Product Introduction and the Market
Technology is developing at a rapid pace. These changes are influenced by the internal organizational strategies as well as an external environment that determines the evolution of consumer demand and expectations. Companies constantly seek for technology-driven solutions to operational excellence and enhanced customer experience (Porter, 2008). One of the most recent trends, driven by technological development are drones and the potential for these devices in the enhancement of customers' e-commerce experience. While academic and business literature outlines the polarization of the views on the use of delivery drones in the commercial market, the potential and attractiveness this service for both, tech-savvy customers and companies are difficult to underestimate (Keller and Horn, 2003). The purpose of this document is to evaluate the target market and its societal, demographic, psychographic and behavioral characteristic and choose the marketing research approach that would present the best fit for the product analysis.
The Drone Delivery service has been the focus of many companies, including DHL, Amazon, and Google. Amazon, however, managed to get ahead of is competition by conducting the first FAA approved successful trial of drone delivery in the US (Hern, 2016). Drone delivery service gives several advantages to both, company and the final customer due to its capability to not only deliver a product within a radius of over 45 km within 30 minutes but also due to the flexibility of the location to which a product can be delivered to its receiver. With that in mind, the drone delivery service can offer flexibility and responsiveness as well as time-saving, relevant to many customers. Some critical limitations and considerations, however, are essential, to define the target customer. First, the delivery capacity of the existing drones does not exceed 2.6 kilograms, which limits the types of products, which it can carry. Secondly, man people with conservative view find drones dangerous from the perspective of basic safety as well as invasion of private space (Hern, 2016).
Considering the technological characteristics of the service and the major competitive elements of the same, such service will most appeal to individuals of Generation Y and Z, born after 1980 and well-familiar with the technology. This access to technology, information and international mobility of this generation of customers makes them constantly seek for innovation and know-how in every aspect of their lives. Often, Generation Y and Z are described as impatient, narcissistic and highly non-brand loyal, as their switching costs are low due to a wide number of options and competitive prices for most of the "desired" technological products (Kotler and Armstrong, 2010). With the above in mind, the target market for Amazon Drone Delivery Service is men and women, born after the 1990s, including businessmen, students, and housewives.
Critical Societal, Demographic, Psychographic and Behavioral Factors
Some more specific characteristics, relevant for the development of effective marketing strategy include the following:
Market Research Methods
There is a great variety of primary and secondary research methods, which can be used to explore the external environment and get the better understanding of the target customer. The demand of this study is to evaluate the readiness and acceptability of the Amazon Drone Delivery service in the US market. The scope of the research should cover a wide range of considerations, included in the analysis of the societal, demographic, psychographic and behavioral patterns of the target market. Moreover, it is critical that the research does not only test the hypothesis about this population but explores the potential factors, which were not incorporated in the above table. With that in mind, the most appropriate marketing research method for this analysis will be a mixed approach, including primary and secondary research. More specifically, three elements will underpin the approach to this work: (1) closed-ended and open-ended questions, aimed at testing the acceptability and core criteria of the target customer and, (2) secondary research through literature review of existing marketing studies in this field and (3) focus group analysis, focused on gaining additional knowledge and get ideas for the marketing strategy (Ernst, 2003).
This approach will enable the marketing team to not only address the needs of the target customer, already known from the previous market studies but also will allow gaining incremental knowledge about the market and consumer "desires". This knowledge will help to build differentiated strategy and ensure that the go-to-market strategy is aligned with the most critical characteristics of the target market in the US.
The Go-to-Market Plan for the Amazon Drone Delivery Service will involve seven major components and steps:
The business plan with accurate outline of the product, financial projections, and risk assessment;
Timeline and execution planning, including Gantt chart, Work Breakdown Structure, and Project Charter;
Coherent product strategy, including specific training requirements and change management strategy for the interval stakeholders;
Explanation and justification of the channel strategy, including distribution and sales resources required to meet the growth ambition of the service in the US;
Advertisement and Promotional strategies for the launch and the first year of operations;
The analysis of the customer loyalty development strategy from the first introduction of the product to the expected process of decision-making leading to purchase or non-purchase decision;
Evaluation and success assessment framework development.
The above steps are critical for the development of the accurate go-to-market plan, which involves risk assessment, marketing approach and accurate distribution of roles and responsibilities. Critically, this approach will ensure that the work team understands the objectives and the goals of the new product launch and feels "included" in the process of innovation. This strategy will eliminate uncertainty and will minimize resistance to change, allowing for the smooth and effective introduction of the product to the market.
Amazon Drone Delivery Service is a revolutionary product, which will significantly affect the face of e-commerce in the country and will drive changes in the regulatory environment in this field. While there are numerous benefits that the service will provide to the company and its customers, these benefits come at a cost. FAA regulations on monitoring of drones on the ground increased privacy and safety concern of more traditionalistic population and other factors, will continue challenging the wide acceptance of the service and further restrict its use for groups of products. The technology, however, enables the drone service and will continue improving its characteristics, allowing for the successful launch and sustainably effective and profitable operation.
Hern, A. (2016). Amazon claims first successful Prime Air drone delivery. The Guardian [Online]. Retrieved 31 January 2017, from https://www.theguardian.com/technology/2016/dec/14/amazon-claims-first-successful-prime-air-drone-delivery
Keller, M. & Horn P., (2003). Strategic Management. 2nd Edition. Journal of Literature, 12(5), pp.66-89.
Porter, M. (2008). Competitive Advantage. Creating a Sustainable Superior Performance. Berlin: Simon and Schuster.
Kotler P.H..and Armstrong G. (2010). Principles of Marketing. London: Prentice Hall Publishing.
Ernst, A., (2003). Comparison of Qualitative and Quantitative Research. Seminar Paper. London: Green Verlag Publishing.