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New Product in Marketing Aspect - Assignment Example

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Amazon records high sales by setting extremely low prices, which explains the low profit margins. Amazon needs to develop effective pricing strategies that maximizes on profits rather than…
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New Product in Marketing Aspect
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New Product in Marketing Aspect New Product in Marketing Aspect Q1. Is this a marketing issue? The issue at Amazon is of a marketing concern that calls for effective pricing strategies. Amazon records high sales by setting extremely low prices, which explains the low profit margins. Amazon needs to develop effective pricing strategies that maximizes on profits rather than high sales. In addition, the company offers huge discounts to members, who order regular deliveries of grocery and perishable goods, hence making it difficult to earn profits on such huge discounts (Stewart, 2014).

Similarly, the company offers reduced prices on Kindle and Kindle hardware, and, Amazon Prime and Kindle Owner’s Library, in order to attract more customers to purchase its digital content. This strategy aims at increasing membership rather than maximizing on profits. The company also emphasizes on expansion and acquiring of additional markets, with little focus on marketing strategies, such as, market prices, share prices and characteristic the target market (Yglesias, 2014). Although this leads to increased sales turnover, it is also accompanied with increased operation costs, which reduces the gross and net profit margin significantly.

Therefore, there is need for the company to develop sound pricing strategies that focus on maximization of revenue and profits alongside its objective on growth and expansion. Q2. What is dynamically continuous innovation?Dynamically continuous innovation refers to a technology that articulates effect on consumption practices and patterns, through incorporation of a new technology (Hoyer & Deborah, 2008). Recently, the Guardian Telecom Company has launched an extensive line of indoor industrial voice over internet protocol (VOIP) telephones, in an effort to provide versatile telephone products, designed for use in adverse areas.

The technology requires a simple connection to Guardian’s VOIP, over the internet protocol address, and to the users’ phones. The new technology aims to enhance consumer support and communication, in industrial areas that are prone to moderately harmful environment. Compared to consumer phones, this technology is ideal for emergencies and direct assistance communication, since it enables the consumers to initiate calls from any locations with the availability of internet connection (Valdes & Dave, 2014).

In addition to its intended use, this new product also provides additional services to include, call waiting, call transfer, and repeat dial features.ReferencesHoyer, W. & Deborah, M. (2008).Consumer Behavior. New York: Cengage Learning Publishers. Stewart, J. (2014). Is Amazon’s fairy retail story coming to an end? Retrieved on 7 May 2014 from http://articles.economictimes.indiatimes.com/2014-04-28/news/49464679_1_amazon-shares-amazon-com-revenue-beat-forecastsValdes, R. & Dave, R. (2014).

How VIOP Works. Retrieved on 7 May 2014 from http://computer.howstuffworks.com/ip-telephony.htmYglesias, M. (2014). The Prophet of No Profit. Retrieved on 7 May 2014 from http://www.slate.com/articles/business/moneybox/2014/01/amazon_earnings_how_jeff_bezos_gets_investors_to_believe_in_him.3.html

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