The purpose of this paper is to create a global marketing plan for Amazon by carefully analyzes the environment situation in UAE, creating a general strategy, and creating specific marketing plans and strategies; this plan will be implemented by the e-commerce company as it expands into the United Arab Emirates (UAE), the fourth-largest economy in the Middle East.
Analyzing the environmental situation of Amazon in the global arena indicates that economic factors like inflation and high taxes hurt the company’s business whereas economic growth has a positive effect on the company. Socio-cultural factors like increasing wealth disparity, online buying habits, and consumerism in developing nations are likely to affect Amazon. The company's adherence to legal requirements and the nation's political stability has a positive effect on the e-commerce giant business. The United Arab Emirates is an ideal destination for Amazon. With the increasing number of youth and the working population in UAE’s demography, the country becomes an ideal expansion host for Amazon. UAE’s political stability makes it a great destination for Amazon. As one of the most developed countries in the world, socio-cultural conditions in the country may promote the success of the global online store.
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Conducting market research will help Amazon to determine whether their products and services will satisfy the needs of the new client base in the UAE. Big data and marketing information systems will also be useful in supporting the marketing decisions made by Amazon while moving to the UAE.
Demographic segmentation in the Middle East market is a strategy that Amazon should use to categorize socio-economic traits such as gender, age, ethnicity, education, income, and occupation.
While facing stiff competition from industry forces, Amazon needs to stay ahead of competitors by gaining a competitive edge by implementing strategies like an innovative strategy, differentiation strategy, operational efficiency strategy, technology-based strategy, and adaptability strategy.
Properly determining and utilizing the four P’s while expanding to the UAE may help Amazon realize success in the Middle East. The four P’s are product, pricing, placement, and promotion. IMC campaign, coupled with Amazon Prime, demonstrates why Amazon is a business powerhouse, and these strategies can be applied in UAE.
In summary, by creating a global marketing plan for Amazon that carefully analyzes the environment situation in UAE, create a general strategy, and create specific marketing plans and strategies, it is possible to effectively expand the company to the fourth-largest economy in the Middle East.
Environmental Analysis
Despite being one of the largest internet companies in the world, like many other businesses, Amazon is affected by economic changes in the environment. Some of these economic factors include; inflation, tax rates, economic growth rate, currency exchange rates, and unemployment levels. For instance, changes in the rate of currency exchange in 2017 caused economic risks to a great extent. The firm accounted for approximately 28% of consolidated revenues (Jackson, 2018). Likewise, when the U.S Dollar weakens relative to Amazon currencies in an international location, Amazon’s consolidated operation expenses and net sales will be higher compared to when the currency remains constant. On the other hand, changes in taxation that occurred in 2017 for the introduction of ‘internet tax’ influenced the company. There are also costs of labor that affect e-commerce and the system for cloud computing. It enables Amazon to operate with thin margins of profit that is less than 4.5% due to savings in the overall costs of resources and human capital. Similarly, the trade war is impacting Amazon because China and U.S threaten to impose a dent in its rapid economic growth rate. The United States imposed about 15.5% tariffs on $112.5 billion of goods imported from China, including extra taxes scheduled to take off in the future (Jackson, 2018). As such, Amazon e-commerce experienced the highest tariff risks because of the impacts on the prices of products. It increased the prices for goods and services offered in America to approximately 2.2% to 2.7% to offset the overall costs of new tariffs (Jackson, 2018).
Still on environmental factors, social and cultural elements have an impact on Amazon’s performance. The firm faces external social-cultural factors like increasing wealth disparity, online buying habits, and consumerism in developing nations. An increase in wealth inequality enhances the economic gap between the poor and the rich in several countries. It influences the market because of the potential stagnation of the disposable level of customers’ income. Likewise, higher consumerism in the emerging market enhances the possible success in the generic strategies for an intensive strategy for growth and competitive advantage as the firm seeks to enlarge its global online retail stores. Still, on environmental factors affecting Amazon’s performance, legal regulations from different nations in the world can affect the company’s ability to conduct business. Amazon Company must adhere to legal requirements, which provides opportunities such as in increasing product regulations, changing export and import regulations, and increasing environmental regulations and protections on businesses. An increase in product regulation is perceived as societal demands on consumer security and safety. Amazon has chances to expand, based on changing export and import regulations. For example, it can grow its international operation to utilize the increasing capabilities of sellers to access overseas’ suppliers. Its e-commerce sectors have an opportunity to strengthen the brand quality and image using appropriate policy on corporate social responsibilities. This addresses emerging regulations on environmental protection.
The United Arab Emirates is an ideal destination for Amazon. With the increasing number of youth and the working population in UAE’s demography, the country becomes an ideal expansion host for Amazon. Increasing numbers of potential clients have a beneficial impact on the profit margin of a business. UAE is the fourth-largest economy in the UAE (Hollensen, 2019); this together with its trade policies and legal regulations on international businesses operating in the nation may help increasing product regulations, changing export and import regulations, and increasing environmental regulations and protection of Amazon. According to Hollensen (2019), politically stable economies are likely to attract foreign investors that those that are politically unstable. This is true as it UAE’s political stability makes it a great destination for Amazon. As one of the most developed countries in the world, socio-cultural conditions in the country may promote the success of the global online store.
By conducting market research, Amazon will be able to determine whether their products and services will satisfy the needs of the new client base in the UAE. By gathering data on goods and services, UAE’s market research will identify consumers’ buying habits, trends in the market, competitors’ information, demographic, and economic shifts. With all this data, Amazon will have a better understanding of the newly targeted destination because it is now easier to pinpoint potential challenges, identify opportunities, and communicate efficiently to the target market. Marketing information systems will also be useful in supporting the marketing decisions made by Amazon while moving to the UAE. Information systems will also be used as a tool for strategic planning by Amazon. Big data allows marketers to provide clients with products and services that they need in a more efficient manner which also improves brand recognition (Hollensen, 2019). Therefore, Amazon may have a better understanding of the new destination by utilizing market research, big data, and information systems.
General Strategy
Amazon can use a simple marketing strategy to enter a new market in the Middle East, especially because the country is advancing quickly in terms of e-commerce adoption to constitute a higher percentage of total retail (Hollensen, 2019). However, Amazon can still expand its marketing strategy base in the region by enabling innovation, identifying the right customers by enforcing diversity, going local, and directly addressing consumer concerns. UAE is an innovative region market leader and this will assist Amazon in penetrating the country and the Middle East at large. The firm had a considerable influence in the regional market and a high percentage of customers that may be considered as above average according to the global markets. There is also a considerable demand for Amazon products because consumers are hungry for the diversity they are currently not experiencing in their country. Consequently, Amazon should consider operating within the local business, and address consumer needs to enable community involvement and identity, exploit innovation and competition, including an increase of tax base and local jobs. By doing this, the firm will meet customers’ expectations, enhance confidence, build their brand, and promote its operational culture in the UAE.
Demographic segmentation in the Middle East market is an additional strategy where Amazon should use to categorize socio-economic traits such as gender, age, ethnicity, education, income, and occupation. Middle East populations are willing to adopt new technology because of the increasing number of internet users due to advanced educational levels. The literacy level in the region and penetration rate of personal computers is a significant factor in the area to consider for Amazon to expand its e-commerce strategy into the region.
The economic performance in Middle East countries is expanding due to increased economic growth, increased income of customers, low costs of software and hardware, better access to telecommunication infrastructure, and innovative commercial structures. These factors will assist Amazon to increase its sales and experience higher profits by cutting down costs. Trade is also a significant factor in the area. UAE enjoys online trading systems due to advancements in technology. Amazon will benefit from increasing online purchase habits because more customers around the globe prefer to order and buy products through the internet. Another aspect is social and a cultural factor is that populations in the United Arab Emirates hold no typical beliefs, traditions, and behavior concerning Amazon products which may play as a big advantage for Amazon's plan to expand to the destination. Amazon must produce goods that can be differentiated based on societal wealth, religion, social class, and education. There is considerable growth in sales interest in the Middle East due to their emerging importance as a market because they offer multiple markets for numerous products and services.
Specific Plans and Strategies
Amazon faces stiff competition from industry forces like Oracle, Google, Microsoft, International Business Machines Corporation, and Alibaba (Plant, 2018). While expanding to the new territory Amazon needs to stay ahead of the industry forces that the company is competing against. Gaining a competitive edge can be achieved by studying the strengths and weaknesses of the competitors and fill the gap where there are weaknesses or outperform the competitors. Cost leadership strategy is one way that Amazon can place itself ahead of competitors; offering attractive prices to the clients in the Middle East can achieve this. Differentiation strategy is another technique that can be used by Amazon to create a competitive advantage. Branding is the most common form of a differentiation strategy. The innovative strategy is the third technique that Amazon may implement to get ahead of the competition while expanding to the UAE. Amazon has always been great in operational efficiency strategy; the e-commerce company is a leader in the industry and this may prove useful during the expansion to the Middle East. Technology-based and adaptability, strategies are just other implementations that Amazon may use to gain a competitive advantage as they expand.
After being tested for many decades, the four P’s have proved to be an effective marketing plan formula if properly used (Westwood). The formula is effective because it is capable of meeting both the customers’ and the entrepreneur's needs. Properly determining and utilizing the four P’s while expanding to the UAE may help Amazon realize success in the Middle East. The four P’s are product, pricing, placement, and promotion. In determining the product, Amazon should be able to clearly state the problem that the product will solve, what makes the product unique, and the benefits of the product. It is also important to note what the product is lacking. Easy navigation, instant migration, and great reliability are some of the outstanding features that may help the Amazon product penetrate more in the Middle East. Amazon needs to examine the price thoroughly to ensure products and services are delivered to the customers at a reasonable price and the company will still achieve the targeted profit margins. Placement refers to the location the products and services will be sold and even the location of the business in UAE. The location with the most potential customers in the country is ideal for setting the company’s head office. With Amazon’s merchandising and many other promotional features, the company is likely to thrive in the UAE.
Amazon’s IMC campaign is can be used to ensure consistency and relevancy in the United Arab Emirates. A perfect example of a noble IMC strategy for Amazon is Amazon Career Day. Amazon’s Career Day is an annual virtual event that seeks to create a high amount of job opportunities for its subscribers and customers. People can directly communicate with career experts and other professionals who offer valuable advice and insights about career and job moves. More than 100,000 people get valuable jobs and connections each year. It has been advertised across several media, for starters, Twitter. Amazon updates its Twitter feed daily, and their Careers Day advertisement was quite precise (Kelly & London, 2020). This is a perfect example of a detailed and candid advertisement.
Amazon career day 2020 has also been generously featured on YouTube, in a one-minute long video, through Daily Buzz. The video features a narrator, who explains in detail what will be on offer on September 16th, 2020, alongside how to access the information (DailyBuzz, 2020). In an article on the New York Post, on September 10th, 2020, an advertisement was printed about the Amazon career day (Vega, 2020). The article informed customers about the shift to a virtual event due to the COVID-19 restrictions and disclosed more registration information at the disposal of all customers. Finally, on September 10th, 2020, KCTV News aired a short news piece, with a headline ‘Amazon is hiring,’ and went on to highlight the 33000 new jobs available in 2020 for the taking (Benveniste, 2020). There were three crucial elements of an IMC displayed in that campaign, throughout all the platforms. The brand focus was clear and candid and reached a vast number of people, subscribers, or not. The communication was also massively consistent, and the bottom-line message was that fans needed to apply for the positions. Finally, the integration tools were multiple, as it was also advertised on Facebook, magazines, blog articles, and Instagram. This campaign showed all the basic tenets of an excellent IMC campaign, and then some. This strategy can also be used in the Middle East.
Another marketing strategy that has endeared Amazon to its customers is Amazon Prime. Amazon Prime is a premium subscription service, which is offered once a week to its premium members at insanely subsidized rates. The customers can enjoy discounts, video streaming platforms, and music services. This leads to record-breaking sales every week and is their most profitable period, as well as generating millions of subscribers every month or so, with 150 million subscribers. Compared to the IMC campaign, amazon prime is a more independent entity. The main difference is that with amazon prime, the subscribers pay more each year and that Amazon Prime can be used as a useful marketing tool of its own. It, therefore, is advantageous because it is reliable and consistent and can be counted on to generate revenue at a high rate. However, its major demerit is that it favors the financially well-off demographic, as the subscription rates are quite astronomical for most customers.
In marketing, one of the most important factors to consider is cultural appropriateness. A company can create a global product and then advertise it differently for different cultures. A perfect example is the iPhone 4 advertisement in 2012 by Apple. The ad was so diverse that it covered four cultures in less than two minutes (Hollensen, 2019). It featured different women and kids dressed differently, culturally appropriate, I presume, when testing out the interactive audio input, commonly known as Siri, in different languages. The advertisements are language accurate, as each character speaks their native languages, this can be applied in UAE as well. I find that localized advertisements are the most effective way to increase sales. Coca-Cola, for example, has succeeded through localized advertisements, in all but two countries, and has been embraced by all cultures. In this short ad, they used a more evidential and logical appeal, which is a perfect method. I would stick with it because it showed the users of all four cultures the new features of the phone, with plenty of demonstrations and screenshots. For such a short advertisement, it hit the nail on the head and appealed to many cultures. Amazon’s Career Day incorporated multiple media in its marketing campaign that showed all the signs of an excellent IMC campaign, coupled with Amazon Prime, demonstrate why Amazon is a business powerhouse, and these strategies can be applied in UAE.
Amazon's CSR for the United Arab Emirates is to manage all the effects of its operations in line with the nation’s expectations. The CSR can be achieved by working with ethical business partners, reinvesting in safety and health programs, and promoting fairness and equality in their operations.
By creating a global marketing plan for Amazon that carefully analyzes the environment situation in UAE, create a general strategy, and create specific marketing plans and strategies, it is possible to effectively expand the company to the fourth-largest economy in the Middle East.
References
Benveniste, A. (2020). Amazon is hiring 33,000 new employees at its Career Day. KCTV Kansas City .
DailyBuzz. (2020). Amazon Career Day . Retrieved from https://www.youtube.com/watch?v=GUxYnbuYP74.
Hollensen, S. (2019). Global Markets and Marketing .
Jackson, T. (2018). Amazon: The Largest Internet Company .
Kelly, B., & London, M. (2020). Amazon .
Plant, R. (2018). Ecommerce (4th ed.). Financial Times/Prentice Hall.
Vega, N. (2020). Amazon is hosting virtual Career Day to fill 33,000 US jobs. New York Post .
Westwood, J. (2019). How to write a marketing plan . KoganPage.
