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Marketing Communications: a Case of Amazon

ABSTRACT

The role of market communications continues to strengthen in the business world. With the increasing levels of competition and other dynamic developments, businesses have to focus on how to communicate with customers and clients. The appropriate employment of marketing communication tools can provide a strong competitive edge. Therefore, the necessity arises to conduct a study to ascertain the influence of marketing communications tools on consumption decisions of the target markets.

The current research project attempts to establish the connection between the use of marketing communication tools and the influence on consumer decisions using Amazon Corporation as a successful example. The study will rely on a sample of two hundred customers who have shopped at Amazon. Primary information will be sought from the subjects in order to assess the effectiveness of Amazon’s marketing communications tools.

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INTRODUCTION

1.1 Research Background and Aims

Advertising, public relations, and projected sales decisions affect the marketing of a brand. In the case of a company as big as Amazon, inconsistencies in promotional efforts and poor management decisions can lead to confusion of customers (Stone 2013). Thus, the company began altering its marketing strategies from the market-orientated to market-driven approach. The shift was motivated by realizing that the delivery of messages across the organizational levels at Amazon influences the reception of promotional efforts by consumers (Brandt 2011). The realization led Amazon into its decision to guide the employees to take strategies that guarantee success for the organization.

Presently, successful companies have embarked on the adoption of competitive marketing and communications strategies. The implementation of an enduring communication strategy is a beneficial strategy, given that it allows an organization to maintain contact with its clients, employees and other stakeholders. The long-term planning practices allow an organization to attain and sustain relevancy in the marketplace for a long period (Hun 2014).

Amazon has enjoyed a sustainable success resulting from effective marketing communication strategies. Studies reveal that the company has introduced competent marketing communication tools that guide its marketing operations and streamline the relationship with customers (Kitchen & Schultz 2003). Amazon has used its communication strategies to address the interest and needs of its customers effectively and timely (Kitchen & Schultz 2003). With the fragmentation of the mass market, Amazon noted that consumers had become more educated and skeptical about many advertising efforts. The widespread presence of controlled and uncontrolled information sets, such as news reports, word of mouth or expert opinion, allowed customers to learn more about products. Owing to the abovementioned developments, Amazon came up with innovative marketing strategies to facilitate the penetration of information flow in the markets.

The proposed research seeks to analyze the marketing communication tools that Amazon employs and assess their effectiveness. Given that Amazon is an online company, the study intends to look at a range of Internet marketing communication strategies, such as sponsored searches, portal advertising, and associate programs.

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1.2 Introduction of Context

A number of communication tools are available in the business world today. The role of the instruments is to promote ideas, goods, and services offered by companies. According to Kitchen and Schultz (2010), marketing departments or entities need to recognize that the transmission of messages occurs via several channels. However, many businesses do not have the intention of learning the channels. For instance, if an entity runs a compelling video advertisement, chances of the ad to be transferred to youtube.com are high. Similarly, if an organization makes an error in a print ad or passes a wrong impression, many bloggers will raise concerns about it. Consequently, companies need to practice and use integrated marketing communication to ensure that the company-customer communication is consistent and relevant.

The use of marketing communication tools concentrates on controlling measures used to release messages to the public to ensure that the channels do not conflict with each other (Gould 2004). The intention is to avoid weakening the objective of the messages that the company in question wishes to convey. The implication is that instead of having different communication departments for various audiences, fusing them together, or encouraging a common approach is necessary. Thus, companies now focus on uniformity of messages relayed to customers through integrated marketing systems.

For Spector (2000), it is not surprising that technology companies are keen on adopting integrated communication systems. For example, Amazon.com provides the consumers with a customized homepage with products related to the previous purchases or searches (Spector 2000). In addition, the company sends emails on deals and new items that meet the specifications of customers based on preceding orders. The business also offers bloggers the chance to list their preferred books or reviewed lists on their blog. Thus, public relations are among the factors that the company appeals to in its marketing communications. The Amazon website permits customers to post their book reviews or any other product ratings. In essence, the company has built a rich database of reviews that add credibility to the items it offers. Entities that allow customer reviews are preferable in the market, given that they assist new buyers in making product decisions. Moreover, the provision of posting reviews adds to the company’s business by generating Internet traffic to the site.

Another important aspect of integrated marketing communication borders on how the business associates with the current and potential employees. In instances when an employee is dissatisfied with the company, chances increase that the individual in question will undermine the performance of the company. The situation might be dangerous o the business reputation. Firstly, customers will be persuaded that dissatisfied employees reflect an unfriendly work environment. Secondly, customers might perceive that the company’s products are not of high quality. Overall, the organization will portray a bad public image leading to discomfort among customers. Thus, Amazon treats the employees appropriately. In fact, the company provides accommodation and pays regular wages with a goal to make each of them feel welcome to work for the company (Friedman 2004).

The Amazon Company is an online marketplace platform. Hence, customers access their products and services using the Internet via search engines, blogs, and shopping portals. Thus, the implication is that the company can use webmaster tools to follow the site visitors, determine if a user is entering for the first time, or recognize a regular customer (Stone 2013). The entity is also in a position to establish the way a user entered the platform. It can include Google and Yahoo search engines or the Amazon.com link. For instance, when the Harry Porter book was on sale, the company aimed to have the reputation of the number one seller of the item by setting aside specific sections for the book. Amazon management worked with the publisher and other online sites with the intention to lure customers to Amazon.com. The effort bore fruit, as the company led in the online sale of Harry Porter’s books.

The aim of the company’s marketing communications includes increasing customer traffic on its websites, creating awareness about the products and services offered, promoting repeat purchases, developing incremental service and product revenue opportunities, and strengthening and broadening the company’s brand name (Brandt 2011). Amazon.com believes that focusing on the improvement of customer experience is the most effective communication tool in the pursuit of new customers and the encouragement of repeat purchases.

According to Marcus (2004), Amazon has relied on personalization through the use of technology to reach a big number of customers. Previously, Amazon used what Bezos originally referred to as ‘the hard middle’ (Stone 2013). In his view, reaching the top ten customers may be easy. Moreover, finding even ten million people who bought common products may be feasible. However, it has become increasingly difficult to reach individuals who fall in-between. With search facilities on the Amazon site and search engines, accompanied with product recommendation features, Amazon can link its products with customer interests.

Online advertising techniques such as portal interactive ads, search engine optimization, e-mail campaigns, and paid search marketing have become useful in promotion projects (Solomon 2009). The automation of the techniques implies that it is relatively easier to link customer purchases and related preferences. Besides employing the methods, Amazon also increases site visits by using a range of approaches that link its site with popular media (Stone 2013). For instance, the company’s affiliates are allowed to use text links to product pages. Moreover, they provide an array of dynamic banners featuring different content of books. The company also uses cooperative advertising or contra-deals with selected vendors and third parties (Stone 2013). In 2005, the use of print ads on wireless routers accompanied by free laptop cards featured a specific Amazon URL. Finally, the company also includes leaflets in some ads sponsored by non-competitors.

1.3 The Research Questions and Structure of the Dissertation

The proposed study seeks to evaluate the role of effective marketing communication tools in the consumer decision making process at Amazon. In line with the above, the study addresses the following research questions.

· Which communication tools does Amazon use?

· How effective are the communication tools employed?

· Which methods can Amazon introduce to improve its relationship with customers?

The study is organized in the following ways. Chapter 1 introduces the background knowledge of the research topic, general field of study and context. The second chapter provides the literature review reflecting on past research and definitions of key terms. The third chapter focuses on the research methodology. The section will justify the choice of the research approach, and present the advantages and limitations of the selected methods. The fourth chapter presents and analyses data, in addition to comparing results from the conclusions in the literature. Finally, chapter 5 presents the conclusion and recommendations based on the results.

1.4 Summary of Chapter 1 and Introduction of Chapter 2

From the first section, it is remarked that marketing communication tools are associated with influencing consumer behavior in reference to their consumption patterns. As a leading online store, Amazon employs the tools with a goal to impress its customers and influence them to decide to buy products. The preliminary findings warrant a study to ascertain the effectiveness of the tools in consumers’ decision-making. In the subsequent chapter, the literature on marketing communication tools and consumer decision-making process is reviewed.

Chapter 2: LITERATURE REVIEW

2.1 Brief Introduction of Marketing Communication Tools

Every element in the promotional mix has a different capacity to pass information and achieve objectives. The effectiveness of a tool is assessed against purchase decisions. Advertising creates awareness although personal selling is more relevant when promoting purchase behavior (Shimp 2003).

Viewing the various elements of the mix as complementary is critical given that tools are interchangeable depending on circumstances. For instance, through network marketing, it is possible to employ personal selling to finalize the many activities involved in making purchase decisions. According to Kitchen and Schultz (2010), effective communication is integral to counterbalancing the high costs involved in the approach. However, the interchangeability complicates the issue. The phenomenon motivates the management of identifying problems before selecting the right tool to handle the concerns and choosing the most appropriate promotions mix.

2.1.1 Definition of Marketing Communication Tools

Marketing communications are tools that business organizations use to deliver promotional messages to target markets. Companies select from a wide range of tools as the current marketing provides many strategies to attract consumer attention. According to Ratnatunga and Ewing (2005), the primary intention is to promote the products, services, and company image. Brochures, websites, sales promotions, mailshots, press publicity campaigns, advertisements, personal and selling exhibitions are some of the most popular methods employed as marketing communication tools. The approaches are employed in isolation or collectively in order to scale better levels of performance.

Every attribute of the mix can be assessed against certain criteria such as the 4Cs (cost, clout, credibility, and control) (Naik & Raman 2003). Regarding the aspect of cost, the overall expenses involved in a campaign are put into perspective. Questions on whether wastage might be witnessed, or how much it would cost to reach the target audience are critical in the evaluation case (Naik & Raman 2003). Concerning clout, a factor of concern includes the number of people to be reached and the extent to which the message can be personalized. On the aspect of credibility, issues regarding the perception of the market about the advert assume significance. In other words, the concern is the market acceptance of an advertisement as accurate. Finally, the control element borders on the level to which an organization is able to target a specific audience or adjust a message to suit selected markets as the campaign advances (Naik & Raman 2003). From the above account, it is observed that the aim of all marketing communications is to increase the volume of sales. Hence, communicating effectively is a critical factor when pursuing a sales objective.

2.1.2 Communication in Marketing

The role of communication in any endeavor is well documented. Marketing flows are represented as networks with intentions of satisfying customers’ needs and wants (Kitchen & De Pelsmacker 2004). Central to the effectiveness of the exchange networks is the role of communication in marketing.

According to Kitchen and De Pelsmacker (2004), communication informs potential customers about organizations’ offerings. In addition to extending information, communication is used to persuade both existing and potential customers regarding the benefits of associating with an entity. Besides the above considerations, organizations use communication tools to reinforce the experience. One of the methods the reinforcement follows is reminding customers about the need to engage with the company. Additionally, communication reassures people or comforts them after buying certain items in a bid to eliminate purchase dissonance, which surfaces when customers acquire costly products.

At an advanced level, communication extends beyond the above-mentioned roles to include a means of exchanging. For instance, communication facilitates entertainment, deliberations on solutions, bolstering of self-esteem and learning of some concepts (Finne & Gronroos 2009). The process of communication can also yield some benefits such as psychological gains when advertisements run on televisions. Perpetuating and transferring culture or values are also attainable through the process.

Communication is also used for various purposes. It is noted that organizations do not exist in isolation. As a result, each party enters into a relationship with others in an industry with a goal to transact deals that ensure the smooth running of operations (Dewhirst & Davis 2005). The relations facilitate the acquisition of resources and discharging of value-added outputs.

Exchanges that business entities enter require making partnerships. Having a diverse web of connections eases the way business is done when seeking market opportunities. Channels of distribution are also envisioned based on the nature of relationships that companies enter (Dewhirst & Davis 2005).

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2.2 Theories of Marketing Communication Tools

Many theories have been developed in a bid to understand the effect of communication tools on the conduct of marketing. In essence, many of the theoretical dispositions concentrate on how consumers are influenced by behaving in a given way. The current section relies on psychological and economic models and theories that attempt to explain individual behavior.

Extensive research exists on the influence that integrated marketing communications (IMC) have on consumer behavior. Focusing on each element of IMC is critical to comprehend how the process works. The analysis rests on the psychological mechanisms involved in the purchase and decision-making exercise. Mersey, Malthouse, and Calder (2010) identified four frameworks useful in the classification of consumers based on the universal view of individual behavior. The theory of planned behavior is reviewed before presenting the four models suggested by Mersey, Malthouse, and Calder (2010).

2.2.1 Theory of Planned Behaviour

Mihart (2012) has made a significant contribution to the discipline of marketing communications. According to the author, a big proportion of the marketing communication tools employed by online visitors are designed distinctly to achieve long-term influence on consumption patterns of users. Referring to the theory of planned behavior, Mihart (2012) argued that organizations design strategies in a way that focuses on persuading target customers to align with the perceptions of the company regarding their products. According to Haghshenas et al. (2013), an organization that uses marketing strategies utilizing the theory has a high probability of influencing customers positively. Karrh, McKee, and Pardun (2003) affirm that many organizations have integrated the ideals of the theory into action in the crafting of their marketing strategies.

Gaining a deeper insight into the power of marketing communications and behavior of consumers requires looking at how companies tailor their marketing tools to influence behavior patterns. According to Winer (2009), using the theory of planned behavior is critical towards redressing the discrepancy between marketing communications and their results. Under the theoretical disposition, understanding why consumers behave in a particular way is integral to attaining a positive result. The knowledge can also help organizations to predict the behavior of customers, and respond appropriately.

For organizational planners of promotions, understanding how consumers make decisions is a primary requirement. Additionally, planners must design a comprehensive way to employ knowledge by devising methods to exploit them. Organizations should know the needs of customers, the search for information patterns, their manner of evaluating alternatives, their post-purchase behavior, and other related conduct (Gronroos 2004).

According to UmitKucuk and Krishnamurthy (2007), evidence shows that more than 80% of Amazon users would like their stakeholders and customers to use the Amazon online platform. Thus, the fact offers an important marketing communication tool that assists in the selection of products and services. It appears that Amazon has strong strategies for maintaining its status as an effective communicator. Through its online platform, the company has managed to use modern technology to transform itself into a preferred enterprise among many consumers.

2.2.2 Economic Decision-Making Model

Drawing on the economic model, consumers make rational choices. Solomon (2009) observed that the decision-making model relies on the availability of information. The assumption is that consumers have the necessary data to decide what to buy or not to buy. However, the possibility is impossible given the existence of market imperfections which negate the free flow of information. In brief, the possession of all market information is difficult to obtain. The passive model arose in response to the inadequacies of the economic view. The perspective holds that consumers are the objects of marketing machinations and manipulation. Thus, buyers are not allowed to have the autonomy to arrive at their decisions independently. In truth, a big number of consumers are persuaded into buying products that they sometimes do not need. In other instances, they are misled into believing one item is better than another when such is not necessarily the case.

2.2.3 Cognitive Decision-Making Framework

The cognitive view is another useful framework that helps in the understanding of marketing communications. The theory perceives a consumer as both an active and receptive individual who is searching for information (Solomon 2009). Based on the information-gathering exercise, the buyers attempt to arrive at satisfactory decisions.

In marketing, cognitive dissonance has been explained as the feeling of discomfort following significant purchase decisions (Solomon 2009). At another level, reference is made to thoughts about product recommendations presented by socially popular individuals or media, which may deviate from what a buyer knows. Often, consumers have preconceived ideas or experience with a given product. Thus, whenever the emerging information conflicts the perceived truth of an individual, cognitive dissonance is said to have occurred.

The dissonance that exists in the minds of consumers is often a product of conflicting social commentary or contradicting recommendations. Consumers encounter inconsistent information from the media or promotions. Individuals, whose preferences and experience match the data emerging from popular sources, find the decision-making process easier because of the overwhelming support for the position. However, for people who believe the emerging information is contradictory, a dilemma ensues as regards to what to do. Understanding cognitive dissonance allows marketers to take advantage of the knowledge to play with the minds of consumers by influencing them to make certain decisions.

Through the understanding of market segments that experience dissonance, marketers can employ strategies to counter the negative feelings leading to the reinforcement of positive emotions; thus, increasing purchase intentions and decisions (Clow 2010). By employing marketing communications, managers can align the content of ads to product features in order to support the positive assessment of their choice among potential customers.

Managing existing customers is also an important consideration for marketing communications (Beverland & Luxton 2005). Organizations need to control the post-purchase feelings of consumers. As already indicated, after buying products, consumers may encounter negative feelings. The business should address and counter the feelings of disappointment to encourage repeat purchases. Marketing communications aim to correct the discouraging feelings by engaging in influence management through pinpointing aspects that can ease the pressure, and possibly alleviate the feelings. Excellent customer service and after-sales offers are some of the approaches used.

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2.2.4 Emotional Decision-Making Perspective

Consumer behavior has also been explored based on the emotional view which highlights the significance of feelings and emotions when buying certain items (Mersey, Malthouse & Calder 2010). The implication is that in certain instances, consumers act impulsively without necessarily evaluating existing alternatives. Therefore, a model that explains consumer behavior must combine various elements from the mentioned theories. It is acknowledged that not every occasion of consumer decision-making on consumption has to go through the same process. In practice, the attention, consideration, and concern a buyer assign to purchase depends on a number of factors such as the significance of the problem at hand, or item being bought.

Consumers have been viewed as problem-solvers (Mersey, Malthouse & Calder 2010, and Solomon, 2009). According to Bettman, Luce, and Payne (1998), consumers assess efforts involved in making a decision before evaluating the most efficient strategy to solve the problem. Based on the decision-making perspective, buying behavior is understandable on the basis of the problems that a consumer seeks to solve through a specific action. Decisions, which border on extended problem-solving, correspond to the problem-solving standpoint. Thus, buyers lack clear criteria to assess a product or a brand. In addition, the consumer requires extensive information to use in evaluating the items. Given the scenario, it is complicated to arrive at a decision based on available information because a consumer will not have the complete information, sufficient time, the knowledge or expertise to decide judiciously.

2.3 Empirical Literature

According to Clow (2010), in a global world, high levels of dynamism and fierce competition push organizations to explore the most efficient approach to passing information to customers, so that they understand the value of using the products in question. As a result, marketing communications are fundamental in conveying business vision, which is critical in carrying out a successful campaign. For Shimp (2003), marketing and communication cannot be separated given that organizational business areas rely on various interaction means to make their offers in order to meet their targeted financial objectives.

Marketing communication is strongly linked to the use of an integrated marketing approach. Despite the perceived benefits of the approach, research of integrated marketing communications remains highly controversial. In particular, approaches and opinions on the topic are diverse. For instance, Kitchen and De Pelsmacker (2004) observed that integrated marketing does not extend beyond an assortment of traditional marketing concepts.

Previous studies have covered a number of areas of marketing communication. For instance, Naik and Raman (2003), Dewhirst and Davis (2005), Finne and Gronroos (2009) and Ratnatunga and Ewing (2005) have delved into the association between integrated marketing communication and internal marketing matters, corporate communication, relationship marketing, brand identity, and brand equity. On the other hand, Beverland and Luxton (2005) and Cornelissen, Lock, and Gardner (2001) have focused on managerial and organizational concerns connected to integrated marketing communications.

Moreover, the issue of the effectiveness of the adoption of integrated marketing communication has attracted diverse attention. In particular, Belch and Belch (2008) and Duncan and Moriarty (1998) are some of the prominent researchers who have interrogated the effectiveness of marketing communications.

Conceptualising the processes of integrated marketing communications is also integral to the generation of relevant knowledge on the topic. In the aforementioned regard, reference is made to the works of Cornelissen (2001), Cornelissen and Lock (2000) and Kitchen and Schultz (2009), who concentrated on the conceptual aspect of integrated marketing communication. They based the research on the IMC activities as a theoretical foundation, a status and an approach to goals pursuit. However, Gould (2004) and Fitzpatrick (2005) question the wisdom of implementing the method as they observe that barriers mar the implementation of the platforms in business.

Hun (2014) is one of the researchers who have delved into the question of marketing communication and its effect on consumer’s decision-making. Based on the outcome of the study, marketing communication tools have a significant role in peoples’ perceptions regarding a company, and its products. Compared to traditional marketing strategies, online versions have emerged to be more beneficial. According to Hun (2014), timeliness, cost-effectiveness, and diverse coverage are the major benefits associated with online marketing communications. Hun (2014) further observed that organizations needed to develop effective marketing communication tools to offer influential evidence-based guidance to customers and other stakeholders. In order to benefit from the communications, businesses invest considerable resources in marketing.

Owing to changes that have taken place in the world of business, organizations must master the art of integrating information technology in marketing strategies in order not only to reach a wider market but also to increase popularity (Mihart 2012). Strategies based on information technology appeal to a big number of customers because they have an influence on their purchasing power. According to UmitKucuk and Krishnamurthy (2007), consumers’ capacity to discriminate between substitutes in the market increases, in addition to the ability to handle their finances.

Creating synergies through the establishment and sustenance of relationships is also a consideration that marketing communication tools address (Haghshenas et al 2013). Amazon takes the outside-in approach as it considers partners in building relations. Knowledge of media and consumers’ lifestyles allows the company to customize the media messages to optimize communication as it makes market segments receptive. Amazon develops comprehensive databases containing consumers’ information before prospecting on their expectations. Based on the data analysis and processing, the company segments the customers into various groups. The foundation for the grouping includes but is not limited to, predispositions, awareness levels, media strategies that guide communication procedures and marketing aims. Through the abovementioned approach, Amazon is able to build and reinforce profitable alliances with its customers.

The decision-making process across the entity is known for its orientation on the synergy created through the coordination of the promotional mix elements into a clear program. The strategy is consistent to ensure positive and maximum effect. According to Haghshenas et al (2013), Amazon’s customers are unequivocal regarding the effectiveness of the company’s communication strategies. The authors indicate the entity’s market approach influences customers’ attitudes, perceptions, and behavior. For the consumers, the marketing communication tools provide adequate and timely responses to the issues that arise.

2.3.1 Online Marketing Communications

The rise in the use of social media as a promotion tool has coincided with developments in information technology. The advances have changed significantly the conduct of business. However, social media is dissimilar from mainstream media because it facilitates interactive engagements. In addition, the team of friends, role models, and celebrities on the platforms adds to the enhancement of the reputation of a business. Having realized the impact of social media on the society, marketers of Amazon have widely adopted the idea for building awareness.

The relationship between social media and buyer decision-making behavior is a contested topic, although the platforms manipulate consumer attitudes, brand attitudes, and consumer purchasing intentions. According to Taining (2012), social media does not necessarily influence the choices that consumers make. However, it is an influential variable. In particular, social media contributes to the formation of attitudes on brands which affect the behavior of consumers.

2.4 The Gap in Current Knowledge

Previous studies have largely focused on factors that affect customers’ willingness to respond to marketing strategies. It also emerges that consumer behavior is explained by influential aspects of social relations that marketing communication tools seek to create. Despite alleging that the marketing communication tools affect consumer decisions, the case of Amazon is not understood clearly. Besides, the literature does not contain in-depth studies focused on analyzing the effectiveness of marketing communication on consumer decision-making processes.

2.5 Summary of Chapter 2 and Introduction of Chapter 3

The review of the literature demonstrates that marketing communication tools influence the decisions of consumers. Thus, many organizations design systems to motivate purchases. The study intends to employ the qualitative research method to contribute to the existing pool of knowledge. Specifically, a case study approach will be used. The subjects of the research are two hundred shoppers who have used the Amazon stores. They will be requested to participate in the study. After the collection of the data, qualitative methods of analysis will be employed to understand the outcome.

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