anjalicutek
Anjali Khurana
Kindle is a portable e-book reader. More precisely, it is a software, hardware and network platform developed by Amazon.com (subsidiary Lab126[1]) that utilizes wireless connectivity to enable users to shop for, download, browse, and read e-books, newspapers, magazines, blogs, and other digital media.[2]
Several hardware devices support this platform, including a main "Kindle" line and a parallel "Kindle DX" line. The most recent Kindle device is the third incarnation of the main line, officially named "Kindle", but usually referred to as "Kindle 3".[3][4][5][6][7][8] Kindle 3 was released on August 27, 2010.[9] User reports indicate that the new display on the Kindle 3 is noticeably superior to previous generations.[3]
The Kindle DX line features larger screens than the main Kindle line.[10] It is marketed as more suitable for displaying newspaper and textbook content, however, no Kindle model preserves the print edition page numbers used when citing sources in school papers and scholarly research.[11][12] Amazon has also introduced Kindle software for use on various devices and platforms, including Microsoft Windows, iOS, BlackBerry, Mac OS X (10.5 onwards), Android and soon Windows Phone 7.[13]
The Kindle hardware devices use an e-ink electronic paper display that features 16 shades of gray. This allows for a long battery life and easy readability. Content for the Kindle can be purchased online and downloaded wirelessly, using either standard Wi-Fi or Amazon's 3G "Whispernet" network.[14] Whispernet is accessible without any monthly fee or wireless subscription,[15] although fees can be incurred for the delivery of periodicals and other content when roaming internationally beyond the customer's home country. Through a service called "Whispersync", customers can synchronize reading progress, bookmarks and other information across Kindle hardware devices and other mobile devices.[16][17]
Amazon.com got outside the web browser in 2007 and offered its customers a way to purchase books through its very own making: an e-book reader specially designed by the online retailer. Since available in 2007, a new version has been announced and Amazon continues to expand the services and products available to current and future Kindle owners.
The Kindle has been compared to the iPod in the press and by financial analysts for many reasons: both innovative products push forward the concept of digital media on-the-go. Yet, Apple, which makes the iPod takes a very different approach in creating awareness and selling its world renowned iPod than Amazon takes with the Kindle. We will be taking a look at how Amazon.com specifically has been using its marketing mix to sell and promote the product.
Take caution when using the words "Marketing" and "Amazon" in the same sentence. Within the company, the word "Marketing" is very taboo. Yes, Amazon has numerous employees who perform marketing functions; however, Amazon culture dictates that the openly discussed focus should be on the product and making it great for customers. The idea here is that if the product and user experience is great, customers will refer others to the product. Further, Amazon considers itself a technology company, an innovator, and the company gives engineering more emphasis than marketing. So, the cultural emphasis is on innovation and engineering, not "marketing." This is pretty common in tech companies - I remember Bill Gates in the '80s being quoted on how he considers marketing a necessary evil and did not like to focus the company on it. Amazon has taken the same tone within.
The firm does have a preeminent marketing strategy that is near universal for its products and services: it can't be emphasized enough how much Amazon values its customers as promoters of its service and products. It is a critical piece of Amazon's marketing strategy to depend on its customers to talk about the Kindle and raise awareness for the product. This point can not be understated - counting on customers to spread the word is Amazon's chief strategy for raising product awareness. Nonetheless, It is interested to see how Amazon is marketing its reading device in the past year.
Getting the Word Out
Amazon heavily promotes the Kindle on its United States website, right on the front page. Below is an example of what the homepage looks like with a Kindle advertisement.
By far, Amazon has leveraged its home page traffic as its primary source of raising awareness of the product more than any other channel or avenue. The Amazon.com website property is in the top twenty in monthly web traffic attracting 48+ million visitors a month, per Nielson Online.
Customers can click on the ad on the homepage and go to a "detail page" for the product which contains customer reviews, videos, Amazon provided customer testimonials, and photos. The home page is one of the few places you will find a Kindle advertisement today. Amazon's kindle advertising strategy has been not to prominently advertise the Kindle in print or television - in fact if there are any offline advertisements I've haven't seen them! The only advertising I have seen is on search engines via sponsored results. Below are some screen shots of paid advertisements that show up when you search for "Kindle" on Google or MSN Live.
The intention of these advertisements is to drive traffic to the kindle "detail page" - the primary place that customers can purchase a new Kindle in the world!
Amazon also places on other websites as well through ad networks, such as the one provided by Google. Here's a advertisement that showed up on my blog when viewed in Google Reader, presumably because I had written about the Kindle:
Amazon Ads in TV and Print
The take home here is that Amazon is not hiring rock bands or creative ad agencies to design and develop print or TV ads for the Kindle. This is different than what you'll see for your typical consumer tech product. Windows 95 got the Rolling Stones. The iPod got U2 and many others. Amazon hasn't done this. In general the company has never invested in developing capabilities and processes to advertise on TV or print. Many years ago, Amazon developed experimental TV ads promoting its online retailing service, and test ran them in select markets. The advertisements did little to drive consumers to the website to buy, so they were pulled and the initiative to advertise on TV was killed.
Amazon also started offering e-commerce services to retailers such as Target - powering Target's website and fulfillment operations - in 2002. It would be a little odd for Amazon to run TV ads, especially if they aired right after a Target ad. With regard to its retail business, it's probably better that Amazon not advertise on TV now - to avoid annoying Target and its other retail customers. Advertising a single product, such as the Kindle, shouldn't be an issue though.
In general, Amazon tries to spend its dollars on engineering and technology, as it has proven in the past to be the most effective way to drive revenue and consumer traffic. Broadly speaking, the company's dollars go into personalization, community, search, and catalog technologies instead of TV ads.
Now, you will see the Amazon logo on TV or in print on occasion - for example when Pepsi offered its customers the ability to use Pepsi points to purchase items on Amazon, you saw Amazon's logo on TV. I've also seen specific products advertise their item in print, focusing on the product, but also detailing the availability of the item at retailers such as Amazon. In sum, Amazon gets into print in TV usually through partnerships or co-op placements, but it almost never advertises its own services or products in print or TV.
The Press
You will also see Amazon in the news and on TV. The Kindle has gotten a tremendous amount of press, minimizing the need for Amazon to have to pay magazines, newspapers, and broadcasting companies to promote the Kindle. In addition, Jeff Bezos, the CEO, has done dozens of interviews for journalists and television shows to talk about the Kindle. As the public face of the company, he has promoted the Kindle on the Charlie Rose show as well as Oprah. Now, Bezos does not have the flair and panache that Steve Jobs does, so there is less magic about him talking about the Kindle or promoting it at press events, but it is a part of Amazon's strategy to make the CEO available to the press to discuss the Kindle. Most well known was the show Oprah did on the first version of the Kindle where she called it her "Favorite New Gadget."
Amazon does have a previous business relationship with Oprah - for example, Amazon has a web page featuring Oprah's book club picks. So its not the first time that Oprah has worked with Amazon.com. The episode is credited with giving a boost to Kindle sales and helped get the word out about the Kindle to the marketplace. Oprah's website has a video with the CEO giving a tutorial on how to use the Kindle, as well as page featuring Oprah with the Kindle.
Where to Buy
No other major retailers such as Best Buy or Wal-Mart sell the Kindle in their stores or on their website. Amazon hasn't authorized other companies to sell the Kindle just yet. Amazon has a program where third-party websites can promote the Kindle on their website, just as they can promote any other product sold on Amazon.com, and if the third party refers a customer to Amazon who completes a purchase, the refer gets a referral fee. Here's a screen shot of web site that promotes the Kindle in hopes of getting a referral fee:
Being the only channel for the product does minimize costs for Amazon as well as give Amazon a lot of control of the product message. Given that the Kindle is early in its product life cycle and does not sell at sky-high volume levels, Amazon has to stay away from offering the product through other retailers if it wishes to keep the price for the product down. The cost of developing those channels is high. This comes at a sacrifice, especially when we consider how consumers can learn about the product hands on. A consumer can not just go to a retail store in their neighborhood and play with a Kindle - touch the Kindle - like they can with Apple's iPhone or iPod. A potential customer has to find an existing customer who has one! Thus, we again see the need and use of current Kindle owners in marketing the Kindle. Amazon in fact had a feature on their website that facilitated potential owners who wanted to meet current Kindle owners, validating further the use and need of word of mouth over TV advertising or retail partners.
Surprisingly, other websites don't offer to sell the Kindle either. For example, Apple sells computers on Amazon.com. If you purchase a Mac on Amazon, the end product could come from a distributor or even Apple itself - it could be drop shipped. Drop shipping is a common practice - where one company like Amazon "sells" a product and refers the purchase to another company like Apple who ships the product from their own warehouse. High profile web sites like Dell, Apple, Wal-Mart, or Target could easily become selling points for the Kindle where Amazon could drop ship the order, but so far Amazon has yet to secure partnerships or selling relationships with these other high profile online retailers.
The price
The price for the Kindle is fairly high by most measures - how many people in this economy have $360 dollars to spare on a high tech toy! Most consumers are trying to reduce their overhead expenses these days. So a higher price that the consumer might see from selling through other channels has to be avoided by Amazon - it's a must - so we won't likely see others selling the Kindle until Amazon improves its sale volume and margins.
And who has $360 to spend on an eReader? From my experience, the kindle is most popular among the i-travel-alot-and-read-on-the-plane demographic. The company has sold hundreds of thousands of the first generation of the device, though, and doesn't really just promote it to travelers. The Kindle 2 detail page has four pictures of women using the kindle - two pictures of a woman on the beach, one using the device while lounging on a living room sofa, and a thumbnail for a video with one woman just sitting there against a white background. Is Amazon going after women with the Kindle? Here are snapshots of the models on the Kindle detail page:
The partners
Amazon doesn't have many partners promoting the Kindle just yet. It did make a smart move and allow bloggers to sell their content to Kindle owners. Generally bloggers solely depend on advertisements on their site for revenue and do not sell their content. You can order Slashdot, a free blog, for $1.99 a month on your Kindle. It's smart because it enables bloggers like Slashdot to generate revenue from Kindle owners, in some theoretical manner roping bloggers in as supports of the Kindle and creating an economy around the Kindle. No word or information publicly available on whether a blog like Slashdot derives more income from a Kindle customer than a website visitor. Same goes for the newspapers and magazines that sell on the Kindle - nobody is talking about whether is its profitable. Being available on the Kindle, though, certainly does align interests to some degree with publishers and Amazon. Below are some of the blogs that Amazon promotes on its "Kindle Blogs" section.
Amazon is also teaming up with authors to promote the Kindle with exclusive content. Stephen King wrote a novel "UR" which is currently only available on via Amazon.com for reading on the Kindle. The novel goes for $2.99, though the exclusive book has a suggested "Digital List Price" of $3.99.
The competition
The Kindle is a closed platform - Amazon uses digital rights management it gained through an an acquisition - and the hardware was developed by an Amazon subsidiary. The iPod started off as a closed platform and stayed closed till competitors started offering DRM free music. So competitors can't offer devices that display electronic books offered for Kindle. The most prominent competitor is Sony's Reader Digital Book (a very literal name for a product, btw), which is a notable device, but does not have the same buzz as the Kindle.
As someone who doesn't want to purchase a special device to read electronic books, I do hope mobile phones become a better means to read books. It would be great for consumers if this happened, in my opinion, as it would likely force open the closed platforms to open up and perhaps even kill Digital Rights Management (DRM) on books, the presence of which is a nasty downside to purchasing electronic books in my opinion. DRM gets in the way of a consumer reading their e-books on any device they may own, whether the device be offered by Amazon or a competitor. Put squarely, you can't lend a Kindle book to a friend because of the DRM. The same arguments apply to digital music, though the press and consumers have not been nearly as vocal about DRM on books as they were with music. Kind of interesting, actually!
Summing it up
So there you have it...a glossy overview of Amazon.com Marketing of the Kindle. Amazon really wants its name associated with the Kindle - the Kindle logo has the companies name it in, and most of the companies literature refers to the product as the "Amazon Kindle." So don't expect a Sony or Dell eBook reader that can display Kindle books. The Kindle will remain a closed platform for the time being.
As a student, it's out of my price range, so I won't purchase one anytime soon. It certainly is a prominent product, however, and its exciting to see it will take digital books. The Kindle is currently the device that is making waves in the e-book reader product category.
Both Amazon and Apple sell digital music, and Apple is the market leader in that category. If Apple made a e-reader, it would probably be sleeker, thinner, and have a bigger wow factor. So it will be exciting to see the market develop for e-books and find out what technology companies that have a history of designing amazing products offer consumers in the future.
Several hardware devices support this platform, including a main "Kindle" line and a parallel "Kindle DX" line. The most recent Kindle device is the third incarnation of the main line, officially named "Kindle", but usually referred to as "Kindle 3".[3][4][5][6][7][8] Kindle 3 was released on August 27, 2010.[9] User reports indicate that the new display on the Kindle 3 is noticeably superior to previous generations.[3]
The Kindle DX line features larger screens than the main Kindle line.[10] It is marketed as more suitable for displaying newspaper and textbook content, however, no Kindle model preserves the print edition page numbers used when citing sources in school papers and scholarly research.[11][12] Amazon has also introduced Kindle software for use on various devices and platforms, including Microsoft Windows, iOS, BlackBerry, Mac OS X (10.5 onwards), Android and soon Windows Phone 7.[13]
The Kindle hardware devices use an e-ink electronic paper display that features 16 shades of gray. This allows for a long battery life and easy readability. Content for the Kindle can be purchased online and downloaded wirelessly, using either standard Wi-Fi or Amazon's 3G "Whispernet" network.[14] Whispernet is accessible without any monthly fee or wireless subscription,[15] although fees can be incurred for the delivery of periodicals and other content when roaming internationally beyond the customer's home country. Through a service called "Whispersync", customers can synchronize reading progress, bookmarks and other information across Kindle hardware devices and other mobile devices.[16][17]
Amazon.com got outside the web browser in 2007 and offered its customers a way to purchase books through its very own making: an e-book reader specially designed by the online retailer. Since available in 2007, a new version has been announced and Amazon continues to expand the services and products available to current and future Kindle owners.
The Kindle has been compared to the iPod in the press and by financial analysts for many reasons: both innovative products push forward the concept of digital media on-the-go. Yet, Apple, which makes the iPod takes a very different approach in creating awareness and selling its world renowned iPod than Amazon takes with the Kindle. We will be taking a look at how Amazon.com specifically has been using its marketing mix to sell and promote the product.
Take caution when using the words "Marketing" and "Amazon" in the same sentence. Within the company, the word "Marketing" is very taboo. Yes, Amazon has numerous employees who perform marketing functions; however, Amazon culture dictates that the openly discussed focus should be on the product and making it great for customers. The idea here is that if the product and user experience is great, customers will refer others to the product. Further, Amazon considers itself a technology company, an innovator, and the company gives engineering more emphasis than marketing. So, the cultural emphasis is on innovation and engineering, not "marketing." This is pretty common in tech companies - I remember Bill Gates in the '80s being quoted on how he considers marketing a necessary evil and did not like to focus the company on it. Amazon has taken the same tone within.
The firm does have a preeminent marketing strategy that is near universal for its products and services: it can't be emphasized enough how much Amazon values its customers as promoters of its service and products. It is a critical piece of Amazon's marketing strategy to depend on its customers to talk about the Kindle and raise awareness for the product. This point can not be understated - counting on customers to spread the word is Amazon's chief strategy for raising product awareness. Nonetheless, It is interested to see how Amazon is marketing its reading device in the past year.
Getting the Word Out
Amazon heavily promotes the Kindle on its United States website, right on the front page. Below is an example of what the homepage looks like with a Kindle advertisement.
By far, Amazon has leveraged its home page traffic as its primary source of raising awareness of the product more than any other channel or avenue. The Amazon.com website property is in the top twenty in monthly web traffic attracting 48+ million visitors a month, per Nielson Online.
Customers can click on the ad on the homepage and go to a "detail page" for the product which contains customer reviews, videos, Amazon provided customer testimonials, and photos. The home page is one of the few places you will find a Kindle advertisement today. Amazon's kindle advertising strategy has been not to prominently advertise the Kindle in print or television - in fact if there are any offline advertisements I've haven't seen them! The only advertising I have seen is on search engines via sponsored results. Below are some screen shots of paid advertisements that show up when you search for "Kindle" on Google or MSN Live.
The intention of these advertisements is to drive traffic to the kindle "detail page" - the primary place that customers can purchase a new Kindle in the world!
Amazon also places on other websites as well through ad networks, such as the one provided by Google. Here's a advertisement that showed up on my blog when viewed in Google Reader, presumably because I had written about the Kindle:
Amazon Ads in TV and Print
The take home here is that Amazon is not hiring rock bands or creative ad agencies to design and develop print or TV ads for the Kindle. This is different than what you'll see for your typical consumer tech product. Windows 95 got the Rolling Stones. The iPod got U2 and many others. Amazon hasn't done this. In general the company has never invested in developing capabilities and processes to advertise on TV or print. Many years ago, Amazon developed experimental TV ads promoting its online retailing service, and test ran them in select markets. The advertisements did little to drive consumers to the website to buy, so they were pulled and the initiative to advertise on TV was killed.
Amazon also started offering e-commerce services to retailers such as Target - powering Target's website and fulfillment operations - in 2002. It would be a little odd for Amazon to run TV ads, especially if they aired right after a Target ad. With regard to its retail business, it's probably better that Amazon not advertise on TV now - to avoid annoying Target and its other retail customers. Advertising a single product, such as the Kindle, shouldn't be an issue though.
In general, Amazon tries to spend its dollars on engineering and technology, as it has proven in the past to be the most effective way to drive revenue and consumer traffic. Broadly speaking, the company's dollars go into personalization, community, search, and catalog technologies instead of TV ads.
Now, you will see the Amazon logo on TV or in print on occasion - for example when Pepsi offered its customers the ability to use Pepsi points to purchase items on Amazon, you saw Amazon's logo on TV. I've also seen specific products advertise their item in print, focusing on the product, but also detailing the availability of the item at retailers such as Amazon. In sum, Amazon gets into print in TV usually through partnerships or co-op placements, but it almost never advertises its own services or products in print or TV.
The Press
You will also see Amazon in the news and on TV. The Kindle has gotten a tremendous amount of press, minimizing the need for Amazon to have to pay magazines, newspapers, and broadcasting companies to promote the Kindle. In addition, Jeff Bezos, the CEO, has done dozens of interviews for journalists and television shows to talk about the Kindle. As the public face of the company, he has promoted the Kindle on the Charlie Rose show as well as Oprah. Now, Bezos does not have the flair and panache that Steve Jobs does, so there is less magic about him talking about the Kindle or promoting it at press events, but it is a part of Amazon's strategy to make the CEO available to the press to discuss the Kindle. Most well known was the show Oprah did on the first version of the Kindle where she called it her "Favorite New Gadget."
Amazon does have a previous business relationship with Oprah - for example, Amazon has a web page featuring Oprah's book club picks. So its not the first time that Oprah has worked with Amazon.com. The episode is credited with giving a boost to Kindle sales and helped get the word out about the Kindle to the marketplace. Oprah's website has a video with the CEO giving a tutorial on how to use the Kindle, as well as page featuring Oprah with the Kindle.
Where to Buy
No other major retailers such as Best Buy or Wal-Mart sell the Kindle in their stores or on their website. Amazon hasn't authorized other companies to sell the Kindle just yet. Amazon has a program where third-party websites can promote the Kindle on their website, just as they can promote any other product sold on Amazon.com, and if the third party refers a customer to Amazon who completes a purchase, the refer gets a referral fee. Here's a screen shot of web site that promotes the Kindle in hopes of getting a referral fee:
Being the only channel for the product does minimize costs for Amazon as well as give Amazon a lot of control of the product message. Given that the Kindle is early in its product life cycle and does not sell at sky-high volume levels, Amazon has to stay away from offering the product through other retailers if it wishes to keep the price for the product down. The cost of developing those channels is high. This comes at a sacrifice, especially when we consider how consumers can learn about the product hands on. A consumer can not just go to a retail store in their neighborhood and play with a Kindle - touch the Kindle - like they can with Apple's iPhone or iPod. A potential customer has to find an existing customer who has one! Thus, we again see the need and use of current Kindle owners in marketing the Kindle. Amazon in fact had a feature on their website that facilitated potential owners who wanted to meet current Kindle owners, validating further the use and need of word of mouth over TV advertising or retail partners.
Surprisingly, other websites don't offer to sell the Kindle either. For example, Apple sells computers on Amazon.com. If you purchase a Mac on Amazon, the end product could come from a distributor or even Apple itself - it could be drop shipped. Drop shipping is a common practice - where one company like Amazon "sells" a product and refers the purchase to another company like Apple who ships the product from their own warehouse. High profile web sites like Dell, Apple, Wal-Mart, or Target could easily become selling points for the Kindle where Amazon could drop ship the order, but so far Amazon has yet to secure partnerships or selling relationships with these other high profile online retailers.
The price
The price for the Kindle is fairly high by most measures - how many people in this economy have $360 dollars to spare on a high tech toy! Most consumers are trying to reduce their overhead expenses these days. So a higher price that the consumer might see from selling through other channels has to be avoided by Amazon - it's a must - so we won't likely see others selling the Kindle until Amazon improves its sale volume and margins.
And who has $360 to spend on an eReader? From my experience, the kindle is most popular among the i-travel-alot-and-read-on-the-plane demographic. The company has sold hundreds of thousands of the first generation of the device, though, and doesn't really just promote it to travelers. The Kindle 2 detail page has four pictures of women using the kindle - two pictures of a woman on the beach, one using the device while lounging on a living room sofa, and a thumbnail for a video with one woman just sitting there against a white background. Is Amazon going after women with the Kindle? Here are snapshots of the models on the Kindle detail page:
The partners
Amazon doesn't have many partners promoting the Kindle just yet. It did make a smart move and allow bloggers to sell their content to Kindle owners. Generally bloggers solely depend on advertisements on their site for revenue and do not sell their content. You can order Slashdot, a free blog, for $1.99 a month on your Kindle. It's smart because it enables bloggers like Slashdot to generate revenue from Kindle owners, in some theoretical manner roping bloggers in as supports of the Kindle and creating an economy around the Kindle. No word or information publicly available on whether a blog like Slashdot derives more income from a Kindle customer than a website visitor. Same goes for the newspapers and magazines that sell on the Kindle - nobody is talking about whether is its profitable. Being available on the Kindle, though, certainly does align interests to some degree with publishers and Amazon. Below are some of the blogs that Amazon promotes on its "Kindle Blogs" section.
Amazon is also teaming up with authors to promote the Kindle with exclusive content. Stephen King wrote a novel "UR" which is currently only available on via Amazon.com for reading on the Kindle. The novel goes for $2.99, though the exclusive book has a suggested "Digital List Price" of $3.99.
The competition
The Kindle is a closed platform - Amazon uses digital rights management it gained through an an acquisition - and the hardware was developed by an Amazon subsidiary. The iPod started off as a closed platform and stayed closed till competitors started offering DRM free music. So competitors can't offer devices that display electronic books offered for Kindle. The most prominent competitor is Sony's Reader Digital Book (a very literal name for a product, btw), which is a notable device, but does not have the same buzz as the Kindle.
As someone who doesn't want to purchase a special device to read electronic books, I do hope mobile phones become a better means to read books. It would be great for consumers if this happened, in my opinion, as it would likely force open the closed platforms to open up and perhaps even kill Digital Rights Management (DRM) on books, the presence of which is a nasty downside to purchasing electronic books in my opinion. DRM gets in the way of a consumer reading their e-books on any device they may own, whether the device be offered by Amazon or a competitor. Put squarely, you can't lend a Kindle book to a friend because of the DRM. The same arguments apply to digital music, though the press and consumers have not been nearly as vocal about DRM on books as they were with music. Kind of interesting, actually!
Summing it up
So there you have it...a glossy overview of Amazon.com Marketing of the Kindle. Amazon really wants its name associated with the Kindle - the Kindle logo has the companies name it in, and most of the companies literature refers to the product as the "Amazon Kindle." So don't expect a Sony or Dell eBook reader that can display Kindle books. The Kindle will remain a closed platform for the time being.
As a student, it's out of my price range, so I won't purchase one anytime soon. It certainly is a prominent product, however, and its exciting to see it will take digital books. The Kindle is currently the device that is making waves in the e-book reader product category.
Both Amazon and Apple sell digital music, and Apple is the market leader in that category. If Apple made a e-reader, it would probably be sleeker, thinner, and have a bigger wow factor. So it will be exciting to see the market develop for e-books and find out what technology companies that have a history of designing amazing products offer consumers in the future.