1. What is the decision facing Amazon?

2. What factors are important in understanding this decision situation?

3. What are the alternatives? What decision(s) do you recommend?4.4. What are some ways to implement your recommendation?

Marketing in Action Case Real Choices at Amazon In marketing, yesterday's success quickly becomes old news. In addition, periodically on select items sold by Amazon offers How should one of the world's largest retailers plan to build on 0 percent APR financing with 12 equal monthly payments. One its' previous achievements? In the retail marketplace, it is be- of the key benefits to Amazon is that compared to the use of coming harder for companies to differentiate themselves from traditional cards like Visa, MasterCard, or AmEx, transaction the competition beyond simply price. Amazon is now faced processing costs for its Prime Store Card are lower. with this challenge and must develop offerings to protect and One of the best benefits that brick-and-mortar retail grow its customer base. One of its primary offerings to meet stores have maintained over online retailers is the ability to this task has been the creation of Amazon Prime. The service provide customers with instant gratification. Amazon aims was created in 2005 offering free two-day shipping within the to decrease that advantage through its services. Recently U.5. on qualified purchases. The initial annual membership fee introduced in select cities is Prime Now. a service that allows was 579 and also allowed discounted one-day shipping rates customers to receive their order within one hour for a fee of on those same purchases. In 2014, the fee was increase to $99 $7.99, or within two hours for no additional fee. Currently, and more services were added to increase customer value. the products available for Prime Now delivery are limited to Prime Instant Video allows customers to stream movies 15,000 to 40,000 available items, which may seem like a lot and TV shows to their web browsers or multiple Amazon video- compatible devices. The current library of tens of thousands of but Prime members currently have access to millions of items titles provides a wide array of choice to lure potential custom- to select from for two-day shipping. Prime Now is definitely an ers. Subscribers can also purchase online video subscriptions innovative service, but in some markets it is faced with other from premium content providers like showtime, Starz, and competitors for on-demand delivery offerings, like Google Express and UberRush. other streaming entertainment channels. The objective of the add-on services is to attract new customers to Amazon Prime in Amazon continues to establish more services under the a crowded competitive environment. As of 2016, Netflix is the Prime umbrella. Prime Pantry is an option by which members world's largest provider of streaming video content with more can fill a virtual box with groceries and household products than 75 million subscribers. In addition, Hulu is a joint venture and have them delivered for $5.99 per box. Prime Music offers of Walt Disney, 21st Century Fox, and Comcast's NBCUniversal ad-free access to playlists and a catalog of more than1 mi- that similarly provides streaming services. lion songs and albums, Prime Photo provides unlimited photo One of Amazon's latest additions to its Prime service is the storage on the Amazon Cloud. This wide variety of associated Prime Store Card. The card rewards subscribers with 5 percent services draws the attention of numerous varied competitors cash back on all Amazon purchases. Or, in lieu of the 5 percent and the key question as Amazon move forward is: How will cash back, members can choose a tiered financing option for the company successfully manage such a large portfolio of of purchases more than $149, In this plan, when customers reach ferings? For success to be sustained over time, Amazon must cost thresholds they can avoid paying interest if the outstand- carefully consider what long-term strategies are necessary to ing balance is paid within 6, 12, or 24 months, as applicable. continue to make Amazon Prime a profitable winner in a con petitive marketplace