Marketing Mix for Amazon

Question:

Discuss about the Financial Statements of Cengage Learning.

Global marketing is the part of marketing where an organization expands and diversifies its market globally. Amazon Inc has been chose for this report. Inc is the largest company in the online retail store and currently, it is running its business very smoothly and enhancing the return of the company. This company has planned to diversify its market into overseas (Amazon, 2017). Basically, this company is of US. It offers various product and services to its customer through an online portal. Amazon deals with the seller to sell out their product through Amazon and then it delivers the product to the customer and charge commission from the seller. There are various competitors of the company in the market but still company has managed to make its place into the market and currently it is leading the e commerce business. The main mission of the Amazon is to enhance its market base and the share through entering into the new market and satisfying the customers. Various policies and strategies are used by the company to achieve its goals and targets. The main product and services of the company are clothes, books, household stuffs, toiletry products, kitchen products etc. services of the Amazon are quite satisfactory and the existing customers of the company are quite satisfied with the performance of the company (Best, 2009).

Marketing mix is the combination of various factors which could be controlled by an organization to manage and influence the customers to buy a product. Amazon Inc. is required to have a look over its marketing mix before entering into the new market. The marketing mix of the company must be created in such a manner that company could achieve its goal effectively. The marketing mix strategy of the company must be accordingly:

As Amazon is the online retail store, so it must offer entire products such as variety of clothes, household stuff, appliances, books, beauty products, furniture, car, mobiles, electronic products, gifts, grocery, pet suppliers, office essentials, watches, various tools and home improvement etc so that the customers could attract more towards it in the overseas market (Snyder & Davenport, 2013).

The prices of the Amazon Inc must be lower than other competitors, the current strategy of pricing of Amazon is satisfactory and company must follow the same in global market too (Peter & Donnelly, 2011). Company must directly buy the product from the manufacture and sell is directly to the customers so that the price level of the company could be lower than the market price.

Promotion Strategies

This marketing mix is a contradicting issue for the company as the company would offer all the products through its portal so individual could download it into their android, ios mobile and order anything which is available at the store of the company. Website could launch its web links on the web pages to enhance the market share (Stratton, SAS Institute Inc., 2009).

Company could take the help of various strategies to promote its product into the global market such as coupons, sale, emails, offer etc. company could ask various questions to the people and gift them a voucher (Weygandt, Kimmel & Kieso, 2015). Company could also promote its business through print media, TV, radio, hoardings etc to promote its business into the global market. This would help the company to enhance its market share and it would also help the company to achieve its goals.

In order to buy the goods in the cart, a check out section is required to select. This check out policy of the company follows 5 steps which starts from identifying the clients then selecting the shipping address then select the payment method then the overview of the order could be analyzed and the order could be confirmed and lastly the order is confirmed by the company through an email (Saunders and Cornett, 2014). The above process of the company is bit easy and thus the customers get attracted more.

In Amazon, people are those who brings the customer product. Company must identify the best courier company in the international market and take the help of that company to deliver its products so that the product could be delivered on time to the customer. It could also start the prime system in which the product would be delivered in next 48 hours after placing the order.

Company could put its links on various websites and other web pages which would help the customers to know about the company and this company could also set its position through various keywords that make it simple and easy for the individual and visitors to find the website and purchase products from the website (Martani and Khairurizka, 2009).  

Thus the above strategies would help the company to manage the marketing strategies of the company and enhance the market share into the international market.

Economic evaluation is very crucial for every business. This part is prepared by the company to identify the future changes and predict the future performance of the company. In this part, various planning related to financial performance, cost of the company, total profit of the company, sales etc are analyzed. Amazon’s economic evaluation has been done in this report, on the basis of various strategies to identify the performance of the company and the various financial consequences and the benchmark.

Distribution Strategies

Firstly, the planning of the company into the Australian market has been examined in the context with the financial consequences. The sales of the company have been analyzed according to the market population and market share of the company. The discount has been analyzed on the basis of annual report of the company and historical data of the company. Stock ratio of the company has been planned according to the consolidated profit and loss account of the company (Bojadziev, 2007). Further, the various expenses of the company has been forecasted according to the competitors expenses, Australian market, the labour cost of the Australian market and various other factors.

The sales of the company have been analyzed according to the market population and market share of the company. Market shares of the company have been predicted according to the overall performance and competitive companies of the company, the main competitor of the company is JB HI FI. According to the analysis, the market share of the company would be 20%. The total population, market population, annual purchase, commission etc has been analyzed to identify the total sales of the company:

Market share of the comapny	20%
Total population of the country	24.13	million
Total market populations	4.826	million
average annaul purcahse	25	per customer
Estimated annual revenue	120.65	million

            Further, the cost and profit of the company has been analyzed through considering various aspects of the market, company and the competitors. The cost and profit analysis of the company is as follows:

Profit and Loss Statement
	(Amt in $’000)
Month	Oct 17
Income
Sales
Sale of goods/services	$           1,20,650.00
Sundry Income (e.g. Commission earned, frachise fees etc.)
Etc.
Total Sales	$           1,20,650.00
Less Discounts/Commissions
Sales Discounts given	$                5,000.00
Sales Commissions paid	$                         –
Total Discounts/ Commissions	$                5,000.00
Total Net Income	$           1,15,650.00
Cost of Sales
Opening Stock	$              10,000.00
Stock Purchased	$              60,000.00
	$              70,000.00
Less Closing Stock	$                   500.00
Total Cost of Sales	$            69,500.00
Gross Profit	$              46,150.00
Expenses
General & Administrative
Bank charges	$                   500.00
Credit card commission	$                   300.00
Consultant fees	$                    35.00
Office Supplies	$                   100.00
Business insurance	$                   100.00
Etc.	$                         –
Total General & Administrative	$                1,035.00
Marketing & Promotional
Advertising	$                1,500.00
Promotion – General	$                1,000.00
Promotion – Other	$                   500.00
Etc.	$                   250.00
Total Marketing & Promotional	$                3,250.00
Operating Expenses
Newspapers & magazines	$                    25.00
Parking/Taxis/Tolls	$                   105.00
Laundry/dry cleaning	$                   100.00
Cleaning & cleaning products	$                    75.00
Sundry supplies	$                   500.00
Equipment hire	$                   250.00
Etc.	$                         –
Total Operating Expenses	$                1,055.00
Motor Vehicle Expenses
Fuel	$                   750.00
Vehicle service costs	$                   300.00
Tyres & other replacement costs	$                   200.00
Insurance	$                   100.00
Registrations	$                         –
Total Motor Vehicle Expenses	$                1,350.00
Website Expenses
Domain name registration	$                1,000.00
Hosting expenses	$                5,000.00
etc	$                         –
Total Website Expenses	$                6,000.00
Employment Expenses
Permanent	$                         –
Salaries/Wages	$                2,000.00
PAYE	$                1,000.00
Superannuation	$                1,000.00
Other – Employee Benefits	$                1,250.00
Recruitment costs	$                1,250.00
Total Perm. Employment Expenses	$                6,500.00
Casual
Salaries/Wages	$                1,800.00
Recruitment costs	$                         –
Total Casual Employment Expenses	$                1,800.00
Workcover Insurance	$                         –
Total Employment Expenses	$                8,300.00
Occupancy Costs
Electricity/Gas	$                   312.50
Telephones	$                   500.00
Property Insurance	$                   150.00
Rates	$                   100.00
Rent	$                   150.00
Repair & maintenance	$                   600.00
Waste removal	$                   250.00
Water	$                   250.00
Etc.	$                         –
Total Occupancy Costs	$                2,312.50
Other Expenses
Machineries	$                   700.00
Vehicles	$                   200.00
Equipment	$                   700.00
Total Other Expenses	$                1,600.00
Total Expenses	$              17,552.50
Net Profit / (Loss)	$              28,597.50
Total Year to Date Net Profit / (Loss)	$              28,597.50

(David, 2011)

The above table depict that the total cost of the company is $ 1,75,52,500 whereas the total gross profit of the company is $ 4,61,50,000.

Further, the study has been conducted over the budgets of the company. The budget has been prepared for a year in which the total sales of the company, various expenses, cost of sales, gross profit, net profit etc as been evaluated (Geraedts et al, 2012). The budgeting information of the company is as follows:

Profit and loss a/c has been prepared according to the basis of the above prediction. The summary of profit and loss a/c of the company is as follows:

Profit & Loss Statement
Month	Sep 17
Income		(Amt in $’000)
	Total Sales	1,20,650
	Less Total Disc/Comm	5,000
	Total Net Income	1,15,650
	Less Total Cost of Gooods Sold	69,500
	Gross Profit	46,150
	Expenses
	General & Administrative	1,035
	Marketing & Promotional	3,250
	Operating Expenses	1,055
	Motor Vehicle Expenses	1,350
	Website Expenses	6,000
	Total Employment Expenses	8,300
	Occupancy Costs	2,313
	Other Expenses	1,600
Total Expenses	17,553
Monthly Net Profit / (Loss)		28,598
Total Year to Date Net Profit / (Loss)	28,598

(Garrison, Noreen, Brewer & McGowan, 2010)

This depict that the net profit of the company would be $ 2,85,98,000, in case the company would enter into the Australian market. Further, the shares and the revenue of the company would be enhanced.

Further, the study has been proposed over the total promotional expenses of the company. Following amount could be spent by the company to conduct the promotional techniques for the better positioning in the customer’s mind.

Amazon Limited
Promotional Budget as a Percentage of Total Sales
Estimated Total Sales	1,20,650
% of Gross Revenue for Promotion	2.69%
TOTAL PROMOTIONAL BUDGET (in $)		3250
Promotional Activities
Television Advertising Campaign	1500
Newspaper & Magazine Advertisement	500
Social Media Advertising	300
Flyer, Banner and Billboard Advertising	200
Brand Promotional Events & Sponsorship	250
Charity for Health & Wellness research	150
Public Relation Campaigns	350
TOTAL	3250	3250

Pricing Strategies

The promotional budget table depict that the total 269% of the total sales would be spent by the company for its promotion in the Australian market. Thus the total promotional budget of the company would be 32,50,000. The company would spent its promotional budget on various promotional methods such as television advertisement campaign, social media advertising, newspaper, banners, public relations etc. It would help the company to set its position into the Australian market (Higgins, 2012).

Marketing implementation is the main course of managing and developing the marketing strategies into movements to complete the marketing objectives and goals. Amazon’s strategic and marketing plan must also be set out to address the CEO and management of the company which are liable for the company to achieve its target and enhance the growth of the market (Healy and Palepu, 2012). This implementation plan depict that what actions must be started by the company at what time and till when it would be finished.  Implementation plan is way important for the Amazon to achieve its mission and vision and expected goal of the company. Following are the action and contingency plan of the company which could help the company to manage it goals and objectives:

The main purpose of an action plan is to manage the plan of strategy and marketing to support the necessary change and the policies which could help the company to mitigate any kind of risk. The action plan of this company supports entire factors such as profit and loss account, budgets, sales forecast, profit, cost analysis, marketing mix etc. Though a successful implementation action plan could only take place in positive manner if all the activities, strategies, policies and people could be managed properly. While implementing the strategic plans, action and activities control must be closely related to mitigate the risk factor of the company from not achieving its targets (Hollensen, 2015). Monitoring evaluation of Amazon depict that actual marketing outcomes and the solutions help the company to achieve the expected result. Moreover, Amazon limited could also adjust the strategies and plans to become more suitable to its present conditions, if the first seems to be obsolete for going forward.

The main goal of preparing this and managing this is to achieve the goals of the company and manage the performance of the company in a better manner, this action plans helps the company to reduce the level of the risk and enhance the level of the profit of the company.

Economic Evaluation for Amazon

The evaluation of an action plan depicts that a global market must exercise even marketing variable controls as numerous surprises could result in implementing the marketing plans of Amazon Inc. Amazon must check their marketing strategies and plans through evaluating the different strategies of marketing and plans and according to that plans and policies a better result could be concluded and  a better action could be taken against the risk factors of the company (Kotler & Keller, 2006). Such as selecting the partner, maintain a good relation with the partners, relations with government officials, aid agencies etc could be negative and thus could help a risk to be occurred. Company must prepare the contingency plans before to manage the performance and the result of the company. Various risks and their mitigation plan of Amazon business plan has been given in the appendix.

Conclusion:

According to this study, it has been found that the entrance of Amazon into Australian market would be grateful as the company would be able to enhance its market share as well as the profitability of the company would also been enhanced. The marketing strategy and financial performance of the company is way better which would help the company to grab the Australian market quickly. To conclude, the Amazon is suggested to enter into the Australian market to manage the performance and profitability of the company. The main mission of the Amazon is to enhance its market base and the share through entering into the new market and satisfying the customers. This entrance into the Australia market would help the company to achieve its goals and targets. So, it has been found that the entrance of Amazon into Australian market would be grateful as the company would be able to enhance its market share as well as the profitability of the company would also been enhanced.

References:

Amazon. (2017). Home. Retrieved from https://www.amazon.com. Accessed on 8^th Oct 2017

Best, R. J. (2009). Market-based management: Strategies for growing customer value & profitability.

Bojadziev, G., (2007). Fuzzy logic for business, finance, & management (Vol. (23). World Scientific.

David, F.R., (2011). Strategic management: Concepts & cases. Peaeson/Prentice Hall.

Doyle, P., & Stern, P. (2006). Marketing management & strategy. Pearson Education.

Garrison, R. H., Noreen, E. W., Brewer, P. C., & McGowan, A. (2010). Managerial accounting. Issues in Accounting Education, 25(4), 792-793.

Geraedts, J., Doubrovski, E., Verlinden, J. & Stellingwerff, M., (2012), May. Three views on additive manufacturing: business, research & education. In Ninth Int. Symp. Tools Methods Compet. Eng., I. Horváth, A. Albers, M. Behrendt, & Z. Rusák, Eds (pp. 1-15).

Healy, P.M. & Palepu, K.G., (2012). Business analysis valuation: Using financial statements. Cengage Learning.

Higgins, R.C., (2012). Analysis for financial management. McGraw-Hill/Irwin.

Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.

Jouini, F., (2013). Corporate governance & the level of financial disclosure by Tunisian firm. Journal of Business Studies Quarterly, 4(3), p.95.

Kotler, P., & Keller, K. L. (2006). Marketing management 12e. New Jersey.

Martani, D. & Khairurizka, R., (2009). The effect of financial ratios, firm size, & cash flow from operating activities in the interim report to the stock return. Chinese Business Review, 8(6), p.44.

Peter, J. P., & Donnelly, J. H. (2011). Marketing management: knowledge & skills: text, analysis, cases, plans. Plano: Business pub., INC.

Saunders, A. & Cornett, M.M., (2014). Financial institutions management. McGraw-Hill Education,

Snyder, H. & Davenport, E., (2013). What does it really cost? Allocating indirect costs. Asian Libraries.

Stratton, A.J., SAS Institute Inc., (2009). Systems & methods for costing reciprocal relationships. U.S. Patent 7,634,431.

Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2015). Financial & Managerial Accounting. John Wiley & Sons.