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Running head: Strategic Marketing for Amazon Echo dot 1

Strategic Marketing for Amazon Echo dot 8

Strategic Marketing for Amazon Echo Dot

Kyami Clarke

University of Maryland University College

Writing Assignment Part 1

MRKT 310 7983 Marketing Principles (2188)

Professor Melissa Daston

Fall 2018

Strategic Marketing for Amazon Echo Dot

The Amazon company’s reputation for attracting and retaining loyal consumers comes from their customer-centric attitude and their ability to be everything their customers need, when they need it, all available in one convenient place. Amazon’s 2017 fourth-quarter revenue was listed at $117.9 billion. Their revenue from third to fourth quarter increased by 38% mainly due to the expansion to the Echo line (Enright, 2018). The Amazon Fire TV Stick and Echo Dot are the company’s best-selling products. In such a competitive market, how is Amazon and the Amazon Echo Dot so successful?

Creating Value for Customers

One of the four major components of marketing, as defined by the American Marketing Association, is creating value for customers. The creation component is the first stage, which is where a business collaborates with suppliers and customers to create an offering of value (Chapter 1: What Is Marketing?, 2012). The term value does not merely refer to product pricing or a monetary amount. In the context of marketing, value equates to the benefits the consumer receives over the hassle and costs of the product.

The Echo Dot is Amazon’s most popular smart home product. The Echo Dot utilizes Artificial Intelligence (AI) technology, Wi-Fi, and Bluetooth to allow customers to ask questions, make calls, check the news, play music, and control their home with smart home devices. Automatically bundled with the Echo Dot is the cloud-based Alexa virtual assistant service, also developed by Amazon. Plus, it can sync with an infinite number of other external products and suppliers. A few of their significant partnerships includes other popular brands such as Google, Nest, Phillips, and the Marriot (DeGeurin, 2018). Each of these characteristics adds value to the product and benefits the customers.

Value plays the central role in the marketing plan. Even though the customer ultimately determines the value, a business creates and enhances the value to their product or offerings by understanding their target audience and customer needs (Chapter 1: What Is Marketing?, 2012).The Amazon Echo Dot (2nd generation) has 119,335 customer reviews. 81% of those reviews are 4 stars or higher (Amazon Company, n.d.). Amazon has shown that they have a great understanding of their customer needs. Their insight is gained through customer feedback and incorporating that in their product designs and customer service model.

Customers Role in the Company’s Strategic Plan

It is essential for a company to develop a strategic plan, which will lead to their marketing strategy. An integral part of a strategic marketing plan is the customers, their needs, and their overall satisfaction (Chapter 2: Strategic Planning , 2012). Amazon’s mission statement is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavours to offer its customers the lowest possible prices” (Amazon.com, Inc., 2018). As reflected in Amazon’s mission statement, all three components are incorporated in their innovative product designs and service models.

Amazon’s number one leadership principle is customer obsession (Amazon.com, Inc., 2018). They start with customer input and continue to include the customer in each tier of their business process, from corporate to functional. A business with this level of customer focus does not need to make any modifications. In regards to my personal experience with Amazon, I am a loyal Amazon customer. I have two Amazon Echo Dots, an Amazon Echo, two Amazon Fire Sticks, a Kindle, and have been an Amazon Prime member for over 10 years. The reason for my continued use and endorsement is a result of my customer satisfaction and their customer service. I can unequivocally say the fact that Amazon has ranked number in customer satisfaction, for the last nine years (Amazon, 2018) is a testament to the validity of their mission statement.

SWOT Analysis

It necessary for a business to conduct a SWOT analysis. The purpose of a SWOT analysis is to analyze a company’s strengths, weaknesses, opportunities, and threats (Chapter 2: Strategic Planning , 2012). The internal factors, for SWOT analysis, are strengths and weaknesses. Conversely, the external factors are opportunities and threats. Exhibit A below illustrates a simplified SWOT analysis for the Amazon Echo Dot (Greenspan, 2017).

Exhibit A. Amazon Echo Dot SWOT Analysis

Strength’s

Weaknesses

· Pricing

· Mobile Integration

· Design

· Alexa Contextual Speech Recognition

· Supply Chain (Amazon)

· Customer Loyalty

Opportunities

Threats

· Sound System/Sound Distribution

· Cybercrimes

· Diversify Market

· Heavy Competition

Some of the strengths associated with the Amazon Echo Dot are the product design, size, cost, supply chain. Although, the greatest strength is the company’s customer base and loyalty. Alternatively, the Echo Dot’s weaknesses are its lack of mobile integration (i.e. Apple HomePod) and Alexa’s issues with understanding contextual speech patterns (i.e. Google Home)(Greenspan, 2017). There are a couple of key external factors, opportunities and threats, that impact the Echo Dot. The two opportunities would be the sound enhancements and distribution of the sound system and marketplace diversification. The two threats are heavy competition, cybercrimes.