Amazon Segmentation, Targeting and Positioning: Widest Range of Target Customer Segment
Amazon segmentation, targeting and positioning involves a set of activities aimed at determining specific groups of people as customers and developing products and services attractive to this group.
Segmentation involves dividing population into groups according to certain characteristics, whereas targeting implies choosing specific groups identified as a result of segmentation to sell products to. Positioning refers to the selection of the marketing mix the most suitable for the target customer segment.
Amazon mainly uses the following two types of positioning:
Multi-segment positioning. Amazon offers a wide range of products and services, successfully exploiting more than one segment at the same time. Specifically, the online retail giant sells more than 75 million products, appealing to the needs and wants of a wide range of customer segments.[1]
Adaptive positioning. The online retail giant closely monitors changes in external marketplace and addresses increasing customer expectations by periodically repositioning of products and services according to changes in the segment.
Anticipatory positioning. This refers to positioning to a market segment that has low turnover with the anticipation that the turnover will increase in the future. Amazon Web Services (AWS) is a stark example for anticipatory positioning. Company’s founder and former CEO Jeff Bezos notes that “no one asked for AWS. No one. Turns out the world was in fact ready and hungry for an offering like AWS but didn’t know it”[2] Additional examples of anticipatory positioning applications by the e-commerce giant include Amazon Sage Maker, Amazon Comprehend and Amazon Rekognition.
Stop-gap positioning This strategy involves investing in currently unprofitable brand due to profitability expectations on long-term perspective. The e-commerce giant applied stop-gap positioning strategy in relation to a number its brands such as Core 10, Happy Belly and Vedaka.
The following table illustrates Amazon segmentation, targeting and positioning:
| Type of segmentation | Segmentation criteria | Amazon target customer segment
|
|
Geographic |
Region | More than 100 countries |
| Density | Urban and rural | |
|
Demographic |
Age | 14 and older |
| Gender | Males & Females | |
| Life-cycle stage | Bachelor Stage young, single people not living at home
Newly Married Couples young, no children Full Nest I youngest child under six Full Nest II youngest child six or over Full Nest III older married couples with dependent children Empty Nest I older married couples, no children living with them Empty Nest II older married couples, retired, no children living at home Solitary Survivor I in labour force Solitary Survivor II retired |
|
| Occupation | Students, employees and professionals | |
| Behavioural | Degree of loyalty | ‘Hard core loyals’
‘Soft core loyals’ ‘Switchers’ |
| Benefits sought | Widest range of products
Convenience of online purchasing Competitive prices |
|
| Personality | Easygoing, determined and ambitious | |
| User status | non-users, potential users, first-time users, regular users, or ex-users of a product | |
| Psychographic | Social class | All social classes: lower class, working class, middle class and upper class |
| Lifestyle[3] | Resigned, Struggler, Mainstreamer, Aspirer, Succeeder, Explorer
Reformer |
Amazon segmentation, targeting and positioning
Amazon.com Inc. Report contains the above analysis of Amazon segmentation, targeting and positioning and Amazon marketing strategy in general. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix and McKinsey 7S Model on Amazon. Moreover, the report contains analyses of Amazon leadership, organizational structure and organizational culture. The report also comprises discussions of Amazon business strategy, ecosystem and addresses issues of corporate social responsibility.
[2] Annual Report (2018) Amazon Inc.
[3]According to Cross Cultural Consumer Characterization by Young & Rubican