Note: Sample below may appear distorted but all corresponding word document files contain proper formattingExcerpt from Essay:
Marketing Mix and Kindle Fire
The Marketing Mix and Amazon's Kindle Fire
The marketing mix is an important tool used by organizations and individuals as part of an effective marketing strategy. "Every marketing strategy is composed of the same four components: price, product, place, and promotion" (Colbert, Nantel, Bilodeau, & Rich, 2001, pp. 19). A marketing specialist needs to know the function of each of these components and must also know how to balance them in order to create a successful marketing strategy. Most importantly, and before the marketing mix can be utilized, a marketing specialist must know the product he or she is marketing inside and out to best determine how to develop a marketing strategy. The combined components of the marketing mix are often also referred to as the four Ps. The four Ps can be used to show the marketing approach taken by e-commerce giant Amazon.com (Amazon) in marketing their line of e-readers, the Kindle, specifically, the Kindle Fire.
Product is the first P. Of the marketing mix. Colbert et al. (2001) state, "the product is the centerpiece of any enterprise" (pp. 20). The product can be either a good or service that is going to be sold to the consumer. While Amazon offers a wide variety of products, the most recent tablet, the Kindle Fire, will be the focus of this analysis. The Kindle Fire is the most recent eReader tablet that has been released by Amazon. The Kindle Fire reduces or eliminates the need for traditional books, magazines, or other paper-based documents. Additionally, the Kindle Fire has the capability to play music, watch movies and television shows, play online games, provides unlimited cloud storage, provides the user access to a lending library, and allows the user to browse the web (Amazon, 2012).
Pricing is the second P. Of the marketing mix. A product's price is the monetary value assigned to a specific product. "Price also includes the effort a consumer must expend in the act of buying the product. Thus, there is always a price to pay for a product, even when it's free" (Colbert et al., 2001, pp. 20). Because pricing is a "highly visible element of a competitor's marketing" it raises several questions that must be answered (Lehmann & Winer, 2005, pp. 97). These questions include if the product is priced uniformly across markets, if there are any discounts being offered, and how will the pricing change over time, if it changes at all? Figuring out at what price a product will be priced is often a difficult task as many factors have to taken into consideration when determining a product's price. At this time, the Kindle Fire is one of the most affordable eReader tablets currently on the market and is priced at $159. The Kindle Fire is priced uniformly across all markets; differences in price can be attributed to state taxation differences. Additionally, the price of the Kindle Fire, and most other Kindle products, tends to drop before a new tablet is introduced to the consumer and before older generation Kindle tablets are discontinued.
Place is the third P. Of the marketing mix. Several elements make up a product's place including physical distribution, distribution channels, and commercial venues (Colbert et al., 2001, pp. 20). Place is how a product gets from the company to the consumer. The Kindle Fire is placed in both online venues -- directly from Amazon.com, and in brick-and-mortar stores including Best Buy and Staples. The combination of distribution channels allows the consumer to choose which method of getting the Kindle Fire is most convenient for them. There are several benefits and downfalls to the different types of distribution channels. One of the benefits of selling the Kindle Fire through online vendors is that the need for physical space to store the product is eliminated. This also reduces overhead costs that may have been needed to store a product within a physical location. Instead cost is shifted to a single, centralized storage facility. On the downside, a consumer is not able to give the Kindle Fire a test run to determine if they like the tablet before deciding to purchase it. Brick-and-mortar stores allow the consumer to test the product they are going to purchase and reduces the need to return a product if the consumer is not satisfied with what they purchased. However, brick-and-mortar stores are forced to stock a limited supply of product because of the limited amount of space that can be dedicated to it.
Promotion is the final P. Of the marketing mix. Promotion is the final step in the marketing mix. "In the pre-preparation stage of a promotional campaign, a company must know which product is offered at which price and where. It must be known beforehand the main characteristics of the targeted consumers and, in particular, the most convincing selling arguments for those consumers" (Colbert, 2001, pp. 20). The Kindle Fire's target demographic are those people who want to purchase an eReader that is comparable to the iPad, but at a drastically reduced price, or those individuals that wish to purchase a device similar to Barnes & Noble's Nook Tablet, which is priced equally to the Kindle Fire, but who want to take advantage of features exclusive to the Kindle Fire, such as unlimited cloud storage, which are not available on the Nook Tablet. Moreover, promotion can be broken down into four different elements: advertising, personal selling, sales promotions, and public relations (Colbert, 2001, pp. 21). Advertising for the Kindle Fire can be seen in a variety of platforms including print advertisements, online advertisements, and television commercials aired on broadcast and cable television. The Kindle Fire is heavily advertised on Amazon.com, as it is an Amazon brand product, and is marketed and promoted in brick-and-mortar stores such as Best Buy and Staples. If and when Amazon opens a brick-and-mortar store, the Kindle Fire is more than likely going to be stocked at the store to further promote the product. Personal selling can only occur if a product is found at a physical store and thus this element is eliminated when the consumer purchases the Kindle Fire online or when the consumer is exposed to online advertisement exclusively. Another component of promotion is timing or release date. The Kindle Fire is considered to be Amazon's most popular gift and during the 2011 holiday season, it was considered to be the top best-seller from the e-commerce giant. Given the Kindle Fire's popularity, it can be projected that the new generation of Kindle Fire tablets will be at least as successful as its predecessor.
In order to fully analyze the impact the marketing mix has on the success or failure of product, Porter's five forces must also be taken into consideration. The first force that needs to be analyzed is the threat of new entrants to the market. Presently, the threat of new entrants into the market is low. Presently, the Kindle Fire holds 52.2% of the Android tablet market share in the United States (Kingsley-Hughes, 2012).
The second force that needs to be analyzed is the threat of substitutes. Presently, the Kindle Fire is in direct competition with the Nook Tablet. Both tablet/readers are offered to the public at the same price, and offer almost identical features. Additionally, the Kindle Fire outperforms other comparable Nook tablets While the Samsung's Galaxy Tablet held 15.4% of the Android tablet market share, its market share hold has dramatically dropped over time (Kingsley-Hughes, 2012). Additionally, any tablet can be easily replaced with the individual equivalent of the services it provides: books, newspapers, magazines, and other documents in print form; mp3 players, radio, or CDs; and television and films, or DVDs, that are watched on a stationary entertainment system.
The third force, the bargaining power of suppliers, is very…[continue]
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