Amazon Kindle: Pricing Issues

Details

Case Code : CLMM046
Publication date : 2009
Subject : Marketing Management
Industry : Publishing, Electronics
Length : 04 Pages
Price : Rs. 100

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Key words:

Amazon, Kindle, pricing, publishing industry, iPod, iPhone, eBook, eBook Readers, newspaper industry

Note

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Abstract:

The case discusses various aspects of Amazon's marketing of its Kindle series of eBook readers, with particular emphasis on the pricing of the product as well as the eBooks and other content available for the reader. It also describes some of the efforts made by Amazon to promote the Kindle among newspaper readers and the student community.

Issues:   » Pricing approaches   » Product line extension Introduction On May 6, 2009, Amazon.com, Inc. (Amazon), announced that its third generation eBook reader, called Kindle DX, would be released on June 10, 2009. The new device was stated to have features that were superior to that of the earlier versions, the original Kindle launched in November 2007 (and referred to as Kindle 1 after a new version was launched) and Kindle 2 (launched in February 2009)...

Questions for Discussion:

1. Critically evaluate Amazon's pricing for the Kindle, and for the eBooks on its sites. The Kindle is being sold at a relatively high price, while the eBooks are being sold at a standard price of US$ 9. 99, even though the price of the printed versions the books are higher, and variable. What are the benefits and disadvantages of this approach for Amazon? What are the implications of this pricing approach on:

a. The sales of Kindle
b. The sales of eBooks
c. Amazon's revenues and profits
d. The revenues and profits of the publishers of the eBooks.

2. What are the longer term implications of this pricing approach on the publishing industry? Are the publishers in danger of losing their pricing power to Amazon?

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