Many companies often offer discounts to senior citizens and students. For instance, Beside its regular prime...

Many companies often offer discounts to senior citizens and students. For instance, Beside its regular prime membership, Amazon also offers a discounted membership program to students.

“Amazon Prime Student is a Prime membership program created for college students. As a Prime Student member, you receive a six-month trial that include-es Free Two-Day Shipping on over 50 million items, unlimited streaming of Prime movies and TV shows, unlimited photo storage with Prime Photos, 20% off pre-order and new release video games, exclusive deals and savings, and more! After your six-month trial ends, your Prime Student membership makes you eligible to receive 50% off Amazon Prime, and includes access to all Prime benefits.”

Discuss why Amazon create a Prime student membership. What are benefits of such a pricing strategy?
Customers who sign -up for Prime Student will be required to verify their student status via a .edu e-email. Discuss why Amazon requires the verification.

Expert Solution

a) Amazon want to increase its sales by using this prime student membership because if it is able to get more students on board it will get more business as according to recent survey many youth around the world are preferring online shopping as they are giving them more offers. The main reason for Amazon to keep student prime membership is to attract more students which inturn to create more revenue from sales.

The benefits of this discount stratergy is that students will get free enrollment for 6 months which make to use all its features for free than after that students pay a discounted price. As students are using this membership they know it's benefit which will make them to pay and take this membership. So Amazon will have both sales and membership fees which is like a profit for them.

b)

People those who are not students also can take this membership if there is no verification process which makes Amazon to loose income earned from membership. So if there is a verification than the probability of people cheating will be low and mostom students will take this membership. If Amazon does not keep it membership it will make some one who is not a student to use all the benefits for 6 months at a free of cost.

Rahul Sunny answered 2 years ago

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