Paying $25 less for an advertisement-based kindle
About $399 was spent in 2007 on the first Amazon kindle. The price has gone down a lot since then. To be able to try and compete with the iPad in the e-reader market, the ads were put on it this time in the price deduction. There will be Special Offers in the May 3 edition of the Kindle. It is a product several will want. Target and Best Purchase will sell the advertisement-supported version of the Kindle 3 in stores at that time.
Founder and CEO of Amazon Jeff Bezos state it is a "chicken in every pot" move. Everyone will want the Special Offers $114 kindle:
"We're working hard to make sure that anyone who wants a Kindle can afford one," he said via a statement.
There were many responders to an article by the Christian Science Monitor that many might have about the kindle with advertisements. One reader argues for a free ad-based Kindle with $0.99 books, but that reflects another thorny issue regarding the price of e-books. The $25 discount is not enough, according to some readers. Most experts' say it is okay though since the ads only come up on the bottom of the home screen and on the screen saver.
"It's very important that we didn't interfere with the reading experience," Kindle director Jay Marine told the Associated Press.
Importance of a price
TechCrunch predicts that the $114 Amazon Kindle with Special Features is an intermediary step toward a $99 Kindle for Christmas 2011. Traditional marketing psychology suggests that the ".99" price point is a magic number.
This isn't real anymore though according to research done at the New York Columbia Business School. A dollar plus approach, adding a penny, was more effective than the dollar minus approach, taking a penny away. The Columbia study showed this clearly. There was a 3 percent increase in sales of dollar plus method products. This is because they didn't seem as manipulative to customers.
Citations
Christian Science Monitor
csmonitor.com/Books/chapter-and-verse/2011/0413/Will-readers-accept-ads-in-exchange-for-a-cheaper-Kindle
Columbia Business School
gsb.columbia.edu/ideasatwork/researchbriefs/7314376?&top.region=main
Knowing and Making
knowingandmaking.com/2011/04/new-research-99-no-longer-optimal-for.html
TechCrunch
techcrunch.com/2011/04/11/amazon-kindle-99/
Kindle sales tripled after last price drop
youtu.be/PaAFm_fZQ2A
Source of article - Amazon to release ad-supported Kindle for $114 by MoneyBlogNewz.
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