Analysis Of Factors Affecting The Marketing Of Waterstones Books
Political
Political and legal factors contribute immensely towards the regulations of Waterstones. Certain political aspects can affect the spending power of customers within book retailing industries such as Waterstones,. Legislation with in certain countries can influence Waterstones performance especially within the Uk and Ireland. Credit facilities supported by the government fell as the economic downturn(recession) in 2007 had effected the revenue levels and therefore decreased booksales. It is likely that taxes had increased due to the high unemployment levels,therefore people has less disposable income to spend. “Education is mainly affected as the credit facility on textbooks became reduced and tuition fees at university increased”which leads to lower sales of printed books. Overtime government agencies implement different strategies forcing businesses to alter the way in which they operate such as in 1997 when NBA was outlawed,when discounting became the way forward.
The government introduced this high discounting policy and it had major effect on the strategic marketing Waterstones. This is due to the increased pressure of amazon and supermarkets. As taxes fluctuate,trade discounting became more difficult as taxes are different among different countries so it made it difficult when trading and also due to the increasing pressure of the world wide web.
Economic
Economic factors play an immense role within all organisations. They contribute enormously to both the profit and losses of waterstones. These economic factors are essentially out of control of waterstones but it is clear that they motor them effectively. Waterstones is highly dependant on the UK market. One of the major concerns economically of waterstones is the high unemployment levels which decreases the demand for books and affected the demand to manufacturing costs while making the books. ‘Economic uncertainty and under inflation pay increases in both the public and private sector would result in less spending “Therefore is it shown that the Waterstones was affected by the recession.
Technological Factors
As for the Technological impact on Waterstones, amazon. com was leading from the beginning in (1996) by adapting the new technological ways of selling and advertising the books and getting it out to the customer. Waterstones in that time didn’t adapt the idea from amazon, which they could have used especially with Waterstones reputation in UK, they could’ve opened their own websites and establish the same ideas as amazon and maybe get overstep amazon in the UK. Using online sales points was cheaper to run. Waterstones has over 300 stores in Britain which has to accrues a monthly overhead payments, they had to produce a major book selling numbers to compete with amazon. The essential effect was in 2008 when the e-readers arrived to the UK. Waterstone did a good move by providing the Sony e-reader in the bookshops but amazon in 2009 launched their own device “kindle “and it was unique as it allows to download any book from anywhere via a mobile connection. Most of the other leading book sellers in UK followed this move from amazon and established their own devices such as “The Nook” for Barnes & Noble and “Kobo” for WHSmith. Waterstones adopted the revolution by selling the amazon e-reader “kindle” in their 300 bookshops from May 2012. The decision gave amazon an obvious increase in the online book selling.
Social factors
Social elements that can influence a company including different populations, people’s various understandings of products from other countries and cultures, different age groups and employment levels. In this case, Waterstones as a book retailer, the purchases can be affected by external social factors. Although almost all age groups read. Different generations have different reading habits, like the younger people are tend to buy books related to their work and studies while older people may prefer books are more relaxing and newspapers. As well as the rapid development of internet and technology changed people’s lifestyle, younger people are more familiar with e-books and e-commerce than older, that cause the reading devices take a big part of book selling chain. In UK most of people can access to Internet. From 2008 to 2014 the UK publishers’ digital sale rise from 100 to 563. It present that people changed their reading habits because of the Internet development.
Also old people have more stable and regularly book purchasing habits than young people. The reading time could also be a factor that influences book purchasing. How much time consumers would like to spend for books and what time of a day they would like to read. People’s opinion changed in past few years. And their taste of books changed as well. They were likely to consider more aspect before their purchases. Moving us ever forward from the traditional customers focused on transactions to the authentic customer, where purchasing is based not just on cost, but also is a reflection of their personal beliefs, values, behavior and emotions.
People from different employment levels have different incomes can impact their reading habits as well. Supermarkets entered the book market after the NBA (Net Book Agreement). Waterstones had been one of the main booksellers to discount book prices before this starting in 1991. Supermarkets tended to focus on a small range of books that were likely to sale in high volumes. That could attract more people from high-street book retailers and suit for people from different income levels.
Legal factors
The NBA (Net book agreement) was a fixed book price agreement in the United Kingdom and Ireland between The Publishers Association and booksellers which set the prices at which books were to be sold to the public. The agreement was concerned solely with price maintenance. It operated in the UK from 1900 until the 1990s when it was abandoned by some large bookshop chains and was then ruled illegal (Net Book Agreement). The NBA makes Internet booksellers and supermarket had better discounts than high street retailers. That brings dangerous to high street booksellers like Waterstones. Waterstones responded by cost cutting through centralizing book purchasing and cutting staff. Nowadays, there are no strict limits about prices from online booksellers.
Five forces
Threat of new entrants
The Uk and ireland book retailing industry is constantly being challenged by new entrants into the market may that be technological or high street retailers. In the past few years waterstones and many other book markets have had to implement different strategies in order to keep up with new developing markets such as online retailers and supermarkets. Although these new industries offer threat to book retailers such as waterstones,it is still one of Uk best known book retailers. Waterstones are aware of these new competitors and have increased their promotional activities,taking part in events and are associated with different literacy fairs in order to increase sales and promotion. Waterstones values their identity by increasing their brand awareness.
Bargaining power of suppliers
The publishers are waterstones main suppliers and so they value and honour their contribution to their store. Since the development of new entrants waterstones is anxious to support new up coming publishers and values existing publishers and their contribution to the literacy world.
Bargaining power of customers
Customers are the main asset to any business and drive change within organisations. Customers are the main targets within every organisation and in turn they can affect your price increases or decreasing. Although Waterstones is a customer oriented market with the division of different market segments within the literacy environment,they may face weak buyer power. The ability to meet the needs of every customer will in turn increase profits.
Threat of substitutes
Technology has caused major impacts for Waterstones over the past number of years. The development of ebooks,kindles,ipads etc say waterlines forcing the development of new up to date marketing strategies in order to sustain profits and increase demand for their books. Waterstones saw these new advanced methods of literacy a threat and in turn adapted to the changing environment by selling their books online and increasing bargaining power. “Digital sales had grown from 100 million in 2008 to 563 million in 2014”
Competitive Rivalry
Water stones has many competitors all offering similar products. It is important for water stones to become innovative when competing and adopt certain strategies to sustain profitability. When adapting strategies they should also focus on effective communication with both employee and suppliers and include them.
