Promotion Campaign for Amazon Kindle Situational Analysis Industry Overview The eReader market has obviously achieved its maturity stage. Although the first eReaders were introduced already in the late 1990s, the devices had grown in popularity only a few years ago, after the launch of the Amazon’s Kindle in 2007. Since 2006 when Sony introduced the American market to the first so-called “dedicated ebook reader” using electronic ink, a lot of other manufacturers decided to share a piece of the money cake. Soon Sony was no longer the monopolist on the market of this utterly new class of devices. Amazon managed to get the biggest slice of the market thanks to Kindle’s ultimate competitive advantage at that point – wireless download of ebooks, which contributed to an increase in impulse buying. At the moment, not only has the competition among eReader manufacturers escalated, but the consumers are being aggressively persuaded to buy a more multi-purpose device, such as a tablet computer, thus causing a category competition between dedicated eReaders and Tablets, most notably iPads. Growth of the market In recent years, despite tough competition from tablet computers, the eReader market has been experiencing outstanding growth rates. The number of ereader owners in the US has doubled in May 2011 since November 2010 from 6% to 12%, according to Pew Research Center, which is outstanding compared to the growth of tablet ownership: only 60% growth over the same time period, up to 8% total in May 2011. Moreover, future sales of eReaders promise high profit gains for manufactures competing on the market. According to market research firm In-Stat, 30 million eReaders will be sold in 2013. By 2014 revenues associated with selling of Kindle will presumably reach $2.3 billion. Current Market Trends and Developments Ebooks are growing in popularity: due to the intense competition among eReader manufacturers – Amazon, Barnes & Noble, Sony – trying to undercut one another, eBook sales almost doubled over 2010 and made up 9% of total consumer book sales in December 2010 compared to 3.31% at the close of 2009, according to the Association of American Publishers. In dollar terms, eBook sales for January to August were up from $89.8 million in 2009 to $263 million in 2010. At the end of October 2010 Amazon announced that for its top 10 best-selling books, customers bought the Kindle edition twice as often as the print copy. The growth of eReader popularity is accounted for by several reasons: target market consumers are eager to own more technology. Despite the economic downturn, digital content is more portable and accessible and therefore the demand is on the rise. Incidentally, Kindle is recommended by celebrities’ clubs, for instance Oprah’s book club. Another reason why eReaders are so high in demand, is because consumers enjoy the possibility of carrying a big amount of books, along with documents in other supported formats, around them inside a light, easy-to-operate digital ‘container’. Moreover, eReaders have gained great awareness: in 2010 77% of consumers at least heard of an eReader, while 5% already owned one. And finally, owners of eReaders seem to read more books than non-owners: in 2011 36% of eReader users said they read more than they did before, compared to only 16 percent of non-users. Environmental analysis The key factors that influence the eReader market are technological, economical, competitive and legal. Technology-wise, the market is constantly advancing forward with eReader devices being upgraded with new features to better meet the target audience’s needs. The speed of downloading books has grown with the introduction of 3G feature; eReaders are now lighter, smaller, and have Touch Screen navigation; some eReaders will even read your book to you with Text-to-Speech. In terms of economy, manufacturers are struggling to accommodate for the shaken budgets of consumers making their devices less and less expensive; now the simplest Kindle sells for $79, while the price at the time of its introduction in 2007 was $399. Competition also has a great impact on the market, both decreasing the prices and forcing technology improvements. At this point, consumers really can’t see too much difference among the competitors, with all the features and prices being sort of in line with one another. Strong pressure is experienced by eReader market from the publishing industry which is trying to save itself by manipulating the cost of ebooks sold on Amazon. Since the whole printing industry has been suffering declining sales, publishers have made attempts to prevent discounted sales of ebooks through Amazon, in order to secure larger profits. Incidentally, in August 2011, a nationwide antitrust class-action lawsuit was filed against 5 top publishers and Apple, alleging that they “colluded to increase prices for popular e-book titles to boost profits and force e-book rival Amazon to abandon its pro-consumer discount pricing”. Competitor analysis Major competitors on the eReader market are as follows: Amazon, Pandigital, Barnes and Noble, Sony, and Hanvon. The top players switched places quite a few times over the years. Sony Reader, a clear leader in 2006, stepped aside in 2009, with a share of 35%, while the new number 1, Amazon Kindle stood out with 60%. After an intense price war in 2010, Amazon still stays the leader in eReader sales with a share of 57%, and Barnes and Noble’s Nook (introduced in 2009) follows close with 22%, which leaves the rest of the competitors with just a little less than a quarter of the market. The differences in quality of eReaders may be insignificant, but the choice consumers make in favor of each one will greatly affect their interaction with the device further on. For starters, eReader devices of different manufacturers support different eBook formats; some may not have touch screen navigation, others might not have E-ink technology; some will have removable memory, others will let you use 3G network. Amazon Kindle has long maintained the leader status both in quality and set of features, which has distinguished this product favorably from its competitors, the closest ones probably the B&N’s Nook and Sony Reader. The Nook has long been going neck in neck with Amazon’s Kindle introducing features that enhance the usability of the device; however, Kindle still preserves some unique features not available in Nook or Sony Reader. The points of difference include: target market, availability of Text-to-Speech, ebook formats, storage of books online, online browser, and keyboard. The target market of Sony Reader users is mainly 25-45 years old tech-savvy people who focus in their decision-making on innovative and sophisticated devices. Nook is more skewed towards women’s audience 25-45 years old, which is visible in their commercial messaging featuring female users and such endorsers as Jane Lynch and James Patterson (writer). The target market for Kindle will be evaluated in the Target Market part of this plan. A rare feature found on Kindle and just a few other competitor devices, excluding Nook or Sony Reader, is text-to-speech, which will read the book to you. Combined with MP3 playback, this feature allows users enjoy reading even without holding the device and to the sound of their favorite music, which contributes to multi-tasking. This benefit of being able to experience the author’s voice or the text easily converted to speech when driving, cooking or just wanting to relive a childhood memory of being read a story before bed, truly makes Kindle stand out of the crowd. The eBook formats compatible with the devices are different, for instance, AZW is only read by Kindle, while EPUB will be read solely by Nook and Sony Reader, however all the three competitors will open a PDF file. Only Kindle will let you store you ebooks in the Amazon Cloud, where they will be accessible even if you delete the copy off your device. In terms of connectivity, Nook does not have a built-in browser, unlike Kindle, therefore it does not allow you to follow web links often embedded in modern magazines, newspapers and any content originated as web pages. Sony Reader has a simple web browser on some of its devices in the product line. Nook, Sony Reader and Kindle all have items in their product lines that support 3G network, which is more preferable in contrast with Wi-Fi, since it makes download possible from a considerably bigger number of locations. Another thing unique to Kindle product line as opposed to Nook is the existence of a relatively light keyboard Kindle, which may be preferred by users who are not comfortable with touch screen navigation. Finally, all the three competitors, - Kindle, Sony Reader and Nook, - have good-quality readability, and give users an opportunity to change fonts. Market segmentation Demographics of eReader owners has been changing dramatically over the last few years. As the chart in Figure 1 demonstrates, the largest portion of eReader owners is concentrated in the segment of ages 55+, which had grown 5% over less than a year. The number of eReader owners aged 45-54 is second largest, having increased by 6% over the same period. Young adults accounted only for 18% of people who bought dedicated eReaders, the percentage being less than the previous year, which could probably be explained by the penetration of the market by tablet computers. EReader adoption among women ballooned to 61% in the second quarter of this year, up from 46% in the same quarter last year.

[pic] Figure 1. Age distribution of eReader owners (Nielsen Study, August 2011) In recent time there has been a significant increase in eReader ownership among Hispanic adults (from 5% to 15% over half a year), college graduates (from 8% to 22% over half a year), and among those living in households with incomes of at least $75,000 (from 12% to 24% over same period), as reported by Pew Research Center. Target market Based on market segmentation we considered reasonable to target the following group of population, who has expressed greatest interest and activity in purchasing eReaders so far. Target market profile: Ages – 45 – 64 years old Education – have higher education. Rationale: 57% of eReader owners have a bachelor’s degree or higher Income – at least $75,000 annually, since 28% of purchasers have income of $100,000 a year Occupation – white collar jobs, predominantly business and managerial positions Family – married with or without children Geography – suburban and urban, primarily located on the West coast, because 20% of residents of the West are most likely to use an eReader, according to Harris Poll research. Lifestyle – work 8+ hours a day, commute to work, often travel on business or for pleasure, keep up to date with news and technology (eReader owners have 5 connected devices on average). VALS – achievers: successful, career and work-oriented; social lives revolve around family, church, and work: respect authority and the status quo. In terms of technology adoption, our target market is early majority - careful consumers who tend to avoid risk and adopt the product once it has been proven by the early adopters. They rely on recommendations from others who have experience with the product, they are socially active and more educated and financially better-off than the late majority. Key benefits and positioning The main issue that our target market is constantly struggling with is the lack of time and they strive to be more productive in everything they do. They are endeavoring to cope with time-crunched lifestyles, trying to combine family and career, being constantly connected and having time for own selves. They dream of a simple way to be more successful and enjoy the life at the same time. Reading is one of the hobbies they would hate to miss and with Kindle they can derive the most of it. Kindle has a unique combination of features that all pertain to an incredible benefit for the consumer. With Kindle reading becomes more convenient: - because you can carry up to 3,500 books and even more documents with you at all times; - the Amazon Cloud will save your books for you in case you need to access them; - the device is light and easy to hold with one hand; - Kindle allows you to listen to your ebooks with Text-to-Speech and play MP3 music in the background; - Kindle has electronic ink screen which is easy on the eye and lets you read with no glare in sunlight; - Kindle has extensive battery life and extremely low cost. The convenience users get with Kindle allows them to read books in the variety that they prefer in the order that they like, in any place they go or have to be in. Kindle gives users freedom to multitask and still be able to enjoy a pleasant read, allowing them to experience more. Creative messaging and Positioning There are a variety of e-readers currently on the market. Most of these e-readers have similar features. We want to show how Kindle is different. In order to this, we are positioning Kindle as the multi-tasker of e-readers. We will show that Kindle allows its users to experience more at one time by using our product. With Kindle, you can have more time to do other things that are important to you in your life. Some examples of being able to multi-task with Kindle include: walking on the treadmill while reading a book on Kindle or cooking dinner for your family while having the “text-to-speech” feature on Kindle read you the recipe. Marketing Objectives Our campaign will support the marketing objective to increase sales of Kindle by 10% in 2012. The result of this campaign will also increase Kindle’s market share by 5% in 2012, bringing its share from 48 % to 53%. The price per Kindle is $79.00. The amount of Kindles sold will be 5,000,000. The overall revenue after the year-long campaign is $395,000,000.The promotion budget is $300,000, resulting in a $394,700,000 ROI. Communication Objectives We have put three main communications objectives in place for our campaign. The first is to increase usage among our current target market of adults ages 45-64. We plan to do this by raising awareness of Kindle’s unique benefit of giving users freedom to multitask and still be able to enjoy a pleasant read, allowing them to experience more. We will also strengthen brand image with new creative messaging that shows how Kindle truly lets the customer experience more with their e-reader and also in their everyday lives. Promotion mix In our promotion mix we will integrate Traditional and Non-traditional methods united with the same creative messaging “Experience more”, namely we will have printed and broadcast media and a totally new website specially made for the campaign. We have chosen to put our full-page print ads in newspapers and magazines, because our target market is the group of people who utilize those channels a lot for various purposes. Since we’re targeting West Coast, we will be putting our promotional messages in the local versions of the following newspapers: Times (Los Angeles), Chronicle (San Francisco), Union-Tribune (San Diego). Besides, we will place our print ads in the Reader’s Digest and magazine People. Our print ads will be presented by a series of advertisements, featuring people in various situations showing how Kindle allows you to experience more. Since we are trying to establish an emotional bond with the target audience, the ads will not show the people’s faces and it will not focus on the device, its purpose will be to convey a feeling and experience which the target audience will feel easy to identify with. The ad will visually depict how you can experience more if you use a Kindle, for example a picture of the front of a car with a Kindle on the passenger’s seat and the driver listening to the book being read by device while he’s waiting in traffic: Kindle gets you through traffic. Kindle experience more! The tagline will organically fit with the message in every ad. - An ad of a woman cooking while listening to a book being read by Kindle, showing the text from a culinary book: Kindle is your culinary guru. Kindle, experience more! - An ad featuring a woman working out on a treadmill listening to a book on Kindle: You no longer have to worry about turning the page on the book you’re reading on your treadmill, Kindle will read it to you. Kindle, experience more! The TV commercial will be all those stories together put in a nice smooth way implying the message that you can do more and experience more if you have a Kindle, and at the same time you will be enjoying your hobby. The custom made TV commercials will run on channels CBS, NBC and ABC during Prime Time 8-11pm, when the target audience is most likely to be home after work. The commercial will emphasize the Text-to-Speech feature of Kindle, which accounts for the benefit of multitasking and experiencing more. Thanks to the TV commercials and print ads we will increase visibility of the brand and attract consumers attention to the sales promotion campaign running for a limited time. The sales promotion for Kindle will consist of several premiums that customers will get with the purchase of the product. First of all, each buyer will receive a premium leather cover along with their Kindle. They will be asked to register their purchase on a specially-made campaign website to get even more bonuses – to download a best-selling ebook and an audiobook. The leather cover will be appropriate for the target market’s needs, while the best-selling book and audiobook will serve as incentives for people to try the product and buy more ebooks in the future, which will mean more profit for Amazon. The expenses on the sales promotion whose aim is to drive sales and incite trial of the product, will cover a limited amount of premiums, namely for the first thousand of customers. The website created for the campaign will be different from the one that Amazon has now for Kindle, namely customers typing in kindle.com in the address box of their browsers will be simply transferred to one of the pages on amazon.com. Therefore, since our communications objectives for this campaign include strengthening Kindle’s brand identity and generating interest and stimulating trial, we consider reasonable to separate Kindle from Amazon, while retaining their strong relation to each other. The campaign’s website will create a feeling of a bookclub, where visitors could purchase Kindles, ebooks and audiobooks, as well as lend each other ebooks they have read, write reviews and share other information related to ebooks and e-reading. Moreover, the website will receive traffic from customers who bought the device in a retail store or from Amazon’s website with the purpose of registering it in order to receive the premiums. This way the brand will be able to engage customers in activities related to their hobby (reading and writing reviews, sharing and buying ebooks, etc), and at the same time generate profit for the marketer. Banner ads and Pay-per-Click ads on third-party websites will serve the purpose of increasing visibility and driving traffic to the website. The choice of websites will reflect the interests and internet behavior of the target market, for instance ads will be placed on websites for news, reading associated websites as well as on www.oprah.com, since the star often recommends Kindle to her audience. The online advertisements will feature the same characters and stories as the print ads for newspapers and magazines; however they will be relatively simplified and adjusted for view on host websites. Despite the fact that Kindle is not a convenience product we consider it beneficial for the brand to utilize Place-of-Purchase displays to fulfill our communication objectives of raising awareness, evoking interest and encouraging product trial in the store. The campaign will include displays in retail stores, such as Walmart, Target, Best Buy, OfficeMax and Staples. Displays will feature posters and hard-paper standing displays depicting various benefits of using Kindle, which will intrigue shoppers and attract their attention, as well as prompt trial of the product, to see how it works and what is inside. It is very important to appreciate the benefit customers get from the first pre-purchase interaction with the product, that they can get in a retail store as opposed to buying products online, when they can’t touch it or see for the themselves how it works, therefore our POP displays will not only show the product and its features, but they will also have the devices connected and operating, so that everyone could take it and take a virtual tour to see for themselves how Kindle can help them experience more. The last but not the least component of our promotion mix is the press releases. We will employ both media relations and press release writing for newspapers and trade publications. This will insure proper representation of the promotion campaign in the media and will contribute to positive brand imaging.

|Communications Vehicle |PRICE |QTY |Total | Budget spending |
|Print Ads | | | |300000 |
|Creative production (newspaper + magazine) |800 |7 |5600 |294400 |
|Newspaper (4 weeks full page) MMN |12000 |4 |48000 |246400 |
|Magazines (3ads in each monthly mags) |2000 |4 |8000 |238400 |
|TV commercials | | | |238400 |
|Local TV commercial creative & production (2) |12000 |2 |24000 |214400 |
|spots on TV (1400* 50 each) |1400 |100 |140000 |74400 |
|Online ads | | | |74400 |
|Charges for being on 3rd party site |2 |10000 |20000 |54400 |
|Premiums | | | |54400 |
|Cost of merchandise (cover+book+audiobook) |43.655 |1000 |43655 |10745 |
|Publicity | | | |10745 |
|Writing press release |500 |2 |1000 |9745 |
|Media relations |100 |4 |400 |9345 |
|Point of sale materials | | | |9345 |
|Poster creative |500 |1 |500 |8845 |
|Poster printing |200 |6 |1200 |7645 |
|Paid search | | | |7645 |
|Avg. $3.70/CPC |3.7 |1500 |5550 |2095 |
|Custom Web pages | | | |2095 |
|Create new site for the campaign |200 |10 |2000 |95 |
|BALANCE OF THE BUDGET | | | |95 |

Evaluation and Control of IMC Program Print ads and TV commercial ads. We will evaluate the effectiveness of our print ads and TV ads after they appear in the media, in order to measure the success of our campaign. We will use one of the print and TV commercial posttesting methods which will determine if the campaign is achieving the necessary objectives and serve as first-hand material for the next period’s situation analysis. We will be using inquiry tests for print ads to measure the effectiveness of the ads and different media, by asking how consumers found out about the campaign. Moreover, we will have recall tests run for evaluating the print ads and their impression on consumers. For our broadcast commercials we will be using a combination of day-after recall tests and diagnostics. These tests will help the company find out how the ads affect the consumers and help the company understand how consumers evaluate the ad, as well as how the creative idea is understood. Besides, the focus group method will measure the rational and emotional response to the ads and show how well the consumers remember our ads and commercials. Website and online ads evaluation. Using Google Analytics and regular website design tools we will be able to evaluate the performance and overall success of the campaign. By checking the traffic to our website, we will be able to measure how many times the customer visited the website and how long they stayed on each and every page. Besides, we will be able to find out how many ebooks or audiobooks they downloaded from the website, after they registered their purchased Kindles. The Google Analytics will also show what keywords they used to access the website, or if they were transferred from a Pay-per-Click advertisement. The performance of PPC ads will also be measured during the campaign to see how well the third-party websites were chosen to reflect the target market, as well as if the ads were all in all appealing. In addition, even if customers will simply join the website as a bookclub, without registering or purchasing Kindle, we will see how many people download the eBooks, and we will be able to learn more about the target market in general, by assessing their interactions on the website. Finally, use of modern in-store promotional testing will allow us to measure the performance of POP displays in retail sellers. This information will be used for future promotion campaigns.

Work cited
Belch G and Belch M (Ed 9e). (2011), Advertising and Promotion: An Integrated Marketing Communications Perspective, New York: McGraw-Hill Irwin
E-bookvine (2011), How Many Kindles are Sold by Amazon? 8 Million or 8+ Million? ”, Viewed 15 November 2011 eReaderGuide.info (2010), eBook Reader Industry Commentary, viewed 15 November 2011
Epstein Z (2011), Nielsen: Tablet and eReader adoption accelerated among older users, women in Q2, viewed 15 November 2011