What prices would you recommend Amazon charge
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Amazon is one of a number of companies (Sony is another) which have developed electronic devices which deliver books, newspapers and other printed matter without using paper. This is a growing market, with technology evolving rapidly. In the not too distant future it is thought that mobile phones and other devices will perform a similar service. How though are such devices priced?
Write a 2 page paper, double space in which you answer the following case question:
Amazon's Kindle 2.0 was priced at $359 and delivery started in February 2009. The price was dropped to $300 in July after a newer model with a larger screen, the Kindle DX, was launched, priced at over $400. Explain what factors could have been taken into account in deciding on these prices. Then assume that you are responsible for deciding the future pricing of Kindle models over the next year. What prices would you recommend Amazon charge? Why?
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Solution Summary
Amazon's Kindle 2.0 was priced at $359 and delivery started in February 2009. The price was dropped to $300 in July after a newer model with a larger screen, the Kindle DX, was launched, priced at over $400. Explain what factors could have been taken into account in deciding on these prices. Then assume that you are responsible for deciding the future pricing of Kindle models over the next year. What prices would you recommend Amazon charge? Why?
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Amazon's Kindle 2.0 was priced at $359 and delivery started in February 2009. The price was dropped to $300 in July after a newer model with a larger screen, the Kindle DX, was launched, priced at over $400. Explain what factors could have been taken into account in deciding on these prices.
The initial launch price of Kindle 2.0 was decided by taking into account certain factors such as cost of the equipment, availability of substitute or competitive offerings, etc. For example, the price was not kept too low because it would have affeted Amazon's print business. If the price for this device was kept too low, people would have shifted from paper based books and publications to this one. At the same time, the price was decided keeping in mind other offerings from competitors. As such ...
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