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| *Ostroff, Fair and Company>>>Other - Advertising & Marketing |
Why is amazon.com is so successful? |
What are the types of marketing strategy amazon.com use ? What are their weakness ? Give some recomendations for them to do better in the future ? Selection: With 16 million items for sale, Amazon has ''Earth's biggest selection,'' says Chief Executive Jeffrey P. Bezos. Amazon has added music, video, gifts, and greeting cards to the books it offers some 8.4 million customers--plus links to drugstore goods, pet supplies, and more. Since late March, Amazon has begun holding daily auctions many experts believe that online, consumers will flock to an even smaller number of major brands than they do traditionally because there are few other cues for building trust. Already, some 101 million U.S. adults recognize the Amazon brand--ranking it No. 1 in E-commerce Bezos credits Amazon's success to a deceptively simple goal: He wants it to be the most customer-focused company ever--both online and off. That's why Amazon has spent heavily to build several distribution centers around the world to hasten deliveries. It's why the company has spent countless hours tweaking its Web pages to remove every possible obstacle to purchasing. It invented one-click ordering, which lets buyers store credit cards and addresses after the first purchase, and it installed software that assesses what people have bought and suggests other purchases. The result: Repeat purchasers account for 66% of sales. Meanwhile, Amazon's business model has yummy aspects that are not fully appreciated--especially vs. physical retailers. Morgan Stanley Dean Witter analyst Mary G. Meeker estimates that Amazon's current $1.2 billion annual sales rate is the equivalent of 235 Barnes & Noble Inc. superstores that generate about $5 million in annual sales apiece. But Amazon has spent only $56 million on fixed assets, such as computers, so far, while B&N has spent about $472 million to build its superstores. And because Amazon gets paid immediately by credit card and doesn't have to pay suppliers for up to 45 days, it essentially funds its growth with its suppliers' cash. So why is Amazon losing so much money--$125 million last year? Because it's spending to acquire and build for a much larger customer base down the road. |
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