Marketing Intelligence of Amazon UK
Introduction
Amazon UK is one of the
prominent e-commerce site in UK and this assignment is based on them. Numerous
factors related with marketing intelligence of Amazon UK are discussed in this
assignment. In the first part of this assignment, I discussed about consumers
and business buyer behavior, buying decision process, branding, company image
and their relation with repeat purchasing. Types of market research techniques,
sources of secondary data, reliability and validity of research findings are
discussed in the middle part of the assignment. Along with them, market size,
market trends, competitor analysis etc. also discussed in the middle part too.
In the last part of this assignment, I discussed about customer satisfaction,
ways of measuring customer satisfaction, designed a customer satisfaction
survey and review the success of a completed survey.
1.1 Describe the main stages
of the purchase decision-making process.
Any persons who purchase products or services from
market for the purpose of consumption are known as consumer. At Amazon UK,
consumers generally follow a five stages buying decision model for buying
existing products or services. This model is given below;
At Amazon UK, consumers will have to feel the need for
any products or services. After that, they search information about the
products or services. Evaluations of the alternative products or services that
are available in the marketplace are happen in the third stage of the model.
Consumers buy their needed products or services in the next stage of the model.
The last stage of this model relating with the measurement of the products value
and usefulness of the purchasing products or services by the consumers.
However, at Amazon UK, consumers also follow another
model for buying new products or services. This model contains with the stages
awareness, interest, evaluation, trial, and adoption. In the awareness stage,
consumers become aware or know about the new products or services. Then they
feel interest for buying new products or services and start searching about the
products. After then, consumers evaluate the new products with the existing
products and pick whether they need the new products or not. In the trial
period, consumers buy products at a small scale for measuring the value and
satisfactory factors of new products. Adoption process occurs only if new
products can satisfy the consumers and then they buy it at a large scale for
regular use (Baker, 2013) .
1.2 Explain theories of buyer
behaviour in terms of individuals and markets
There are many theories that are
related with the buyer behaviour and these theories are used to explain and
predicts the buyer behaviour of both consumers and business buyers. Amazon UK
follow different theories like as rational act theory, new institutional
economic theory, process theory, and bullwhip theory for assessing their buyer
behaviour.
Rational act theory
Rational act theory denotes that both the consumers
and business buyers of Amazon UK buy products or services based on the rational
analysis of their self-interest. Buyers always prefer the most profitable
courses of action when they buy any products or services from Amazon UK
New institutional economics theory
Various forms of uncertainty limited the rationality
of buying decision of any products or services and it described by new
institutional economics theory. Buyers are not always know about the potential
benefit of the product they want to buy and this uncertain factor affects the
buyer behavior.
Process theory
Buyers are not always buy from rationality. Sometimes they
buy from opportunities too. If Amazon UK offer ‘buy one, get one free’ on
different products, sales volume will be increased because buyers make large
scale buying which is not arise from rationality but from opportunities.
The bullwhip theory
A small changes in one side causes major effect on
another side. If sales of Amazon UK increase 20% because of their quality of
products and if Amazon UK started to collect the product from one new supplier
along with the old one then the new supplier have to produce additional product
because of the increasing demand of the product at Amazon UK (Chang, 2014) .
1.3 Explain the factors that
affect buyer behaviour
Different
factors like as cultural, social, personal and psychological factors are
responsible for changes of buyer behavior in Amazon UK.
Psychological factors
Psychological factors are mainly composed with two
elements; motivation and perception. Need becomes a motive when it is backed by
a sufficient level of intensity. Motive encourages a person to act. Perception
towards any product or services of Amazon UK also influences buyer behavior.
Perception arises from past experiences, expectation, selectivity, subjectivity
and so on.
Social factors
Buyer behavior pattern are influenced by surroundings
around them to a great extent. Social factors consist of family, reference
group, and social status and so on. People learn from it and their behavioral
pattern affected by it.
Cultural factors
Cultural factors consist of culture, sub-culture and
social class of people. Culture is the set of beliefs and values commonly
shared by people within a group. Sub-culture is a part of culture which
influences more on buyer behavior at Amazon UK. Need and demand are also
influences by living standard of people.
Economic factors
Economic factors consist of personal income, family
income, income expectation, savings, consumer credit and other economic
factors. These factors directly affected the buyer behavior. Increase of income
will result in purchasing in large scale or buying high quality product from Amazon
UK.
Personal factors
Personal factors consist of age, occupation, income,
life style, attitudes etc. of a person. Buying pattern change at different ages
and according to income. Life style and attitudes of consumers also affected
their buying pattern at Amazon UK.
1.4 Evaluate the relationship
between brand loyalty, corporate image and repeat purchasing
Repeat buying of any product produced by a company
instead of purchasing from competitors or substitute product is known as brand
loyalty. Some people buy from Amazon UK and others from Sainsbury or any other
seller. This happen because of brand royalty. Organizations express itself
towards various publics such as customers, investors, government etc. by corporate
image. Repeat purchasing is buying again and again from the same company
instead of buying from their competitors. Both brand loyalty and corporate
image help to increase company’s sales volume, decrease production costs and
promotion costs and thus helps the company to gain more profit (Chen, 2015)
2.1 Evaluate different types
of market research techniques.
Any organization needs to research the market for
satisfying their customers, evaluating its position at the market, evaluating
the competitors and increasing brand awareness and reach. Market research is of two types; primary
market research and secondary market research. Primary market research is the
research that is done by the company itself and secondary market research is
collecting data and information from secondary sources (Chimngamsert, 2014) . However, there are five most popular
primary research techniques and Amazon UK can use some of them for conducting
their primary market research.
Survey
Structure and straightforward questionnaire are used to
conduct survey. Researchers conduct survey towards sample groups which
represents the total target customers of Amazon UK. There are various types of
survey; person to person survey, telephone survey, mall intercept survey, and
mail survey. Large sample helps to get reliable findings but it needs more cost
and time. Survey is reliable but it is costly and time consuming.
Focus group
An expert moderator conducted the focus group
discussion in a friendly and informal manner. Focus group consists of 8-12
people and moderator has to find out the latent things of group members. It is
time consuming and costly, moreover it is very tough to find an expert
moderator who can successfully conducted the discussion.
In-depth interview
Face to face interview taken by an expert moderator
from single respondent. It is costly and need more time.
Observation
Researchers try to find the desire answer without
questioning respondents directly. They observe respondent by camera, recording,
and so on. There is no chance to bias and it is less costly and less time
consuming.
Experiment
An experiment is occur when any product is given to
the respondent and collects information after they use the product. Experiment
helps to adjust price, improve package, promotion etc. of Amazon UK.
However, secondary market research can be done through
two ways. First one is data collection from internal sources such as company’s
database and second one is data collection from external sources such as
magazines, journals, government agencies, research agencies and so on.
2.2 Use sources of secondary
data to achieve marketing research objectives
Secondary data can be collected from two sources;
internal sources and external sources. Internal sources are the data that
collected by the organization itself previously and stored in their database.
Sources of internal data collection of Amazon UK are given below;
o Balance sheet of Amazon UK
o Profit-loss statement of Amazon UK
o Inventory records of Amazon UK
o Sales figure of Amazon UK
o Consumer response rate of Amazon UK and so on.
Secondary data are the data that are collected by
third parties and Amazon UK can collect secondary data from different sources
which are given below;
o Various media like as newspaper, magazines, journals,
business articles and so on.
o Government agencies like as statistics bureau of
government
o Various market research agencies like as Mintel and
NOP.
2.3 Assess the validity and
reliability of market research findings
Validity is the legality of the research findings.
There are two types of validity; internal validity and external validity.
Internal validity is to check the existence of cause and effect relationships
of the research findings and make them valid by calculating correctly. External
validity is wider concept than internal validity. External validity ensures
that research findings are not only valid for research work but also valid for
real life work (Tiu Wright, 2011) .
Reliability of research findings is the evaluation of
research; whether it is correct or wrong. There are various types of
reliability. Some findings have the chances of being change across time and
some are reliable across time. If findings are reliable across time, it is easy
to make decisions. Reliability across sample defines that, changes of sample
causes changes in the findings. If findings are same after data collection from
different sample, then it is reliable. Findings of research should be same for
claiming the research findings as reliable over time and sample (Dietrich, 2015) .
2.4 Prepare a marketing
research plan to obtain information in a given situation
It is very important to design an effective marketing
research plan for obtaining the desired result. Amazon UK can follow eight
steps marketing research plan for designing their research which is given
below;
o Clearly identify the problems or research objectives.
Problems should be clearly defined.
o Set the research question. Question should be clear,
specific and non-bias.
o Write the research proposal. Research proposal
consists of various things such as types of research, objectives of research,
sources of data collection, data analysis methods, methods of publishing
findings, budget of research and so on.
o Allocate the research budget and resources for
conducting research successfully.
o Research proposal should trial up before final
implementation.
o Data collection methods should clearly define.
o Statistical and mathematical data analysis process
should select to analyze the data effectively.
o Report the findings and make recommendations to
overcome the problem (Griffith, 2013) .
3.1 Assess market size trends
within a given market
Market size can be measured by the total sales volume
of the Amazon UK. Sales volume can be measured by the units of products Amazon
UK sell to their customers. However, evaluating market size is important to
calculating the market share of Amazon UK and its competitors. Market size
selected based on the potential and actual customers. Amazon UK should select
their potential customer; whom buy their products. Then it selects their actual
customer; whom actually buy products from Amazon UK. Suppose, citizens of UK
are the potential customers of Amazon UK, then Amazon UK should able to measure
the number of their potential customers as well as their actual customers;
numbers of UK citizen buy from Amazon UK (Kotler, 2013) . It also able to understand the current
market trends- what currently going on the market and plan according to the
market trends. If Amazon UK failed to understand current market trends, it will
surely face a great loss.
3.2 Plan and carry out a
competitor analysis for a given organisation
Competitor analysis helps any company to understand
their competitors and keep the company ahead of competitors. Sainsbury, asda,
tesco, ebay, etc. are the main competitors of Amazon UK and they should analyze
their competitor’s business plan, marketing strategy, sales records,
promotional activities, after sale services and so on for keeping them ahead of
the competitors. Amazon UK should collect data related with their competitors
from various sources, analyze the data collected from different sources and
find out a way to beat their competitors (LaPlaca, 2014) . Amazon UK should
always follow up the various activities and business decision taken by their
competitors which helps them to keep them ahead in the competition.
3.3 Evaluate an
organisation’s opportunities and threats for a given product or service.
Opportunities and threats of Amazon UK are listed
below;
Opportunities:
o Backward integration: Amazon UK can start their
in-house brands in various product categories and can differentiate their
offering.
o Global expansion: Amazon UK can expand their business
mainly in Asian and African developing countries because of the low competition
and high profitability of those economies.
o Acquisition: It can decrease the competition by
acquiring other company.
o Opening physical stores: Amazon UK can open physical
store in UK which will result in repeat purchases and create loyal customers.
Threats:
o Low entry barriers: Amazon UK faces threat of low
entry barriers because low entry barriers encourage new business to engage
which will increase competition.
o Government regulations: governments rule and
regulations are also another threat for Amazon UK.
o Local competition: Amazon UK faces various local
competitors like as Walmart, Sainsbury, Asda, Tesco etc.
4.1 Evaluate techniques of
assessing customer response
There are various techniques to assess customer
responses. Three major techniques are being used to assess customer responses.
Productive performance indicator
Productive performance indicator measure the ability
of workers. It measure how many orders or services a worker can provide in a
human-hour. Amazon UK can increase this response rate by introducing automation
in the organization. Automation reduces the hiring cost of new people.
Financial performance indicator
Total response cost (TRC) is used to measure the
financial performance. Cost related with customer responses workflow, assets
used for it, infrastructure used within the organization helps Amazon UK to
assess the cost and result of buyer response.
Quality performance indicator
There are two techniques of measuring quality
performance indicator; order entry accuracy (OEA) and first time fill rate
(FTFR). Invoice accuracy and order status communication accuracy also used for
measuring quality performance indicator. Amazon UK can increase buyer response
rate by maintaining OEA, FTFR, invoice accuracy and order status communication
accuracy (Rau, 2013) .
4.2 Design and complete a
customer satisfaction survey
Customer satisfaction survey can be done through the
use of 5 scale Likert chart and structured questionnaire. Here, 5 scale Likert
chart are given below which is used here for measuring customer satisfaction
survey.
|
Option
|
Rating point
|
|
Strongly agree
|
5
|
|
Agree
|
4
|
|
Neutral
|
3
|
|
Disagree
|
2
|
|
Strongly
disagree
|
1
|
Table: 5 scale rating point
A customer satisfaction template is given below:
Name: ………………………………
Address: …………………………….
E-mail: ……………………………….
Cell no. ………………………………
Q a. Services of Amazon UK are very satisfactory.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly disagree
Q b. Amazon UK’s products are very satisfactory.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly disagree
Q c. Customer care services of Amazon UK are very
satisfactoryo Strongly agree
o Agree
o Neutral
o Disagree
o Strongly disagree
Q d. Pricing
strategy of Amazon UK is very satisfactory.
o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly disagree
Q e. Amazon
UK’s after sale services are very satisfactory
.o Strongly agree
o Agree
o Neutral
o Disagree
o Strongly disagree
Amazon UK can assess customer satisfaction level after
data collecting by survey with the use of such questionnaire and 5scale Likert
chart.
4.3 Review the success of a completed survey.
The success of survey lies on how it helps the
organization. After successful survey, Amazon UK can understand where they
stand in terms of customer satisfaction. They can understand their problems of
achieving customer satisfaction and able to take necessary steps to gain more
customer satisfaction. If customers are satisfied, they will be their loyal
customers and more loyal customers are an advantage over the competitors (Ronkainen, 2012) .
Conclusion
Amazon UK has the potentiality to be more successful
in the market and can successfully keep their position in the market. They have
the opportunities of expanding business and they can open physical store in UK
which help them to create more loyal customers. Amazon UK should be developed
more automation system which helps to increase buyer response rate and buyer
satisfaction. Amazon UK should know about their competitors and market trends.
They should conduct market research to know their position, competitor’s
position, and customer satisfaction.
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