Introduction
Amazon was founded by Jeff Bezos, an American electrical engineer and businessman, in the year 1994 from his garage in Bellevue, Washington. In the late 1990s, Bezos transformed it from an online book store to everything to meet customer needs. Today, Amazon has spread globally as an American Multinational Technology Company selling almost every type of goods and services covering the market entirely.
Unique Marketing Strategy of Amazon
- High-runner Marketing Strategy: Amazon offers products to the customers at a lower price to attract customers but when the customer adds the product to cart, it recommends other complementary products to go with it at a higher price margin to make a profit. For example, a trending laptop is heavily promoted in Amazon’s webpage at a lower price but once added at cart it suggests wireless mouse or an extended warranty at a higher price.
- Data-driven Approach: Amazon spends a lot of money to study the shopping and purchasing behaviour of its customers to forecast customer demand, maintain optimal levels of inventory and to find the market needs to research and bring new products.
- User-friendly Website: Amazon provides a user friendly website to help people with a clear layout, personalized recommendations, navigation, and powerful search and filtering tools.
- Utilize Digital Channels: Amazon uses platforms such as social media (Instagram, Twitter, Facebook), associate programs (pay content creators for sending customers), sponsored search (sellers pay Amazon to make their product appear in the top search), and email campaigns (sends personalized recommendations based on customer's browsing history and purchasing behaviour).
- Go Where Your Customers Are: Amazon doesn’t wait for their customers to come to their website, instead they go to online or offline platforms where customers are present with the goal of creating a convenient and seamless experience for the customer. For example, Amazon Go, Amazon Prime and so on.
- Fostering Partnership: Amazon uses partnership with millions of businesses of all sizes to improve customer experience.
Unique Human Resource Policies of Amazon
- Recruitment and Hiring
- Anti-Hiring Pitch: Jeff Bezos used this technique to warn the prospects of the hard and long working hours and the challenge it takes to handle the work rather than motivating them to join the company so that those who choose to work know the hardships and get themselves ready for the challenge.
- Intern Hiring: Amazon hires interns and gives them pivotal roles in their team from day one and also provides transportation, housing, and food services.
- Diverse Talent Hiring: The goal of Amazon is to hire the top talent and then raise standards with each new hire. It aims to select diverse talents.
- Training & Development
Amazon’s program “Career Choice” prepares low level employees for higher-level jobs. It also has a “Pivot Program” to help the employees whose performance is not up to the target by providing additional coaching with a career ambassador.
- Pay to Quit Policy
The goal of pay to quit policy is to make sure that only the employees who are committed remain in the company. This program offers employees a yearly bonus to quit their jobs starting at $2000 and increasing by $1000 each year up to a maximum limit of $5000.
- Diversity, Equity, and Inclusion (DEI)
Amazon has set a goal for representation of women and also minorities of their workforce.
Unique Logistics Policies of Amazon
- Hybrid Delivery Model: Amazon provides a hybrid model to the manufactures where they can act as both vendor and seller at the same time. The goal is to provide maximum flexibility and security for sellers and to ensure faster and better service for customers.
- Inventory and Supply Chain Management: Amazon provides “Fulfillment by Amazon (FBA)” service where the seller can send its product to Amazon and Amazon is responsible for handling the storage, picking, packing, shipping and customer service after selling. It also offers a choice to its sellers if they want to choose the “Fulfillment by Merchant (FBM)” method where the seller manages the process from storing to shipping products directly to customers or if they want to use Amazon's network, paying Amazon to manage all steps.
- Delivery: Amazon uses its own employees and vehicles for delivering goods to customers and also uses third-party couriers to deliver packages.
- Technology: Amazon uses AI to determine the most efficient delivery route for delivering goods. It also uses robotics for picking, packing, and sorting which makes the process more accurate and faster.
Conclusion
In recent times, Amazon has become the biggest e-retailer in the World holding a dominant share in the market. Amazon’s success is the result of its unique management strategies. Its customer-centric marketing strategies secure customer trust and loyalty, its efficient human resource policies keep employees motivated, and its advanced logistics ensure operational efficiency.
Reference
- 1. Tiwari, A., & Sahu, M. K. (2023). An overview of human resource management (HRM) systems and policies in Amazon company. International Journal of Scientific Development and Research, 8(4), 2455–2631. https://www.ijsdr.org/papers/IJSDR2304363.pdf
- 2. Yuting, J., & Li, X. (2023). Financial and marketing strategy analysis of Amazon. Frontiers in Business and Economics Management, 7(3), 2766–842X. https://www.researchgate.net/publication/369015497_Financial_and_Marketing_Strategy_Analysis_of_Amazon
- 3. Wikipedia contributors. (n.d.). History of Amazon. In Wikipedia. Retrieved from https://en.wikipedia.org/wiki/History_of_Amazon
- 4. Hopkins, C. (2023). The history of Amazon and its rise. Michigan Journal of Economics. https://sites.lsa.umich.edu/mje/2023/05/01/the-history-of-amazon-and-its-rise-to-success/