Lot will be said and written about the nook and Kindle price war. Success of iPad will be quoted as the reason for the price cuts. Comparisons will be made to razor and blades and why the reader should be free. Will the price cut increase footprint and convince customers who would have bought iPad to buy nook or Kindle instead?
Let us ask the key question on product positioning for nook and Kindle:
What job will the customer hire the product for?
Kindle is applying for the job of, “Easy to read, even in sunlight. Carry all your books with you.”. nook is applying for the same job as well. In other words nook and Kindle are paper book replacements. Yes there are social features, and free books in stores (nook) but these are add-ons.
To some segments this is the job they are hiring for. As Mr.Bezos said, this is for serious readers to read without distractions. He also said that less than 10% of reading population are serious readers. For this segment that has decided on the job, they will choose on cost to hire for that job. So the price cut by nook threatened to take away customers who would have bought Kindle hence Amazon had to respond with its own price cut.
Will the price cut make the product attractive to segments that are not looking to hire for the job of easy reading? The answer is mostly likely no.
What job is your customer hiring your product for?