teachthe4ps.com - For instructors of marketing.

I have been reading a lot of articles this week about the new line of Amazon Kindles.  The most intriguing of these is the Kindle Fire which appears to provide a worthy competitor to the Apple iPad.  While more limited, the Fire is also less than half the price.  The best article I have found on the new Kindles is from Bloomberg BusinessWeek, “Amazon, the Company That Ate the World” (September 28, 2011).  This article, while long, really digs into the marketing strategy angle from Amazon’s perspective.  It also provides a nice compare and contrast of the marketing strategies of Amazon and Apple — two companies that are bound to have a big impact on American business for many years to come.  The article is also very relevant given our recent post titled “Tablets Drive Online Shopping” (September 30). The article also provides an update to the case scenario on Amazon that opens chapter 3 in each of our books.  We have also posted this at Learn the 4 Ps.

This article provides examples you might find useful when you cover price, competition, marketing strategy planning, new product development or retailing.
 

An update on a recent post.  About a month ago we posted about a BusinessWeek article “What Amazon Fears Most:  Diapers.“  Well problem solved — Amazon just bought the Diapers.com’s parent company Quidsi in a deal worth $540 million.

The Bloomberg BusinessWeek cover story this week (“What Amazon Fears Most: Diapers,” October 7, 2010) is a long article on Diapers.com.  Our kids are older — so we are not in the target market and we were unaware of the success this company is having.  The story is interesting and relays the low-cost start-up strategy.  The founders spent their seed money on building a customer friendly website.  When they launched they were buying diapers from the local club stores and storing them in a friend’s garage.  They have since moved into three state-of-the-art warehouses.

The article describes Diapers.com’s retail and pricing strategy — let’s not make money on the diapers but on the other products shoppers add to the cart with the diapers.  The article also has some excellent examples of logistics and distribution.

UPDATE, November 13:  Amazon buys Diapers.com.

This is a great article to use when you introduce Price.  I do a lot of shopping online — most of it at Amazon and Apple’s iTunes store.  They make paying easy.  I like to tell my students that the price can include the hassle of paying — so how do you reduce the hassle.  Might stimulate a good in-class discussion, too.  See “The real reason why consumers won’t pay online” (Fortune, July 24, 2010).

The Wal-Mart vs. Amazon battle continues to become increasingly intense (see “Price War Brews Between Amazon and Wal-Mart,” New York Times, November 23, 2009). These two competitors have already engaged in price wars over toys, books, and DVDs this holiday season.  Now Wal-Mart is cleverly using one of their strengths relative to Amazon — their physical stores — to their advantage.  This a nice example of competitive advantage, SWOT, and logistics.  Check out “Wal-Mart Uses Its Stores To Get an Edge Online” (see The Wall Street Journal, December 15, 2009 – subscription required, or search the net using the article title).

Consumer reviews are playing an increasingly important role in buying behavior.  This means that traditional marketing communication vehicles are likely to be less influential.  As a nice supplement to this article (“What Do You Think?  Companies are learning to make the most out of customers’ online reviews of their products,” The Wall Street Journal, October 12, 2009), pair it with the results of a July 2009 Nielsen survey that asked consumers how much they trust various sources of information.  As this survey makes clear, 70% of consumers trust online opinions from people they don’t know.  I copied this table (right click on graphic, choose “copy image”) and pasted it into my PowerPoints (right click on the slide and choose “Paste”).  Before showing the results, I asked students which sources of information they trusted the most and the least – choosing a set of five from this list.  The article and survey can lead into discussions about what marketing managers can do with consumer reviews.  For a related story, see “Amazon:  Turning Consumer Opinions into Gold,” (BusinessWeek.com, October 15, 2009).

Here’s another technology product that’s moving quickly from the market introduction to the market growth stage of the product life cycle.  The first Kindle (Amazon’s popular e-book reader) was released on November 19, 2007.  Until I read this article (“Attack of the Kindle Killers:  The Boom in New E-Readers,” Time, October 11, 2009), I did not know there were so many competing e-readers – either on the market or due out shortly.  The article includes a slide show with nine different readers.  Only the Kindle and Sony seem to get significant publicity, but that may change if one of these other readers catches on.  Might be fun to show the slide show to class and ask students to develop a marketing strategy for one of the less well-known readers.