Running head: LONG-TERM CUSTOMER LOYALTY AND RELATIONSHIPS 1
Amazon: Long-Term Customer Loyalty and Relationships
Andrea Butler-Dabreo
BUSI 520
Liberty University
Dr. Wilson
21 September 2018
LONG-TERM CUSTOMER LOYALTY AND RELATIONSHIPS 2
Concept of the Marketing Management
The marketing concept is the philosophy that companies use to examine the
supply and demand of their customers. With the high supply and demand of their
customers the company will focus their marketing decisions based on the needs of their
customers while remaining competitive with other online retailers. Today, most
companies have incorporated several marketing concepts that can be utilized on various
customers.
The marketing concepts involve the 4A’s of marketing, which are acceptability,
affordability, accessibility, and awareness. Kotler& Keller (2016), noted that
“acceptability is the extent to which a firm’s total product offering exceeds customer
expectations” (p. 26). Acceptability is a vital component in the framework and design
aspect that can be increased with the reliability of the product that is produced.
Acceptability can be enhanced by incorporating changes to the brand image, packing, and
design.
“Affordability is the extent to which customers in the target market are able and
willing to pay the product’s price” (Kotler& Keller, 2016, p. 26). Affordability
encompasses two dimensions: economic, “the ability to pay” and psychological the
“willingness to pay.” Acceptability combined with affordability regulates the product’s
value proposition.
“Accessibility, the extent to which customers can acquire the product readily, has
two dimensions: availability and convenience” (Kotler& Keller, 2016, p. 26). A
company’s success is determined by the innovative approaches in which they deliver
both, availability and convenience.
LONG-TERM CUSTOMER LOYALTY AND RELATIONSHIPS 3
“Awareness is the extent to which customers are informed regarding the product’s
characteristics, persuaded to try it, and reminded to repurchase” (Kotler& Keller, 2016, p.
26). Awareness has two dimensions that encompass brand awareness and product
knowledge. Advertising done correctly can be a viable and powerful marketing tool for
potential customers and increased sales.
Dudovskiy (2017), notes that Amazon marketing mix is compromised of the
Amazon 7P’s of marketing (p. 29) that consists of product, place, price, promotion,
process, people, and physical evidence these components are the evolution of marketing
management. The 7P’s of Amazon’s marketing mix focuses solely on product and place
elements. Amazon’s product range offers a variety of over more than 480 million
products online and offline within the USA. Amazon massive cost savings are based on
their ability to offer their customers products at a competitive price due to the low cost of
the online business operations.
Amazon’s efficiency in storing, picking, packing, and shipping goods directly to
customers allows for a lower operating cost. Amazon continuously invests in capabilities
such as automation, which helps to lower their incurred cost of operations. “Amazon
Prime members have proven loyalty to the company, accounting for nearly 60% of its
total gross market value in 2015” (Intelligence, 2016). As Amazon continuously add
perks to their Prime membership, even non-Prime members could be encouraged to join,
thus, increasing their loyalty even further. With such increased loyal by Amazon’s
customer can produce an e-commerce ecosystem that diminishes the need for Amazon
customers to purchase from other merchants.
LONG-TERM CUSTOMER LOYALTY AND RELATIONSHIPS 4
Examine at least 1 practical application/example for your topic.
Amazon is an example of global marketing. In recent years Amazon has crossed
over into the U.K., Germany, and other parts of Europe, fueling the growth of their
company. Amazon Prime in Europe has proven to a significant market for Germany. Even
with the recent price increase, Amazon Prime Europe is still popular with the German
consumers. Amazon offers its European customers the same services offered on Amazon
Prime in the U.S., Amazon Prime video streaming, free Kindle book lending and access
to Amazon Pantry for an extra fee.
The one big difference between Amazon Prime Europe and Amazon Prime U.S.
is that Amazon Prime U.S. offers same-day delivery, which cost U.S. customers an
average of $54 yearly. Ungerleider (2017) states that within the next year Amazon Prime
Europe “customers could get a big change to their Prime experience with two warehouses
being built in Munich, Germany” (p. 1). With the two warehouses being built in Munich
this could offer Amazon Prime Europe customers the option of same-day delivery.
Formulate a question about your topic that your classmates will respond to.
With all the products and services provided by Amazon, where will
Amazon be in a ten-years? What new innovation will they come up with to keep being
the number one online retail company and continue to stay relevant at the same time?
LONG-TERM CUSTOMER LOYALTY AND RELATIONSHIPS 5
References
Dudovskiy, J. (2018). Amazon.com Inc. Report. Retrieved from https://research-
methodology.net/amazon-report/
Intelligence, B. I. (2016, November 29). Amazon's customer loyalty eats into
competitors. Retrieved September 21, 2018, from
https://www.businessinsider.com/amazons-customer-loyalty-eats-into-
competitors-2016-11
Kotler, P., & Keller, K. L. (2016). Marketing management. Upper Saddle River, NJ:
Pearson Prentice Hall.
Ungerleider, N. (2017, April 18). What Amazon Prime Is Like Around The World.
Retrieved September 20, 2018, from
https://www.fastcompany.com/3054295/what-amazon-prime-is-like-around-the-
world
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