Case Study on Marketing Management Practice

SECTION A – CASE STUDY

Read the following case study, as well as the content relating to the concept of ‘influencer marketing’, before answering the questions that follow.

Amazon comes to Africa

During the course of 2020, international e-commerce giant, Amazon, began setting up warehouses in closer proximity to big cities in the US. The primary motive for doing so was to “shave hours off delivery times” and deliver on a same-day service delivery promise (Amazon, as cited by Dastin, 2020).

Same-day delivery is a concept that was foreign to the South African market until online shopping surged due to lockdown restrictions. Contrast that with Amazon’s capacity to deliver “up to 3 million” products a day (Dastin, 2020), South African e-commerce retailers should consider the threat of such excellent service, if Amazon were to arrive in Africa…

Fast forward to April 2021, and news has broken that Amazon will be setting up massive headquarters in the city of Cape Town in a brand-new property development that will have both office and retail space. The result: “a base of operations on the African continent” (Business Tech, 2021).

Arguably, Takealot.com, a firm South African favourite in the e-commerce retail space, will likely be the most impacted by this development.

A possible broader threat across e-commerce is referred to as “The Amazon Effect” in which massive market disruption occurs due to the brand’s dominance in the e-commerce space. More specifically in terms of local e-retail, speculation has been made about online retail launch, which historically has left “casualties along the way” (Diphiko, 2021).

While sources haven’t revealed whether or not Amazon aim to take on same-day delivery in South Africa yet, the mere fact that South African consumers will be able to rely on the new distribution structure will make shopping online for product categories we usually get from the likes of Takealot.com a very different experience. Amazon is the one to watch for superior Fourth Industrial Revolution technology implementation, high levels of automation and retail tech.

You have been assigned the role of Assistant to the Marketing Manager for Amazon South Africa. For the purposes of this assessment, you will imagine that Amazon has set up a new Instagram profile for the South African market and has gained a significant initial following.

Considering that retail operations are not yet established in South Africa, the brand intends to use Instagram to conduct market research for future marketing planning.

The marketing problem you will attempt to address via Instagram stories as the Assistant to the Marketing Manager is: Which product categories does the South African consumer want Amazon to make available?

Assume that your marketing plan will be presented to the Marketing Manager and you will use the information gathered by answering the questions that follow to compile your presentation.

Question 1 Evaluating Consumer Segments

Amazon’s strategic focus for this marketing plan is on product categories that will be suitable for the local context. For broad market research, the different segments that the Marketing Manager has evaluated already are as follows:

• Existing Amazon   customers   who   can   obtain   limited   goods   via international shipping to South For these customers, you would want to find out what product categories they are interested in purchasing from the international e-commerce store.

• Prospective new Amazon customers who currently shop via com who aren’t familiar with Amazon, as they perceive the brand as inaccessible from South Africa. For these customers, you want to know which product categories they would want to see available from Amazon once they launch retail operations in South Africa.

Conduct secondary research on the South African Amazon and Takealot.com customers and complete the following target market segment tables.

1.1 Use the following table format to describe and motivate the two specified target market segments’ characteristics, from a psychographic segmentation perspective:

1. 2 Use the following table format to describe and motivate the two specified target market segments’ characteristics, from a behaviouristic segmentation perspective:

1.3 From the above tables, describe and motivate the typical South African Amazon customer, using the second segment’s characteristics, who could possibly engage in Amazon’s Instagram story for market research purposes.

1.4 Describe, in your own words, how the Instagram story “question sticker” could be used to gather open-ended feedback from the target audience.

Question 2 Assessing External Environmental Factors

This question relates to the second target market segment (existing Amazon customers who can obtain limited goods via international shipping to South Africa) only.

2.1 Explain how each internal environmental factor listed below could impact a South African Amazon follower’s engagement with a “question sticker” Instagram story:

• Perception
• Personality

2.2 Consider the external consumer decision-making factor ‘social class’. How can social class play a positive role in making Amazon a success in South Africa? In your answer, remember the marketing problem you aim to solve is: “Which product categories does the South African consumer want Amazon to make available?”

Question 3 Marketing Objectives and Marketing Mix Strategies

Consider your answers in Question 1 and 2, and read the content below, before answering the question that follows.

From the case study context, and your research on segment two of the target market, it is clear that Amazon South Africa strategically has two split objectives in mind:

1. Gain market research insight into what the South African market wants access to from Amazon via current international shipping.

2. Gain market research insight into what the South African market wants access to from Amazon which can inform their local offering when retail operations launch.

To achieve these objectives, Amazon South Africa will create a “question sticker” Instagram story to gain market insight from their page followers. This concept will be called “Product Insight 2022”.

You plan to centre the Instagram story around product categories, which may include market research insight into categories such as: beauty, books, cell phones & accessories, consumer electronics, pet supplies, sports and office products.

You are aiming to get customers to reply with an answer to the “question sticker” on the Instagram story to address your marketing problem: “Which product categories does the South African consumer want Amazon to make available?”

To increase the chance of audience participation, an incentive will be offered: a discount voucher for first time Amazon buyers.

3.1 Propose two alternative Instagram story tools for market research that would be useful to Amazon in understanding the South African market’s product preferences. Motivate how each tool would work.

3.2 Conduct an extended marketing mix 7P’s analysis that details the stipulated “Product Insight 2022” Instagram story with “question sticker” and customer incentive, along with how its implementation will be integrated.

Question 4 Marketing Material Portfolio

To present your marketing plan, you need visual evidence of how you would like the Instagram story for “Product Insight 2022” to be presented to the customer via Amazon’s South African page.

You therefore need to design a mock-up of an Instagram story that could, in theory, be published by Amazon South Africa.

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