Amazon.

com or Amazon is an American electronic commerce and cloud computing company

and the largest internet-based retailer in the world. The founders vision was to build a virtual
shopping place for book lovers. Amazon.com brings the world largest book store to the door
step of people around the world. Customer has to search and order the desired book. It takes 30
days to deliver books to customers in 45 countries. Amazon’s interactive technology is smart.
It's naturally focused on servicing the high value customers and its services naturally favour the
regular shopper.

When an existing customer comes online, Amazon practices the direct marketing principle
of recognising the customer by using a ‘cookie’ previously placed on their computer. As a result,
Amazon personalises what the customer sees. For instance, each customer gets tailored
recommendations. These recommendations are generated using sophisticated statistical software
that profiles the kinds of interests of each customer and also compares them with other
customers, profiling them into similar groups. Each of the books and other products that Amazon
carries also has category information about it, and of course there is the buying history of which
customers are buying it. As a result, Amazon is more able to recommend books or other products
that are likely to be relevant to that particular individual.

The website is therefore designed as a sophisticated communication tool that automates the
process of creating value for the customer by recognising his or her interests.

It is an interactive, direct marketing tool that facilitates a stream of dialogue between the
customer and the brand. As the customer buys or does not buy a product, knowledge about the
customer increases, as does the ability to serve their interest and needs.

The Amazon Internet system can also provide other related services that complement this. For
example, the customer is able to register their interests, which is used in profiling, and can also
register to receive information in the form of newsletters. On the Amazon.com site services
provided include prompts and advice about birthday presents. This is an example of permission
marketing. To add to customer involvement, there is even a facility to set up information about
yourself for others to read.
Amazon makes use of one of the characteristics of the Web that is regarded as its particular
strength. This is the ability to allow people to dialogue with each other. The way it does this is by
allowing customers to review books and other products. Direct marketing has always aimed to
involve the customer and this is a very powerful technique for doing so. Customers trust each
other, often more than they trust what they know to be advertising material.

Invest according to customer value

Amazon's investment is strategically focused on the high value or regular buyer.

Most of Amazon's acquisition strategy has been based on PR, word of mouth and internet
banners. Spending on Internet banners favours those who are already online shoppers, thereby
focusing spend on heavy users. Furthermore, the investment in quality has been instrumental in
creating stunningly effective word of mouth. In the first three months of 2000 alone, during the
high growth phase of the Internet, Amazon.com acquired 3 million new customers, with virtually
no significant investment in recruitment.

Use technology like an artist

Perhaps the most important point to make is that most people don’t think of Amazon primarily as
a technology company but as a service or shopping site.

Amazon’s CRM system depends on the following functional applications:

1. A relational database of customers, including a history of their purchases and activity, as

well as the marketing activity of the brand.
2. A relational database of product information, including not only basic information such
as price of also reviews, editorial and such like.
3. An order processing system, including financial processing, such as credit cards, linked
to a back-end delivery system. In the case of Amazon, this includes automated
warehouses.
4. A dynamic web page management system that can take standard information and formats
and customise them to the customer.
 5. An efficient and brand enhancing site design and appearance, including navigational tools
and aids.
6. Automated communication systems, such as e-mail systems, order information systems,
and message management while the customer is online, that ensure personalised, timely
and relevant communication.

Manage relationships at all appropriate touchpoints

Amazon is committed to an interactive approach to CRM marketing. It invites you to subscribe

to newsletters emailed to you. It welcomes you to each return and acts like it expects you. It
provides an opportunity for you to tour its home and in each room it comments on its furniture
and fittings, introduces you to other friends and plays the host. It makes suggestions. It is
instantly responsive to your demand and promises prompt dispatch, and it even responds to
complaints.

Amazon leverages the power of big data and web research to power customer-facing
interactions. The call representatives not only take service requests while greeting you with you
name, but leverage your information available to them so as to make more confident and
comfortable.

Amazon.com uses business to customer model for its better growth. Amazon focuses on the
customer satisfaction by providing the various ways to ensure personalization of service, user
ratings and reviews, minimum shipping charge which act as the key ingredient for success of
Amazon.com

(Source: Jenkinson, A. and Sain, B. (2005) ‘Amazon: bonding customers with integrated service’)
Questions

1. Outline the concept of ‘Relationship Marketing’ and its key role in an organization.
(15 marks)
2. Discuss the effective Relationship Marketing strategies in relation to the dynamic
environment that Amazon should adopt for a sustainable business in the future. (25
marks)
3. With reference to the Six markets framework, explain how Amazon can create superior
value by building relationship with different stakeholders. (25 marks)
4. As a marketing consultant, recommend Amazon a customer loyalty program so as to gain
a larger market share in the online business. Appraise your answer using suitable
examples. (20 marks)
5. Assess the relationship between quality and organization performance. (15 marks)