Choosing the right brand _ Discussion questions (1)

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2. The article talks about the "commoditization" of products on AMZ and its implications. What is commoditization and how does that affect a company's products? Commoditization is a process where products become essentially identical to similar offerings from other companies in the eyes of the consumer. This can happen when: ● When features and functionality become standardized, the differences between products become minimal, making them difficult to differentiate. ● Consumers focus mainly on price and choose the cheapest option, regardless of brand. ● Platforms like Amazon showcase multiple similar products together, leading to i nstant comparison and encouraging price-based decision-making. Impact on companies: ● Companies face pressure to lower prices to compete, leading to reduced profit margins. ● New entrants can easily replicate products and enter the market, intensifying competition. ● Consumers become less attached to specific brands when products become indistinguishable. Example: Amazon Basics batteries have become popular, capturing a significant market share from established brands like Duracell. Strategies for companies: ● Focus on unique selling propositions, brand identity, and emotional connection with customers; build strong brand positioning ● Offer superior product features by investing in research and development to create innovative products with clear differentiation. ● Limit unauthorized sellers and maintain control over brand image online. ● Provide excellent customer service and build relationships with loyal customers. Example: Apple's distinctive design, strong brand image, and control over distribution channels help them maintain premium pricing.

3. Obviously one of the biggest advantages of selling on AMZ is reach, but what are the disadvantages and what should sellers do in order to appear high up on the search results? Disadvantages of selling on Amazon: ● Amazon is a massive marketplace with numerous sellers vying for attention, making it difficult to stand out and attract customers, especially in saturated categories. ● Sellers must pay Amazon various fees, including referral fees, fulfillment fees, and advertising fees. These fees can eat into your profits and make it challenging to compete on price alone. ● Amazon's platform prioritizes its own branding, making it difficult for sellers to build their own brand identity, leaving sellers with limited branding opportunities. ● Amazon doesn't share customer data directly with sellers, making it difficult to build long-term relationships and target marketing campaigns. ● Amazon increasingly competes with sellers by offering its own private-label products and prioritizing them in search results. Strategies to appear high up on Amazon search results: ● Opting for product listing optimization means using relevant keywords in your product titles, descriptions, and bullet points. ● Sellers must ensure they have high-quality product images . They should invest in professional photography that showcases your product's features and benefits. ● Encourage customers to leave reviews and respond promptly and professionally. ● Target specific keywords and increase product visibility via Amazon Sponsored Products ads. ● Analyze your competition and price the products competitively while maintaining profitable margins. ● Offer Prime shipping to incentivize customers and increase sales. Ensure fast and efficient order fulfillment to prevent negative customer reviews and maintain a high seller rating. ● Track your performance, analyze sales data, and make informed decisions about your business via Amazon Seller Central tools.

● Regularly review Amazon's policies and adapt your strategies to stay ahead of the curve. ● Choose products with a higher profit margin to offset the impact of lower margins on Amazon. ● Sellers should build their own brand outside of Amazon by utilizing other platforms and marketing channels to build a brand identity and collect customer data. ● Larger sellers may be able to negotiate lower fees with Amazon based on their sales volume. 5. The article mentioned a "hybrid" approach as a way to optimize business strategy for brands, what is it? The "hybrid approach" referred to in the article is a business strategy where brands sell some of their products on Amazon and others on their own website. This allows them to take advantage of both platforms' strengths: Amazon: ● Large customer reach ● Brand awareness ● Customer acquisition Own website: ● Higher margins ● Comprehensive data collection ● Brand control By using this hybrid approach, brands can achieve a balance between these two sets of benefits. Here's how it works: Selling on Amazon: ● Brands can sell a selection of their products on Amazon to reach a wider audience. ● Amazon's marketing and advertising tools can help brands generate awareness and acquire new customers. ● However, brands typically have lower margins on Amazon due to fees and competition.

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● They also have less control over their brand and data on Amazon's platform. Selling on their own website: ● Brands can sell a different selection of products on their own website, where they can set their own prices and have higher margins. ● They can also collect more comprehensive data about their customers, which can be used to improve marketing and personalization. ● Additionally, brands have more control over their brand experience on their own website. Here's an example of how Magic Spoon uses a hybrid approach: ● Amazon: ○ Only single-serve cereal boxes were offered at first. ○ Later, the standard variety pack was added. ● Own website: ○ Full-size boxes of cereal were offered. ○ Limited-edition flavors and custom variety packs were exclusive. This strategy allows Magic Spoon to reach a wider audience on Amazon while still driving sales and building brand loyalty on their own website. Here are some key benefits of using a hybrid approach: ● Increased customer reach and brand awareness ● Improved sales and profitability ● Greater control over brand and data ● Flexibility to experiment with different products and pricing strategies However, there are also some challenges to consider: ● Managing inventory and fulfillment across multiple channels can be complex. ● It can be difficult to maintain consistent brand messaging and pricing across both platforms. ● It requires careful monitoring of performance and data to optimize results. Overall, the hybrid approach can be a powerful tool for brands that are looking to optimize their business strategy. However, it is important to carefully consider the potential benefits and challenges before implementing this strategy.

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