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Netra Shetty
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Marketing Research of Amazon.com - March 29th, 2011

Amazon.com, Inc. (NASDAQ: AMZN) is a US-based multinational electronic commerce company. Headquartered in Seattle, Washington, it is the largest online retailer in the United States, with nearly three times the Internet sales revenue of the runner up, Staples, Inc., as of January 2010.
Jeff Bezos founded Amazon.com, Inc. in 1994 and the site went online in 1995. The company was originally named Cadabra, Inc., but the name was changed when it was discovered that people sometimes heard the name as "Cadaver". The name Amazon.com was chosen because the Amazon River is one of the largest rivers in the world and so the name suggests large size, and also in part because it starts with "A" and therefore would show up near the beginning of alphabetical lists. Amazon.com started as an online bookstore, but soon diversified, selling DVDs, CDs, MP3 downloads, computer software, video games, electronics, apparel, furniture, food, and toys. Amazon has established separate websites in Canada, the United Kingdom, Germany, France, Italy, Japan, and China. It also provides international shipping to certain countries for some of its products.

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Success depends on a lot of things, but when you have information about a particular market segment, a geographic area, or customer preferences, you'll be better prepared to make the decisions that can make or break your business.

Many companies use market research as a guide. Whether you want to expand your business into a new area or introduce a new product, primary and secondary market research can provide valuable insight to help you shape your business and prevent costly missteps.

Secondary Research
If you’re considering extending your business into new markets or adding new services or product lines, start with secondary research. This type of research is based on information gleaned from studies previously performed by government agencies, chambers of commerce, trade associations, and other organizations. This includes Census Bureau information and Nielsen ratings.

You can find much of this kind of information in local libraries or on the Web, but books and business publications, as well as magazines and newspapers, are also great sources.

Although secondary research is less expensive than primary research, it's not as accurate, or as useful, as specific and customized research. For instance, secondary research will tell you how much teenagers spent last year on basketball shoes, but not how much they're willing to pay for the shoe design your company has in mind.

Primary Research
Simply put, primary research is research that's tailored to a company's particular needs. By customizing tried-and-true approaches — focus groups, surveys, field tests, interviews or observation — you can gain information about your target market. For example, you can investigate an issue specific to your business, get feedback about your Web site, assess demand for a proposed service, gauge response to various packaging options, and find out how much consumers will shell out for a new product.

Primary research delivers more specific results than secondary research, which is an especially important consideration when you're launching a new product or service. In addition, primary research is usually based on statistical methodologies that involve sampling as little as 1 percent of a target market. This tiny sample can give an accurate representation of a particular market.

But professional primary research can be pricey. Tabs for focus groups can easily run from $3,000 to $6,000, and surveys cost anywhere from $5,000 to $25,000 and up. Do-it-yourself research is, of course, much cheaper. Services that provide online survey tools usually charge a flat fee (typically around $1 or more per response) plus a setup fee. There are also a host of software products available that will help you conduct your own online and offline primary research.

Using Both for Your Business
Savvy entrepreneurs will do secondary research first and then conduct primary research. For example, the owner of a video-rental shop would want to know all about a neighborhood before opening a new store there. Using information gleaned from secondary sources, the owner can leard all kinds of demographic data, including detailed income data and spending patterns.

They can then send out a questionnaire to a sampling of households to find out what kinds of movies people like to rent. That primary-research technique will help when it comes time to stock the store with the latest Hollywood releases.

Secondary research lays the groundwork and primary research helps fill in the gaps. By using both types of market research, business owners get a well-rounded view of their market and have the information they need to make important business decisions.

Stay focused. Savvy marketers focus their research on the products, brands, and markets that are key to their marketing strategy. In a recession, it's essential to get a clear read on existing core customers, including those who are most loyal to the brand and those who are most profitable, rather than fritter away research resources on potential or peripheral consumers. When times are good, there is budget available for increased research on secondary products or customers. Now, nice-to-knows that are not essential will have to wait.

Enlist trusted partners. Marketers and research suppliers who trust each other and have established long-term relationships can jointly plan how to extract more insights and make better decisions based on fewer expenditures. For example, combining data sets may reveal new leading indicators of changes in consumer behavior. Tracking studies may have an edge over one-off projects. CMOs who trim costs by consolidating their budgets with an integrated research supplier should insist that the supplier aggressively explore synergies across its various component agencies as well as eliminate research redundancies.

Value experience and judgment. CMOs should tap the knowledge and intuitions of managers and researchers who've lived through previous recessions. In setting prices, for example, such insight can help calibrate the optimal level of price promotion offers. Experience also reveals proxies: in tough times, some marketers use research results from Sweden as a proxy for Scandinavia, rather than conducting the same research in all Scandinavian countries.

Seize opportunities overseas. Some large multinational marketers, such as Unilever, are shifting research expenditures away from Western Europe and toward emerging markets in Asia and Latin America. Relative to the developed economies, the costs of research in emerging economies are less and the payoff from incremental insight can often be greater. Brand preferences and consumption levels in emerging markets such as China, India, and Brazil tend to be more fluid. Consumer research is therefore critical to aid marketers trying to cement brand preferences early on as these economies develop.

Go online with a dash of skepticism. Online research is cheap, fast, and the wave of the future. Tools like SurveyMonkey allow non-expert users to create custom surveys in minutes. As an alternative to offline focus groups, custom online panels of consumers can be formed for qualitative research on new product ideas or new ads. Taking the do-it-yourself approach rather than outsourcing to a market research firm is attractive in a cost-cutting era, but you risk getting no more than what you pay for. The opinions of convenience sample of an enthusiastic online brand community may not represent all users.

Don't cut across the board. Just as important as knowing where to cut research is knowing where not to cut. When marketers are creating fewer new ads and introducing fewer new products, it is doubly important to use rigorous pretesting to select the strongest alternatives. In categories where the bases for consumers' value judgments are changing, modest expenditures on copy research can prevent blowing much more money on ineffective messaging. Adding a few questions to standard tracking studies is a low-cost way to shed light on changes in customer attitudes and purchase behavior. For key products, running conjoint studies to check on shifts in price elasticities of demand and price-attribute tradeoffs can usefully improve the profitability of pricing decisions at a time when cash is king.

Keep an eye on the new consumer. No one has a perfect record of predicting the future, and the recession is making it harder for consumers to envision or articulate their needs. Even so, and despite budget pressures, smart marketers devote a portion of their market research to getting a handle on future changes in consumer behavior. Are consumers of your brand going to revert to previous consumption patterns when the recession ends? Or are they developing coping mechanisms that will endure, especially if the recession is lengthy? What new products and services will consumers be open to embracing? If, as in the financial services category, consumer confidence and trust in brands have been seriously eroded, how long and what steps will it take to regain them? Eventually, the recession will end, and future success depends on being well-positioned, based on sound research, when it does.
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Re: Marketing Research of Amazon.com
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James Cord
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Re: Marketing Research of Amazon.com - March 4th, 2016

Quote:
Originally Posted by netrashetty View Post
Amazon.com, Inc. (NASDAQ: AMZN) is a US-based multinational electronic commerce company. Headquartered in Seattle, Washington, it is the largest online retailer in the United States, with nearly three times the Internet sales revenue of the runner up, Staples, Inc., as of January 2010.
Jeff Bezos founded Amazon.com, Inc. in 1994 and the site went online in 1995. The company was originally named Cadabra, Inc., but the name was changed when it was discovered that people sometimes heard the name as "Cadaver". The name Amazon.com was chosen because the Amazon River is one of the largest rivers in the world and so the name suggests large size, and also in part because it starts with "A" and therefore would show up near the beginning of alphabetical lists. Amazon.com started as an online bookstore, but soon diversified, selling DVDs, CDs, MP3 downloads, computer software, video games, electronics, apparel, furniture, food, and toys. Amazon has established separate websites in Canada, the United Kingdom, Germany, France, Italy, Japan, and China. It also provides international shipping to certain countries for some of its products.

Related Articles
Use Demographics to Understand Your Target Market
Introduction to Market Research
Secrets of Successful Market-Research Studies
Sponsored Links
Brother® printers rated #1 in reliability by PCMag.com readers.
Success depends on a lot of things, but when you have information about a particular market segment, a geographic area, or customer preferences, you'll be better prepared to make the decisions that can make or break your business.

Many companies use market research as a guide. Whether you want to expand your business into a new area or introduce a new product, primary and secondary market research can provide valuable insight to help you shape your business and prevent costly missteps.

Secondary Research
If you’re considering extending your business into new markets or adding new services or product lines, start with secondary research. This type of research is based on information gleaned from studies previously performed by government agencies, chambers of commerce, trade associations, and other organizations. This includes Census Bureau information and Nielsen ratings.

You can find much of this kind of information in local libraries or on the Web, but books and business publications, as well as magazines and newspapers, are also great sources.

Although secondary research is less expensive than primary research, it's not as accurate, or as useful, as specific and customized research. For instance, secondary research will tell you how much teenagers spent last year on basketball shoes, but not how much they're willing to pay for the shoe design your company has in mind.

Primary Research
Simply put, primary research is research that's tailored to a company's particular needs. By customizing tried-and-true approaches — focus groups, surveys, field tests, interviews or observation — you can gain information about your target market. For example, you can investigate an issue specific to your business, get feedback about your Web site, assess demand for a proposed service, gauge response to various packaging options, and find out how much consumers will shell out for a new product.

Primary research delivers more specific results than secondary research, which is an especially important consideration when you're launching a new product or service. In addition, primary research is usually based on statistical methodologies that involve sampling as little as 1 percent of a target market. This tiny sample can give an accurate representation of a particular market.

But professional primary research can be pricey. Tabs for focus groups can easily run from $3,000 to $6,000, and surveys cost anywhere from $5,000 to $25,000 and up. Do-it-yourself research is, of course, much cheaper. Services that provide online survey tools usually charge a flat fee (typically around $1 or more per response) plus a setup fee. There are also a host of software products available that will help you conduct your own online and offline primary research.

Using Both for Your Business
Savvy entrepreneurs will do secondary research first and then conduct primary research. For example, the owner of a video-rental shop would want to know all about a neighborhood before opening a new store there. Using information gleaned from secondary sources, the owner can leard all kinds of demographic data, including detailed income data and spending patterns.

They can then send out a questionnaire to a sampling of households to find out what kinds of movies people like to rent. That primary-research technique will help when it comes time to stock the store with the latest Hollywood releases.

Secondary research lays the groundwork and primary research helps fill in the gaps. By using both types of market research, business owners get a well-rounded view of their market and have the information they need to make important business decisions.

Stay focused. Savvy marketers focus their research on the products, brands, and markets that are key to their marketing strategy. In a recession, it's essential to get a clear read on existing core customers, including those who are most loyal to the brand and those who are most profitable, rather than fritter away research resources on potential or peripheral consumers. When times are good, there is budget available for increased research on secondary products or customers. Now, nice-to-knows that are not essential will have to wait.

Enlist trusted partners. Marketers and research suppliers who trust each other and have established long-term relationships can jointly plan how to extract more insights and make better decisions based on fewer expenditures. For example, combining data sets may reveal new leading indicators of changes in consumer behavior. Tracking studies may have an edge over one-off projects. CMOs who trim costs by consolidating their budgets with an integrated research supplier should insist that the supplier aggressively explore synergies across its various component agencies as well as eliminate research redundancies.

Value experience and judgment. CMOs should tap the knowledge and intuitions of managers and researchers who've lived through previous recessions. In setting prices, for example, such insight can help calibrate the optimal level of price promotion offers. Experience also reveals proxies: in tough times, some marketers use research results from Sweden as a proxy for Scandinavia, rather than conducting the same research in all Scandinavian countries.

Seize opportunities overseas. Some large multinational marketers, such as Unilever, are shifting research expenditures away from Western Europe and toward emerging markets in Asia and Latin America. Relative to the developed economies, the costs of research in emerging economies are less and the payoff from incremental insight can often be greater. Brand preferences and consumption levels in emerging markets such as China, India, and Brazil tend to be more fluid. Consumer research is therefore critical to aid marketers trying to cement brand preferences early on as these economies develop.

Go online with a dash of skepticism. Online research is cheap, fast, and the wave of the future. Tools like SurveyMonkey allow non-expert users to create custom surveys in minutes. As an alternative to offline focus groups, custom online panels of consumers can be formed for qualitative research on new product ideas or new ads. Taking the do-it-yourself approach rather than outsourcing to a market research firm is attractive in a cost-cutting era, but you risk getting no more than what you pay for. The opinions of convenience sample of an enthusiastic online brand community may not represent all users.

Don't cut across the board. Just as important as knowing where to cut research is knowing where not to cut. When marketers are creating fewer new ads and introducing fewer new products, it is doubly important to use rigorous pretesting to select the strongest alternatives. In categories where the bases for consumers' value judgments are changing, modest expenditures on copy research can prevent blowing much more money on ineffective messaging. Adding a few questions to standard tracking studies is a low-cost way to shed light on changes in customer attitudes and purchase behavior. For key products, running conjoint studies to check on shifts in price elasticities of demand and price-attribute tradeoffs can usefully improve the profitability of pricing decisions at a time when cash is king.

Keep an eye on the new consumer. No one has a perfect record of predicting the future, and the recession is making it harder for consumers to envision or articulate their needs. Even so, and despite budget pressures, smart marketers devote a portion of their market research to getting a handle on future changes in consumer behavior. Are consumers of your brand going to revert to previous consumption patterns when the recession ends? Or are they developing coping mechanisms that will endure, especially if the recession is lengthy? What new products and services will consumers be open to embracing? If, as in the financial services category, consumer confidence and trust in brands have been seriously eroded, how long and what steps will it take to regain them? Eventually, the recession will end, and future success depends on being well-positioned, based on sound research, when it does.
hey netra,

I also got some information on the Measuring prices and price competition online - Amazon and Barnes and Noble and would like to share it with you and other student's. So please download and check it.
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