Customer-Driven Marketing: An Analysis of Amazon.com, Inc.

Choosing the ideal marketing strategies is critical for any business corporation that seeks to achieve both its short-term objectives and the firm’s ultimate goals. There are a variety of marketing techniques adopted by disparate organisations for the sake of publicising their brands; a few examples include bottom-up approach, top down, inside out and outside in strategies. The choice to select which strategy to implement is a critical decision that requires professional and strategic market analysis. However, Donovan and Samler, (1994) postulate that the ideal marketing approaches are outside in, beginning with consumer wants and needs. Outside in marketing can be defined as the act of mastering the language of one’s clients and potential customers and creating notifications for them in and on their terms (Mathewson and Moran 2016, pg.4). The philosophy of the top down marketing, on the other hand, regards customers as passive players compared to the former strategy which considers the consumers as the most vital and active participants. The paper critically analyses customer-driven marketing by applying the case of Amazon.com Inc. to ascertain that the ideal marketing approaches are not top-down but outside-in. In addition, the essay demonstrates that the voice of the customer influences the selection decision for a specific marketing strategy.

The Need for Customer-Driven Marketing

Understanding the need for an organisation to focus on customer-driven marketing is the initial step to achieving the best marketing approach, which focuses on the wants and needs of the customer. Theoretically, this can be obtained by simply examining the definition of outside in marketing as stated by Mathewson and Moran (2016). Similarly, Piercy and Morgan (1990) write that analysing contemporary markets and coming up with methods to exploit them is essential but it should never be the only focus because it can never be enough to achieve the marketing goals. The common notion that a marketing approach will sell itself is a wrong assumption made by most marketing executives. Piercy and Morgan (1990) compare this perception to the assumption that a commodity will sell itself to a consumer if the quality is good. Therefore, organisations ought to train its workers on how to cope with unconventional customer behaviour, the issue of managing conflict and power in the distribution channel, the need to negotiate with buyers and convince them to make a purchase, and finally trying to outthink the competing firms.

On the other hand, top-down marketing entails looking for a small percentage of wealthy people in a local area and appealing to them to purchase your product (Mom, Van Den Bosch, and Volberda, 2007). The strategy is the opposite of a bottom-up approach that encompasses looking for potential clients in a general pool of people. Top-down approach has several pros; wealthy individuals prequalify because they might be interested in the product; the firm’s current customers may introduce other clients in the same social class to the business. Conversely, its cons are stiff competition from other firms, potential clients are hard to reach as they are over-prospected, and the strategy may take a longer timeline. However, Mathewson and Moran (2016) prefer outside in marketing over other approaches because it focusses on the needs and wants of the customers who are most crucial stakeholders.

With the philosophy of customer-oriented marketing in mind, many business firms have adopted marketing strategies that involve focusing on the customer wants and needs testing opportunities and analysing them to obtain improved results with Amazon.com Inc. being a suitable example of a company that uses the marketing strategy to boost its sales. The firm focusses on consumer experience-a strategy they call “Customer Obsession” (Chaffey, 2018). The performance of the marketing approach implemented by Amazon is demonstrated on the consistency with which the firm outperforms other retail companies on the ASCI consumer satisfaction rating. Their focus on the needs and wants of their customer is the philosophy of the business which is clearly shown on the mission statement that reads “To offer Earth’s biggest selection and to be Earth’s most customer-centric company” (Chaffey, 2018). In addition, the CEO of Amazon, Jeff Bezos explains the true implication of customer obsession by saying that obsessive consumer focus is the best way of centring a business out of the many techniques such as competitor focus, technology focus, business model focus, and product focus (Chaffey, 2018). The ultimate benefits of the strategic marketing approach are evident in the company’s overall turnover of approximately $135 billion (Chaffey, 2018).

Based on the ASCI consumer satisfaction rating of Amazon, one of the largest e-commerce companies in the world, it is safe to say that the ideal marketing approaches are not top-down but outside in, beginning with consumer wants and needs (Chaffey, 2018). However, this type of marketing takes different forms that could be disparate for other organisations depending on their nature of the business. For example, Amazon focuses on the experience of the customers by offering a broad selection of goods, convenience, and low prices. Other measures that organisations can implement are aligning the goals of the firm with the behaviour of the workers, empowerment, reframing, and motivation of employees. The primary aim of the marketing strategy is to not only achieve brand awareness but also to build loyalty and thus achieve repeated purchases (Chaffey, 2018).

Customer-Oriented Approach

Following the increased success of the marketing strategy, many organisations have embarked on using the approach as their main marketing technique (Mukerjee, 2013). According to Mukerjee (2013), an organisation seeking to become a long-term profitable corporation ought to put the interests of its customers first. Customers’ orientation needs creating a suitable working culture and encapsulating the relevant information on consumer wants and needs. The information gathered should make the firm a suitable condition to deliver the appropriate products to their customers. The behaviour of the senior management should also be in accord with customer orientation to ensure that the right attitude passes on to the employees of the company. For these reasons, Donovan and Samler (1994) postulated that customer-driven marketing strategy is not a one-stage procedure but rather involves several steps. These steps have to be adhered to by the stakeholders of the firm that are directly impacted to attain the level of brand maturity.

The first step of the process, called communal coordination, entails the development of a central database that stores all the consumer data including their transactions. Creation of the repository requires involvement from all the workers in the firm. Consumer information is critical especially for e-commerce companies similar Amazon and hence having a reliable data pool would serve as proof of transactions in cases including customer dissatisfaction. For this step to succeed, the company needs to overcome resistance to sharing information and political boundaries. The second step, termed as serial coordination deals with analysing the information gathered to create important intelligence that is shared with all the members of the company. The third process, symbiotic coordination, purposes to comprehend the customer’s future behaviour and to determine the results obtained from customer orientation activities. The fourth process, integral coordination, incorporates consumer orientation into the philosophy of the business across the functions of the organisation to make employees adopt this behaviour. These four approaches collectively make a company be in an ideal position for monitoring customer attitudes and trends.

However, these steps do not qualify an organisation as customer-oriented (Mukerjee, 2013). The procedures that a firm should implement to become consumer-driven are the following; developing a great comprehension of what the consumer truly values, delivering the desired value to the customer and tracking their satisfaction, and retaining and rewarding profitable and loyal customers.

Developing a Great Comprehension of What Consumer Values

A customer-driven firm attempts to monitor current trends and get ready for their customers by creating suitable capabilities. The workers are empowered and allowed to engage with existing and potential customers to gain good knowledge on what they truly value. Customer engagement has made many large firms to boost their sales; for example, the Connect + Develop study initiative launched by P&G on 5 million consumers across 100 nations resulted in massive sales (Mukerjee, 2013). The process requires a discerning analysis of the behaviour of the customers characterised by assembling information on customer’s transactions and creating consumer profiles based on their buying behaviour. Amazon.com Inc. also applies such kind of marketing strategy called e-commerce segmentation where they create personas of which potential customers will buy certain products and in what ways. Amazon uses psychographic and demographic segmentation to partition its market according to the purchase behaviour, that is, what people buy and not what they are interested in. The market segmentation is based on customers’ product preferences, the perception of life and price sensitivity help the firms to come up with products that are specifically tailored to meet the needs of an individual consumer. The strategy has proven to be effective based on the ASCI consumer satisfaction rating done by the Amazon’s customers from around the world (Chaffey, 2018).

Delivering the Desired Value and Tracking Consumer Satisfaction

Customer-driven firms pay attention to product delivery to ensure that their consumers receive the desired value through setting policies, and appropriate systems and structures. In addition, the firm also incorporates tracking systems into its initiatives to monitor the purchasing patterns of the customers and track their satisfaction. Contemporary business firms such as Toyota and FedEx are developing processes, culture, and systems as a marketing strategy to give them a competitive edge over their rivals. Therefore, other firms should follow suit and incorporate such initiative in their daily activities.

Innovative Ways for Rewarding and Retaining Loyal Customers

Due to the constant change in the needs of consumers, a customer-driven business organisation should constantly look for innovative ways to maintain their clients. Innovation addresses the issue of the dynamism of the market that constantly influences the needs of customers with regards to technology, globalisation, societal norms etcetera. These alterations need to be encapsulated by the firm and the associated customer profiles updated accordingly. Maintaining loyal consumers is significantly profitable for the organisation because it is relatively cheaper to sell to such customers. Therefore, every firm should purpose to retain their loyal clients. However, corporates should be cautious to reward these customers in a manner that they prefer and appreciate as opposed to granting them an arbitrary reward that may render the whole initiative counterproductive.

Similarly, apart from philanthropy, innovations and adequate research also plays a huge role in retaining a client. For example, Amazon conducted experiments on their customers’ needs and came up with a new feature on their website called “Ask an Owner” (Chaffey, 2018). With this functionality, a customer can inquire any information related to a product they may be interested in, and the website would redirect the question to the owner for clarifications. The new feature is very helpful especially to customers who have had problems with products purchased via Amazon. Such innovative ideas are very important to maintaining the loyalty of the customers especially the long-term ones. Thus, organisations should constantly research their customer’s attitude and preferences to come up with innovative solutions to major problems and in turn keep their loyal customers.

Conversely, measuring the performance of employees in relation to customer-driven behaviour is a vital aspect of the marketing strategy. Mukerjee (2013) suggests that it is beneficial for organisational management to evaluate the performance of their workers according to consumer orientation and restructure their incentives and rewards accordingly. This would improve the collaboration of the workers towards the customer-oriented philosophy of the organisation. The performance could be measured through huge amounts of quantitative and qualitative data that is produced by filtering every employee’s touch points and factoring in real-time comprehension of performance and the success factors against the priorities of the organisation. Typical examples of these factors include customer engagement, employee engagement, community involvement, financial performance, and product service excellence. Measuring the performance of employees and the other strategies discussed above can be essential in making a firm consumer-oriented.

Customer Satisfaction

Customer satisfaction is always the core principle of any contemporary marketing strategy including outside in approach. Therefore, many managers have focused on ways of ensuring that their customers remain satisfied with the services provided by the firm. However, despite the attempt by many organisations to achieve this goal, the problem lies in the means of measuring and evaluating customer satisfaction. Similarly, in spite of the numerous attempt to measure and evaluate customer satisfaction, there has been minimal research on the impact these analyses have on the firm. Existing evidence shows that many companies have used the existence of the two markets and customers-external and internal because of their significant implications for customer satisfaction (Piercy, 1995). The knowledge of how to assess customer satisfaction is a critical aspect of customer-oriented marketing and should be addressed by a firm seeking to achieve success in its marketing goals.

Some of the factors used as pointers to determine the perception of external customers concerning the quality of specified product service include reliability of the service, service tangibility, responsiveness in attending to customer feedback, empathy with the service provider, and service/product assurance. These issues can also reflect upon the internal market of the organisation. The problem now presents itself in how the management of the organisation uses the results of the customer satisfaction analysis. The questions seek answers to the following: whether the measurement means for customer satisfaction are perceived to be fair to the workers (reliability); whether the measurement systems generate actionable findings or just innuendo (tangibility). Also, it addresses whether the management of the firm pays attention to the customer feedback and deals with it (responsiveness), whether these measurements are used coercively (empathy) or positively; and finally whether customers trust the integrity of the firm’s management (assurance).

Measurement of customer satisfaction according to the metrics discussed herein and their application as a strategic marketing technique is faced by several problems. The first issue is on the measurement systems that are more than consumer popularity polls and hence resulting in a case where popularity is appreciated while unpopularity is not. The second problem is on systems that only capture negative comments and criticism from the customers but no positive feedback. Such systems may produce biased information that may not be a true reflection of what the consumers genuinely need and hence render the process as counterproductive. The third issue is on the reporting systems that show the facts to the management, but only negative conclusions are communicated to the workers. Piercy (1995) finds this issue as a result of incompetent leadership. Finally, the blind use of results acquired from customers’ feedback is not a strategic way of handling the issue because the input may only be from a small sample of the clients. These problems among others present the biggest hindrance to measuring customer satisfaction, and they should, therefore, be addressed keenly (Huang and Rundle-Thiele, 2015).

One primary way of achieving customer satisfaction is through internal marketing, which is defined as the process of creating customer orientation in the workers via motivation of the support staff and customer contact and training them to function as a unit (Kotler and Armstrong 1989). IM approaches are meant to make the employees understand the organisation’s marketing strategy, and they include training, staff development, integration schemes, and effective communications. An effective IM strategy aligns the organisation’s philosophy with the behaviour of the workers. Hence, for a business to maintain customer experience that is positive throughout its objectives, a proper IM approach should be adopted via inside-out management.

The Role of IM

Internal marketing roles are important for achieving the day-to-day objectives of the business and the ultimate marketing goal. Three levels may apply to address this roles; change management, strategic IM, and building a corporate image. IM can achieve a smooth transition of the organisation’s business activities by enabling easier acceptance as it aids the internal communication of the business and helps in minimising resistance to organisational change. IM also assists in building the corporate image since every worker acts as an ambassador towards creating brand awareness and achieving the business objectives. Building and maintaining a good corporate image ensures customer loyalty and attracts potential clients who may be willing to associate themselves with the business. Finally, strategic IM helps in reducing inter-functional and inter-departmental conflict and helps to create commitment and cooperation required in the external marketing strategies. These roles place the organisation management at a strategic position for implementing customer-based marketing approaches that are beneficial for achieving customer satisfaction.

Nevertheless, the benefits associated with internal marketing also play a huge role in outside in marketing. IM motivates employees to work better towards achieving the organisation’s marketing strategy. IM also empowers workers and makes them responsible and accountable in their tasks by creating a universal understanding of the firm’s goals. By encouraging employees to offer exceptional services to the customers, the IM strategy greatly influences the firm’s success in achieving its goals. Amazon achieves excellent sales by implementing these strategic approaches (Chaffey, 2018). Hence, the company records a high number of repeat purchases (55% rate). Furthermore, internal marketing improves consumer retention which is one of the primary objectives of customer-oriented organisations. The benefits of internal marketing are aligned by the objectives of customer-oriented marketing strategy and hence making IM the ideal approach for achieving customer satisfaction.

Managing Internal Marketing Strategy

Since the role and benefits of IM are beneficial to customer-oriented organisations, it is imperative for the corporations to adopt strategic management approaches to ensure that their choice of a marketing technique achieves the best possible results. Managers have a responsibility of setting a good example for their employees and setting standards of job effectiveness and customer relations. In addition, IM management requires strategic goal development that would align the objectives of the business with those of marketing approach and ultimately improve the sales and contributes to brand awareness. Furthermore, uniformity and good consistency when dealing with consumers is a critical management approach that every manager should ensure. These three management approaches are vital to implementing successful internal marketing and hence very essential in achieving customer-oriented marketing objectives.

Conventionally, many marketing strategies including internal marketing have problems associated with them that affect the successful implementation of the approach. The first and the most significant issue results from the managerial incompetence, especially in the technical, conceptual and interpersonal skills. These restrictions hinder successful communication that is necessary for implementing the IM strategy and achieving the organisation’s success. Managers with poor interpersonal skills relate poorly to both their subordinate and the customers. Therefore, they do not depict the ideal corporate image that is required for marketing purposes. Furthermore, such managers do not set good examples for their employees as far as customer relations are concerned.

Another problem that hinders successful implementation of IM strategy is a misunderstanding of the internal marketing concept. The result of this issue is the possible adoption of counterproductive measures that would make it difficult for the organisation to achieve its business goals. The third problem is the internal conflicts between different departments in the firm that make it difficult for employees to work as a team towards achieving a specific goal. Other issues include bureaucratic leadership, inflexibility of the organisation structure, poor communication, resistance to change, ignoring subordinates.

Creating IM Programs

Developing strategic IM approaches is a complex process that requires careful considering of the market, the customers, and the possible limitations among other things. Therefore, the marketing executive needs to be strategic since these initiatives play huge roles in influencing the perception of the customers and improving company sales. The first step in creating an IM program is to define the market that the company targets.. After identifying the target market, the next stage is to conduct thorough research of the market. This study helps to analyse different aspects of the market such as the needs and wants of the workers, job satisfaction levels, knowledge and skills needed, and the attitude of workers towards the organisation. The management of the organisation should ensure that the needs of their subordinates are aligned with those of the customer and the company. Pointers such as job satisfaction levels can show such insights. Satisfied employees have the right attitude and are usually motivated to do what the organisation requires them. Maintaining high levels of job satisfaction of the employees is a strategic approach that should be prioritised by any firm seeking to achieve its marketing goals. Market research should be conducted carefully since it is fundamental for IM.

The next step in developing internal marketing program is market segmentation. The approach is used both in internal and external marketing. Segmentation ensures accurate, appropriate and effective targeting of the customers in the market. Amazon uses psychographic and demographic segmentation of its market basing the purchase behaviour of its customers. E-commerce segmentation has been the cause of massive success in the marketing of products sold by Amazon.com Inc. (Chaffey, 2018) and hence a critical stage in creating marketing programs.

Marketing action is arguably the core stage in developing internal marketing programs because it involves the selection of techniques and implementing them to achieve the most success. The employees of the organisation play a considerable role in ensuring that these programs are successfully selected and executed. Teamwork initiatives such as brainstorming, employee empowerment, and effective communication are critical at this stage.

The next stage in developing IM programs is marketing communication which focusses on spreading information on marketing both externally and internally in a timely and accurate fashion. The organisational management should encourage participation from all the relevant stakeholders (mostly employees and customers) to obtain immediate and detailed feedback. Feedback helps the administration to make appropriate adjustments to the marketing strategy to satisfy the needs and wants of both customers and workers. Similarly, the feedback helps the firm to analyse the level of brand awareness and the perception of the consumer about this brand. Effective communication of a marketing program is achieved using appropriate channels that reach the highest number of customers and potential clients in the market. According to Chaffey (2018), Amazon advertises its brand through online media channels like sponsored search, email campaigns, portal advertising, and associates programs among others. These techniques have been well received by the customers and hence the proper corporate image of the organisation.

The final stage is market orientation that entails clarification of the marketing vision and objectives to all workers and communication the individual goals of every employee and their associated responsibilities towards business success. Furthermore, this programs helps the employees to know whom to look for in case of an issue since IM is about working as a team.

Implementing the Marketing Plan

After identifying the target market, conducting market research and creating marketing programs, the next vital aspect is the implementation of the marketing plan. Conventionally, this stage is attained through the cooperation of functional managers and top-level leadership of the firm. Furthermore, implementing this plan needs a flexible approach that will manage the internal environment of the business towards achieving the set goals and objectives (Morgan, Katsikeas, and Vorhies, 2012). Finally, the dynamic needs of workers need must be considered at this stage. Implementation can be attained through the following methods: marketing audit, marketing analysis, objective setting, designing action measures, and assigning responsibilities to employees, controlling and monitoring the plan. A feasible plan should generate the required results, and hence this stage is the most crucial part of marketing.

Conducting a marketing audit encompasses achieving a comprehensive, independent, periodic and systematic assessment of the organisation’s marketing. The purpose of a marketing audit is to examine the marketing activities and assets based on the conditions of the market and aid the business in planning. The review covers both the external and internal environment such as processes, capabilities, strategies, goals, and systems. An audit leads to actionable recommendations to be done by the organisation.

Another method of implementing the plan is through marketing analysis, that is, a research of the market dynamism. Market analysis involves a careful review of various market components of the operating business such as employee needs and requirements, demand and supply of products etcetera. Also, objective setting follows market analysis. The next stage is strategy development which entails developing steps that should be followed to achieve the set goals. Strategy development is usually influenced by employee involvement in the entire marketing strategy. Strategy development is then followed by the design of the action programs and assignment of the roles to the employees. These methods are fundamental for successful implementation of any strategy regardless of the nature of the target group.

Furthermore, the culture of an organisation can be used to develop a strategy for marketing that would be effective in achieving its business goals. Culture development has been possible due to service marketing approach that has been adopted by many organisations in the contemporary society. Wasmer and Bruner (1991) describe six flows that govern the process of identification and implementation of the appropriate measures; they include making the offer to the customer, conducting internal communications, service specifications, service performance, customer feedback, and employee feedback. Similarly, Cravens, Piercy, and Prentice (2000) present almost similar insights when writing about the market-driven approach. They address changes in the marketplace that could be identified through market analysis. The next step involves coming up with the necessary action plan followed by deigning accurate visions to achieve customer satisfaction.

Conclusion

Despite the existence of a variety of marketing techniques adopted by disparate organisations to achieve their business goals, customer-oriented strategies have proven to be the most ideal, and this can be attested by considering the case of Amazon.com Inc. whose philosophy is to be the greatest customer-eccentric business organisation in the world. The firms focus on the needs, and want of their customers is the primary objective of the business that is shown on the mission and vision statement and also through its most successful marketing strategy known as Customer Obsession. The ultimate benefits of this strategic marketing approach are shown in the company’s overall turnover of approximately $135 billion. Customer-driven firms achieve their business goals by criteria such as developing an excellent comprehension of what the consumer indeed values, delivering the desired value to the customer and tracking their satisfaction, and retaining and rewarding profitable and loyal customers. These measures are imperative in ensuring consumer satisfaction. However, problems arise in measuring the consumer satisfaction that presents a challenge of assessing the benefits of outside in marketing. One primary way of ensuring that the goals of the business are focused on achieving a customer-oriented philosophy is through internal marketing which purposes to make the employees understand the organisation’s marketing strategy. These approaches include training, staff development, integration schemes, and effective communications. Therefore, from this paper, it sufficient to claim that the ideal marketing approaches are not top-down but outside in, beginning with consumer wants and needs.

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