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Amazon - Case Study

Amazon, founded by Jeff Bezos in 1995, has grown into a leading online retailer by obsessively focusing on customer value and experience. The company innovates based on customer needs, exemplified by the development of the Kindle e-reader, and personalizes shopping through features like tailored recommendations. By allowing third-party retailers and fostering a sense of community, Amazon enhances its selection and customer relationships, consistently ranking high in customer satisfaction.

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Amazon - Case Study

Amazon, founded by Jeff Bezos in 1995, has grown into a leading online retailer by obsessively focusing on customer value and experience. The company innovates based on customer needs, exemplified by the development of the Kindle e-reader, and personalizes shopping through features like tailored recommendations. By allowing third-party retailers and fostering a sense of community, Amazon enhances its selection and customer relationships, consistently ranking high in customer satisfaction.

Uploaded by

harshitasharmannl
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Amazon: Obsessed with Creating Customer


Value and Relationship

When you think of shopping online, chances are good that you think first of Amazon.
The online pioneer first opened its virtual doors in 1995, selling books out of founder
Jeff Bezos's garage in suburban Seattle. Amazon still sells books—lots and lots of
books. But it now sells just about everything else as well, from music, electronics, tools,
housewares, apparel, and groceries to loose diamonds and Maine lobsters.

From the start, Amazon has grown explosively. On a past holiday season, at one point,
Amazon.com's more than 173 million active customers worldwide were purchasing 110
items per second. What has made Amazon such an amazing success story? Founder
and CEO Bezos puts it in three simple words: “Obsess over customers.”

To its core, the company is relentlessly customer driven. “The thing that drives
everything is creating genuine value for customers,” says Bezos. Amazon believes that
if it does what's good for customers, profits will follow. So the company starts with the
customer and works backward. Rather than asking what it can do with its current
capabilities, Amazon first asks Who are our customers? What do they need? Then, it
develops whatever capabilities are required to meet those customer needs. At Amazon,
such words are more than just “customerspeak.” Every decision is made with an eye
toward improving the Amazon.com customer experience. In fact, at many Amazon
meetings, the most influential figure in the room is “the empty chair” – literally an empty
chair at the table that represents the BMM important customer. At times, the empty
chair isn't empty, but is occupied by a “Customer Experience Bar Raiser,” an employee
who is specially trained to represent customers' interests. To give the empty chair a
loud, clear voice, Amazon relentlessly tracks performance against nearly 400
measurable customer related goals.

Amazon's obsession with serving the needs of its customers drives the company to take
risks and innovate in ways that other companies don't. For example, when it noted that
its book buying customers needed better access to e-books and other digital content,
Amazon developed the Kindle e-reader, its first ever original product. Then Kindle took
more than four years and a whole new set of skills to develop. But Amazon's start-with-
the-customer thinking paid off handsomely. The Kindle is now the company's number
one selling product, and Amazon.com now sells more e-books than hardcovers and

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paperbacks combined. Thus, what started as an effort to improve the customer


experience now gives Amazon a powerful presence in the burgeoning world of digital
media. Not only does the Kindle allow access to e-books, music, videos, and apps sold
by Amazon, it makes interacting with the online giant easier than ever.

Perhaps more important than what Amazon sells is how it sells. Amazon wants to deliver
a special experience to every customer. Most Amazon.com regulars feel a surprisingly
strong relationship with the company, especially given the almost complete lack of
actual human interaction. Amazon obsesses over making each customer's experience
uniquely personal. For example, the Amazon.com site greets customers with their very
own person-alized home pages, and its “Recommendations for You” feature offers
personalized product recommendations. Amazon was the first company to use
“collaborative filtering” technology, which sifts through each customer's past purchases
and the purchasing patterns of customers with similar profiles to come up with
personalized site content. Amazon wants to personalized site content. Amazon wants to
personalize the shop- ping experience for each individual customer. If it has 173 million
customers, it reasons, it should have 173 million stores.
Visitors to Amazon.com receive a unique blend of benefits: huge selection, good value,
low prices, and convenience. But it's the “discovery” factor that makes the buying
experience really special. Once on the Amazon.com site, you're compelled to stay for a
while – looking, learning, and discovering. Amazon.com has become a kind of online
community in which customers can browse for products, research purchase
alternatives, share opinions and reviews with other visitors, and chat online with authors
and experts. In this way, Amazon does much more than just sell goods online. It creates
direct, personalized customer relationships and satisfying online experiences. Year after
year, Amazon places at or near the top of almost every customer satisfaction ranking,
regardless of industry.

To create even greater selection and discovery for customers, Amazon long ago began
allowing competing retailers – from mon-and-pop operations to Marks & Spencer
department stores – to offer their products on Amazon.com, creating a virtual shopping
mall of incredible proportions. It even encourages customers to sell used items on the
site. And with the recent launch of AmazonSupply.com, the online seller now courts
business and industrial customers with products ranging from office supplies to radiation
detectors and industrial cutting tools. The wider selection attracts more customers, and
everyone benefits. “We are becoming increasingly important in the lives of our
customers,” says an Amazon marketing executive.

Whatever the eventual outcome, Amazon has become the poster child for companies
that are obsessively and successfully focused on delivering customer value. Jeff Bezos
has known from the very start that if Amazon creates superior value for customers, it will
earn their business in returns, and if it earns their business, success will follow in terms
of company profits and returns.

Source: Principles of Global Marketing, 15th Edition – Philip Kotler, Gary


Armstrong

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