The Amazon Platform Dilemma: Brand Experience Effects

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Table of Contents

The Management Decision Problem (MDP)
The Market Research Problem (MRP)
Approach to Solving It
Specification of the Required Data
Conclusion
References

Millions of potential customers visit Amazon.com daily to search for or buy products. This means that any product listed on the site can be seen by millions of people from different regions. A thousand monthly sales through the site is enough to make a company profitable. Conversely, selling on Amazon has many disadvantages, including the possibility of fake items and an inability to control marketing (Taher, 2021). Thus, whether or not to sell on Amazon is a contentious issue for many brands, particularly emerging ones. In this context, DripIt, an upcoming men’s apparel brand, is uncertain whether it should sell on Amazon. This essay outlines DripIt’s management decision problem (MDP), the appropriate market research problem (MRP), and the approach to solving it.

The Management Decision Problem (MDP)

Will listing Dripit’s products on the Amazon.com marketplace increase the company’s sales and customer reach?

DripIt has gained popularity among teenagers and young adults since it started operations a few years ago. The majority of its current clientele are aged between 10 and 26 years. Many of these customers have transformed into enthusiasts are always visiting DripIt to stores to check if there are new products. This has enabled the company to add one additional physical store from the original two. The management has seen the potential of the company becoming even more popular but is worried that the growth has stagnated, especially since not many grownups relate to the brand. Indeed, DripIt has been adding a wide range of apparel that should appeal to this particular clientele, particularly for males above 25 years. However, this strategy has not worked, so DripIt is considering listing its clothes on Amazon.com to increase sales and add more customers. The company understands that this is a great opportunity since eCommerce has grown significantly in the past two years. Moreover, in 2019, a third of all internet users were between the ages of 25 and 34, with internet users in this demographic constituting the largest group of internet users globally (Johnson, 2022). Accordingly, the company considers its ambition realistic and economically viable.

As initially stated, DripIt is concerned that listing on Amazon.com might hurt its thriving business. Primarily, the management feels that selling on the eCommerce platform increases the likelihood of its apparel being counterfeited. DripIt understands that the brand has succeeded mainly because of the unique design of its clothing lines. Listing on a site with over 200 million subscribers from different parts of the world risks this competitive advantage (Howley, 2021). At the same time, selling on Amazon.com implies will require the company to play by the site’s rules. This encompasses upholding their A-to-Z guarantee, how they interact with customers, and what they can and cannot sell. In other words, if DripIt wishes to market its products on Amazon, it will lose a significant level of control and independence.

Whether a product will be listed on Amazon or not is seldom a choice made completely by the business. Since Amazon is an online platform, it allows people and businesses of all kinds and sizes to sell their products. This is intentional, as Amazon executives feel that extra vendors equal more choices, which equals increased pricing competitiveness and broader options for Amazon consumers. Essentially anybody can create a merchant account in seconds and begin selling an item obtained through different reputable, dubious, or entirely illegal means. Due to this unregulated planform framework, DripIt should assume that any of its products will appear for purchase on Amazon.com with or without the company’s approval.

The Market Research Problem (MRP)

DripIt’s market research problem is to figure out which distribution strategy is ideal for the brand to maintain lucrative control over what occurs on Amazon.com. In this case, the brand executives must choose between selling on or to Amazon.com. The focus concerns, difficulties, and product management goals will be determined by which of these pathways it selects and the distribution method it adopts in that sector. The ability of DripIt to control its brand tactics (e.g., pricing, brand content, marketing), make profits, and establish a sustainable frequency for overseeing operations on the site will be impacted by either distribution option.

Approach to Solving It

Analytical framework

Amazon is the leading platform customers use when undertaking an eCommerce search, surpassing even internet search giants like Google. Amazon currently accounts for 38.5 percent of all online transactions in the US, with third-party vendors now accounting for 60% of its online sales (Howley, 2021). These statistics illustrate the many advantages of selling products on Amazon.com.

Analytical model

Mainly, it comprises a selection of variables linked together in a particular way to represent the whole or a portion of a real-world system or process. Models may take several formats, but this research will concentrate on visual models. That is a representation of the theory graphically and pictorial with supporting explanations. This will provide a clear picture of the current market state and how it influences brand decision-making.

Research Questions

Do shoppers who frequent Amazon.com prioritize quality above price?
Are grownups being targeted by the company fashion-conscious?
Could they afford to pay more for higher-quality apparel?
Is the success of competitors such as Calvin Klein and Levis on Amazon.com tied to cost-effectiveness or brand popularity?
Is the grownup population higher than teenagers and young adults to help DripIt gain market share?

Hypothesis (H1): Grownups are not fashion-conscious, and they prefer inexpensive or reasonably-priced apparel.

Hypothesis (H2): Grownups are fashion-conscious, they are more discriminating about the sort of clothing they wear, and they prefer to spend extra for higher-quality clothing.

Specification of the Required Data

The researcher may identify what evidence should be gathered by concentrating on every element of the problem, the research questions, and the hypotheses. It is beneficial to repeat this process for every element of the problem and create a checklist detailing all data that needs to be gathered. I will seek out accessible secondary data to address every aspect of the research questions. To begin, I will utilize target demographic data for my research. There is a wealth of data available that has studied the figures in three crucial groupings; age, income, and ethnicity—and questioned authorities from across the sector regarding how these factors influence fashion (Huaman-Ramirez & Merunka, 2019). The second aspect that requires clarification is: What do clients expect from online fashion brands? I will determine if the issue is cost, convenience, or quality. Ultimately, my investigation will ascertain what shoppers see in Amazon.com to make the company dominant in the sector and what DripIt can do to compete favorably. Through aggregating this information, I may have a new perspective of the customer’s preferences and motivations.

In general, there are main concepts that must be continuously developed and maintained for a product to have a strong base on Amazon. They include branding, distribution, pricing, product availability, and catalog selection.

Branding: What information is utilized on Amazon to explain the firm’s goods? Who is accountable for ensuring that the information is factual, comprehensive, and aligned with marketing activities across all other touchpoints for the product?

Distribution: Which Amazon vendors represent the product? How many of those vendors are familiar with the company and are enthusiastic about its items as anything more than a selection of widgets to resell?

Pricing: How are the company’s items priced compared to the company’s pricing across all touchpoints? Are there any unplanned or uncontrollable price changes? What level of control does the company over the pricing of its products?

Product Availability: How efficient is the company at keeping its items in stock, or at least adequately supplied compared to other brands targeting Amazon shoppers?

Catalog Selection: When and how will the company’s new merchandise be available on Amazon? Is a specific seller in place to ascertain that a company’s new merchandise is released as quickly as they are made accessible in other touchpoints?

Conclusion

The management decision problem inquires about the policymaker’s action plan, while the marketing research problem inquires about what evidence is necessary and how it may be collected. The research goal is to provide the data needed to make an informed choice. The management decision problem is execution-oriented, focusing on what must be accomplished. The marketing research problem, on the other hand, is evidence-oriented. The research goal is to provide the knowledge needed to make an informed choice. DripIt management must differentiate these concepts and apply them appropriately to make the best decision.

References

Huaman-Ramirez, R., & Merunka, D. (2019). Brand experience effects on brand attachment: The role of brand trust, age, and income. European Business Review, 31(5), 610-645. Web.

Howley, D. (2021). Amazon Prime now has 200 million members, jumping 50 million in one year. (2018). Yahoo.com. Web.

Johnson, J. (2022). Distribution of Internet users worldwide as of 2019, by age group. Statista. Web.

Taher, G. (2021). E-Commerce: Advantages and limitations.International Journal of Academic Research in Accounting Finance and Management Sciences, 11(1), 153-165. Web.

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