Initially selling books online, the US company Amazon.com, Inc. has been transformed into a major online retailer over the course of its existence by providing its services to millions of customers around the world. Customer loyalty has always been essential to the success of a business, but never as much before as in the digital age. The associated customer loyalty programs are now an indispensable medium in the marketing world. Amazon is one of the most frequently mentioned examples of customer loyalty measures in general and in the world of e-commerce, in particular through its established premium program.
Private labels and retailers take advantage of the multiple capabilities of the Amazon.com e-commerce platform, thereby increasing their sales and reaching new customers. Amazon's evolution from a website to an e-commerce partner and on to a development platform is driven by the spirit of innovation that is part of the company’s DNA of the company. The smartest minds in the world of technology come to Amazon.com to explore and develop technologies that make life easier for buyers, sellers, and developers around the world. The author objectifies Amazon's subjective claim of being a customer-centric company and identifies key-areas of customer- centricity by applying theoretical concepts of that topic to the company itself, resulting in an assessment of Amazons degree of customer centricity and giving readers a better understanding of the meaning and historical development of the concept.
Table of Contents
1 INTRODUCTION
1.1 AIM AND OBJECTIVE
1.2 STRUCTURE OF THE THESIS
2 ELECTRONIC COMMERCE
2.1 DEFINITION OF E-COMMERCE
2.2 THE ONLINE MARKETPLACE
2.2.1 CURRENT STATUS
3 THE PATH TO CUSTOMER CENTRICITY
3.1 THE MARKETING MIX
3.1.1 THE 4 PS
3.1.2 THE 4 CS
3.2 CUSTOMER CENTRICITY
3.3 THE SEVEN PILLARS OF CUSTOMER CENTRICITY
3.4 ECONOMIC MOTIVATION OF PERSONALIZATION
3.4.1 DIRECT SWITCHING COSTS
3.4.2 OPPORTUNITY COSTS
3.4.3 SUNK COSTS
4 AMAZON
4.1 THE FOUNDING OF AMAZON AND RISE OF THE INTERNET
4.2 AMAZON’S CULTURE AND BUSINESS STRATEGY
4.3 CURRENT STATUS OF AMAZON
4.4 CUSTOMER LOYALTY
4.4.1 MEASURABLE EFFECTIVENESS
4.4.2 AMAZON PRIME
4.4.3 AMAZON APPS
4.4.4 TARGETED ADVERTISING
4.4.5 SUBSCRIBE & SAVE
4.5 AMAZON WEB SERVICES
5 THE MCR-BM CONCEPT
5.1 INTRODUCTION TO CRM
5.2 MANAGEMENT OF CUSTOMER RELATIONSHIP IN BUSINESS MEDIA (MCR-BM)
5.2.1 CUSTOMER INTERACTION
5.2.2 ADDED VALUE FOR THE CUSTOMER
5.2.3 CUSTOMER PROFILING
5.2.4 TRUST
5.2.5 VIRTUAL COMMUNITIES
5.2.6 PROCESSES
5.2.7 CONTROLLING
6 ANALYZING AMAZON’S ‘CUSTOMER CENTRIC’ EFFORTS
7 CRITICAL ANALYSIS OF THE ASSESSMENT
8 CONCLUSION
Thesis Objectives and Key Focus Areas
The primary objective of this thesis is to critically evaluate Amazon.com, Inc.'s ambition to become the world's most customer-centric company by analyzing its business practices, strategic frameworks, and loyalty initiatives against established marketing theories and the Management of Customer Relationship in Business Media (MCR-BM) model.
- Theoretical examination of traditional marketing mix concepts versus modern customer-centric approaches.
- Evaluation of Amazon’s corporate strategy and culture regarding customer obsession.
- Analysis of specific customer loyalty drivers like Amazon Prime, Subscribe & Save, and personalized services.
- Application of the MCR-BM framework to assess Amazon's practical implementation of customer relationship management.
Excerpt from the Thesis
3.1.2 The 4 Cs
Lauterborn shifts the existing 4 Ps variables towards customer-centric focused ones as he changes product to consumer wants and needs, price to cost to satisfy, place to convenience and promotion to communication, finally making up the 4 Cs model.
Consumer wants and needs
Lauterborn suggests that suppliers of goods and services cannot sell anything they can make anymore but only what is requested by consumers. As a result, bringing value to customers should be the focus of a marketing campaign.
Cost to the consumer
Price becomes the cost when shifting to the consumer’s perspective and represents the amount customers will have to pay for a product or service and has always been a major factor in determining whether customers are willing and able to make a purchase decision. Here, Lauterborn claims that the price is close to irrelevant as such, given that it only represents a part of the total costs to the consumer. The cost to the consumer is not only of monetary value but also the time spent driving to a given place or costs of guilt for not treating somebody else but spending the money on oneself.
Convenience
Making purchasing decisions in favor of convenience has gained in extended importance to consumers as convenience costs are also caused by the expense of physical and nervous energy. Thus, simplifying the process customers must endure in order to make business with a retailer increases the level of convenience for the customer and prevents them from following convenient solutions provided by another retailer.
Communication
”Promotion is out—out, manipulative, 1960s.”, further claiming that the purpose of a good advertisement should be the beginning of a dialogue between buyer and seller “Communication is from the buyer– in, cooperative, 1990s.”. The aim is not to promote a business, but to communicate with the customers displaying the value of a given product and to offer content to attract them.
Summary of Chapters
1 Introduction: Introduces the author’s motivation and the research objective to evaluate Amazon’s customer-centric mission.
2 Electronic Commerce: Defines e-commerce and provides an overview of the current digital market landscape.
3 The Path to Customer Centricity: Discusses historical marketing theory, the transition from the 4 Ps to 4 Cs model, and the core pillars of customer centricity.
4 Amazon: Examines Amazon's history, corporate culture, business strategy, and specific loyalty mechanisms like Prime and targeted advertising.
5 The MCR-BM Concept: Introduces the Management of Customer Relationship in Business Media (MCR-BM) framework and its seven building blocks.
6 Analyzing Amazon’s ‘Customer Centric’ Efforts: Applies the theoretical frameworks to Amazon’s actual practices.
7 Critical Analysis of the Assessment: Discusses the limitations of the evaluation based on data availability and the qualitative nature of the analysis.
8 Conclusion: Summarizes findings and confirms Amazon's strong alignment with customer-centric principles.
Keywords
Amazon, Jeff Bezos, customer centricity, CRM, MCR-BM, e-commerce, marketing mix, 4 Ps, 4 Cs, personalization, customization, consumer behavior, market strategy, digital economy, customer loyalty.
Frequently Asked Questions
What is the core focus of this research?
The thesis examines how Amazon.com, Inc. operationalizes its mission to be Earth's most customer-centric company through various technological and service-based strategies.
What are the primary thematic fields addressed?
The work covers e-commerce evolution, marketing mix theories (4 Ps vs. 4 Cs), customer loyalty programs, and the application of CRM frameworks within digital business models.
What is the main research objective?
The goal is to objectify Amazon's subjective claim of being "customer-centric" by comparing their strategies against established academic frameworks like the MCR-BM model.
Which scientific methodology is utilized?
The author uses a literature-based qualitative analysis, comparing existing academic marketing theories with empirical data and observations of Amazon's operational business practices.
What is discussed in the main body of the text?
The main body bridges the gap between historical marketing theory (4 Ps/Cs) and modern CRM tools, followed by a detailed case study of Amazon's services like Prime, FBA, and targeted advertising.
Which keywords characterize this thesis?
Key terms include customer centricity, MCR-BM, e-commerce, Amazon, personalization, and marketing mix.
How does Amazon utilize its 'Subscribe & Save' program?
It acts as a recurring delivery service that incentivizes customer retention through discounts, thereby increasing both customer convenience and long-term relationship commitment.
What role does the MCR-BM model play in the analysis?
It serves as a sophisticated CRM framework used to evaluate how companies manage relationships with customers in the digital economy, specifically identifying seven building blocks relevant to Amazon.
- Quote paper
- Anthony Blint (Author), 2019, Amazon.com. An e-commerce force in Europe, Munich, GRIN Verlag, https://www.grin.com/document/469581
