Wanna make your bank account go ka-ching in a competitive industry?Newspaper publishing industry is one cut-throat industry. Due to the advent of the Internet, many people have stopped buying newspapers as they get all the news they want online. For free. In Italy, the scenario was the same. Publishers were cutting down prices, even giving away the newspaper for free in order to hook the readers to their papers. Many newspapers went out of business. Some stayed in business only by giving away the newspapers for free and then charging higher rates from the advertisers. But the Italian newspaper publisher Gruppo Editoriale L'Espresso acted differently. Instead of giving away the newspaper for free or even slashing the prices, they increased their prices. Yep, they increased their prices and made sure that the subscription rate didn’t go down either. Instead the number of subscribers increased. How did they do that? They decided to add value to their newspapers. They gave discounts to 20th century literary masterpieces to every subscriber. The discounts enabled the subscribers to buy these masterpieces at dirt cheap prices. The publisher could afford to give these discounts because of economies of scale. It was cheaper for them to publish books in large quantities. And as these were 20th century masterpieces, they didn’t have to pay a royalty fee to anyone either. what’s more, the subscribers would receive the discount offer only when they bought a yearly subscription! They sold truckloads of books in a country where it’s considered that people don’t read much. You will be amazed by their success. In 2003, they sold 34 MILLION books for around 7 euros per book! The circulation of the paper was up. And the profits increased by a huge 47%. In a situation when others were floundering, they prospered. Action summary:
[This article is licensed under a Creative Common License]
|
Snip:
Subscribe to Business Bullet newsletter:
|
||||||||
