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The Market Demand for Books in the U.S.: 2006-2011. Albert N. Greco Professor of Marketing Fordham University Graduate School of Business Administration New York City and The Institute for Publishing Research, Inc. 201-439-1839 [email protected] November 2008. Areas of Research.

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The market demand for books in the u s 2006 2011 l.jpg

The Market Demand for Books in the U.S.: 2006-2011

Albert N. Greco

Professor of Marketing

Fordham University

Graduate School of Business Administration

New York City

and

The Institute for Publishing Research, Inc.

201-439-1839

[email protected]

November 2008


Areas of research l.jpg
Areas of Research

Book Publishing Industry

  • Publishers (Editorial; Sales/marketing; Intellectual property issues; Exports and imports; Market/consumer demand issues)

  • Retailers (B & N; Borders; BAMM; Mass merchants; Price clubs; etc.)

  • Distributors (B & T; Ingram; Hudson News; etc)

  • Libraries (Public; School; College/university; Special libraries)

    Scholarly Journals Publishing

    Scholarly Communications

    Marketing Entertainment (Industries)

  • Newspapers and Magazines

  • Motion Picture Industry

  • Broadway and the Performing Arts

  • Toys, Games, and Theme Parks


Market demand research methodology l.jpg
Market Demand Research Methodology

U.S. Department of Commerce Bureau of the Census

U.S. Department of Education U.S. Department of Labor

The Congressional Budget Office National Endowment For the Arts

International Trade Administration B.E.A.

The Federal Reserve Bank S.E.C. Reports

Quarterly Reports Annual Reports

Conference Calls Interviews/Visits

Wall Street Analysts’ Reports Publishers Weekly

Subtext The Wall Street Journal

The Financial Times The L.A. Times

The Washington Post CNBC

The New York Times Bloomberg

Detailed Data Since 1982ARIMA Models


Marketing data major trade book publishers fy 20007 2008 millions l.jpg
Marketing Data: Major Trade Book Publishers FY 20007-2008 ($ Millions)

U.S. % of U.S. World U.S. %

Sales Market Sales World

Share Sales

Random House $1,266 13.2% $2,388 53%

Penguin 1,015 10.6 1,692 60

HarperCollins 970 10.2 1,388 70

Simon & Schuster 730 7.6 886 82

Hachette 515 5.4 515 100

Wiley 390 4.1 469 83

Scholastic 390 4.1 422 92

Holtzbrinck 225 2.4 350 64

HM/Harcourt 180 1.9 197 91

Rodale 193 2.0 193 100

Thomas Nelson 190 2.0 190 100

Sterling 150 1.6 150 100


Marketing data juvenile book publishers net publishers revenues million l.jpg
Marketing Data: Juvenile Book Publishers (Net Publishers’ Revenues; $ Million)

2007 2006 % Change

Scholastic $432 $226 91.1%

Random House 320 322 -6.2%

HarperCollins 228 225 1.3%

Penguin 224 223 0.4%

Simon & Schuster 160 163 -1.8%

Disney 80 84 -4.8%

Candlewick Press 65 60 8.3%

Little, Brown 52 47 10.6%

Houghton Mifflin* 50 53 -5.6%

Holtzbrinck 27 25 8.0%

Harcourt* 20 23 -13.0%

TOTAL $1,658 $1,451 14.2%

*Merged in 2008


Market demand data forecasts l.jpg
Market Demand Data Forecasts

Determine “Top Line” Forecasts for Books in the U.S.

Revenues Projections Projections Release

Estimates Release Date Date: U.S. Department

of Commerce

2004 AG: Jan. 2004 Com. Dept. Dec. 2005

2005 AG: Jan. 2005 Com. Dept. Dec. 2006

2006 AG: Jan. 2006 Com. Dept. Dec. 2007

2007 AG: Jan. 2007 Com. Dept. Dec. 2008

2004- 98.4% of

2006 Commerce’s data


The law of supply and demand l.jpg
The Law of Supply and Demand*

Supply and demand are the forces that make market economies

work.

Law of Supply:

A microecnomic law stating that, all other factors being equal, as

the price of a good or service increases, the quantity of goods or

services offered by suppliers increases or decreases.

Law of Demand:

A microecnomic law that states that, all other factors being

equal, as the price of a good or service increases, consumer

demand for the good or service will decrease and vice versa.

* There are exceptions; e.g. gas used in cars, etc.


Supply l.jpg
Supply

A fundamental economic concept that describes the total amount

of a specific good or service that is available to consumers. Supply

can relate to the amount available at a specific price or the amount

available across a range of prices.

Each product will have its own supply and demand patterns

based on price, utility, or personal preference. If consumers

demand more of a product and are willing to pay more for it, then

producers will add to the supply.

As the supply increases, the price will fall given the same level of

demand.


Demand l.jpg
Demand

An economic principle that describes a consumer’s desire and

willingness to pay a price for a specific good or service.

Holding all other factors constant, the price of a good or service

increases as the demand increases, and vice versa.

Companies spend money to determine the amount of demand

that the public has for its products and services.

Incorrect estimates will either result in money left on the table if it

underestimates demand OR looses money if it overestimates

demand.


Market demand media usage hours per person per year above the age of 18 selected list l.jpg
Market Demand: Media Usage (Hours Per Person per Year Above the Age of 18; Selected List)

2006 2007 2008 2009 2010 2011

Consumer

  • Books 110 109 109 108 108 108

  • Magazines 125 125 126 124 124 122

  • Newspapers 178 171 164 159 155 152

    Videogames (+12) 76 85 101 116 125 131

    Broadcast TV (Net/Ind.) 650 639 639 642 643 644

    Cable TV (Basic/Prem.) 962 973 964 964 964 958

    Internet (+12) 182 189 193 195 197 197

    Mobile (Downloads) 12 15 19 24 29 32

    Box Office 12 12 12 12 12 12

    Total media 3,499 3,496 3,493 3,493 3,509 3,502

    Source: The Statistical Abstract of the U.S.


Market demand media expenditures dollars per person per year above the age of 18 selected list l.jpg
Market Demand: Media Expenditures the Age of 18; Selected List)(Dollars Per Person per Year Above the Age of 18; Selected List)

2006 2007 2008 2008 2010 2011

Consumer

  • Books $99.56 103.60 105.52 107.96 110.75 114.03

  • Magazines 44.46 44.35 44.42 43.97 44.31 43.10

  • Newspapers 49.23 47.74 45.78 44.61 43.85 44.20

    Video Games 33.91 43.91 55.77 67.60 75.36 80.76

    Cable TV (Basic/Prem.) 306.60 330.93 354.51 378.15 400.78 422.82

    Internet 54.06 55.45 59.53 63.88 67.42 70.65

    Mobile 12.33 15.66 19.4 23.42 27.22 30.70

    Box Office 36.36 38.01 38.16 37.66 38.80 39.29

    Total all media 813.19 851.57 903.30 950.64 998.07 1,038.70

    Source: The Statistical Abstract of the U.S.


Market segmentation l.jpg
Market Segmentation the Age of 18; Selected List)

Refers to the aggregation of prospective buyers

into clearly defined groups (i.e., market

segments) that have common wants and needs

and will respond similarly to a marketing

“action”.


Market demand shock and market anomaly l.jpg
Market Demand Shock And the Age of 18; Selected List)Market Anomaly

A sudden surprise event (sometimes called a “Black

Swan”) that increases or decreases demand for goods or

services and has an impact on prices.

A positive shock increases demand.

A negative shock will decrease demand


Market equilibrium l.jpg
Market Equilibrium the Age of 18; Selected List)

The state in which market supply and market

demand balance each other and, as a result, prices

become stable. Generally, when there is too much

supply for goods or services, the price does down,

which results in higher demand.

The balancing effect of supply and demand results

in a state of equilibrium (which is often not

achieved).


Market equilibrium15 l.jpg
Market Equilibrium the Age of 18; Selected List)

The equilibrium price is where the supply of

goods and services matches demand.

Is there “market equilibrium” in the U.S. book

industry?


Supply u s new book title output l.jpg
Supply: U.S. New Book Title Output the Age of 18; Selected List)

2003 2004 2005 2006 2007

Agriculture 1,535 1,501 1,483 1,426 1,298

Arts 8,431 8,779 8,762 9,201 9,423

Biography 9,837 9,765 8,904 11,271 10,615

Business 7,614 7,905 7,885 8,719 7,651

Computers 8,955 6,928 6,092 5,472 5,709

Cookery 2,590 2,857 3,062 2,705 2,673

Education 7,562 7,135 6,951 6,449 7,335

Fiction 24,666 38,832 34,927 42,777 50,071

General Works 2,195 4,266 2,017 2,078 2,346

History 13,192 14,191 12,686 15,241 14,764

Source: R.R. Bowker


Supply u s new book title output17 l.jpg
Supply: U.S. New Book Title Output the Age of 18; Selected List)

2003 2004 2005 2006 2007

Home Economics 1,628 1,760 1,634 1,755 1,682

Juveniles 33,469 37,976 32,112 30,395 30,063

Language 6,899 6,088 5,669 5,134 4,846

Law 4,675 4,509 5,468 5,359 5,380

Literature 6,493 7,972 6,297 8,227 9,796

Medicine 10,552 11,834 11,688 10,931 10,720

Music 3,740 4,859 4,076 3,545 3,407

Personal Finance 402 552 542 582 538

Philosophy/Psych. 10,040 11,410 10,556 12,961 12,635

Poetry/Drama 7,007 9,891 9,414 10,700 10,258

Source: R.R. Bowker


Supply u s new book title output18 l.jpg
Supply: U.S. New Book Title Output the Age of 18; Selected List)

2003 2004 2005 2006 2007

Religion 14,517 21,669 16,785 19,854 18,956

Science 12,962 12,639 12,626 12,655 12,872

Sociology/Economics 23,530 23,222 23,750 27,675 24,596

Sports/recreation 6,323 6,196 6,438 6,666 6,363

Technology 7,142 7,753 7,138 7,262 6,858

Travel 4,172 5,304 4,941 5,376 5,793

Subtotal 240,098 275,793 251,903 274,416 276,649

POD/Short Run/Misc. 26,224 19,730 30,597 21,936 134,773

Total 266,322 295,523 282,500 296,352 411,422

Annual % Change -- +11% -4.4% +4.9% +38.8%

Source: R.R. Bowker


Supply u s new book title output 2007 l.jpg
Supply: U.S. New Book Title Output: 2007 the Age of 18; Selected List)

New Annual Titles: 411,422

Net Title Published Every Day: 1,127.18 (365 Days)

New Title Published Every Hour: 46.97

New Fiction Title Published Every Hour: 5.72

New Juvenile Title Published Every Hour: 3.43

New Religious Title Published Every Hour: 2.16

New Sociology/Econ. Title Pub. Every Hour: 2.81


All books excl stand tests l.jpg
All Books (Excl. Stand. Tests) the Age of 18; Selected List)

2006 2007 2008 2009 2010 2011

Publishers Net

Dollar Sales

Millions USD $ 35,685.9 37,264.1 38,298.6 39,371.0 40,653.7 42,009.9

% Change 4.4 2.8 2.8 3.3 3.3

Publishers Net Units

Millions 3,100.2 3,126.8 3,106.3 3,107.0 3,116.4 3,132.2

% Change0.9 -0.7 0.0 0.3 0.5

Domestic Consumer

Expenditures

Millions USD $ 54,244.0 56,625.1 58,128.8 59,739.3 61,574.7 63,525.0

% Change 4.4 2.7 2.8 3.1 3.2


Adult trade books total l.jpg
Adult Trade Books (Total) the Age of 18; Selected List)

2006 2007 2008 2009 2010 2011

Publishers Net

Dollar Sales

Millions USD $ 9,180.4 9,576.9 9,750.2 9,988.1 10,256.1 10,511.6

% Change 4.3 1.8 2.4 2.7 2.5

Publishers Net Units

Millions 824.3 838.8 835.8 839.6 841.7 844.2

% Change 1.8 -0.40.5 0.3 0.3

Domestic Consumer

Expenditures

Millions USD $ 16,133.5 16,842.6 17,140.4 17,561.4 17,989.0 18,416.6

% Change 4.4 1.8 2.5 2.4 2.4


Juvenile trade books total l.jpg
Juvenile Trade Books (Total) the Age of 18; Selected List)

2006 2007 2008 2009 2010 2011

Publishers Net

Dollar Sales

Millions USD $ 3,399.9 3,656.6 3,658.9 3,752.0 3,842.2 3,931.2

% Change 7.5 0.1 2.5 2.4 2.3

Publishers Net Units

Millions 873.4 900.9 888.3 886.9 887.4 888.2

% Change 3.1 -1.4-0.2 0.1 0.1

Domestic Consumer

Expenditures

Millions USD $ 5,995.9 6,423.8 6,436.6 6,585.1 6,737.0 6,893.0

% Change 7.1 0.2 2.3 2.32.3


Juvenile trade book categories l.jpg
Juvenile Trade Book Categories the Age of 18; Selected List)

2006 2007

Fiction/YA/Fantasy $ 529.9* $ 736.9

Picture Books 1,355.6 1,369.2

Chapter Books 457.5 462.6

Readers: Early Beginners 305.8 324.7

Workbooks/Activity Books 452.0 457.1

Religion 58.7 59.6

Reference 129.7 132.3

Novelty/Film Tie-Ins/”Other” 110.7 114.2

*Net Publishers’ Revenues


Juvenile trade books hardbound best sellers l.jpg
Juvenile Trade Books: Hardbound Best Sellers the Age of 18; Selected List)

How Many Copies Do You Have to Sell to Make the Top Ten List?

2007 H.P & The Deathly Hallows (13,114,692)

2006 The End (Series of Unfortunate Events) (2,089,054)

2005 H.P. & The Half-Blood Prince (13,500,000)

2004 The Grim Grotto (1,404,367)

2003 H.P & the Order of the Phoenix (12,193,840)

2002 Carnivorous Carnival (Series of Unfort. Events) (726,543)

  • The Prayer for Jabez for Kids (478,957)

  • H.P. and the Goblet of Fire (7,900,000)

  • H.P. and the Prisoner of Azkaban (3,600,000)

    N.B. H.P is Harry Potter


Mass market paperback books l.jpg
Mass Market Paperback Books the Age of 18; Selected List)

2006 2007 2008 2009 2010 2011

Publishers Net

Dollar Sales

Millions USD $ 1,886.2 1,814.7 1,777.7 1,765.4 1,771.5 1,790.6

% Change -3.8 -2.0 -0.7 0.3 1.1

Publishers Net Units

Millions 575.1 541.8 520.8 506.5 495.3 488.9

% Change -5.8 -3.9 -2.8 -2.2 -1.3

Domestic Consumer

Expenditures

Millions USD $ 3,242.2 3,125.4 3,069.2 3,047.7 3,054.9 3,081.8

% Change -3.6 -1.8 -0.7 0.2 0.9


Religious books total l.jpg
Religious Books (Total) the Age of 18; Selected List)

2006 2007 2008 2009 2010 2011

Publishers Net

Dollar Sales

Millions USD $ 2,422.0 2,575.0 2,719.6 2,864.2 3,021.5 3,190.0

% Change 6.3 5.6 5.3 5.5 5.6

Publishers Net Units

Millions 263.4 275.5 284.1 293.3 302.7 312.2

% Change 4.2 3.5 3.2 3.2 3.1

Domestic Consumer

Expenditures

Millions USD $ 4,685.1 4,981.7 5,255.4 5,538.3 5,838.0 6,154.2

% Change 6.3 5.5 5.4 5.4 5.4


Professional books total l.jpg
Professional Books (Total)* the Age of 18; Selected List)

2006 2007 2008 2009 2010 2011

Publishers Net

Dollar Sales

Millions USD $ 8,893.0 9,240.9 9,611.5 9,848.4 10,084.9 10,363.2

% Change 3.9 4.0 2.5 2.4 2.8

Publishers Net Units

Millions 280.9 285.6 287.3 287.3 287.7 289.0

% Change 1.7 0.6 0.0 0.1 0.4

Domestic Consumer

Expenditures

Millions USD $ 11,648.5 12,104.0 12,594.2 12,882.8 13,188.7 13,539.9

% Change 3.9 4.0 2.3 2.4 2.7

* Print. Digital books TBA.


K 12 elhi elementary and high school books total l.jpg
K-12/Elhi [Elementary and High School] Books (Total)* the Age of 18; Selected List)

2006 2007 2008 2009 2010 2011

Publishers Net

Dollar Sales

Millions USD $ 4,748.9 5,051.9 5,246.3 5,434.4 5,770.9 6,115.8

% Change 6.4 3.8 3.6 6.2 6.0

Publishers Net Units

Millions 177.2 178.4 181.9 185.1 192.4 199.8

% Change 0.7 2.0 1.7 4.0 3.8

Domestic Consumer

Expenditures

Millions USD $ 5,374.8 5,713.4 5,942.1 6,168.1 6,544.4 6,949.4

% Change 6.3 4.0 3.8 6.1 6.2

*Includes printed textbooks and supplementals. Digital TBA.


Standardized tests total l.jpg
Standardized Tests (Total) the Age of 18; Selected List)

2006 2007 2008 2009 2010 2011

Publishers Net

Dollar Sales

Millions USD $ 2,396.6 2,672.2 2,928.7 3,165.0 3,422.4 3,658.6

% Change 11.5 9.6 8.1 8.1 6.9


College books total l.jpg
College Books (Total)* the Age of 18; Selected List)

2006 2007 2008 2009 2010 2011

Publishers Net

Dollar Sales

Millions USD $ 4,642.1 4,801.2 4,971.1 5,138.3 5,309.7 5,493.9

% Change 3.4 3.5 3.4 3.3 3.5

Publishers Net Units

Millions 77.0 77.9 79.0 80.2 81.2 82.2

% Change 1.2 1.4 1.5 1.3 1.2

Domestic Consumer

Expenditures

Millions USD $ 6,522.3 6,750.6 6,986.8 7,231.4 7,477.2 7,723.7

% Change 3.5 3.5 3.5 3.4 3.3

*Includes printed textbooks. Digital TBA.


University press books total l.jpg
University Press Books (Total) the Age of 18; Selected List)

2006 2007 2008 2009 2010 2011

Publishers Net

Dollar Sales

Millions USD $ 531.0 546.9 563.3 580.2 597.0 613.7

% Change 3.0 3.0 3.0 2.9 2.8

Publishers Net Units

Millions 29.0 28.7 29.1 28.2 27.9 27.7

% Change -1.0 1.4 -3.1 -1.1 -0.7

Domestic Consumer

Expenditures

Millions USD $ 641.7 683.6 704.1 724.5 745.5 766.4

% Change 6.5 3.0 2.9 2.9 2.8


Market demand u s books l.jpg
Market Demand: U.S. Books the Age of 18; Selected List)

Certain book categories have or will experience declines

in unit sales. Why? Problem with the “marketing mix”?

Product (not what consumers want?)

Price (too expensive for consumers?)

Placement (books are hard to find?

Promotion (publishers and retailers do not promote?)

or

Economic issues (discretionary expenditure?)


Demographic data who reads books l.jpg
Demographic Data: Who Reads Books? the Age of 18; Selected List)

Percent of U.S. Population

1982 2002

Read any book 60.0% 56.6%

Read literature 54.0% 46.7%

Literary Reading 1982 1992 2002

Males 48.1% 47.4% 37.6%

Females 63.0% 60.3% 56.1%

Source: National Endowment for the Arts


Demographic data who reads books34 l.jpg
Demographic Data: Who Reads Books? the Age of 18; Selected List)

Men’s Favorite Book Categories

Under 18 Science Fiction & Fantasy

18-24 Science Fiction & Fantasy

25-34 Science Fiction & Fantasy

35-44 Science Fiction & Fantasy

45-54 History

55-64 Mystery

+65 Mystery

Source: Codex Group


Demographic data who reads books35 l.jpg
Demographic Data: Who Reads Books? the Age of 18; Selected List)

Women’s Favorite Book Categories

Under 18 Young Adult

18-24 Literary Fiction

25-34 Literary Fiction

35-44 Romance

45-54 Romance

55-64 Romance

+65 Romance

Source: Codex Group


Demographic data who reads books36 l.jpg
Demographic Data: Who Reads Books? the Age of 18; Selected List)

Literary Reading By Age

1982 1992 2002

18-24 58.6% 53.3% 42.8%

25-34 62.1% 54.8% 47.7%

35-44 58.7% 58.8% 46.6%

55-64 54.8% 56.8% 51.6%

65-74 52.8% 52.8% 43.8%

+75 47.2% 50.8% 45.3%

Source: National Endowment for the Arts


Demographic data who reads books37 l.jpg
Demographic Data: Who Reads Books? the Age of 18; Selected List)

Literary Reading By Age (Millions)

1982 1992 2002

18-24 17.8 12.9 11.4

25-34 24.9 23.1 17.6

35-44 17.0 23.4 20.5

45-54 12.7 15.8 20.1

55-64 12.0 11.3 12.6

65-74 7.8 9.3 8.0

+75 4.1 5.0 5.7

Source: National Endowment for the Arts


Demographic data who reads books38 l.jpg
Demographic Data: Who Reads Books? the Age of 18; Selected List)

Literary Reading by Percentage of Population

by Geographic Region: 2002

Northeast 49.7% [N.E. 50.0%; Mid-Atlantic 49.7%]

Midwest 46.7% [West No. Cen. 49.9%; East No. Cen.

45.5%]

South 42.1% [South At. 43.3%; West So. Cen. 40.9%

East So. Cen. 40.9%]

West 51.2% [Mountain 53.4%; Pacific 50.4%]

Source: National Endowment for the Arts


Demographic data who reads books39 l.jpg
Demographic Data: Who Reads Books? the Age of 18; Selected List)

Literary Reading by Gender

1982 1992 2002

Males 49.1% 47.4% 37.6%

Females 63.0% 60.3% 55.1%

Overall 56.4% 54.2% 46.7%

Source: National Endowment for the Arts


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Demographic Data: Who Reads Books? the Age of 18; Selected List)

America’s Most Literate Cities

Minneapolis

Seattle

St. Paul

Denver

Washington, DC

St. Louis

San Francisco

Atlanta

Pittsburgh

Boston

Source: Jack Miller. Based on: booksellers; educational attainment; Internet

resources; library resources; newspaper circulation; and periodical publications.


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Marketing Information: Where Do Consumers Find Out About New Books?

Under 25 55-64

Browsing in local bookstore 67% 74%

Recommendation friends 63 62

Displays in local bookstore 45 47

Info. In author’s prior book 32 32

re new book

Library/librarians 25 22

E-mail from bookseller 24 25

Rec. Bookstore staff 16 14

E-mail from author/bookseller 12 10

TV/radio ad 6 7


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Marketing Data: Favorite Authors: Under 25 Books?

Stephanie Meyer 20%

Kanye West 7

Chuck Palahniuk 6

Meg Cabot 9

Dave Eggers 3

Chelsea Handler 2

Gregory Maguire 5

Chris Paolini 5


Marketing data favorite authors 25 l.jpg
Marketing Data: Favorite Authors: +25 Books?

Stephen King 14%

Mitch Albom 7

Harper Lee 13

Jodi Picoult 6

John Steinbeck 11

Philip Roth 2

Bill Bryson 2

John Updike 2

Daniel Silva 1

Carl Hiaasen 2

Janet Evanovich 4

John Grisham 7

Ian Fleming 2

Lee Child 1

Patricia Cornwell 2

Ken Follett 1


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Marketing Data: Top 15 Trade Book Categories: 2007 Books?

% of Total Revenues

Adult Fiction 17.97%

Juvenile 16.26

Religion 15.4

Romance 6.97

Health/Diet 5.22

Business 4.62

Self-Help/Inspiration 4.19

Gen. Ref. 3.94

Computer/Tech 3.42

Cooking/Home Ent. 3.25

Art/Illus/Coffee Table 3.17

Sci-Fi/Mystery 2.74

Travel 1.88

Biography 1.63

Personal Finance 1.37

Other/Misc. 7.96


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Marketing Data: Trade Books 2007: Where Do Consumers Purchase New Trade Books?

Revenues Units

Bookstores 48.84% 49.83

General Retailers 25.80 25.90

College Adoptions 7.80 7.49

Libraries & Insts. 8.28 4.43

Elhi Schools 3.34 2.08

Direct to Consumers 5.95 10.29


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Marketing Data: Juvenile Books: Where Do Consumers Purchase New Juvenile Books?

Revenues Units

Large Bks.Chain 25.3% 18.3%

Book Clubs 15.3 16.2

Internet 11.9 8.3

Mass Merchants 6.5 7.9

Indep/Sm. Book Chains 9.0 8.6

Mail Order 5.2 4.5

Price Clubs 5.0 3.8

Food/Drug 2.1 2.9

Dollar Stores 2.1 5.7

Used Bookstores 1.6 5.3

Books Fairs 0.5 0.8

Other 15.6 17.9


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Market Demand: Will Consumers Accept Digital “E-Books”? New Juvenile Books?

Are you ready and willing to read a

digital book?

On a desktop computer?

On a laptop computer?

On a SONY Reader ($270)?

On a Kindle ($350)?

On a smart phone (Black Berry, etc.)?

On a “Palm Pilot” type hand-held device?


Marketing issue disruptive technologies l.jpg
Marketing Issue: Disruptive Technologies New Juvenile Books?

Michael Porter’s Five Forces provide a framework to

analyze this question:

  • Competition in the industry

  • Potential of new entrants into the industry

  • Power of suppliers

  • Power of customers

  • Threat of substitute products


Market demand threat of substitutes l.jpg
Market Demand: Threat of Substitutes New Juvenile Books?

A product or service that partly satisfies the wants and needs

of consumers.

For a product to be a substitute of another good, it must have a

particular relationship with that good OR provide a better service.

When a product’s price increases, the demand for its substitute

will increase because consumers will go looking for a cheaper

alternative.

When a product’s price decreases, the demand for its substitute

decreases.


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Market Demand: Threat of Substitutes New Juvenile Books?

Switching Costs

This is the cost a consumer incurs as a result of switching to

another product or a supplier.

The switching “cost” could be financial or psychological.

Many companies try to employ marketing strategies that trigger

some sort of high switching costs to dissuade consumers from

switching to a competitor’s product (e.g., cell phone companies; 2

year contracts; high cancellation clauses)


Market demand l.jpg
Market Demand New Juvenile Books?

Would you have a “switching cost” if you

decided to read your books as “digital books”?

What would be the “switching cost”?


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The Changing Marketing Landscape: New Juvenile Books?E-Book Sales: 2003-2007

E-Book Wholesale Revenues: Trade Books

2003 $7.34 Million

2004 $9.62 Million

2005 $10.83 Million

2006 $20.00 Million

2007 $31.80 Million


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Marketing Data: Kindle Owners Percentage of Age Cohorts New Juvenile Books?

Percent of U.S. Book Buyers

18-24 0.2%

25-34 0.5

35-44 0.5

45-54 0.5

55-65 0.9

+65 0.6


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The Changing Marketing Landscape: E-Books New Juvenile Books?

When will consumers switch to digital e-books?

Adult trade books

Juvenile trade books

Mass market paperbacks

Religious books

Professional books

College textbooks

K-12 Elhi textbooks, supplementals, stand. tests

University press books


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Marketing Data: Library and Institution Sales: 2006-2012 Net Publishers’ Revenues ($ Million)

2006 $3,478.8 2010 $3,975.2

2007 3,655.8 2011 4,091.3

2008 3,766.9 2012 4,213.4

2009 3,869.1

N.B. Includes: Public Libraries; School Libraries; College/University Libraries; and Special Libraries


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