Waterstones Marketing Strategies

Table of Contents

Introduction3

The Changing Environment4

Challenges and Opportunities for the Waterstones5

SWOT Analysis of Waterstones6

Alternate Marketing Models for Waterstones7

Conclusion10

References11

Waterstones Marketing Strategies

Introduction

The Waterstones book retailing company is facing an uncertain future with a variety of challenges, including new media habits, especially of the younger generation, adaptation to new technologies and a demographic shift. These challenges, in general, have led to slower or negative growth in readership, sales, and net incomes to the publishing companies and to the book retailers.

Several marketing innovators such as Waterstones have taken advantage of the changes and essentially have redefined the meaning of “the book industry.” It is not easy to define the business of Amazon because its businesses cover many areas. However, one of its main revenue sources has been “book” sales and related businesses such as sales of the e-book device. The new Managing Director. James has experience of the sector and is Managing Director of his own (profitable) book retailers (Daunt Books with 7 retail outlets in London). Waterstones - the current situation

Waterstones were part of HMV group which was in financial difficulties throughout 2010 and into 2011. In June 2011 Waterstones were sold to Alexander Mamut (a Russian Oligarch) for £53 million. He immediately appointed James Daunt

For many years a key feature of Waterstone's marketing strategy has been their three for two offers whereby if a customer buys 3 books the cheapest is free. James Daunt's first decision was to axe the vast majority of 3-for-2s as a symbolic statement of intent (a few such promotions will carry on for things like cookbooks). The 3-for-2 promotion is based on supermarket tactics of piling things high and selling them cheap - an approach which is anathema to Daunt.

The Changing Environment

The rapid expansion of the internet triggered a series of changes that affect the publishing industry. According to the Internet World Stats (2011), the penetration rate of the internet was 78% in 2010, which is much higher than the global penetration rate of 30%. Although the internet usage in developing regions is lower than in developed regions, the gap is narrowing rapidly.

Industry Analysis

SWOT Analysis of Waterstones

Strengths

Clear strategy for Retail sales

Good customer service.

Fast delivery

Unrivaled knowledge of retail commerce so it's likely developments.

Reputation on selling consumer goods on the retail

With loyalty, ease of purchase (52% sales => used)

Collaborative selection

Client relationship / business

Little overhead (low cost of inventory, maintenance, personnel)

Leading position in retail sales, brand image

Numbers of links to important site

Relationship with publishers, and other online retailers.

Supply Chain performance.

Weakness

Scandal payments from publishers for their suggestions on books

High marketing costs for the sector

Low financial position (long-term debt).

Low profitability 

Opportunity

Wider range of products        

Growing number of online e Readers with greater access to the Internet and greater security transaction. (In the sector about 25% growth in 2003)

International presence without excessive investment.

Large database of customers.

Threads

New competition from traditional sellers   

Repurchase 60% ??of its master distributor for its main competitor. Hence an increase in distribution costs.

PESTEL Framework

Political Factors

Waterstone is a British based book retailer which operates in United Kingdom and Republic Of ...