Clever Marketing Strategy

My classmate, Nick Krishan wrote this blog post on Amazon’s marketing strategy for its online store. Mr. Krishan revealed that Amazon loses money on every Kindle Fire (its tablet) that it sells. The rationale for this decision is that the low price will grab a large amount of the market from Apple, and direct them towards the Amazon store, where the company will make money. Mr. Krishan’s opinion is that more and more people are purchasing items online than they did before, so Amazon’s business strategy is a good one. I agree for additional reasons, by looking at profit. Amazon only has to sell one Kindle Fire to each customer in order for them to be able to access the Amazon store an infinite number of times. Once each consumer has a tablet, they will buy items off of the store and the company will profit. Amazon does not have to worry about losing money because only one tablet will be bought per person, but a large amount of items can be purchased per person on the Amazon store, covering the losses of the Kindle Fire, while also taking a portion of the market.

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