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amazon-prime

In our last blog we discussed how Amazon used predatory pricing as a pricing strategy to gain market share. Another strategy used by Amazon to increase market share, is price bundling. They now offer their service called ‘Prime’. Prime is a subscription/ membership service where consumers can get free next day delivery or even within two hours in some locations along with  “instant streaming of thousands of movies and TV episodes, unlimited streaming of over a million songs, unlimited photo storage and more.” https://www.amazon.co.uk/gp/prime/pipeline/landing?ie=UTF8&*Version*=1&*entries*=0

Amazon wants to provide enough value into the membership so that is creates loyal customers for life. The idea is that by offering a good price to join, the members will be encouraged to always think Amazon when they want to purchase something, locking the consumer in (Euromonitor, 2016). This is a good example of how accounting pricing strategies are entwined with marketing strategies.