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Nook Color Swop Analysis

In: Computers and Technology

Submitted By fairypoet
Words 1914
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Situation you Analysis
Industry Analysis Demographic | The Demographic of e-reader consumers is between the ages of 25-65. The Demographic group ranging from Male and Female although it is shown that most of the dedicated e-reader owners tend to be women. Also their education background varies, since the device can be used for various reasons and not just reading. Study also shows e-reader owners have higher household income than average comparing to the US population. | Ethical Background | As of May 2011, 15% of Hispanic population own an e-reader, followed by 11% of Caucasian and 8% of African American. Consumer who has a college degree and high house-hold income are also more likely to own an e-reader. (Yarter, 2011). Overall, the highest rate of tablet device and e-reader ownership are Hispanic Adult with the house hold income of $75,000 a year. (Yarter, 2011). | Economic | The Nook book has prices, which vary from the Nook first edition that is $119.00 and the Nook Color that is $249.00. The costs of the devices do affect the consumer because the United States is going through financial issues and jobs are limited to some Americans. About 14% of adults response that $199 is the highest price that they would pay for an e-readers without internet access. | Legislative | The Nook has the Android software, which has a licensing agreement with Microsoft. Microsoft is actually suing Barnes and Noble for not having a licensing agreement with Microsoft. Microsoft claims that “the manufacturers of its Nook e-reader…assertion that the Android operating system violates its intellectual property”. There are nearly 6 Patents that Microsoft has against Barnes and Noble with the ereader Nook and its Android software. The case is still pending. | Social Trend | eBook and tablet industry has been blooming for the last 3 years. Printed magazine and newspaper are shrinking and society is heading to a paperless world. The iPad has proved that tablet devices are replacing laptop computers. Demand for eBooks and tablet devices are expected to keep on rising. | Political | The Nook is said to raise its pricing on the Nook Color and earlier versions of the Nook since parts for the ereader are harder to come by. This is the effect of the earthquakes in Japan. There are various companies who are dealing with the same issues, including Sony, and Apple. This has only just begun with Barnes and Noble since Japans material suppliers stopped taking orders which effected the production. The Nook is assembled in China but receives parts from various countries. |

SWOP Analysis
Reference to the S.W.O.P Chart in the appendix, exhibit 1 S * Strong brand equity * Cheapest tablet device that can run Android * Have brick-and-mortar stores * Allow book sharing between Nook's users * Strong internet browsing capacity | W * Highly dependent on the U.S. market * Do not have text-to-read features * Low battery life comparing to other dedicated e-readers * Lack of 3rd party application developers | O * More supports to 3rd party developers to encourage more application development * Capable of playing music and videos * Can expand to other product other than eBook such as online music store or online app stores * Book sharing open doors for peer-to-peer marketing | T * Strong competitor: Amazon and Apple * Lack of a strong identity: Nook Color is not a dedicated e-reader reader (Kindle) and is not a full-fledged tablet (iPad) device. * Internet piracy and illegal downloading of eBooks can hurt sale. |

Being a Banes and Noble product, the Nook Color automatically enjoys a strong brand reorganization. Of all the current e-Readers, the Nook Color is the only touch screen device that uses the Android operating systems. This allows users to browse the internet, play music, and video and run applications. Therefore, the Nook color is very appealing to heavy internet users. At $249, The Nook Color have a very reasonable price entry point for a device that not only allow book reading but also internet browsing and social networking via applications.
Another unique feature of Nook Color is the Barnes and Noble book sharing services. This service allows user to trade and lend e-books to one another. It is expected that customers will recommend this products to their friends and family so they can expand their reading circle.
The Nook color has some weaknesses that need to be aware of. First of all, Barnes and Noble is not an international brand. Therefore, the Nook sale can only based on the US market. Moreover, because of the recent popularity of eBooks and tablet devices, there are many strong competitors such Amazon, Apple and Sonny. All of them have a strong brand and are leaders in technology.
Not using e-ink technology, the Nook Color suffer glares in direct sunlight and have much shorter battery life comparing to other e-reader. This weakness makes the Nook Color unfit for customers who travel extensively.
There are multiple opportunities that we can explores to improve the performance and sale of the nook color. The unique book sharing features, if employed correctly, can encourage mouth-to-mouth marketing. This form of marketing has high conversion rate and is free. In addition, the capacity of the Nook Color to browse the internet, play music, video and run Android application opens doors for multimedia products other than eBook such as interactive games, music and movies.
If focusing on supporting 3rd party developer, Barnes and Noble can improve the quality and quantity of applications available for the Nook Color. Such improvement will surely benefit the sale of the product.
Modified SWOT Analysis IPad | Strengths | Weaknesses | Light weightLargest app store: has Kindle App and Nook AppTouch screenStrong Brand ReorganizationPowerful tablet device, have lot of memory. | Very High Price Harder to read in the sunlightNo flash support |

The iPad 2 is a unique device designed by Apple. Among its strengths are its portability, mostly due to its lightweight size (1.33 pounds), small depth (0.34 inches) while displaying information on a 9.7-inch screen. Its memory storage holds up to 64 gigabytes, allowing for the storage of various applications (apps) from professional to personal. But at the same time the iPad 2 does come with its deficiencies, like it is much harder to read in the sunlight. With its starting price twice that of the Nook color and 4 times that of the Kindle, using the iPad as entry point to eBook is very expensive. Kindle 3 | Strengths | Weaknesses | Cheapest eReader Light weightUses E-ink technology. Work great under sunlight.Have a big database of eBook from AmazonFull physical keyboard Established BrandHave text-to-speech featureVery long battery life (up to 2 week) | No touch screenNo color images (for picture books)Disorganized file systemVery limited internet browsing capacityNeed external light to read in the dark |

.The Kindle 3 uses a technology called E-ink that uses very little power to reader images on the screen. This technology also allow in direct sunlight without having to worry about sun glares. This device is also the lightest one and can easily be held on one hand for extended reading session. With its 7-day battery life (2 weeks if Wi-Fi is turned off), Kindle is also appealing to readers to travel extensively. As a dedicated reader, the Kindle has no color screen and no touch screen. Users who wish to browse internet will find this product dissatisfactory.

Sony PRS-505 | Strengths | Weaknesses | Easy to useUser e-ink technologyStores mp3 files for play backSuper light and thinExpandable memory3 hour charge timeLong battery life | No keyboardNo purchase a/c adapter for charging Do not have lot of software supportNo touch screenLower database of eBook |

The Sony PRS-505 is one of the fastest growing tablets in the United States. It has a super light and thin body but at the same time can hold just over a 100 different books (extendable flash memory). If there is a book that you would like to have then just download it (it takes less than 20 seconds to download a book). Another great feature is the Sony PRS-505 has the fastest recharge time of all the eReader/tablets at just about 3 hours and will last roughly a week and a half. But the objects weaknesses might be its undoing, with no keyboard the user has no way of making annotations into the book. Loading larger pdf files slows the Sony PRS-505 to a craw and like the Kindle before there is no touch sensitive screen for a more real book feel.
Marketing Strategy
Market Segmentation Analysis
E-book sales has been increasing exponentially in the last few years. According to Pew Research Center, the share of U.S adults who owns an e-book reader of some kind has doubled since last year ( from 6% to 12%).(Purcell, 2011).
Traditionally, the market segment for e-readers has been spited into two major segments. The Baby Boomer generation (55 and up) are going for a dedicated reading devices (Kindle and the Nook). Mean while, the Y generation is more likely to buy a tablet product ( Ipad or Xoom). The Nook Color; however, blurs the line between traditional E-reader and a tablet device. We are seeing a bigger market share for Nook Color.
Study shows that Texas is the biggest E-book consuming state in the USA. 8.57% of ebook sale nationwide goes to Texas. Therefore, it is safe to expect an even bigger demands for e-reader in Houston area. (Coker, 2011).
In term of gender, the population of USA adults who own a e-reader device split fairly evenly between male and female (12% to 11%). As of May 2011, 15% of Hispanic population own an e-reader, followed by 11% of Caucasian and 8% of African American. Consumer who has a college degree and high house-hold income are also more likely to own an e-reader. (Yarter, 2011).
Overall, the highest rate of tablet device and e-reader ownership are Hispanic Adult with the house hold income of $75,000 a year.
Consumer Purchasing Behavior
Research done by Mediamark indicates that the owners of e-readers are more likely to have higher income and well educated. Interestingly, they are also far more likely to be heavy internet users. The Nook Color comes with a stable internet browsers will hit the sweet spot of this target market.
About 14% of adults response that $199 is the highest price that they would pay for an e-readers without internet access. Therefore, the current price point of the Nook Color, which is $249 is sustainable.
With lot of access to children book and interactive books, the Nook Color make attractive gifts for children as well. Internet Marketing Trends show that 16% of parent with kids under 18 own an e-reader device. This is one market segment that the Nook Color can tap into.
References
Coker, Mark. (2011). Where US e-book buyer live.
Smashword, Retrieved from http://blog.smashwords.com/2011/03/where-us-ebook-buyers-live.html
Yarter,Jennifer. (2010). Demographic of Kindle and other eReader users. Florida Research Group, Retrieved from http://floridaresearchgroup.wordpress.com/2010/02/16/demographics-of-kindle-and-other-ereader-users/
Purcell, Kristen. (2011). E-Reader Ownership Double in 6 Months. Pew Research Center, Retrieved from http://www.onlinemarketing-trends.com/2011/07/us-consumer-patterns-tablets-vs-ereader.html…...

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