11/26/2018 Week 6 Writing Assignment Due Dec 2 11:59PM - MRKT 310 7983 Marketing Principles (2188)

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Week 6 Wri�ng Assignment Due Dec 2 11:59PM

Instruc�ons

MRKT 310 7983 Marke�ng Principles (2188)

MRKT 310 Principles of Marke�ng

Week 6 Wri�ng Assignment

Part 1 ‑ Crea�ng Offerings

Learning Outcomes

1. Offering.  Student can describe an offering based on features, benefits, price, and costs of ownership

2. Type of consumer offerings.  Student can suggest marke�ng strategy implica�ons based on the type of consumer offering under examina�on.

3. Product line extensions or new product development.  Student can suggest possible product line extensions or related product or service offerings based on the student’s chosen product or service

offering.

4. Product lifecycle. Student can suggest poten�al marke�ng strategies based on the product or service’s lifecycle stage.  

Direc�ons

Your job in this Wri�ng Assignment is to develop marke�ng mix strategies to ensure a value

offering for the target market you iden�fied in the previous assignment. We begin with the value

offering this week.  

We don’t expect you to develop strategies based on a total knowledge of the product or service

since you are not, or most likely not, employed by your product or service’s company.  We will be

looking to see if you can apply the marke�ng concepts to the real world situa�on. 

Again, do not fall into the trap of repor�ng on the product or service.  This is obvious because your

assignment will look like a rewrite of the company’s website.  Don’t be afraid to make strategy

recommenda�ons based on what you have discovered about the product or service, and how you

think it can move forward.  Be crea�ve, be reasoned, take risks.  

Remember your product’s target market(s) from the previous paper.  Always keep them in mind

when making your recommenda�ons.  You now work for the company, and your goal it to help

them grow sales.  

Prepare your assignment beginning with a �tle page with your name and the name of your product

or service.  Then answer each of the following eight ques�ons (four in part 1 and four in part 2) in

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order and number the beginning of your response to each ques�on.  You do not need to repeat the

ques�on.  The paper should contain a minimum of 5+ pages of analysis for the responses to the

eight ques�ons.

1. Offering.  Describe your product or service offering as it is currently in terms of features and benefits, price and the total cost of ownership as discussed in the week's readings.  Is it more

product dominant or service dominant?  What are the tangible and intangible aspects?

2. Type of consumer offering.  Based on the four categories of type of offerings discussed in course content,  describe the category in which your product or service offering belongs.  Based on your

new target market, would that category of the offering change and if so, how?  How would it

change the marke�ng strategy?  

3. Product line extensions or new product development.  Should the current product or service be modified to more fully meet the needs of your new target market?  Would the changes cons�tute a

new product line, a product line extension or a new product?  If no product changes are needed,

how does the same product or service meet the need of your target market differently than current

customers?  Would the product line extension or new product allow the offering to occupy

uncontested space in the perceptual map for the target market as covered in thr previous paper?

4. Product lifecycle.  In which stage of the product lifecycle is your product or service offering now? Would the changes described in number 3 above change the lifecycle stage and if so how?  What

would this mean to the lifecycle marke�ng strategy?  

Part 2 ‑ Using Marke�ng Channels and Price to Create Value for Customers

Learning Outcomes

1. Marketing Channels.  Student can outline a mul�‑channel distribu�on system 2. Marketing channel strategy.  Student can recommend a marke�ng channel strategy for a product or service offering that assures the correct amount of intensity.

3. Value chain.  Student can discuss how each channel in the product or service offering adds value to the customer.

4. Pricing strategy.  Student can analyze a current pricing strategy and make recommenda�ons for modifica�ons.

Direc�ons

This part of the assignment assesses your ability to relate marke�ng mix concepts of distribu�on

and pricing to your product or service offering.  You will also have a chance to recommend new

distribu�on and pricing strategies based on your new target market to meet their needs.  

Answer each of the following four ques�ons, in order, numbering each of your responses.  There is

no need to repeat the ques�on; however, headings should separate the sec�ons.  

1. Marketing channels.  To the best of your ability, outline the marke�ng channels of your product or service offering as they currently exist.  Refer to Figure 6.2 for some ideas.  Most

product and service offerings will have more than one channel, so your system should

include at least two; for example (1)  a direct channel for internet sales:  manufacturer ‑‑>

customer; and  (2) an indirect channel such as manufacturer ‑‑> distributor ‑‑> wholesaler ‑‑

> retailer ‑‑> customer. If your product or service only has only a direct channel, explain

why.  Would this channel strategy change as a result of your new target market?  Why or

why not?

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Submissions

No submissions yet. Drag and drop to upload your assignment below.

2. Marketing channel strategy.  Why type of distribu�on intensity strategy does your product or service currently use?  How do you know this?  Would this distribu�on intensity strategy

change for your new target market? Why or why not?

3. Value chain.  Referring back to your marke�ng channel diagram, discuss what each member of the value chain does to bring value to the consumer.  

4. Pricing strategy.  Referring to the various pricing strategies outlined in the week's readings, which one does your product or service currently use?  Would you recommend any changes

for your new target market?  If so, how would you change it and why? 

General Submission Requirements

Prepare as a word processed document (such as Microso� Word). Use a simple 12‑ point font such as Times New Roman. Use black ink for majority of your work and only use colors if it enhances your ability to communicate your thoughts.  

Your assignment should be the equivalent of approximately five pages of double‑spaced text (although more are acceptable), approximately 1/2 page for each of the eight ques�ons (four in Part 1 and four in Part 2).  You may a�ach exhibits that will not be counted towards the page count of double‑ spaced text. The cover page and References page are not part of the wri�en analysis. Be sure your name, wri�ng assignment number, and the name of your product or service are on the cover page of your wri�ng assignment. Include a References page, which includes references that explain the concept and references to the actual product. You should use a minimum of six (6) references, four (4) of them dated 2015 to the present.

You should use APA style for a paper which includes forma�ng for page numbers, page

margins, etc. More informa�on about using a style guide can be found in the UMUC's virtual

library accessible from your LEO classroom in Content "Learn to Use APA" or at

umuc.edu/library.   

Upload your word processed document in your LEO assignments folder by the due date in

the LEO calendar.  

Refer to the grading rubric for the assignments.  Be sure to note that 20% of your grade on this assignment will be based on your grammar, composition, adherence to the submission requirements, and use of an appropriate college-level style guide for writing and referencing.  

Any questions?  Please post in the general discussion forum for Week 6. Or, feel free to contact your professor by email.

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Running head: STRATEGIC MARKETING FOR AMAZON ECHO DOT 1

Strategic Marketing for Amazon Echo Dot

Kyami Clarke

University of Maryland University College

Writing Assignment Part 1

MRKT 310 7983 Marketing Principles (2188)

Professor Melissa Daston

Fall 2018

STRATEGIC MARKETING FOR AMAZON ECHO DOT 2

Strategic Marketing for Amazon Echo Dot

The Amazon company’s reputation for attracting and retaining loyal consumers comes

from their customer-centric attitude and their ability to be everything their customers need, when

they need it, all available in one convenient place. Amazon’s 2017 fourth-quarter revenue was

listed at $117.9 billion. Their revenue from third to fourth quarter increased by 38% mainly due

to the expansion to the Echo line (Enright, 2018). The Amazon Fire TV Stick and Echo Dot are

the company’s best-selling products. In such a competitive market, how is Amazon and the

Amazon Echo Dot so successful?

Creating Value for Customers

One of the four major components of marketing, as defined by the American Marketing

Association, is creating value for customers. The creation component is the first stage, which is

where a business collaborates with suppliers and customers to create an offering of value

(Chapter 1: What Is Marketing?, 2012). The term value does not merely refer to product pricing

or a monetary amount. In the context of marketing, value equates to the benefits the consumer

receives over the hassle and costs of the product.

The Echo Dot is Amazon’s most popular smart home product. The Echo Dot utilizes

Artificial Intelligence (AI) technology, Wi-Fi, and Bluetooth to allow customers to ask questions,

make calls, check the news, play music, and control their home with smart home devices.

Automatically bundled with the Echo Dot is the cloud-based Alexa virtual assistant service, also

developed by Amazon. Plus, it can sync with an infinite number of other external products and

suppliers. A few of their significant partnerships includes other popular brands such as Google,

Nest, Phillips, and the Marriot (DeGeurin, 2018). Each of these characteristics adds value to the

product and benefits the customers.

STRATEGIC MARKETING FOR AMAZON ECHO DOT 3

Value plays the central role in the marketing plan. Even though the customer ultimately

determines the value, a business creates and enhances the value to their product or offerings by

understanding their target audience and customer needs (Chapter 1: What Is Marketing?,

2012).The Amazon Echo Dot (2nd generation) has 119,335 customer reviews. 81% of those

reviews are 4 stars or higher (Amazon Company, n.d.). Amazon has shown that they have a great

understanding of their customer needs. Their insight is gained through customer feedback and

incorporating that in their product designs and customer service model.

Customers Role in the Company’s Strategic Plan

It is essential for a company to develop a strategic plan, which will lead to their

marketing strategy. An integral part of a strategic marketing plan is the customers, their needs,

and their overall satisfaction (Chapter 2: Strategic Planning , 2012). Amazon’s mission

statement is “to be Earth’s most customer-centric company, where customers can find and

discover anything they might want to buy online, and endeavours to offer its customers the

lowest possible prices” (Amazon.com, Inc., 2018). As reflected in Amazon’s mission statement,

all three components are incorporated in their innovative product designs and service models.

Amazon’s number one leadership principle is customer obsession (Amazon.com, Inc.,

2018). They start with customer input and continue to include the customer in each tier of their

business process, from corporate to functional. A business with this level of customer focus does

not need to make any modifications. In regards to my personal experience with Amazon, I am a

loyal Amazon customer. I have two Amazon Echo Dots, an Amazon Echo, two Amazon Fire

Sticks, a Kindle, and have been an Amazon Prime member for over 10 years. The reason for my

continued use and endorsement is a result of my customer satisfaction and their customer

service. I can unequivocally say the fact that Amazon has ranked number in customer

STRATEGIC MARKETING FOR AMAZON ECHO DOT 4

satisfaction, for the last nine years (Amazon, 2018) is a testament to the validity of their mission

statement.

SWOT Analysis

It necessary for a business to conduct a SWOT analysis. The purpose of a SWOT analysis

is to analyze a company’s strengths, weaknesses, opportunities, and threats (Chapter 2: Strategic

Planning , 2012). The internal factors, for SWOT analysis, are strengths and weaknesses.

Conversely, the external factors are opportunities and threats. Exhibit A below illustrates a

simplified SWOT analysis for the Amazon Echo Dot (Greenspan, 2017).

Exhibit A. Amazon Echo Dot SWOT Analysis

Strength’s Weaknesses • Pricing • Mobile Integration • Design • Alexa Contextual Speech Recognition • Supply Chain (Amazon) • Customer Loyalty

Opportunities Threats • Sound System/Sound Distribution • Cybercrimes • Diversify Market • Heavy Competition

Some of the strengths associated with the Amazon Echo Dot are the product design, size,

cost, supply chain. Although, the greatest strength is the company’s customer base and loyalty.

Alternatively, the Echo Dot’s weaknesses are its lack of mobile integration (i.e. Apple HomePod)

and Alexa’s issues with understanding contextual speech patterns (i.e. Google Home)(Greenspan,

2017). There are a couple of key external factors, opportunities and threats, that impact the Echo

Dot. The two opportunities would be the sound enhancements and distribution of the sound

system and marketplace diversification. The two threats are heavy competition, cybercrimes.

STRATEGIC MARKETING FOR AMAZON ECHO DOT 5

Competitive Analysis

Amazon has a few smart home technology competitors that are available to consumers.

Two of the major contenders on the market are Google Home Mini and Apple HomePod. The

Google Home Mini has almost all the same features and capabilities as the Echo and integrates

with Android, but lacks the level of customer loyalty and satisfaction. The newest competitor,

Apple HomePod, has strong brand awareness, similar smart speaker features with a virtual

assistant (Siri), and integrates with Apple products. Mobile integration will be a significant

distinction from the Echo Dot, which is not affiliated or integrated with an outside mobile device

unless you install an app.

A smart home product would be a high-involvement product because of the widespread

problem solving involved. With products that are complex, high risk, or high cost, a customer

will spend more time on actual research and reviews. (Chapter 3: Consumer Behavior: How

People Make Buying Decisions, 2012). They will examine the specific brand of interest, see

what others had to say, and compare it to similar products, available by other companies. When it

comes to choosing a smart home product, there are five factors that a customer may take into

consideration. Those five factors in the buying decision would be the product price, technical

specifications, partnerships/integration, mobile integration, and virtual assistance. Exhibit B

provides a side-by-side comparison of the five deciding factors for each smart home product.

Exhibit B. Side-by-Side Product Comparison

Amazon Echo Dot Google Home Mini Apple’s HomePod (Amazon, 2018) (Google, 2018) (Apple, 2018) Product Factors: Amazon Prime - $ Google Account - Free Apple Account - Free Price $39.99 $49.99 $349.00 Technical Specifications (design, audio, features)

Fire OS 6 color options 32mmx84mmx84mm 5.7 oz 1.1 single speaker

Android OS 3 color options 98mm x 42mm 0.38lbs

Apple A8 Chip OS 2 color options 172mm x 142mm 5.5lbs

STRATEGIC MARKETING FOR AMAZON ECHO DOT 6

Bluetooth WiFi 3.5 stereo output A2DP support OS, Android, & IOS device compatible Micro USB port

Partnerships/ Integration

Amazon services, subscription, and devices (Kindle, Firestick, FireTV) Fire TV, Google Calendar, Spotify, Pandora, iHeartRadio, TuneIn, others, Nest, Ecobee, Honeywell, SmartLocks SmartThings, Wink, Insteon, Belkin WeMo, Philips Hue, Lifx, Big Ass Fans, IFTTT, Control4, Crestron, Appliances, Garage Door openers, other devices and apps via 5000 skills (Lyft, Dominions, ADT)

Chromecast, Google Play, Google calendar Music, YouTube Music, Spotify, Pandora, TuneIn, Nest, SmartThings, Philips Hue, Belkin WeMo, Honeywell, IFTTT

Airplay, Apple Music, Beats 1, Philips Hue, Logitech, Honewell, iHome products, Belkin, Ecobee, Idevices,

Mobile Integration No, via Alexa app only Yes Yes Virtual Assistant Yes – Alexa Yes – Google Yes - Siri

Subsequently, you will find Exhibit C, the competitive analysis, depicts the five factors

aggregated product worth. Based on the results of the competitive analysis the Amazon Echo Dot

has the highest overall score, Google Home is second, and Apple’s HomePod last. The most

significant influence on Apples low score is the price comparison. Amazon’s lowest influence is

mobile integration.

Exhibit C. Amazon Echo Dot Competitive Analysis Amazon Echo Dot Google Home Mini Apple HomePod Price 5 3 1 Technical Specifications 3 4 5 Partnerships/Integration 5 2 1 Mobile Integration 3 4 4 Virtual Assistant 4 4 3

Total: 20 17 14

STRATEGIC MARKETING FOR AMAZON ECHO DOT 7

Even though all three products have a lot of the same or similar technical specification,

the slight differences make a difference. According to an article published by the AMA, the

voice-control speaker market is dominated by Amazon, at 66.6%, Google a distant second, at

29.4%, and Apple does not even register on the scale yet (Steimer & Conick, 2018).

Customer Empowerment

Jeff Bezos, Founder and CEO of Amazon, has been quoted saying, “We see our

customers as invited guests to a party, and we are the hosts. It’s our job every day to make every

important aspect of the customer experience a little bit better.” Customer empowerment is all

about establishing, encouraging, and enabling customer feedback (Chapter 14: Customer

Satisfaction, Loyalty, and Empowerment, 2012). Customer purchase reviews was a traditional

source for customer feedback, but it was limited. Amazon took this to the next level, by being

one of the first e-retailers to embrace customer review transparency, by displaying customer

feedback. Transparent customer feedback, holds manufacturers and vendors accountable for

product quality and other customers gain valuable product insight before purchasing.

Now businesses are taking a 360 degree approach to customer empowerment, by

including customers in each level of the business from product developments to asking for input

on marketing campaigns, or social networking and inviting loyal customers to try new products

(Chapter 14: Customer Satisfaction, Loyalty, and Empowerment, 2012). The Amazon Echo Dot

was initially an invite-only product. The invitation was sent to select Amazon Prime customer, to

try out the product first and give input before it was officially released. I was one of those lucky

customers twice, once for the Amazon Echo Dot and again for the Amazon Echo Look. The

Washington Post established a readers review panel for input on new cartoonist for the Sunday

paper. One of the comics I reviewed, The Boondocks, made it into the paper and eventually

STRATEGIC MARKETING FOR AMAZON ECHO DOT 8

turned into a television series. 10 years later, I still subscribe to the Washington Post and read the

comics every Sunday.

Customer Satisfaction

Amazon’s sole focus is on customer satisfaction. This is mirrored in their mission

statement, “Customer Centric”. According to a study conducted by Salesforce, “75% of

customers want a consistent customer experience, whether they engage with a company by

phone, online, on social media or in the store (Customer Expectations Hit All-Time Highs, n.d.).

Due to the rapid technological advancements, customers expect more than a product; they expect

an experience. Amazon delivers and exceeds their competitors when it comes to customer

satisfaction. For example, the success behind their Echo Dot is that it improves their customers

lives and makes them more comfortable. The Amazon brand is known for giving customers what

they need and delivering what they expect from their product. The top customer expectations are

seamless engagements, personalization, innovation, and data protection. 69% of business and

consumer expect an Amazon-like buying experience (Customer Expectations Hit All-Time

Highs, n.d.). Amazon offers a superior customer experience, whether it is retail services, through

social media, or dealing with customer inquiries. Furthermore, Amazon has greater presence,

than its two main competitors, on almost all the major social media channels, as illustrated in

Exhibit D below.

Exhibit D – Social Media Presence

Followers Amazon Echo Google Home Mini Apple HomePod

Facebook • Amazon – 28.3m • Amazon Echo – 595k

• Google – 26.6m • Google Home – n/a

• Apple – 11.6m • Apple HomePod – n/a

Instagram • Amazon – 1.5m • Amazon Echo – n/a

• Google – 7.8m • Google Home – n/a

• Apple – 9.4 • Apple HomePod – n/a

Twitter

• Amazon – 2.8m • Amazon Help – 194k • Amazon Echo – 119k • Developers – 39.7k

• Google – 20.7m • Google Home – n/a • Developers – 2.18m

• Apple – 2.41m • Apple HomePod – n/a • Apple Support – 970k

STRATEGIC MARKETING FOR AMAZON ECHO DOT 9

Pinterest • Amazon – 75.5m • Amazon Echo – n/a

• Google – 82.8m • Google Home – n/a

• Apple – n/a • Apple HomePod – n/a

YouTube • Amazon – 348k • Amazon Echo – 26k

• Google – 6.7m • Google Home – n/a

• Apple – 7.7m • Apple HomePod – n/a

Amazon tries to address customer questions or issues before they become complaints or

require human intervention. They do this by providing easily accessible customer data, a help

section, and an almost entirely automated return policy. If it does come to the point that human

involvement is necessary, there are a number avenues a customer can choose from to deal with a

situation (Chakrawarty, 2017). I have dealt with their customer service department a few times

over the years. Each experience has been quick and easily resolved, regardless of the complexity.

Customer Relationship Management

Measuring a customer’s lifetime value has become easier thanks to technology. The most

significant opportunity to capitalize on the customer experience is through Customer

Relationship Management (CRM). It enables a business to market to multiple generations using

individual details and data analytics (Steimer & Conick, 2018). CRM tracks customer

preferences and purchase patterns and uses the information gained from past behaviours to make

recommendations for the future. Amazon’s CRM strategy has been unparalleled for the better

part of 20 years. You only have to look at the countless loyal customers, despite a competitive e-

commerce industry, to tell you that critical aspect to their success is their well-managed and

efficient way of CRM.

Amazon’s ability to successfully manage their customer relations across the world,

without even a brick and mortar store is a phenomenon. This phenomenon is commonly referred

to as the “Amazon Effect”. Between Amazon’s easy to use interfaces, product recommendations,

and one-click ordering these are just a few of the features that make customer interaction smooth,

quick, and simple (Chakrawarty, 2017). Their intuitive use of customer data ensures each

STRATEGIC MARKETING FOR AMAZON ECHO DOT 10

customers experience is personalized and valued. Amazon’s CRM is the stimulus for their high

customer retention and attraction rate. Amazon organizes their CRM into 5 approaches: data

collection, personal data storage, recommendations, customer support, and the Kindle

marketplace. Combine these approaches, and you have an accessible, simple, natural

marketplace (Chakrawarty, 2017). This allows Amazon to market their products and services,

with minimum customer actions, but maximum customer engagement.

Customer Privacy

Research shows 82% of Americans find artificial intelligent (AI) assistants helpful

(Steimer & Conick, 2018). Even though customers want humanized technology, this type pf

technology generates concerns over customer privacy and security. Amazon’s Echo Dot has be

subject to customer concerns, over their product’s network connected microphone. Allegations of

Alexa spying on homes and third party applications accessing the audio information. This issue

plagues not only the Echo Dot, but also Google Home, and HomePod. It is important to note that

each of these devices retains digital recordings and, if subpoenaed, are required to provide these

recordings to law enforcement, government agencies, or other entities (Amazon.com, Inc., 2018).

Although Amazon has come out stating audio is not collected unless the key command has

activated the device, the Echo Dot does have the capability of recording at any time. Also, the

Echo includes location-based services, which means Amazon and third-party applications have

access to your location information. Each of these privacy concerns is addressed on the Amazon

website. I reviewed Amazon’s privacy notice specifically for Alexa, last updated on May 23,

2018. The notice explains how personal customer information is gathered and what they do with

this information. It contains customer choices and instructions for modifying your settings for the

collection of information and individual marketing campaigns. More than that, it includes steps

STRATEGIC MARKETING FOR AMAZON ECHO DOT 11

customers can take to secure their Alexa device and protect their privacy. The main Amazon

website also has their own privacy notice, last updated August 29, 2017, providing similar

information as the Alexa privacy policy. Both privacy notices state that they use firewall

protection against domestic and foreign hacking (Amazon.com, Inc, 2017). For all the headlines

surrounding Alexa spying, I have yet to hear about a security breach or customer information

being hacked. It appears the business stands behind their privacy notices, which reassures their

customers that their information will be protected at all costs.

STRATEGIC MARKETING FOR AMAZON ECHO DOT 12

Bibliography

Amazon. (2018). Amazon Echo Dot. Retrieved November 1, 2018, from Amazon:

https://www.amazon.com/Amazon-Echo-Dot-Portable-Bluetooth-Speaker-with-Alexa-

Black/dp/B01DFKC2SO

Amazon. (2018). Thank You for Voting Amazon #1. Retrieved October 30, 2018, from Amazon:

https://www.amazon.com/gp/feature.html?ie=UTF8&docId=1001924291

Amazon Company. (n.d.). Amazon Echo Dot (2nd Generation). Retrieved October 29, 2018,

from Amazon: https://www.amazon.com/Amazon-Echo-Dot-Portable-Bluetooth-Speaker-

with-Alexa-Black/dp/B01DFKC2SO

Amazon.com, Inc. (2017, August 29). Amazon Privacy Notice. Retrieved November 1, 2018,

from Amazon: https://www.amazon.com/gp/help/customer/display.html?nodeId=468496

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STRATEGIC MARKETING FOR AMAZON ECHO DOT 13

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STRATEGIC MARKETING FOR AMAZON ECHO DOT 14

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Running head: CONSUMER BEHAVIOR AND MARKET SEGMENTATION 1

Consumer Behavior and Market Segmentation for Amazon Echo Dot

Kyami Clarke

University of Maryland University College

Writing Assignment Part 2

MRKT 310 7983 Marketing Principles (2188)

Professor Melissa Daston

Fall 2018

CONSUMER BEHAVIOR AND MARKET SEGMENTATION 2

Consumer Behavior and Market Segmentation for Amazon Echo Dot

The Amazon Echo is a brand of Smart Speakers marketed and developed by Amazon. The

device supports music playback, setting alarms, voice interactions, offering real-time information,

and controlling other smart devices. It thus acts as a home automation hub t that control many

activities. The Amazon Echo is a product of Silicon Valley. It is an attempt to increase the product

and the service portfolio of Amazon. Ongoing plans intend to push the product in different global

markets (Steimer & Conick, 2018). The functioning of the device requires an internet connection.

As of November 2018, reports by Amazon point that the device is available in over 39 countries

(Amazon Company, 2018). Amazon has a reputation for creating a massive base of loyal clients.

The adoption of a unique marketing mix contributes to these factors.

Part One: Consumer Behavior

Consumer Behavior Model: Environmental Factors

Different environmental factors influence buyers' decisions. Environmental factors like

social class and social group influences may affect the reception of the Amazon Echo. Social class

refers to a group of society members that share common values and position. Parameters that define

social class include education, income, and occupation. Level of income and exposure levels are

likely to influence the purchase of the product (Steimer et al. 2018). There are chances of recording

higher sales among the middle-income earners than the low-income earners.

On the other hand, social group influences shape consumer relationships or attitudes that

influence purchase decisions. Chances of influencing the consumption behaviors in this setting are

high. They can either reduce or lower the sales levels of the Amazon Echo product.

CONSUMER BEHAVIOR AND MARKET SEGMENTATION 3

Consumer Behavior Model: Consumer Factors

Consumers are keen on quality and pricing of products. When all facts are constant, the

law of demand and supply explain that demand increases with a reduction in price levels. A rise in

price levels will lower the sales levels. Lowering the price of the Amazon Echo will imply that

more buyers can afford the device. The high price may prompt the consumers to look for cheaper

alternatives. Consumers pay keen attention to the quality of the products. Quality improves the

value of money and the utility from the products. A quality product that comes with innovative

features will see an increase in the sales levels.

The third factor concerns the evaluation of the possible alternatives. Consumers tend to

base their purchase decisions on other quality products. They make evaluations in terms of quality,

price and unique features. In such a setting, the consumers will settle for products that offer

maximum utility (Chapter 3: Consumer Behavior: How People Make Buying Decisions, 2012).

The argument rests on the fact that consumers are rational beings and engage in activities that

maximize benefits. Parameters such as price, quality, and promotion may influence the decision

to either purchase the Amazon Echo or go for other products.

Role of Involvement in Consumer Decision-Making

After identifying an ideal product, consumers embark on collecting information relating to

the product. They will consider the price, features, promotions and other factors. Secondly, there

will be a consideration of the possible alternatives as compared to the product. In this case, there

will be efforts to search for products that offer similar services to Amazon Echo. Amazon

participates in the decision making processes by offering an effective marketing mix. Marketing

serves the role of providing the buyers will vital information relating to the products.

CONSUMER BEHAVIOR AND MARKET SEGMENTATION 4

The marketing mix ought to provide details concerning the price, features, promotions,

and places where one can buy the product (Steimer et al. 2018). The case of the Amazon Echo

involves complex buying behavior. The argument rest on the fact that other alternatives offer

similar services to the Amazon Echo. Consumers are thus keen on collecting information about

the existing brands and the information relating to the marketers. The buyers of the Amazon Echo

are likely to have significant knowledge of other brands.

Consumer Decision-Making Process

Any purchase decision follows a series of steps that ensures that the buyer attains maximum

value from the purchase. The first step is problem recognition. The Amazon Echo may contribute

to this step by explaining ways that the features and innovation will impact on the buyer's life. The

second step is information search on the product. Amazon can contribute by making adverts that

highlight the details of the Amazon Echo product. The other step is the evaluation of alternatives

that offer better options for a product. Amazon can ensure there is a highlight of features that are

unique as compared to other products (Amazon Company, 2018).

The fourth step is making the purchase decisions. Amazon needs to highlight places that

the buyers can access the product. Online platforms will play a role in improving the efficiency

levels in the purchase processes. After the fifth step, which is purchasing, is the post-purchase

evaluation. In the last step, Amazon may ensure that they offer effective after sale services to the

clients.

Part Two: Market Segmentation, Targeting, and Positioning

Segmentation

Market segmentation is the move to focus on a specific group. In the case of the Amazon Echo

Dot, Amazon can segment the market by income and age. The age factor will ensure that there is

CONSUMER BEHAVIOR AND MARKET SEGMENTATION 5

a focus on the youths and the corporate sector. The smart interaction technology and music

playbacks readily connect to the young generation. Moreover, reaching the group would call for

the use of social media platforms in the marketing activities.

Income will also affect the reception of the product. An increase in the income levels positively

impacts on purchase decisions. A high disposable income implies that the clients will be more

willing to but the Echo product (Amazon Company, 2018). The Amazon group can thus settle for

the corporate sector as well as the middle-income earners. The group would contribute to

improving the sales levels of the brand.

Target Market

The target that offers a massive prospect for the Amazon Echo Dot product is the youth. It is

imperative to note that the youth accounts for the most substantial portion of the human population.

The product has features that conform to trends in this age group. Persons under the age of 35

years will find the product high useful. The smart interaction platforms will readily connect to the

age group. The group also meets the six criteria of an ideal target market. The young population is

growing, it is keen on embracing new trends, it can easily be reached via social media platforms,

using social media platforms in marketing is cheaper, and lastly, it fits in the objective of the

Amazon group. Amazon intends to increase their sales levels by targeting the young population

(Papayiannis et al. 2018).

However, maintaining the target group requires the continuous improvement of the product.

The move ensures that there is the incorporation of the ongoing trends in the market. It is worth

noting that this group is keen on ensuring that all emerging technologies are incorporated into the

designs. However, the features of the Amazon Echo clearly suit in the needs and tastes of the target

market. The product has unique designs, innovative technologies and comes it efficient pricing.

CONSUMER BEHAVIOR AND MARKET SEGMENTATION 6

Target Market Strategy

Adopting the multi-segment marketing would offer better returns as opposed to simply

focusing on a single group. The cost of targeting the youth is low as Amazon will only utilize

social media platforms. Social media platforms are cheap and help cover a large population within

a short time. Aside from focusing on the young population, there is the possibility of segmenting

the market on the basis of income and regions. Income will allow Amazon to focus on the middle-

income earners. The move will help diversify the operations of the group thus minimizing chances

of loss and other problems.

Currently, many market players offer similar products. There is thus the risk that the rival may

lower the price level. A reduction in the price would disrupt the target markets. However, having

diverse target groups implies that these dangers will be reduced. Other than the use of social media

platforms, other options may prove useful in the marketing processes (Greenspan, 2017). The use

of online platforms may prove useful in pushing the brand to regional and global markets. The

method is cost effective and allows for the inclusion of images and videos concerning the product.

Positioning

The perceptual map above offers a highlight of some of the rivals brands and ways

they compared to the Amazon Echo Dot in term of quality and price. The JB link View is

competitive due to its high quality and low prices (Amazon.com, 2018). While the Google Home

Max and the Lenovo Smart Display comes with unique features, the high price makes them less

competitive. They create less danger to Amazon Echo as compared to JBL Link View. The Sonos

Beam is the least competitive product as it comes with a high price but low qualities. While the

Sonos has low quality, some clients may settle for the product due to the low pricing.

CONSUMER BEHAVIOR AND MARKET SEGMENTATION 7

Google Home

max

Sonos One

Amazon Echo

Sonos Beam

High in

Quality

High

Price

Low

Price

Low in

Quality

JBL Link

View Lenovo Smart

Display

CONSUMER BEHAVIOR AND MARKET SEGMENTATION 8

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Jobs: https://www.amazon.jobs/en/principles

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CONSUMER BEHAVIOR AND MARKET SEGMENTATION 9

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