Is an advertisement-based Kindle worth $25 off standard price?
The first generation Amazon kindle in 2007 cost $399. The price deduction never involved ads before this. Doing this, the e-reader market will be breached making the iPad competition. May 3 is when the kindle will start with Special Offers. Target and Best Purchase will sell the ad-supported version of the Kindle 3 in stores at that time.
It is "chicken in every pot" decision made with the $114 kindle with Special Offers according to Jeff Bezos, the Amazon CEO and founder:
"We're working hard to make sure that anyone who wants a Kindle can afford one," he said via a statement.
An ad-based kindle might bright out typical concerns. These concerns were displayed as responders on a Christian Science Monitor article on price cuts. The price of books was brought up by one reader that states kindles for free with advertisements would be okay with $0.99 books. Another reader concurs that a $25 discount is not enough to make up for the presence of advertisements, however one thing experts believe Amazon has done right is to isolate the ads to the Kindle's screensaver and the bottom of the home screen.
"It's very important that we didn't interfere with the reading experience," Kindle director Jay Marine told the Associated Press.
What is in a price
The guess TechCrunch has is that the $114 Amazon Kindle is just leading up to the Christmas 2011 $99 Kindle. Traditional marketing psychology suggests that the ".99" price point is a magic number.
The Columbia Business School in New York did research on this though. It showed this is probably not the case anymore. 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. Sales of goods that used the dollar-plus method increased by 3 percent, and consumers felt greater trust for dollar-plus brands since the costs were perceived as being less manipulative.
Christian Science Monitor
Columbia Business School
Knowing and Making
Kindle sales tripled after last price drop
Source for this article - Amazon to release ad-supported Kindle for $114 by MoneyBlogNewz.
Article Source: JS2 Article Marketing