The impact of price reduction marketing activities for sellers on Amazon - measured by the sales performance
Schreiber, Laura (2021)
Schreiber, Laura
2021
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2021120223143
https://urn.fi/URN:NBN:fi:amk-2021120223143
Tiivistelmä
This thesis is written in collaboration with the case company Remazing GmbH, which is an e-commerce agency specialized in the platform Amazon. Due to the importance of prices on Amazon, the e-commerce platform gives sellers on Amazon the option to use a variety of types of temporary price reductions. The aim of this thesis is to support sellers to decide on offering discounts. Thus, research to answer the question of whether price reduction mar-keting activities have an impact on the sales performance of a seller on Amazon was con-ducted.
To answer that question theoretical background was researched regarding the impact of price reduction marketing activities on the consumers' shopping behaviour and the Amazon algorithm. The consumer on e-commerce platforms has different expectations compared to a regular shopper. In terms of prices, consumers on the e-commerce platform Amazon ex-pect low prices and discounts. In this thesis also the impact of price reduction marketing activities on the marketing funnel regarding the shopping behaviour of those consumers is introduced. Price reduction marketing activities do cause psychological effects in the con-sumers' behaviour – positively as well as negatively. Not just the consumer is influenced by the temporary price reduction but also the Amazon algorithm. Even though this algorithm is a black box for sellers on Amazon, through studies and experiences some information on what influences the algorithm are known. For example, the sales history and the click-through rate of the products are factors that have an impact on the Amazon algorithm and are influenced by price reduction marketing activities.
Based on the theoretical research quantitative research in form of an experiment was con-ducted. This field experiment was based on four test groups that had different amounts of discount running for two weeks in form of the price reduction marketing activity tool coupon. Those two weeks of price reduction were compared to the previous two weeks in which the products were sold at their regular price. Eight hypotheses were statistically tested with the statistic tool SPSS. The results showed that there was mainly no statistically significant im-pact of the price reduction marketing activity on the sales performance of a seller. Neverthe-less, the samples were too small to be statistically significant. However, the evaluated re-sults and statistical data lead to the assumption of an impact of price reduction marketing activity on the sales performance of a seller on Amazon. For the sellers on Amazon, it is recommended to use the option of doing price reduction marketing activities but with cau-tion. Yet, further research is highly recommended.
To answer that question theoretical background was researched regarding the impact of price reduction marketing activities on the consumers' shopping behaviour and the Amazon algorithm. The consumer on e-commerce platforms has different expectations compared to a regular shopper. In terms of prices, consumers on the e-commerce platform Amazon ex-pect low prices and discounts. In this thesis also the impact of price reduction marketing activities on the marketing funnel regarding the shopping behaviour of those consumers is introduced. Price reduction marketing activities do cause psychological effects in the con-sumers' behaviour – positively as well as negatively. Not just the consumer is influenced by the temporary price reduction but also the Amazon algorithm. Even though this algorithm is a black box for sellers on Amazon, through studies and experiences some information on what influences the algorithm are known. For example, the sales history and the click-through rate of the products are factors that have an impact on the Amazon algorithm and are influenced by price reduction marketing activities.
Based on the theoretical research quantitative research in form of an experiment was con-ducted. This field experiment was based on four test groups that had different amounts of discount running for two weeks in form of the price reduction marketing activity tool coupon. Those two weeks of price reduction were compared to the previous two weeks in which the products were sold at their regular price. Eight hypotheses were statistically tested with the statistic tool SPSS. The results showed that there was mainly no statistically significant im-pact of the price reduction marketing activity on the sales performance of a seller. Neverthe-less, the samples were too small to be statistically significant. However, the evaluated re-sults and statistical data lead to the assumption of an impact of price reduction marketing activity on the sales performance of a seller on Amazon. For the sellers on Amazon, it is recommended to use the option of doing price reduction marketing activities but with cau-tion. Yet, further research is highly recommended.