Amazon is one of the leading organizations on a global level and under the visionary leadership of Jeff Bezos; the company has been leading the e-commerce sector with its innovative and technologically advanced service and products.
Jeff Bezos passion for reading and commitment to innovation led to the development and launch of the first ever successful e-reader tablet the Kindle in 2007, amid an array of competition in the e-reader market mainly Sony Reader and Iliad by the Rex (Goodman et al, 2014).
Kindle features was inclusive of an easy to use interface and the key value proposition of the product was to connect with primary target segment of the e-reader consumers, who can access the reading content without computers effortlessly and quickly, in terms of discovering, purchasing, and syncing content, that the aforementioned competition was not able to provide (Goodman et al, 2014).
The positioning of the Kindle Product line has been done with a focus on enhancing the consumer ‘experience’, and in lieu with the technological trends, the launch of the Kindle Fire tablet in 2011 was the zenith of the company’s commitment to innovation by amalgamating all the major services that the company had to offer, i.e. Amazon Web, Prime, Kindle, Video Streaming and the app store into one product, i.e. The Kindle Fire.
Amazon utilized their advanced cloud based resources to create a cloud accelerated web browser Amazon Silk, to position the tablet’s services in a distinct manner against Apple, besides; Amazon utilized promotion by offering apps, 18 million movies, TV shows, songs and magazines for streaming and user integration by offering buyers with a free one month subscription to Amazon Prime.
The most important aspect for the successful launch of a product or service is to be able to select the right customer segment that is most promising in terms of creating an awareness, interest and eventual buy, in view of the product’s features.
The most promising customer segment that would respond to Kindle Fire would be the Media Junkies, in view of the fact that, being an all encompassing product featuring all the services offered by Amazon with competitive pricing and tactical promotions with free subscriptions and other benefits position it directly towards the media junkies as a very attractive option.
Kindle Fire needs to be positioned against Apple and the competitors as, All Round Experience, tablet hardware, taking into consideration the range of services, i.e. software offered by the tablet, and the specification featuring Amazon based cloud accelerated web browser, with the focus on providing users experience with competitive pricing.
The business model being pursued by Amazon for Kindle Fire is to focus on low margins combined with large scale delivery referred to as razor-razor blades, and with Kindle Fire tablet (razor) being offered at a competitive price against the major competition, the primary revenue generating tactics is to sell the content and advertising (razor blades), considering Amazon has the largest and most successful online retail store in the world (Kirk, 2012).
Apple, Google and Microsoft business model and strategy focus on selling tablets with content, and Kindle Fire has been positioned as the key for accessing the Amazon store, and providing an unrivaled online shopping experience.
In view of the product and the services on offer that comes with the package, the heavy subsidizing is justified to be able to connect with the consumers by offering, the Amazon experience from every aspect and that would in essence lead to high purchase of the services and the Kindle Fire tablets, and subsequent purchasing of the content accessible, that will offset the hardware subsidy in lieu of the margins gained (IHS Technology, 2012).
The Kindle Fire tablet value as the product is very high due to the tablets hardware and software offerings, nevertheless the one-two combo of low tablet prices and an unrivaled online shopping experience, is the real value that the tablet provides to the consumers.
The competitive pricing is a major factor that makes the tablet valuable to a large consumer base, since Apple’s tablets are expensive.
The integration of Google’s open source android in the tablet operating system, and the cloud based web browser have lifted the operational capability of the tablet, thus providing an enticing product that will connect with the consumers on multiple level (Kirk, 2012).
References
Goodman at al (2014). Kindle Fire: Amazon’s Heated Battle for the Tablet Market.
Kellogg School of Management. Northwestern University.
IHS Technology (2012). Amazon Loses Less Money with Kindle Fire HD, Teardown Reveals. Press Release.
Retrieved from https://technology.ihs.com/414163/amazon-loses-less-money-with-kindle-fire-hd-teardown-reveals
Kirk, J. (2012). Battle Of The Tablet Business Models: Amazon Kindle Fire. Tech Pinions.
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