Kindle Fire- Amazon\'s Heated Battle for the Tablet Market PDF

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The study case solution done in class by Debora Bettiga...

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Case study: Kindle Fire: Amazon's Heated Battle for the Tablet Market SEGMENTATION & TARGETING

STRATEGIC MARKTING PROCESS

POSITIONING OPERATIONAL MARKETING PROCESS

MARKETING MIX

Kindle fire: A device for content, e-reader with added functionalities, SEGMENTATION & TARGETING The more suitable target segments for Kindle Fire are: media junkies, children and mobile gamers and higher education industry. o Media junkies: o Children: o Mobile gamers: o Education industry: business industry, requires a lot of time and high investments, need a high stablish relationships. MEDIA JUNKIES

MOBILE GAMERS

CHILDREN

o o o ADVANTAG ES

o o

Availability of media content Low price Coherent with target needs in terms of functionality

o o

Low price and low functions are needed Growing segment Does not break easily

o o

Growing segment Lower price

o

o

o o o CONSTRAI NTS

o

More competitors Screen performances not good enough Do not purchase from amazon platform  compatibility

o

Do not have purchasin g power

o

Weak performanc es (screen + processor)

o

o

EDUCATION INDUSTRY Growing segments (weight less, easy to download, …) Cost less than physical books and also tablets Some additional functionalities (take notes, read books in color, …) High investments Weak relationships with industry players Weak performances (screen + processor)

Select the better segments following the criteria: Expected grow of the segments, how big is the segment, …

Not the whole mobile gamers segments, but even price conscious gamers could be a possible segment Also e-readers is not a suitable segment. POSITIONING o Kindle Fire vs iPad Kindle Fire is priced at $199 while iPad is priced at $499. iPad has a higher performance in terms of processing and screens  gamers, people with professional necessities, … o Kindle Fire vs Nook Table Kindle Fire is priced at $199 while nook is priced at $259. o Kindle Fire vs Kindle e-reader Kindle Fire is priced at $199 while Kindle e-reader is priced at $149. Kindle Fire offer/try to offer: - Cloud service - Ecosystem - Partnerships - Books, movies, games - Internet access with an accelerated web browser - Amazon app (30 days free subscription to amazon prime) - In terms of device they do not differentiate a lot from others They try to offer an experience, they do not offer a product, they offer a way to access other offer or services. Their point of difference is the service and the experience they offer. In this way they can position against iPad. The main competitor is PDT, the other competitors have not a really differentiation point. Kindle is an e-reader that is black and white, does not provide access to content, does not provide access to movies, games, or shopping. The point is that the price of the Kindle is $149. We shouldn’t position ourselves against the kindle, we don’t want to customer to think that Kindle Fire is better than Kindle so they only buy Kindle Fire, that would cannibalize our successful product (Kindle), customer need to perceive differences between Kindle and Kindle fire, Kindle as a e-reader and Kindle fire with more services. We want people to buy both products!!! This positioning is suitable for media junkies; Kids want to play games, but not to read books, so mums would see Kindle Fire as the perfect product in terms of price and functionality (lower price and functions than iPad); Experts on the field suggest to increase the price

The objective of amazon is to obtain profit from the device and obtain more revenues from the platform: COSTS $200 REVENUES FROM THE DEVICE $199 REVENUES FROM THE PLATFORM $10/month (FROM MUSIC AND MOVIES) +10%/year (expected growth) $120/year (1 book per month at $10) +10%/year (expected growth) REVENUES FROM ADVERTISMENT From the advertisers $30  From the final customers that pay to dismiss advertisements REVENUES FROM E-COMMERCE $50/month (the biggest source of revenues) +5%/year (expected growth) Price of competitors, which are your customers and which is the value you can offer, which are the costs and revenues. Try to figure out if this is a suitable price in order to generate such revenues, what should happen if you increase or decrease this price???  scenarios! You shouldn’t go near or lower $149 because you can cannibalize your other product (Kindle). On-line channel (social media) is the best considering our target but maybe for mothers that want to but the product to their children it would be better physical distributors. Value proposition: Get all the content in only one device! Also: you are open to other brands (communication) while apple not. Why amazon would take this challenge? The risk is to cannibalize kindle, there are potential competitors, … Positioning Apple is a manufacturing of premium products with high performances and price while Amazon looks for high volumes, with very low margin. So the price is coherent with that also. Apple range of premium products is wide, while amazon do not have premium products but have a high volume of the most common required products and also others (so have a very wide range of different products). Amazon is a flexible platform that enter and exit from products very easily, the fact is that their main objective is to offer a lot of products.

MARKETING MIX...