Amazon Prime

Question 1

Amazon Prime was established in 2005, and by the year 2018, it had served over 100 million clients globally. Amazon Prime is a form of subscription offered by Amazon which facilitates the availability of services to its clients at a low price. Amazon prime provides services such as streaming entertainment content and rapid delivery of various products among others. The success of Amazon Prime is anchored on the ability of its management in using various variables to segment the firm’s target markets. It is impossible for a firm to connect with all clients, especially in broad, large, and diverse markets. That is why it was wise for Amazon Prime to identify the market segments. Hence, concentrating on the segment that the firm can serve effectively. It is imperative to acknowledge the fact that marketers use physiographic, demographic, behavioral, and geographical segmentation methods in reaching their target market. Amazon Prime uses demographic segmentation which divides a market into various measurable characteristics. Those factors include education, income, gender, and age among others.

Demographic segmentation uses the most common elements which define a particular target market. With that in mind, it is clear that demographic segmentation has aided Amazon Prime in establishing the tastes and preferences of each target client globally. Amazon Prime targets the young people in society who like to use technology in running their errands. Over time, that form of segmentation has facilitated the efforts of Amazon Prime marketing team to deliver products within the wants and needs of their target audience. Therefore, it is logical to state that the success of Amazon Prime is driven by the use of an appropriate marketing strategy. Such strategies enable management to understand the segmentation concept in-depth.

Question 2

As discussed above, demographically Amazon Prime targets middle-aged people who use tech platforms as a shopping tool. Amazon Prime has been attracting young and wealthy shoppers to use the website in buying a wide range of goods, notably apparel. Statistics indicate that Amazon Prime has over time went on gaining more market share and posing as a threat to traditional retailers. In evaluating the attractiveness of that target market, Amazon Prime had to analyze and interpret available statistical data. One of the studies that Amazon Prime used for that purpose is Cowen’s survey. The survey studied 2500 Amazon Prime clients who had paid for an annual subscription.  Cowen’s survey found out that the average household income for those subscribers was $69300. Such a figure indicates a salary that is well above that of regular Amazon and other shoppers. For example, it was 24.8% higher than the average income of Walmart shoppers. That is a clear indicator of the fact Amazon Prime is attracting higher-income shoppers who are young. From various statistics, Amazon Prime has noted that its clients are shopping across more categories. For example, the number of Amazon Prime customers buying various types of apparels rose by 35% in 2017. Over time, it is critical to note that such statistical data has played a significant role in shaping various management decisions at the helm of Amazon Prime boardroom. Hence, determining that the target segment is profitable, responsive, substantial, reachable, and identifiable. Those factors facilitate the process of accessing attractiveness of Amazon Prime clients regarding viability and sustainability.

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