Team Zulu presented a plan to launch the Amazon Kindle e-reader in South African schools in order to improve literacy, outlining strategies for product positioning, pricing, distribution, marketing communications, and addressing cultural and financial considerations. The team projected strong sales growth and profitability over 5 years by targeting the education market with a multi-pronged approach. Key elements of the plan included competitive analysis, grant funding, and partnerships to expand Kindle adoption across Southern Africa.

1. Amazon Kindle Product Launch: South Africa
Presented by Team Zulu Global Marketing 5849 April 7th, 2012

2. Today’s Agenda
 Introductions
 Product Overview
 Competitive Analysis
 Cultural Influence
 Targeting and Positioning
 Pricing and Financials
 Marketing Communication
 Promotion and Packaging
 Pricing and Place Strategy
 Sourcing and Distribution Channels
 Contingency Plan
 Team Zulu’s success
 Questions

3. Kristen Poggensee:
Product overview and Competitive analysis

4. Who we are
 Amazon’s International Marketing and
Business Development Group: Team Zulu
Our mission: “is to introduce, develop and
expand the presence of Amazon’s Kindle e-
Reader into the SA school system”

5. Meet Team Zulu
 Kristen Poggensee – Director of
Product Marketing and Legal Affairs
 Shaku Ramachandran – Director of
Supply Chain and Cultural Affairs
 Breanna Speed – Director of Market
Targeting and Positioning and Finance
 Jeff Salle – Director of Marketing
Communication and Distribution

6. Our Value Proposition
“To effectively deliver Amazon’s
Kindle e-Reader into schools to help
revolutionize education and improve
literacy in South Africa”

7. Definition of Product
 Kindle e-Reader holds 1,400 books
 Most advanced e-ink display
 Read in bright sunlight
 Built-in Wi-Fi – Get books in 60 seconds
 6” screen-fits in your pocket, 6oz
 One month battery life
 Support for six international language

8. Kindle Vs e-Content Pricing Strategy
(Razor Vs Razor Blade Concept)
 Actual cost to manufacturer Kindle is $185
and selling price is $79
 Value added (difference between wholesale
cost and retail cost)
 Amazon is well-positioned to capture Kindle’s
value back through its:
 e-books
 wireless data service

9. Product Positioning
Ideal for use in SA schools
Amazon’s
Traditional Textbooks
Kindle Access to
No access to
textbook
textbook
e-content
e-content
Barnes & Noble’s Apple’s
Nook iPad2
No use in SA schools

10. Competitive Pricing
AMZN “Kindle” BKS “Nook” AAPL “iPad2”
E-Reader Device $79 $199 $399
Case $29 $29 $39
Adapter $14.99 $20.99 $29.99
Import Duties $16.79 $16.79 $16.79
Shipping $30.00 $30.00 (not avail in SA) $30.00 (not avail in SA)
Total $169.78 $274.78 $514.78
Cost per student Total cost of license $235 $235* $235*
Assumption: 7 books per e-textbook
per student per year
Total Products $404.78 $509.78 $749.78
Cost to buy textbooks $700 $700 $700
($100 x 7 books)
Cost / Savings $295.22 $190.22 ($49.78)
Discount 10% (500 $76,401.00 $123,651.00 $231,651.00
units)
Discount 15% (1000 $152,802.00 $247,302.00 $463,302.00
units)
* Currently not available
Kindle has exclusive license

11. Competitive Analysis
Competitor Competitors
Information
Text Book Apple “iPad2” Barnes and Amazon
Publishers Noble “Nook” “Kindle”
McGraw Hill
Education,
Cengage,
Learning,
Pearson, Wiley
Revenues $6,246M $127.84B $7.12B $48.08B
Strengths Long history as Brand Lightweight Distribution
leading global Product design Page turn Exclusive for e-
provider of Multiple product Battery life content
educational lines Price
content
Weaknesses Technology Price Not available in Product design
Product Delivery time SA
Weight Reflective
Outdated display
Targets Students and All consumers Reading Schools,
schools including student enthusiasts students and
e-book users reading
enthusiasts

12. Shaku Ramachandran:
Cultural influence

13. Opportunity Assessment
 Large potential market
 Increasing Amazon’s market share
 First mover into SA school system
 Exclusive license with publishers
 Increase literacy in SA children
 Improve corporate responsibility

14. Profile of Prime Customers
 Prime Customer:
Ministry of Education
 Private Schools
 Public Schools
 End User:
 Students (ages 7-18)

15. Cultural Influence
 Relationships and business negotiations
 In South Africa, education plays a huge role
 Government spends 20% of the central
budget on education
 Technology has become an increasingly
important lever
 READ Program
 Library - portable and book in the box

16. Cultural Word of Mouth

17. Cultural Impact on Kindle
 Affect on buyer behavior
 Drive towards technology
acceptance
 Word of mouth in South Africa
rates highest in the world with
regards to brand advocacy

18. Breanna Speed:
Targeting & Positioning Strategy and Financials

19. Positioning - Targeting
 14M Students in SA
 Initial target market share 5%
 Three bands of education:
 General education and training
 Further education and training
 Higher education and training
 Grades R – 9
 Grades 10 -12

20. Market Segment
FET, 320,000 ECD, 400,000
Combined
Intermediate, 2,
445,473
Primary, 5,992,8
63
Secondary, 3,83
1,937

21. South African Market: Target Cities

22. Secondary Markets
 Phase III
 Botswana
 Lesotho
 Namibia
 Swaziland
 Madagascar

23. Financing
 Grant Donors:
 SA government: $10,000,000
 World Bank: $2,000,000 *
 Gates Foundation: $2,000,000
 Grant from Oprah: $500,000
 Clinton Fund: $750,000
 Total subsidized funding = $15,250,000
* Through World Reader Foundation

24. Annual Sales Forecast
340000
330000
320000
Axis Title
310000
300000
290000
280000
2013 2014 2015 2016 2017
Annual Sales Growth 299643 308632 317891 327428 337251

25. Financial Analysis
$70,000,000.00
$60,000,000.00
$50,000,000.00
$40,000,000.00
$30,000,000.00
$20,000,000.00
$10,000,000.00
$0.00
2013 2014 2015 2016 2017
Annual Revenue Income from Operation
Other Income Annual Net Income Before Taxes

26. Jeff Salle
Marketing Communication Strategy

27. Marketing Communication Strategy
Three Point Approach:
1. Market to the South African Ministry of Education.
2. Market to individual school districts (metro + rural)
3. Market to the end user using a pull strategy to create demand to
bring the Kindle into more school systems
Market to Market by Market to
Ministry of School end user:
Education Districts Students
Marketing
Communications
Program

28. Marketing Communication Strategy
Advertising Modes of Communication
Sales
promotion
Events & Brand
experiences awareness
Public relations Brand
& publicity Marketing image
Brand
Communications
Equity
Direct & Program
Brand
Interactive responses
marketing
Word-of-mouth Brand
marketing relationships
Personal
selling Direct
marketing

29. Advertising
 Kindle Packaging and Labeling
 Print Ads in educational magazines like
Scholastic’s book club
 Point-of-Purchase displays at Ministry of
Education and urban schools
 Brochures to schools

30. Packaging: Outside
 Amazon’s ‘frustration free’ packaging
 Amazon’s smile logo & Kindle barcode logo
 Eco-packaging is recyclable & compostable
 Accessories are shipped separately
 Open your Kindle and begin your story
 “Once upon a time…”

31. Packaging: Outside
 Animal print Kindle covers!
 LED light for night reading
 Kindle personalization:
*Each student will be able to choose and
personalize their own Kindle

32. Sales Promotion
 Booth at Trade Shows
 Demonstrations, Coupons and Contests
Direct and Active Marketing
 Electronic Shopping: Amazon.com
 Website: Company website, and Social
Media, Facebook and Twitter

33. Public Relations
Promote Good Will:
 Through grants, we will make Kindle
e-Readers available to those in rural school
areas who cannot afford to purchase
 Helping students improve literacy through
the practical use of e-Reading on a Kindle and
demonstrating the value of green technology

34. Word of Mouth Marketing
 Person-to-Person; Family, Friends and
Colleagues
 Social Platform; YouTube, Twitter and
Facebook
Personal Selling
 Celebrity endorsements:
 Bono of U2 musician
 Lucas Radebe SA soccer star
 Social Platform; YouTube, Twitter and
Facebook

35. Events and Experiences
Sponsor of Events:
 Sporting events such as FIFA World Cup soccer and
SASCOC Olympic Youth Games
 Higher education is linked to sports and sets the
stage for expansion and going global on a world stage

36. Sourcing the Kindle
 Amazon is headquartered in Seattle WA
 Kindle components are sourced in a number
of locations, assembled in China, and then
shipped to the US
 Fulfillment centers in 10 states
 e-Reader content is downloaded from
account with Amazon.
 License agreement for text books
 Software development center currently in
Cape Town SA

37. Distribution Channel Strategy
 Channels
 www.kindsouthafrica.com
 Bulk discount for S.A. schools
 Amazon Export Sales, Inc. manages contract
with S.A. Ministry of Education
 Transportation and warehouse
 Courier choice depends on shipping time
 Amazon’s co-sourced fulfillment center and
customer service center
 JV with PostNet Courier in country

38. Contingency Plan
 Maintain ~ 5% Market Share
 Monitor and adapt to competition through
innovation
 Contract license negotiation
 Ministry of Education (SA Gov)
 Individual school districts
 Textbook publishers
 Sourcing – Manufacturing suppliers
 Currency exchange
 Natural disasters

39. Team Zulu‘s Success
 Our talented marketing team’s multi-tiered
communications strategy will ensure the rapid
implementation of Amazon’s Kindle e-Reader through
reaching our target audience and demonstrating the
superior benefits of our value proposition through
continued education and support.
 Our marketing communication program will
promote the Kindle e-Reader as a major player in the
marketplace and introduce our e-Reader to the world
of education in South Africa.

40. Thank You

41. Questions

42. Appendix

43. Cost effectiveness
 R450,000 (US$105,634) to build one school library with an
area of 300 sq.m
 $ 303 117 portable library
US$0.12; Cost of the service per school student at level one
 US$2; The cost of the service per school student at level two
 US$51;The average cost of a book box for level
 US$288:The cost of a book box for level two
 US$17; costs per book pupil
 US$18: the cost of READ classroom library per pupil

44. South African Context
Per 1000 SA UK US Aus
Personal 85 600 762 683
computers
Internet Users 109 473 630 698
Broadband 3.5 163 166 103
subscribers
Bandwidth (bits 19 13062 3306 5903
pp)
Cost Internet 63 27 15 22
(US$ pm)
Mobile 724 1088 680 906
subscribers
ITU/World Bank 2005

45. Market Segment

46. PEST Analysis
Political Economical Social Technological
Competing/
Lifestyle trends evolving
Ecologically Cost of technology
safe production
Favorable Demographics
Replacement
legislation Import fees/
Consumer Technical/
trend Taxation
attitudes Solutions
Funding/ Specific
Media views Associated/
Private and industry factors dependent
public
Lenient technologies
Global
Regulatory legislations
recession Product
bodies recovery
Major events Maturity
Wars and
Technology, co
conflicts
ntracts, licensi
ng,

47. Marketing Timeline Milestones
2012 2015 2020 2025
Milestone 1 Milestone 2 Milestone 3 Milestone 4
- Commit to -As we expand -Slowly faze - Capture 40-50%
Ministry of into rural areas, Kindle into of the Southern
Education in SA realize return on Southern Africa Africa school
for initial trail investment with countries using market for e-
into public and estimated sales same strategy. Readers.
private schools as of over $50
we enter new million.
market.

48. P&L
Income from
Annual Revenue Operation Other Income Annual Net Income Before Taxes
2013 $50,873,388.54 $ 7,631,008.28 $8,989,290.00 $ 16,620,298.28
2014 $52,399,590.20 $ 7,859,938.53 $ 9,258,968.70 $ 17,118,907.23
2015 $53,971,577.90 $ 8,095,736.69 $ 9,536,737.76 $ 17,632,474.45
2016 $55,590,725.24 $ 8,338,608.79 $ 9,822,839.89 $ 18,161,448.68
2017 $57,258,447.00 $ 8,588,767.05 $ 10,117,525.09 $ 18,706,292.14
$169.78 $514.78 $274.79
$235 $235 $235
$404.78 $749.78 $509.79
ROI Port of Entry
Kindle
only 299643$169.78 $50,873,388.54 500$169.78 $84,890.00 $8,489.00 $76,401.00
license 299643$165.00 $49,441,095.00 1000$169.78 $169,780.00 $16,978.00 $152,802.00
other 299643$70.00 $20,975,010.00
Nook 299643$509.78 $152,752,008.54 500$274.78 $137,390.00 $13,739.00 $123,651.00
1000$274.78 $274,780.00 $27,478.00 $247,302.00
$169.78 $25.47 $7,631,008.28
500$514.78 $257,390.00 $25,739.00 $231,651.00
1000$514.78 $514,780.00 $51,478.00 $463,302.00

49. References
http://www.sabookcouncil.co.za/pdf/PICC_Cost_of_books_studyFinal.pdf
www.kindsouthafrica.com
www.apple.com
www.barnesandnoble.com/nook
http://www.mcgraw-hill.com/
http://www.education.gov.za/
http://www.rogerfedererfoundation.org/en/projects/education-in-africa/read-south-africa/
http://en.wikipedia.org/wiki/List_of_countries_by_literacy_rate
http://www.education.gov.za/dynamic/dynamic.aspx?pageid=306&id=10877
Nelson Mandela – Long Walk to Freedom – ISBN 0-316-87496-5
www.marketingmix.co.za
www.uneca.org/com4dev/workshop/TV_africa_presentation.ppt
http://www.southafrica.info/about/education/education.htm#ixzz1qTOLq8kr
Picture http://ebookreaderreview.co.za/
http://www.southafrica.info/about/education/education.htm#ixzz1qwvOjndg
http://www.southafrica.net/sat/content/en/us/top-10-cities
http://www.education.gov.za/
http://www.worldbank.org/
http://www.oprah.com/angel_network.html
http://www.clintonfoundation.org/

50. References
Marketing Management, 13/e, Kotler
http://www.youtube.com/watch?v=84yOJvTwX6g
http://articles.businessinsider.com/2009-02-24/tech/30062573_1_first-e-book-reader-kindle-box
http://www.squidoo.com/leopard-print-kindle-covers-and-skins
http://www.sascoc.co.za/
http://www.fifa.com/worldcup/index.html
http://blogs.hbr.org/hbr/restoring-american-competitiveness/2009/10/the-us-cant-manufacture-
the-ki.html
http://www.amazon.com/Locations-Careers/b?ie=UTF8&node=239366011
http://www.kindsouthafrica.com/Home_Page.html
http://www.reuters.com/finance/stocks/companyProfile?symbol=AMZN.O
http://www.southafrica.info/about/education/education.htm