Quercus – Market Devlopment

Quercus is a book publisher that recently announced sales of £15 million. What – you have never heard of them? Well perhaps you would be more familiar with their core product: Steig Larsson’s ‘Millenium Triology’, which starts with ‘The Girl with the Dragon Tattoo’. As you are already to be likely aware of,  the trilogy has taken Britain by storm and a film adaptation, featuring Daniel Craig, is set for release later this year. But the trilogy’s success in Britain was preceded by a favourable reception in Sweden; Quercus, therefore, used a marketing strategy similar to what Ansoff’s Matrix would define as market development – finding new customers for existing products – by purchasing the English language publishing rights.

The benefits of such approach appear simple: the book had over 3 million sales in Scandinavia and even out sold the Bible in Denmark – so expanding sales abroad would seem an obvious move. But in fact, particularly as market development is viewed as high-risk, this proved to be a strategy hard to implement; it required strong leadership to negotiate with retailers and a tactical approach, which meant any form of marketing plan would be useless.

The critical issue with the majority of market development strategies are the difficulties associated with customers who do not recognise the product’s brand, in this case the author’s name. Not only does it make Quercus dependant on an effective promotional mix to create awareness, it weakened their negotiating power with major customers. As outlined by Michael Porter’s Five Forces, due to the high availability of substitutes – new books are constantly available for retailing – Quercus’s customers, high-street retailers, have the upper hand in negotiations. For instance, one retailer refused to stock the book after claiming their customers do not like authors with ‘funny’ names. Moreover, the books’ dark themes increased the degree of risk  that both stakeholders are exposed to, within the business to business distribution channel. This meant that there was no prior-reputation to exploit in order to gain a foothold in the market.

However, thanks to some desperate, ‘direct marketing’ – if you can consider giving away free copies directly to consumers a strategy – the books were released in 2008. Now, some what inevitably, the up-coming Hollywood film adaptation highlights further potential through diversification of the core product into new mediums, with the same aim of increasing sales revenue. Despite this, particularly as the books are published post-humourously, the product life cycle is likely to limited. Hence, Quercus now looks to be using the Millenium Trilogy as a Cash-Cow to fund the publication and promotion of the next big, Swedish hit: ‘Three Seconds’.

© Joshua Blatchford author of Manifested Marketing 09/08/2010

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