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Case studio Portfolio
The following case studies provide lessons into critical success factors in book publishing. The reader may believe that they are not all relevant to their country at the present time. Such views should be made very cautiously as most developments in book publishing have taken place as a result of new entrants into publishing. Most of these entrepreneurs, viewed, at the time, as outsiders to the book publishing industry, saw book publishing as the profitable medium for achieving their business goals.
In order to compete with these entrepreneurs, book publishers need to stay ahead by exploiting distribution channels, and customer and author relationships, for joint profit, by identifying and supplying new areas of demand for books. Book publishing is not an island either nationally or internationally!
Other lessons concern the skills needed in successful book publishing, Sales or marketing skills are essential. A balanced team is needed which combines sales, creative and business and organisational skills.
Authors must select publishers who will best market their titles over the longer term. Publishers must demonstrate to these authors that their literary skills are complemented with commercial and marketing skills, and more importantly, by success. However readers may note that in all cases the publisher identifies a profitable market gap rather than relying on authors to submit manuscripts.
Case study 1
A teacher worried how few little young children read books. She carried out a personal study of story books available for pre-school children. She found almost no small short storybooks at affordable prices and decided to develop cheap simple books for them to read.
As a teacher she insisted that the texts would also have an educational value as well as being enjoyable to read. Storylines and illustrations would be simple and friendly. As the books would be aimed at young children, the books would be small enough for them to hold when reading e.g. a bedtime story. To make them interesting the books would be in full-colour even though most children’s books at the time were printed in single or two-colour. The books had to be strong, as they would be subject to rough treatment by the young readers. Case binding was therefore essential. Authors and artists would be commissioned on a fee basis rather than on a royalty basis. Both had to work to a strict brief and style.
The teacher wanted children to learn to enjoy reading. Repeat sales were essential. If the children enjoyed the books, they would try to persuade their parents to buy more books. If the books were affordable, parents would encourage this. As children became older, they could buy the books with pocket money. The teacher realised that parents would be unlikely to be frequent visitors to bookshops but would visit toyshops under pressure from their children. She decided to sell through toyshops and general stores.
She approached a local printer. Together they devised a small format, which would be economic in both printing and binding. All books would be books as a series and in the same format. Bookshops would be sold a range of titles; not single titles in order that children would have a choice of repeat purchases.
Over a period of years the series became very successful and has remained a huge success for several decades. It is now one of the strongest brands in many countries. Books continue to be produced locally. Many publishers have sought to compete by seeking cheap printing sources in remote parts of the world where labour costs are cheaper than European printing. Few have found ways of competing with these publishers whose books sell at the price of a Greeting card, a packet of cigarettes, or a hamburger, the cost of 3 newspapers. a metro journey
Now part of a public company, the company’s main failure occurred when sought to make changes with new formats and more modern illustrations. Lessons
A refuge from another country started to sell books in street markets. Finding this profitable and noticing that publishers paid little attention to marketing old titles or backlists, he started to buy overstocks from publishers at low prices. People said that he was a brilliant salesman.
After a few years successful trading he found that few quality overstock titles were becoming available for him to sell. He decided to create his own titles.
He recruited two people to join him. One was the chief book buyer for a major national department store who would take charge of creating the books and for administration, the other a marketing specialist with vision and sales contacts.
Our entrepreneur used his selling skills to persuade printers from his home country to print for him; He offered large volumes in standard formats and in return received fantastically low prices and long credit. Payment would be in part by barter.
The project became a huge success. Books, sold through retail chains rather than through bookshops, were for the first time available at affordable prices in full colour. People who did not frequent bookshops became book buyers. The subjects were confined initially to cookery, gardening and art.
The entrepreneur sold the company to an international group who was seeking an expert to rationalise their book publishing interests that they had acquired. Our entrepreneur did not enjoy being employed and had to attend numerous meetings. The company’s overheads and bureaucracy increased and the company expanded its product range. His fellow directors on the board of the parent company had very different backgrounds and understood little of the skills needed to succeed in selling in the real world outside corporate life. Bored by the administrative chores, the entrepreneur later resigned from the directorship of the public company. He later started again using the same principles and recruited a number of his former staff. The second firm was later acquired for the second time by the same public company for a vast amount of money with perfect timing, He is now the major shareholder in that public company, one of the largest, most successful media groups in the world. He runs a charity fund to assist publishing in young economies. Note: I am proud and grateful to have been trained by this entrepreneur and later to have helped his companies. Lessons
A motorist was frustrated that he could not find any manuals explaining how to repair his motor car. The only manuals were those produced by manufacturers and these were very technical and aimed at garage mechanics. On investigating further he found that this was true for most car manufacturers and that many other motorists found this a problem. Garages did not want to encourage motorists to carry out their own repairs. He decided that there was a huge potential demand and that he should take advantage of the potential.
He started to publish car repair manuals for individual car models. They were strongly bound because the books would be kept in the car. The price was not the key issue as the purchase was linked to the investment in the car and the potential saving on carrying simple repairs. Car repair experts were commissioned to write the books for a fee. Photographers were commissioned to take photographs.
He obtained statistics of new car sales by model and of car registration of older second-hand models. From these statistics he was able to forecast which books would be most saleable. Motorists who owned popular older cars would be more likely to buy.
He sold the titles direct to motor accessory shops, general stores and later to bookshops. As new card models entered the market, he quickly produced repair manuals. His customers knew that any motorist seeking a repair manual could find the appropriate book. They in turn were encouraged to carry a wide range of his titles. His sales force called frequently on customers to check stock levels. His warehouse delivered the books quickly to the shops thus reducing the stock risk.
His books become a well-known brand. Competitors tried to enter the market but never with great success. He took no involvement in the activities of the local Publishers’ Association believing that he was in the car market. The company, two decades later, is a public company quoted on the stock exchange. Lessons
Two employees at the offices of the local ministry observed that the ministry spent a large amount of manuals on training conferences and training manuals. As experts themselves they were invited to speak at such conferences. They came into contact with the key speakers at such conferences. Conference proceedings were often published after the end of each seminar.
They noticed that the same people attended the seminars. They were able to obtain lists of people who had been invited but did not attend, and of people in similar jobs throughout the country. As Guest University lecturers they knew which universities specialised in their area of expertise.
They quickly realised that a market opportunity existed. They knew the top experts who could be authors. They knew many of the potential readers. They started to publish seminar manuals and books for professionals and for university students in that field. The manuals were sold by direct marketing to these customers.
They found the publishing world increasingly interesting and decided to enrol on industry publishing courses under government –funded schemes for small businesses. They started to publish books for sale through bookshops They bought the publishing titles of two competitors at very low prices. They discovered that books were more price-sensitive than manuals. Bookshops only ordered when they received an enquiry from a customer. Stock levels rose. They enjoyed the cultural world of publishing.
A consultant who had advised on their acquisitions persuaded them to focus on their customers and on manuals and conferences. Books had a lower perceived value than manuals; the directors knew far more about the potential customers than bookshops. Thus they should sell direct.
They accepted the advice, ceased their book publishing activities, and concentrated on learning direct marketing techniques. They run specialist conferences and publish specialist manuals direct to delegates and other experts. They operate 100 kilometres from the capital city and have no contact with book publishers. Rather they focus on their council and student customers, and on running conferences. Their customer database is a top priority. Lessons
X was one of the major literary figures. He became a book publisher. Top authors were delighted to be published by X. The books were reviewed by the literary reviewers of the national newspapers and sold only through bookshops.
Books were published when the publisher was satisfied with the editorial quality.
X gave personal attention to all his authors. Each work was perfected before publication. High literary standards were essential. X and several other literary figures became the centre of the publishing industry.
These publishers became brand names in literary circles. Paperback publishers started to buy the paperback rights of their titles. These publishers became more and more dependent on the paperback publishers’ advances. With little attempt to expand the hardback market, print runs of hardback tiles started to fall due to their poor marketing skills.
These imprints are internationally known in publishing circles but are not brands except to a minute literary market. Most have been acquired or rescued by international publishing groups. Their sales and profits are minuscule by comparison with most book publishing companies that have started in the last 30 years.
X met the same fate. An international publisher later saved it, Lessons
Company Z is an international book publisher selling consumer books through the book trade. Every year the stock exchange expects ever-higher profits. Their profits are dependent are dependant on finding several new best-sellers for which vast advances are paid to authors and for which large promotional budgets have to be spent. The company has prestigious offices in the capital city, and a large automated warehouse. It has offices in 3 other countries. Every year the company has to publish a larger number of titles to pay for the overheads.
The company is worried about the erosion of territorial rights, the growth of the Internet bookshops. It has a constant problem of paying for its high overheads and for the declining margins caused by lower print runs and by demands from bookshops for higher discounts. In addition the bookshops expect to return all books not sold after 90 days, and to discount book prices.
A further problem is that its share price has fallen consistently over several years despite increasing profits. Another media group made a hostile take-over bid recently but later withdrew its interest. The share price has fallen further since the hostile take-over bid. Lessons
An accountant who had studied for 5 years to pass his professional examinations identified a need for intensive training sessions for accountancy student about the sit the 3 stages of their examinations. Due to the pressure of time many students studied at home in the evenings. He commissioned the writing of textbook manuals for each examination that the students had to study for. The manuals would attract further students to his training seminars as well as allowing him to increase turnover without increasing his classroom overheads. All customers were attracted by regular advertisements in professional magazines. Manuals were supplied as part of an overall sales training package. Only later did the company start to supply small quantities through the bookshops
The formula became very successful and the company was floated on the stock market. It expanded its operations into the field of legal training. It later acquired a well-known educational book publisher. The shares sell at much higher profit multiples to most other book publishers Lessons
Note: the message here is a marketing message, not about solidarity among financial experts!
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