Amazon Kindle Fire - Assignment Example

Amazon Kindle Fire The idea of an e book can be traced back to early 1970s but in the last two decades Amazon can be considered as the pioneer that took it to other level and gave a total new dimension to the world of books and e reading. Kindle is a product being launched by Amazon, a giant company in the world of Internet which itself was inaugurated in 1995 by Jeff Bezos. Initially Amazon handled online books only but later on expended its paradigms and introduced many other products and services .Kindle is an e-reader device that was launched in 2007,and is now in its fourth generation and lots of improvements and advancements have been introduced over period of time. The main characteristic features of this device are, book reading, blogs, newspapers and all important documents, it mostly supports the portable document format (P.D.F) along with various other formats. Different models have been introduced since the beginning starting from the earlier one, followed by DX in 2009, and now the most recent one being the Kindle Fire. With less than couple of years in market it has made a lot of progress and at the same time it needs to address certain issues, and since after the launch many factors have come to forefront therefore this paper looks at the marketing perspective of Kindle Fire. Introduction : Kindle fire is seen as a beginning of new era in the world of e-book device from Amazon since its considered as the rival to the Apple’s already in market I-pad .With Fire edition, it was the first time since Amazon introduced colored screens in their e book readers.. It provides access to thousands of movies, over a million books. With help of Premier membership access to lots of free stream material becomes possible. It is being stated as the insurgent that has blown I-pad out of the water. It is being dubbed as I-pad killer and with such a formidable package and features it is certainly going to present a challenge to the existing players in the game.The fire edition would serve as outsider force in the industry since it is totally revamped and a new look to the previous versions of Kindle. It is built on Android operating system and hence a complete infrastructure based kernel running the application programs. It runs on Android 2.3 version of the O.S. It provides a battery time of as long as eight hours and supports all three variants of Wi-Fi, that are, b/n/g. It has a dual core processor with clock speed of 1 G-hertz. (McNulty, S. 2011). Financial Statistics: in the category of tablets Apple is the chart leader, but Kindle is not behind and has taken the second position, though the percentage share is slightly low. It is being expected that Kindle fire would sell as many as 12 million models in the current fiscal year. Projected sales: estimated sales for the year 2012 are expected to be around 12 million models Revenues and Fears: it is being quoted that Amazon’s revenue grew by 35 percent to 17.43 billion and possible push in this regard can be termed as the six million Fires being sold recently .However the costs incurred in the production are a serious concern to Amazon. Project Income: if this is achieved this would yield a total of 3 billion as a revenue and would result in overall increase of 5 percent in Amazon’s entire assets by the end of the current year (2012). Break even Analysis: According to some the current model is being sold at a loss of 10 dollars per model since the costs incurred are 209 compared to 199.Amazon might not be earning from it but it is helpful in the content sales and hence increasing the purchase on its domain .A total of 177 percent increase was seen in the sales of Kindle Fire in last quarter of the previous year. Marketing plan strategy: “The marketing strategy of Kindle Fire focuses on low price, rather barely any profit is being made in the initial stage, this is a common ploy by the Amazon, and it followed the same pattern in case of initial versions of Kindle, it is not based on making profit from the tablet device sales, instead it is using this product as a source to establishing a new sales door for the e commerce business and platform for facilitation of the growth and control in the computing serves” (Hickie, 2011). According to Millennial Media, the growth attained by Kindle fire in initial stages is higher than was attained by I-pad when it was launched in 2010.Be it kindle, be it Galaxy Tab or be it Apple’s I-pad they all would want the customers to come into the market since it is believed that the consumer base is quite low when it comes to the e-book reading and magazines and other documents reading through the digital devices. Marketing mix and SWOT analysis: From marketing perspective, a marketing mix as well as SWOT analysis is being analyzed for Kindle Fire, the product has its own strengths and short comings and they are analyzed in form of SWOT analysis: Strength: The entire package in less than a few hundred dollars (U.S $ 199) counts for its strength. Especially with a colored Display to its armory, no other company in the market provides such a product. With colored screens, the web browsing has become easier. Amazon in general enjoys the repute of being the best in the business of e-books providers in the industry for last two and a half decades .Hence this gives the Kindle application and product an edge over its competitors since the company has a well reputed history of being the de facto players of e-books in the industry since long Weakness: The Amazon proprietary factor serves as its weakness and limitation. Only a Premium Id from Amazon allows access to all the books. The non registered users enjoy limited privileges. The unavailability of camera is seen as a weakness in the entire package since its competitors are offering camera option. However since it’s the first launch of its kind, therefore things can be added in new version. Opportunities: there is always margin for improvement in any product launched by any firm .The Fire edition itself serves as the platform for identifying the need of customers, since it’s the first of its kind with colored display and added features, before this particular model, Kindle was more of a book reader in the dark background, but with introduction of Kindle fire, the Kindle family has joined the ranks of other tablets that have long dominated the industry. The low price serves as a vital opportunity in bid to catch the customer and snatch them from the already existing players in the market. Threats: For any product to stay on top, it has to top notch all the time, and to sustain and maintain a permanent spot at the top, challenges are to be embraced and services should be provided to the customers satisfaction, The already existing players in the market like Apple and Galaxy tab are seen as threats towards the kindle, Further, a constant competition is seen as a threat as well as opportunity since it drives the organization, and product towards excellence (jiangbins 2011). Competition with the main player in market: Apple’s I-pad is seen as its main rival that could give it tough time, but it has all that will make a good recipe for a close fight between the two. IF apple is fully equipped this item makes use of the best of both worlds by providing an equally thought-out package which addresses almost all important issues. Both offer same size of Ram memory .In terms of the market mix for Apple, it has already invaded the market to large extend and Apple Inc has done its bit promoting it to large level. in the category of Product ,Apple has already launched a second version of its tablet device I-pad 2, and has aimed at overcoming the shortcomings that were there in the first one, and has increased its capacity and processor capabilities. Finally the promotion, Apple Inc uses its platform to sufficient resources promoting its new brands and packages. On paper I-pad might out smart Fire for its specifications but since the users experience counts too, ever since the product has been launched, this product has been received very warmly and it might need further additions but rarely have any quality related issues come to forefront. I-pad’s initial version also had some limitations, in case of Fire, a second version can be launched which can overcome the weaknesses if any (MARTELLARO, B. C. (2011). The marketing plan should be devised in a manner which ensures availability of the product in almost all main outlets across a particular market and region. It should be available amongst its rival’s strong holds and since the product outlook, its price is way better than its competitors, it would stand out at every place .The low price offer by Amazon is seen as a strategic function with bid to enter the market in first step, consolidate its position and then dominate the proceedings afterwards Sources: http://blog.flurry.com/?month=1&year=2012 The analysis conducted by Flurry Analytics show a comparison of products and their demand between three months, and it can be seen that with in the span of just 90 days, Amazon Kindle rose by 33 percent (from 3 to 36 percent) ,while a critical factor visible in the pie graph is the rise in Samsung’s tablet device ,which also rose by considerable amount . Amazon as a parent figure: Amazon has used its name to its advantage in promoting and expanding the Kindle fire package, kindle can be considered a lucky product since it has an already laid infrastructure ahead of it that provides it with a platform sufficient enough for gliding up right away. The ever expanding libraries of Amazon are working as a plus and to the benefit of Kindle, since all the books are directly available to those who have premium id on the Amazon website. Hence the parent website serves as the shadow and platform that any product would need to be a success in the industry. Marketing Mix: The Amazon’s new product addresses and satisfies all the components of a market mix strategy of management. The 4ps in general make a combination and are altered and adjusted till the right combination is found in all aspects. Kindle Fire rightly satisfies the various categories since it’s a tangible offer from Amazon. The 4ps in case of Kindle identifies the core areas and evaluates the Kindle’s performance in the respective areas .the 4Ps are Price Product Promotion Place In the “price” category, it fulfills the demand way better than any other in the field. No other product and gadget of this specification ranges as low as 199 dollars. Hence it is made with full consideration over the price aspect of marketing mix. The pricing and packaging details might reveal that the margin for profit is too small in the beginning but since aim is to capture the market, therefore it completely satisfies the pricing category of successful management rules. Other products of similar type are two to three times higher in rate compared to the product launched by Kindle. Next in line is the “Promotional” campaign, this product has sufficiently been advertised and pre launch and post launch promotion was a success. Amazon has used its platform to the full to spread the word about the new product in form of Fire. The Amazon website itself is directly advertising for its newly introduced product and it was highly active during its first launch, and even now when slight change or improvement is being made, Amazon, the parent website is used for advertisement and spreading the word across the board and attracting large number of customers, this all because Amazon.com is world’s one of the most frequent website that is being visited on daily basis. The next p in line, “product” tells the company about the specifications whether they are to the requirement and demand of the customers and if any change might be needed, it can be modified in next patches of softwares and newer versions .This P of the marketing mix ensures the physical compatibility, the structure so suggested must be up to date, the dimensions are taken into consideration. Fire has been modeled to such an appearance that appeals right into the customers eyes. With around 7 inch display it is more portable and handy than other similar gadgets. Finally the fourth P in the sequence which is “Place”, Amazon ensures the Kindle’s availability almost all over the world its availability across the world speaks for its success as a product .The phrase “at a right place and right time”. Amazon has kept its timing perfect and has presented the item into market when people wanted something for a relatively small price. Another aspect to the place is its delivery and its outlets. All these must be in reach of the customers and in the reasonable parts of the country. Secondly the online services must be provided round the clock. (Kpsandhu 2012). Marketing Mix conclusion: Kindle can be seen as a best model that satisfies all the important aspects of market mix strategy, ranging from the product design to its public advertisement to the place and timing, all are done with due consideration and have been implemented successfully . Future of Kindle Fire: Seeing the challenges and need for keeping up with the fast pace of electronic world ,modifications and patch versions are believed to be in action and couple of software additions are already on its way which will enable availability of extra features .According to the New York times a sequel to the existing model of Kindle Fire might well be on its way and could hit the market as early as the season Spring, however for time being slight up gradations have been done in form of software .Those features include the following : Carousel Display options More protection to Wi-Fi settings Improved response of touch navigation option. Possible improvements that might be targeted in the upcoming model include improvements in the area of sound quality, addition of couple of more physical buttons since the current one is believed to be missing a few, this followed by the introduction of camera to the setup, and finally probable increase in the screen size which would enhance the visibility. Challenges faced by the company: Amazon as the enterprise and online retailer has an uphill task maintaining the status and light it has shown the world, and in the beginning of the launch of products like Kindle Fire ,it might be compromising on the profits but in longer run it has to devise a strategy that ensures both profit and quality. The aim is to attract customers to buy online products and avail services which are otherwise taken on local level across the world. The challenge faced by Amazon is maintaining the position it has attained in such a congested market that is already occupied by the giants of electronic devices and gadgets .Innovation must be part of the strategy and long term planning and ideas should be generated that allows creation of new trends in the market ahead of its rivals .A “club ”offer is a package in this regard towards creating a distinction and allowing its members to have access to all the new products on trail basis in around 79 dollars (García, 2011 ) Partnership: it is being said that businesses are made “good”and “successful “businesses through partnerships and not isolation or hostility, Any giant player who could complement the product must be considered as an option towards improvement, same happened with Amazon when it joined hands with Sprint and established a relationship that not only helped both the organizations but the product Kindle in itself. Sprint allows access to the Kindle users from places other than Wi-Fi hot spots. Target Market: The kindle fire has been developed with focus on number of segments from society and it has been built with purpose to cover up large segment which includes the students, the business class who are mostly travelling, the tech savvy who would want to stay in touch with through networking sites via internet .Fire makes it more easy with its colored screen option and to its premium members ,provides newspaper on daily basis on affordable prices .Despite all this ,further strategies need to be chalked out for ensuring availability and access of material across the Kindle in subways, airports, railway stations . Recommendations: With a step already been taken into the arena and on the right note already, need for Amazon is to capitalize on the opportunity and create strategic distinction. Strengths should be maintained and weaknesses should be overcome. Fire has the recipe to becoming the “next big thing” this only if it works a little more towards achieving and out classing its rivals .through differentiation kindle can achieve excellence. REFERENCES: 1-McNulty, S. (2011). The Kindle Fire Pocket Guide. Peachpit Press. ( McNulty, 2011) 2-Hickie, B. (2011, Nov 12). Kindle Fire Marketing Strategy: Amazon’s Big Bet. Retrieved Feb 23, 2012, from openviewpartner: http://blog.openviewpartners.com/kindle-fire-marketing-strategy-amazon%E2%80%99s-big-bet/ 3-jiangbins. (2011, oct). Analyses of Kindle. Retrieved Feb 23rd, 2012, from wordpress.com: http://jiangbinsblog.wordpress.com/2011/10/09/analyses-of-kindle/ 4-MARTELLARO, B. C. (2011, Oct 23rd). iPad vs. Kindle Fire Spec Comparison Chart. Retrieved Feb 23rd, 2012, from macboserver.com: http://www.macobserver.com/tmo/article/ipad_vs._kindle_fire_spec_comparison_chart/ García, B. (2011). The Amazon from an International Law Perspective. Cambridge University Press. 5-Muir, N. C. (Dec 2011). Kindle Fire for Dummies. John Wiley & Sons. Muir, Dec 2011 6-Sawyer, B. (Nov 2011). Kindle Fire: Out of the Box. OReilly Media, Inc. (Sawyer, Nov 2011 7-O. C. Ferrell, M. H. (April 2010). Marketing Strategy. Cengage Learning. (O. C. Ferrell, April 2010) 8-Jeanne Hopkins, J. T. (2012). Go Mobile: Location-Based Marketing, Apps, Mobile Optimized Ad Campaigns, 2D Codes and Other Mobile Strategies to Grow Your Business. John Wiley & Sons,. 9-Schermerhorn, J. R. (2011). Exploring Management. John Wiley and Sons. 10-Kaplan, D. (2011). Kindle Fire Application Sketch Book. Apress. Kaplan, 2011 11-Ballew, J. (2012). Kindle Fire QuickSteps. McGraw-Hill Companies,Inc. Ballew, 2012 12-Kpsandhu. (2012). Amozon Kindle Fire Marketing. Retrieved February 23rd Feb, 2012, from oppapers.com: http://www.oppapers.com/essays/Amozon-Kindle-Fire-Marketing/894445 13-Amazon Kindle Fire Improvements: 10 Must-Have Fixes for a New Version. (2011, November 13th). Retrieved February 23rd, 2012, from www.eweek.com: http://www.eweek.com/c/a/Mobile-and-Wireless/Amazon-Kindle-Fire-Improvements-10-MustHave-Fixes-for-a-New-Version-441820/ 13-http://www.slideshare.net/imctommyb/kindle-situation-analysis Read More