Amazon Case Study

Books and CDs they are highly subjective products that are suited to the individuals who consume them. Due to this phenomenon, consumers are likely to be highly involved with these products and respond positively to the ability to review feedback from other users, as well as leave their own feedback. Also, since there are so many different kinds of genres, authors, musicians, etc., there is a huge product selection available. As was mentioned in the case study, it was impossible to have a physical inventory of all of the 3 million book titles and quarter million CD titles (as of 1995), but it was a simple thing to have an online catalog of them with warehousing nationally sourced around the USA. In this way Amazon was able to offer every available book and CD title, with interactive customer feedback that serviced every type of niche market consumer, while also avoiding overhead costs associated with physical inventory. An additional advantage from these savings was Amazon’s ability to have very competitive pricing because of their low operational costs; this made them the go-to company when customers wanted to search for the best prices. When compared to other items, books and CDs had the advantage because they are popular to the masses yet tailored to individual taste, small, cheap, and easily evaluated by word of mouth and popular opinion. They are also interestingly a high involvement purchase for many people but we aren’t able to fully try them out before we buy them; you can’t read an entire book in the book store or sample and entire album in the store. Internet shopping for these items allowed people to learn in detail from other shoppers’ feedback as to the intimate details of the product and helped to assure people before they made a purchase.
[external reference price 450 internal reference price & price perceptions 447 price elasticity 454] Most online shoppers don’t begin as ‘loyal’ customers but most likely develop buying patterns that tend to...