Marketing Principles of Google - Literature review Example

 This paper is in response to the article, “Google wants to shake up the digital book market” that was published in the Economist. The paper tries to analyze the contents of the article from the perspective of marketing principles as given in the text book. The article is about how the internet search giant, Google is planning to enter the market for e-books by launching a service that would allow users to download the same in a wide variety of formats. This essay would analyze the news story from multiple angles ranging from applying the concepts of the marketing mix to the concept of marketing in the digital age. The article emphasizes the fact that once Google launches its “Google Editions”, the online service to sell e-books, it would be in direct competition with another behemoth in the area of digital books, Amazon. The main issue analyzed here is the competition from Amazon and their pricing strategy along with the distribution channels both companies will adopt to market their services since the real winner will be the product that reaches the customer in the most convenient way possible. It is a well known fact that Amazon is the leader in the space for selling books and accessories online. It was one of the first companies to set up a website for selling books and accessories online. The success of the model pioneered by Amazon spurred many companies (Barnes and Noble, Borders etc) to enter the area of selling books online. The article clearly highlights the potential for rivalry between Google (once it launches Google Editions) and Amazon as both the companies are essentially targeting the same market i.e. the consumers of e-books. Further, the article discusses the possibility of a “price war” where each of the competitors would be going in for a “race to the bottom” in search of the consumers for their products. The Implications of this strategy would be discussed in due course. This section analyzes the case from the 4P’s of the marketing mix, namely: Price, Product, Place and Promotion. These are the cornerstones of any marketing strategy and the successful execution of these in a combination or individually would determine the success of the venture as is being undertaken by Google. The marketing mix is the “set of controllable, tactical marketing tools that the company blends to produce the response it wants in the target market.” (Kotler, 2009 63) To take the first component of the Marketing mix, the biggest advantage that Google has is its competitive pricing. Since the market perception is that Amazon’s Kindle (a hand held device for reading e-books) is priced at a higher level ($279) than the other readers for e-books, Google can hope to have an advantage here. Further, many of the readers that are hosted on personal computers are given away free (e.g. Mobipocket, eReader etc). However, the point of contention is the hand held readers and Smart Phone enabled readers cost a packet. Hence, Google can very well take this into account when it prices its reader. If we analyze the next component of the Marketing mix i.e. the Place, or the combination of the distribution channels and coverage that the reader can provide, Amazon has been hamstrung because its reader cannot support multiple formats and is only compatible with the Kindle format of e-books. This is the case with other readers where format compatibility is of the essence when consumers buy e-books. As the article states, Google editions is compatible with a wide variety of gadgets that include a web browser and smart phones, not to mention personal computers. This should make the product appealing to a broad spectrum of users. This situation is akin to the “standards war” that was fought between Microsoft and other software providers over the kind of standards that their web browsers should have in order to communicate with each other and the network. These features of the Google reader make it ideal as a product that has been designed well and has a variety of features to its credit. The other facet in this component is the availability of e-books for customers all over the world. Though the concept of e-books is to make the product and place universal, there are nonetheless some issues that prevent many of the e-book stores from selling to customers all over the world. The last component of the marketing mix, the promotion that accompanies a product’s launch, Google with its access to a wide and loyal customer base is in a much better position than its competitor, Amazon, to promote its Google Editions effectively. However, the fact that Amazon has a good top-of-the-mind recall as well as brand equity makes the battle between Google and Amazon interesting. One of the points emphasized in the article relates to the way in which Google has been negotiating with publishers for out-of-print editions to be made available in digital format. The article gives an instance of the ways in which Google is planning to take the market for online books by storm with its inventory of around half a million of books in digital form as compared to the number of books offered by Amazon that is just over three hundred thousand items. This has led to attempts by Amazon to stymie Google’s negotiations with other publishers to make available their products on the proposed service. This bold attempt to go into uncharted territories is what is needed to thrive in the age of the Internet. As the textbook by Kotler puts it, “the four forces shaping the current internet age are: digitalization and connectivity, the Internet explosion, new types of intermediaries and customization and customerization” (Kotler et al, 2009). According to Kotler, whoever can leverage upon these forces would be in a much better position to dominate the business landscape. As the analysis on the marketing mix has shown, Google appears to be poised to take advantage of these forces as well as position itself in the market for e-books by a clever blend of the marketing mix. However, Amazon, by virtue of its market leader position is not expected to take things lying down. And there are bound to be other players entering the market as well. As the punch line of the article puts it, “Let the battle for readers’ eyes begin”. This news story would be appropriate in the section on “Marketing in a Digital World” chapter of the textbook by Kotler. Word count: 1077 List of References Armstrong, Gary and Kotler, Philip.2009. Principles of Marketing. 6th ed. Prentice Hall: New York. Read More