Value plays the central role in the marketing plan. Even though the customer ultimately

determines the value, a business creates and enhances the value to their product or offerings by

understanding their target audience and customer needs (Chapter 1: What Is Marketing?,

2012).The Amazon Echo Dot (2nd generation) has 119,335 customer reviews. 81% of those

reviews are 4 stars or higher (Amazon Company, n.d.). Amazon has shown that they have a great

understanding of their customer needs. Their insight is gained through customer feedback and

incorporating that in their product designs and customer service model.

Customers Role in the Company’s Strategic Plan

It is essential for a company to develop a strategic plan, which will lead to their

marketing strategy. An integral part of a strategic marketing plan is the customers, their needs,

and their overall satisfaction (Chapter 2: Strategic Planning , 2012). Amazon’s mission

statement is “to be Earth’s most customer-centric company, where customers can find and

discover anything they might want to buy online, and endeavours to offer its customers the

lowest possible prices” (Amazon.com, Inc., 2018). As reflected in Amazon’s mission statement,

all three components are incorporated in their innovative product designs and service models.

Amazon’s number one leadership principle is customer obsession (Amazon.com, Inc.,

2018). They start with customer input and continue to include the customer in each tier of their

business process, from corporate to functional. A business with this level of customer focus does

not need to make any modifications. In regards to my personal experience with Amazon, I am a

loyal Amazon customer. I have two Amazon Echo Dots, an Amazon Echo, two Amazon Fire

Sticks, a Kindle, and have been an Amazon Prime member for over 10 years. The reason for my

continued use and endorsement is a result of my customer satisfaction and their customer

service. I can unequivocally say the fact that Amazon has ranked number in customer

STRATEGIC MARKETING FOR AMAZON ECHO DOT 4

satisfaction, for the last nine years (Amazon, 2018) is a testament to the validity of their mission

statement.

SWOT Analysis

It necessary for a business to conduct a SWOT analysis. The purpose of a SWOT analysis

is to analyze a company’s strengths, weaknesses, opportunities, and threats (Chapter 2: Strategic

Planning , 2012). The internal factors, for SWOT analysis, are strengths and weaknesses.

Conversely, the external factors are opportunities and threats. Exhibit A below illustrates a

simplified SWOT analysis for the Amazon Echo Dot (Greenspan, 2017).

Exhibit A. Amazon Echo Dot SWOT Analysis

Strength’s Weaknesses • Pricing • Mobile Integration • Design • Alexa Contextual Speech Recognition • Supply Chain (Amazon) • Customer Loyalty

Opportunities Threats • Sound System/Sound Distribution • Cybercrimes • Diversify Market • Heavy Competition

Some of the strengths associated with the Amazon Echo Dot are the product design, size,

cost, supply chain. Although, the greatest strength is the company’s customer base and loyalty.

Alternatively, the Echo Dot’s weaknesses are its lack of mobile integration (i.e. Apple HomePod)

and Alexa’s issues with understanding contextual speech patterns (i.e. Google Home)(Greenspan,

2017). There are a couple of key external factors, opportunities and threats, that impact the Echo

Dot. The two opportunities would be the sound enhancements and distribution of the sound

system and marketplace diversification. The two threats are heavy competition, cybercrimes.

STRATEGIC MARKETING FOR AMAZON ECHO DOT 5

Competitive Analysis

Amazon has a few smart home technology competitors that are available to consumers.

Two of the major contenders on the market are Google Home Mini and Apple HomePod. The

Google Home Mini has almost all the same features and capabilities as the Echo and integrates

with Android, but lacks the level of customer loyalty and satisfaction. The newest competitor,

Apple HomePod, has strong brand awareness, similar smart speaker features with a virtual

assistant (Siri), and integrates with Apple products. Mobile integration will be a significant

distinction from the Echo Dot, which is not affiliated or integrated with an outside mobile device

unless you install an app.

A smart home product would be a high-involvement product because of the widespread

problem solving involved. With products that are complex, high risk, or high cost, a customer

will spend more time on actual research and reviews. (Chapter 3: Consumer Behavior: How

People Make Buying Decisions, 2012). They will examine the specific brand of interest, see

what others had to say, and compare it to similar products, available by other companies. When it

comes to choosing a smart home product, there are five factors that a customer may take into

consideration. Those five factors in the buying decision would be the product price, technical

specifications, partnerships/integration, mobile integration, and virtual assistance. Exhibit B

provides a side-by-side comparison of the five deciding factors for each smart home product.

Exhibit B. Side-by-Side Product Comparison

Amazon Echo Dot Google Home Mini Apple’s HomePod (Amazon, 2018) (Google, 2018) (Apple, 2018) Product Factors: Amazon Prime - $ Google Account - Free Apple Account - Free Price $39.99 $49.99 $349.00 Technical Specifications (design, audio, features)

Fire OS 6 color options 32mmx84mmx84mm 5.7 oz 1.1 single speaker

Android OS 3 color options 98mm x 42mm 0.38lbs

Apple A8 Chip OS 2 color options 172mm x 142mm 5.5lbs

STRATEGIC MARKETING FOR AMAZON ECHO DOT 6

Bluetooth WiFi 3.5 stereo output A2DP support OS, Android, & IOS device compatible Micro USB port

Partnerships/ Integration

Amazon services, subscription, and devices (Kindle, Firestick, FireTV) Fire TV, Google Calendar, Spotify, Pandora, iHeartRadio, TuneIn, others, Nest, Ecobee, Honeywell, SmartLocks SmartThings, Wink, Insteon, Belkin WeMo, Philips Hue, Lifx, Big Ass Fans, IFTTT, Control4, Crestron, Appliances, Garage Door openers, other devices and apps via 5000 skills (Lyft, Dominions, ADT)

Chromecast, Google Play, Google calendar Music, YouTube Music, Spotify, Pandora, TuneIn, Nest, SmartThings, Philips Hue, Belkin WeMo, Honeywell, IFTTT

Airplay, Apple Music, Beats 1, Philips Hue, Logitech, Honewell, iHome products, Belkin, Ecobee, Idevices,

Mobile Integration No, via Alexa app only Yes Yes Virtual Assistant Yes – Alexa Yes – Google Yes - Siri

Subsequently, you will find Exhibit C, the competitive analysis, depicts the five factors

aggregated product worth. Based on the results of the competitive analysis the Amazon Echo Dot

has the highest overall score, Google Home is second, and Apple’s HomePod last. The most

significant influence on Apples low score is the price comparison. Amazon’s lowest influence is

mobile integration.

Exhibit C. Amazon Echo Dot Competitive Analysis Amazon Echo Dot Google Home Mini Apple HomePod Price 5 3 1 Technical Specifications 3 4 5 Partnerships/Integration 5 2 1 Mobile Integration 3 4 4 Virtual Assistant 4 4 3

Total: 20 17 14

STRATEGIC MARKETING FOR AMAZON ECHO DOT 7

Even though all three products have a lot of the same or similar technical specification,

the slight differences make a difference. According to an article published by the AMA, the

voice-control speaker market is dominated by Amazon, at 66.6%, Google a distant second, at

29.4%, and Apple does not even register on the scale yet (Steimer & Conick, 2018).

Customer Empowerment

Jeff Bezos, Founder and CEO of Amazon, has been quoted saying, “We see our

customers as invited guests to a party, and we are the hosts. It’s our job every day to make every

important aspect of the customer experience a little bit better.” Customer empowerment is all

about establishing, encouraging, and enabling customer feedback (Chapter 14: Customer

Satisfaction, Loyalty, and Empowerment, 2012). Customer purchase reviews was a traditional

source for customer feedback, but it was limited. Amazon took this to the next level, by being

one of the first e-retailers to embrace customer review transparency, by displaying customer

feedback. Transparent customer feedback, holds manufacturers and vendors accountable for

product quality and other customers gain valuable product insight before purchasing.

Now businesses are taking a 360 degree approach to customer empowerment, by

including customers in each level of the business from product developments to asking for input

on marketing campaigns, or social networking and inviting loyal customers to try new products

(Chapter 14: Customer Satisfaction, Loyalty, and Empowerment, 2012). The Amazon Echo Dot

was initially an invite-only product. The invitation was sent to select Amazon Prime customer, to

try out the product first and give input before it was officially released. I was one of those lucky

customers twice, once for the Amazon Echo Dot and again for the Amazon Echo Look. The

Washington Post established a readers review panel for input on new cartoonist for the Sunday

paper. One of the comics I reviewed, The Boondocks, made it into the paper and eventually

STRATEGIC MARKETING FOR AMAZON ECHO DOT 8

turned into a television series. 10 years later, I still subscribe to the Washington Post and read the

comics every Sunday.

Customer Satisfaction

Amazon’s sole focus is on customer satisfaction. This is mirrored in their mission

statement, “Customer Centric”. According to a study conducted by Salesforce, “75% of

customers want a consistent customer experience, whether they engage with a company by

phone, online, on social media or in the store (Customer Expectations Hit All-Time Highs, n.d.).

Due to the rapid technological advancements, customers expect more than a product; they expect

an experience. Amazon delivers and exceeds their competitors when it comes to customer

satisfaction. For example, the success behind their Echo Dot is that it improves their customers

lives and makes them more comfortable. The Amazon brand is known for giving customers what

they need and delivering what they expect from their product. The top customer expectations are

seamless engagements, personalization, innovation, and data protection. 69% of business and

consumer expect an Amazon-like buying experience (Customer Expectations Hit All-Time

Highs, n.d.). Amazon offers a superior customer experience, whether it is retail services, through

social media, or dealing with customer inquiries. Furthermore, Amazon has greater presence,

than its two main competitors, on almost all the major social media channels, as illustrated in

Exhibit D below.

Exhibit D – Social Media Presence

Followers Amazon Echo Google Home Mini Apple HomePod

Facebook • Amazon – 28.3m • Amazon Echo – 595k

• Google – 26.6m • Google Home – n/a

• Apple – 11.6m • Apple HomePod – n/a

Instagram • Amazon – 1.5m • Amazon Echo – n/a

• Google – 7.8m • Google Home – n/a

• Apple – 9.4 • Apple HomePod – n/a

Twitter

• Amazon – 2.8m • Amazon Help – 194k • Amazon Echo – 119k • Developers – 39.7k

• Google – 20.7m • Google Home – n/a • Developers – 2.18m

• Apple – 2.41m • Apple HomePod – n/a • Apple Support – 970k

STRATEGIC MARKETING FOR AMAZON ECHO DOT 9

Pinterest • Amazon – 75.5m • Amazon Echo – n/a

• Google – 82.8m • Google Home – n/a

• Apple – n/a • Apple HomePod – n/a

YouTube • Amazon – 348k • Amazon Echo – 26k

• Google – 6.7m • Google Home – n/a

• Apple – 7.7m • Apple HomePod – n/a

Amazon tries to address customer questions or issues before they become complaints or

require human intervention. They do this by providing easily accessible customer data, a help

section, and an almost entirely automated return policy. If it does come to the point that human

involvement is necessary, there are a number avenues a customer can choose from to deal with a

situation (Chakrawarty, 2017). I have dealt with their customer service department a few times

over the years. Each experience has been quick and easily resolved, regardless of the complexity.

Customer Relationship Management

Measuring a customer’s lifetime value has become easier thanks to technology. The most

significant opportunity to capitalize on the customer experience is through Customer

Relationship Management (CRM). It enables a business to market to multiple generations using

individual details and data analytics (Steimer & Conick, 2018). CRM tracks customer

preferences and purchase patterns and uses the information gained from past behaviours to make

recommendations for the future. Amazon’s CRM strategy has been unparalleled for the better

part of 20 years. You only have to look at the countless loyal customers, despite a competitive e-

commerce industry, to tell you that critical aspect to their success is their well-managed and

efficient way of CRM.

Amazon’s ability to successfully manage their customer relations across the world,

without even a brick and mortar store is a phenomenon. This phenomenon is commonly referred

to as the “Amazon Effect”. Between Amazon’s easy to use interfaces, product recommendations,

and one-click ordering these are just a few of the features that make customer interaction smooth,

quick, and simple (Chakrawarty, 2017). Their intuitive use of customer data ensures each

STRATEGIC MARKETING FOR AMAZON ECHO DOT 10

customers experience is personalized and valued. Amazon’s CRM is the stimulus for their high

customer retention and attraction rate. Amazon organizes their CRM into 5 approaches: data

collection, personal data storage, recommendations, customer support, and the Kindle

marketplace. Combine these approaches, and you have an accessible, simple, natural

marketplace (Chakrawarty, 2017). This allows Amazon to market their products and services,

with minimum customer actions, but maximum customer engagement.

Customer Privacy

Research shows 82% of Americans find artificial intelligent (AI) assistants helpful

(Steimer & Conick, 2018). Even though customers want humanized technology, this type pf

technology generates concerns over customer privacy and security. Amazon’s Echo Dot has be

subject to customer concerns, over their product’s network connected microphone. Allegations of

Alexa spying on homes and third party applications accessing the audio information. This issue

plagues not only the Echo Dot, but also Google Home, and HomePod. It is important to note that

each of these devices retains digital recordings and, if subpoenaed, are required to provide these

recordings to law enforcement, government agencies, or other entities (Amazon.com, Inc., 2018).

Although Amazon has come out stating audio is not collected unless the key command has

activated the device, the Echo Dot does have the capability of recording at any time. Also, the

Echo includes location-based services, which means Amazon and third-party applications have

access to your location information. Each of these privacy concerns is addressed on the Amazon

website. I reviewed Amazon’s privacy notice specifically for Alexa, last updated on May 23,

2018. The notice explains how personal customer information is gathered and what they do with

this information. It contains customer choices and instructions for modifying your settings for the

collection of information and individual marketing campaigns. More than that, it includes steps

STRATEGIC MARKETING FOR AMAZON ECHO DOT 11

customers can take to secure their Alexa device and protect their privacy. The main Amazon

website also has their own privacy notice, last updated August 29, 2017, providing similar

information as the Alexa privacy policy. Both privacy notices state that they use firewall

protection against domestic and foreign hacking (Amazon.com, Inc, 2017). For all the headlines

surrounding Alexa spying, I have yet to hear about a security breach or customer information

being hacked. It appears the business stands behind their privacy notices, which reassures their

customers that their information will be protected at all costs.

STRATEGIC MARKETING FOR AMAZON ECHO DOT 12

Bibliography

Amazon. (2018). Amazon Echo Dot. Retrieved November 1, 2018, from Amazon:

https://www.amazon.com/Amazon-Echo-Dot-Portable-Bluetooth-Speaker-with-Alexa-

Black/dp/B01DFKC2SO

Amazon. (2018). Thank You for Voting Amazon #1. Retrieved October 30, 2018, from Amazon:

https://www.amazon.com/gp/feature.html?ie=UTF8&docId=1001924291

Amazon Company. (n.d.). Amazon Echo Dot (2nd Generation). Retrieved October 29, 2018,

from Amazon: https://www.amazon.com/Amazon-Echo-Dot-Portable-Bluetooth-Speaker-

with-Alexa-Black/dp/B01DFKC2SO

Amazon.com, Inc. (2017, August 29). Amazon Privacy Notice. Retrieved November 1, 2018,

from Amazon: https://www.amazon.com/gp/help/customer/display.html?nodeId=468496

Amazon.com, Inc. (2018, May 23). Amazon Internet Privacy Notice. Retrieved November 1,

2018, from Alexa: https://www.alexa.com/help/privacy

Amazon.com, Inc. (2018). Earth's most customer-centric company. Retrieved October 30, 2018,

from Amazon Jobs: https://www.amazon.jobs/en/working/working-amazon

Amazon.com, Inc. (2018). Leadership Principles. Retrieved October 30, 2018, from Amazon

Jobs: https://www.amazon.jobs/en/principles

Apple. (2018). Apple HomePod. Retrieved November 1, 2018, from Apple:

https://www.apple.com/homepod/

Chakrawarty, A. (2017, December 13). AMAZON’S CUSTOMER RELATIONSHIP

MANAGEMENT STRATEGY. Retrieved November 3, 2018, from LinkedIn Pulse:

https://www.linkedin.com/pulse/amazons-customer-relationship-management-strategy-

atul-chakrawarty/

STRATEGIC MARKETING FOR AMAZON ECHO DOT 13

Chapter 1: What Is Marketing? (2012). In Principles of Marketing (pp. 1-28). Saylor Academy.

Chapter 14: Customer Satisfaction, Loyalty, and Empowerment. (2012). In Prinicples of

Marketing (pp. 443-483). Saylor Academy.

Chapter 2: Strategic Planning . (2012). In Principles of Marketing (pp. 29-62). Saylor Academy.

Chapter 3: Consumer Behavior: How People Make Buying Decisions. (2012). In Principles of

Marketing (pp. 62-98). Saylor Academy.

Customer Expectations Hit All-Time Highs. (n.d.). Retrieved November 3, 2018, from

SalesForce Research: https://www.salesforce.com/research/customer-expectations/

DeGeurin, M. (2018, June 19). Your Next Hotel Concierge Is Amazon’s Alexa. Retrieved October

29, 2018, from New York Magazine: http://nymag.com/intelligencer/smarthome/amazon-

partners-with-hotels-launches-alexa-for-hospitality-marriott.html

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Retrieved October 29, 2018, from Digital Commerce 360:

https://www.digitalcommerce360.com/2018/02/01/amazon-grows-revenue-31-2017-

profit-tops-3-billion/

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https://store.google.com/us/product/google_home_mini?hl=en-US

Greenspan, R. (2017, February 20). Amazon.com inc. swot analysis & recommendations.

Retrieved October 30, 2018, from Panmore: http://panmore.com/amazon-com-inc-swot-

analysis-recommendations

Steimer, S., & Conick, H. (2018, August 30). What does the future of customer experience look

like? Retrieved November 1, 2018, from American Marketing Association:

STRATEGIC MARKETING FOR AMAZON ECHO DOT 14

https://www.ama.org/publications/MarketingNews/Pages/what-does-future-customer-

experience-look-like.aspx

Vigliarolo, B. (2017). Amazon Echo: The smart person's guide. Retrieved October 31, 2018,

from TechRepublic: https://www.techrepublic.com/article/amazon-echo-the-smart-

persons-guide/

Running head: CONSUMER BEHAVIOR AND MARKET SEGMENTATION 1

Consumer Behavior and Market Segmentation for Amazon Echo Dot

Kyami Clarke

University of Maryland University College

Writing Assignment Part 2

MRKT 310 7983 Marketing Principles (2188)

Professor Melissa Daston

Fall 2018

CONSUMER BEHAVIOR AND MARKET SEGMENTATION 2

Consumer Behavior and Market Segmentation for Amazon Echo Dot

The Amazon Echo is a brand of Smart Speakers marketed and developed by Amazon. The

device supports music playback, setting alarms, voice interactions, offering real-time information,

and controlling other smart devices. It thus acts as a home automation hub t that control many

activities. The Amazon Echo is a product of Silicon Valley. It is an attempt to increase the product

and the service portfolio of Amazon. Ongoing plans intend to push the product in different global

markets (Steimer & Conick, 2018). The functioning of the device requires an internet connection.

As of November 2018, reports by Amazon point that the device is available in over 39 countries

(Amazon Company, 2018). Amazon has a reputation for creating a massive base of loyal clients.

The adoption of a unique marketing mix contributes to these factors.

Part One: Consumer Behavior

Consumer Behavior Model: Environmental Factors

Different environmental factors influence buyers' decisions. Environmental factors like

social class and social group influences may affect the reception of the Amazon Echo. Social class

refers to a group of society members that share common values and position. Parameters that define

social class include education, income, and occupation. Level of income and exposure levels are

likely to influence the purchase of the product (Steimer et al. 2018). There are chances of recording

higher sales among the middle-income earners than the low-income earners.

On the other hand, social group influences shape consumer relationships or attitudes that

influence purchase decisions. Chances of influencing the consumption behaviors in this setting are

high. They can either reduce or lower the sales levels of the Amazon Echo product.

CONSUMER BEHAVIOR AND MARKET SEGMENTATION 3

Consumer Behavior Model: Consumer Factors

Consumers are keen on quality and pricing of products. When all facts are constant, the

law of demand and supply explain that demand increases with a reduction in price levels. A rise in

price levels will lower the sales levels. Lowering the price of the Amazon Echo will imply that

more buyers can afford the device. The high price may prompt the consumers to look for cheaper

alternatives. Consumers pay keen attention to the quality of the products. Quality improves the

value of money and the utility from the products. A quality product that comes with innovative

features will see an increase in the sales levels.

The third factor concerns the evaluation of the possible alternatives. Consumers tend to

base their purchase decisions on other quality products. They make evaluations in terms of quality,

price and unique features. In such a setting, the consumers will settle for products that offer

maximum utility (Chapter 3: Consumer Behavior: How People Make Buying Decisions, 2012).

The argument rests on the fact that consumers are rational beings and engage in activities that

maximize benefits. Parameters such as price, quality, and promotion may influence the decision

to either purchase the Amazon Echo or go for other products.

Role of Involvement in Consumer Decision-Making

After identifying an ideal product, consumers embark on collecting information relating to

the product. They will consider the price, features, promotions and other factors. Secondly, there

will be a consideration of the possible alternatives as compared to the product. In this case, there

will be efforts to search for products that offer similar services to Amazon Echo. Amazon

participates in the decision making processes by offering an effective marketing mix. Marketing

serves the role of providing the buyers will vital information relating to the products.

CONSUMER BEHAVIOR AND MARKET SEGMENTATION 4

The marketing mix ought to provide details concerning the price, features, promotions,

and places where one can buy the product (Steimer et al. 2018). The case of the Amazon Echo

involves complex buying behavior. The argument rest on the fact that other alternatives offer

similar services to the Amazon Echo. Consumers are thus keen on collecting information about

the existing brands and the information relating to the marketers. The buyers of the Amazon Echo

are likely to have significant knowledge of other brands.

Consumer Decision-Making Process

Any purchase decision follows a series of steps that ensures that the buyer attains maximum

value from the purchase. The first step is problem recognition. The Amazon Echo may contribute

to this step by explaining ways that the features and innovation will impact on the buyer's life. The

second step is information search on the product. Amazon can contribute by making adverts that

highlight the details of the Amazon Echo product. The other step is the evaluation of alternatives

that offer better options for a product. Amazon can ensure there is a highlight of features that are

unique as compared to other products (Amazon Company, 2018).

The fourth step is making the purchase decisions. Amazon needs to highlight places that

the buyers can access the product. Online platforms will play a role in improving the efficiency

levels in the purchase processes. After the fifth step, which is purchasing, is the post-purchase

evaluation. In the last step, Amazon may ensure that they offer effective after sale services to the

clients.

Part Two: Market Segmentation, Targeting, and Positioning

Segmentation

Market segmentation is the move to focus on a specific group. In the case of the Amazon Echo

Dot, Amazon can segment the market by income and age. The age factor will ensure that there is

CONSUMER BEHAVIOR AND MARKET SEGMENTATION 5

a focus on the youths and the corporate sector. The smart interaction technology and music

playbacks readily connect to the young generation. Moreover, reaching the group would call for

the use of social media platforms in the marketing activities.

Income will also affect the reception of the product. An increase in the income levels positively

impacts on purchase decisions. A high disposable income implies that the clients will be more

willing to but the Echo product (Amazon Company, 2018). The Amazon group can thus settle for

the corporate sector as well as the middle-income earners. The group would contribute to

improving the sales levels of the brand.

Target Market

The target that offers a massive prospect for the Amazon Echo Dot product is the youth. It is

imperative to note that the youth accounts for the most substantial portion of the human population.

The product has features that conform to trends in this age group. Persons under the age of 35

years will find the product high useful. The smart interaction platforms will readily connect to the

age group. The group also meets the six criteria of an ideal target market. The young population is

growing, it is keen on embracing new trends, it can easily be reached via social media platforms,

using social media platforms in marketing is cheaper, and lastly, it fits in the objective of the

Amazon group. Amazon intends to increase their sales levels by targeting the young population

(Papayiannis et al. 2018).

However, maintaining the target group requires the continuous improvement of the product.

The move ensures that there is the incorporation of the ongoing trends in the market. It is worth

noting that this group is keen on ensuring that all emerging technologies are incorporated into the

designs. However, the features of the Amazon Echo clearly suit in the needs and tastes of the target

market. The product has unique designs, innovative technologies and comes it efficient pricing.

CONSUMER BEHAVIOR AND MARKET SEGMENTATION 6

Target Market Strategy

Adopting the multi-segment marketing would offer better returns as opposed to simply

focusing on a single group. The cost of targeting the youth is low as Amazon will only utilize

social media platforms. Social media platforms are cheap and help cover a large population within

a short time. Aside from focusing on the young population, there is the possibility of segmenting

the market on the basis of income and regions. Income will allow Amazon to focus on the middle-

income earners. The move will help diversify the operations of the group thus minimizing chances

of loss and other problems.

Currently, many market players offer similar products. There is thus the risk that the rival may

lower the price level. A reduction in the price would disrupt the target markets. However, having

diverse target groups implies that these dangers will be reduced. Other than the use of social media

platforms, other options may prove useful in the marketing processes (Greenspan, 2017). The use

of online platforms may prove useful in pushing the brand to regional and global markets. The

method is cost effective and allows for the inclusion of images and videos concerning the product.

Positioning

The perceptual map above offers a highlight of some of the rivals brands and ways

they compared to the Amazon Echo Dot in term of quality and price. The JB link View is

competitive due to its high quality and low prices (Amazon.com, 2018). While the Google Home

Max and the Lenovo Smart Display comes with unique features, the high price makes them less

competitive. They create less danger to Amazon Echo as compared to JBL Link View. The Sonos

Beam is the least competitive product as it comes with a high price but low qualities. While the

Sonos has low quality, some clients may settle for the product due to the low pricing.

CONSUMER BEHAVIOR AND MARKET SEGMENTATION 7

Google Home

max

Sonos One

Amazon Echo

Sonos Beam

High in

Quality

High

Price

Low

Price

Low in

Quality

JBL Link

View Lenovo Smart

Display

CONSUMER BEHAVIOR AND MARKET SEGMENTATION 8