Module 5 – Case

Pricing and Marketing Plan Implementation

Case Assignment

With increasing popularity of e-commerce, retailers such as Amazon, Wal-Mart, Best Buy, Target, and Office Depots are involved in a price matching war in order to attract consumers. The traditional retail pricing strategies are challenged and some look at key value categories (KVCs) and key value items (KVIs) to refine pricing strategy in today’s digital retail environment. Free shipping is considered a part of pricing strategy for online retailers, while payment transparency and overall price image of retail stores (OSPI) serve an important role in a consumer’s purchase decision. In this case, we will look at Amazon’s pricing strategy and tactics.

Falk, T., Kunz, W. H., Schepers, J. L., & Mrozek, A. J. (2016). How mobile payment influences the overall store price image. Journal of Business Research, 69 (7), 2417-2423.

Kilroy, T., MacKenzie, I., & Manacek, A. (2015). Pricing in Retail: Setting Strategy. McKinsey & Company. Retrieved from http://www.mckinsey.com/industries/retail/our-insights/pricing-in-retail-setting-strategy

Loeb, W. (2014, Nov. 20). Amazon’s Pricing Strategy Makes Life Miserable For The Competition. Forbes. Retrieved from https://www.forbes.com/sites/walterloeb/2014/11/20/amazons-pricing-strategy-makes-life-miserable-for-the-competition/#5b8997c35c60

Reimers, I., & Waldfogel, J. (2017). Throwing the Books at Them: Amazon’s Puzzling Long Run Pricing Strategy. Southern Economic Journal, 83(4), 869-885. doi:10.1002/soej.12205

Relentless.com; amazon. (2014, Jun 21). The Economist, 411, 23-n/a.

Roesler, P. (2014, Nov. 24). Why Free Shipping Is a Must. Inc. com. Retrieved from https://www.inc.com/peter-roesler/why-free-shipping-is-a-must.html

Snyder, B. (2015, Jan. 16). Report Analyzes Amazon’s Dynamic Pricing Strategy. CIO.com. Retrieved from http://www.cio.com/article/2870961/consumer-technology/report-analyzes-amazons-dynamic-pricing-strategy.html

Read and cite articles listed above, supplemented with any other articles related to Amazon’s pricing strategy, and develop a report addressing following issues.

• Briefly describe Amazon’s pricing strategy and providing background on the company and retail industry.
• Compare Amazon’s pricing strategy with that of its key competitors and discuss whether or not Amazon’s pricing strategy works.
• Explain why Amazon’s pricing strategy works or does not work. Support your position in terms of environmental factors such as economy, the competition, and changing consumer behavior, as well as Amazon’s segmentation, positioning, and branding strategies.
• How do you think Amazon will perform in the next five years? Take into consideration the competition and relationships between pricing and other aspects of the marketing effort such as promotion, distribution and so on.

Assignment Expectations

Write clearly, simply, and logically. Your paper should be 750-1,500 words, excluding title pages and references, but quality of writing is more important than length. Use double-spaced, black Verdana or Times Roman font in 12 pt. type size. A well-written report should have a brief introduction, headings or subheadings, and a brief concluding comment. Note that you should use some keywords as headings or subheadings such as “Amazon’s pricing strategy,” instead of a sentence or a question.

Back up your positions or opinions with references to the required reading found in the Module 1-5 Backgrounds and Ongoing Useful Resources. In using those references, demonstrate your understanding of the concepts presented. Rather than grading on how much information you find, emphasis will be on the defense of the positions you take on the issues. Also remember that:

• The “why” is more important than the “what.”
• The defense of your positions on the issues is more important than the positions you take.

Do not repeat or quote definitions. Your use of the required reading to support your opinions (that is, contentions or positions) should demonstrate that you understand the concepts presented. Do not include definitions or summaries of the readings or simply describe what the company did. Instead, your responses to the questions should be analytical and should demonstrate that (a) you understand the principles from the background reading and (b) you can apply them to this particular case. Vague, general answers will not earn a good grade.

Avoid redundancy and general statements such as “All organizations exist to make a profit.” Make every sentence count. Paraphrase the facts using your own words and ideas, employing quotes sparingly. Quotes, if absolutely necessary, should rarely exceed five words. When writing an academically oriented paper, you will uncover many facts about the product. If you paraphrase the facts, cite the sources in your text and link those citations to references at the end of the paper.

Here are some guidelines on how to conduct an information search and build critical thinking skills.

Emerald Group Publishing. (n.d.). Searching for Information. Retrieved from http://www.emeraldinsight.com/learning/study_skills/skills/searching.htm

Emerald Group Publishing. (n.d.). Developing Critical Thinking. Retrieved from http://www.emeraldinsight.com/learning/study_skills/skills/critical_thinking.htm

Guidelines for handling quoted and paraphrased material are found at:

Purdue Online Writing Lab. (n.d.). Academic Writing. Retrieved from https://owl.english.purdue.edu/owl/section/1/2/

Purdue Online Writing Lab. (n.d.). Quoting, Paraphrasing, and Summarizing. Retrieved from https://owl.english.purdue.edu/owl/resource/563/1/

Purdue Online Writing Lab. (n.d.). Avoiding Plagiarism. Retrieved from http://owl.english.purdue.edu/owl/resource/589/1/

Your paper consists of arguments in favor of your opinions or positions on the issues addressed by the guidelines; therefore, avoid the logical fallacies described in the following resource:

Purdue Online Writing Lab. (n.d.). Logic in Argumentative Writing. Retrieved from
http://owl.english.purdue.edu/owl/resource/659/03/

Module 5 – Background

Pricing and Marketing Plan Implementation

Bailey, C. D., Hair, J. F., Hermanson, D. R., & Crittenden, V. L. (2012). Marketing academics’ perceptions of the peer review process. Marketing Education Review, 22(3), 263-278.

Burnsed, B. (2009, July 23). In luxury sector, discounting can be dangerous. Businessweek.

Catan, T., & Trachtenberg, J.A. (2012). US warns Apple, publishers. Wall Street Journal,259:55(March 9):A1.

Järvinen, J., & Karjaluoto, H. (2015). The use of Web analytics for digital marketing performance measurement. Industrial Marketing Management, 50, 117-127.

Kumar, V. (2016). My reflections on publishing in Journal of Marketing. Journal of Marketing, 80(1), 1-6.

Rafi, M. (2011). Ditch the discounts. Harvard Business Review; 89 (1/2), 23-5.

Ratchford, B. T. (2009). Online pricing: Review and directions for research. Journal of Interactive Marketing, 23(1), 82-90.

Tadajewski, M. (2016). Academic labour, journal ranking lists and the politics of knowledge production in marketing. Journal of Marketing Management, 32 (1-2), 1-18.

Wiedmann, K., Hennigs, N., Pankalla, L., Kassubek, M., Seegebarth, B., & Reeh, M. (2010). Online distribution of pharmaceuticals: Investigating relations of consumers’ value perception, online shopping attitudes and behaviour in an e-pharmacy context. Journal Of Customer Behaviour, 9(2), 175-199. doi:10.1362/147539210X511362

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