Pricing the Kindle Fire
The Kindle Fire, priced at $199, is just 39% of the price of it's most well-entrenched and popular competitor the Apple iPad2, which sells for $499. Amazon has pursued a market penetration strategy with this product, looking to create a content consumption platform for the future. Apple argues that the iPad2 is a content creation and consumption platform. The price differential of $300 is steep to pay for content creation capability, which is one of the factors in Amazon being so successful with its pricing strategy. Apple could further refine this pricing strategy however and further expand the market.
Defining Kindle Fire Pricing Strategy
The initial pricing elasticity of products that have a high degree of innovation associated with them tend to be more unitary or highly elastic, as demand often outstrips supply of these types of devices (Antonelli, 1989). This factor in pricing...
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