Barnes & Noble - marketing plan

BARNES AND NOBLE 2016 MARKETING PLAN 1

Barnes and Noble 2016 Marketing Plan

By: Cole Ericson, Laurissa Brunk, Leanna Rutledge, Deepika Singh

University of Colorado, Colorado Springs

For: MKTG 4800

April 27th, 2016


Executive Summary Barnes and Noble is a large American retailer specializing in books and also offering

eBooks, music, educational material, gifts, games, toys, and the Nook. Barnes and Noble is up

against strong competition with large retailers coming into the book scene (Barnes & Noble Inc.,

2014). As the only surviving brick and mortar bookstore chain in America, competitors such as

Amazon and traditional retail stores are offering a competitive advantage of convenience through

shopping online from home. Barnes and Noble has been competing in the technology industry

with the Nook and online shopping, but has not seen much success since it has proven

complicated to utilize. B&N’s target customer broadly encompasses all Americans and narrows

down to mainly women with children and non-technology savvy shoppers for the Nook (Owen,

2011).

Recent results show B&N claiming the majority of the book market, but currently there

are disappointing trends in market share (MarketLine, 2015). To overcome their competition

B&N needs to make changes that align with their main benefit of offering a large variety of

books with great customer service and the dynamic benefit of offering community and in-store

events that competitors cannot offer. B&N’s marketing objective is retention of multi-brand

users, and to strengthen their brand the strategic initiatives of attracting competitor’s customers,

defending against a competitive product, and strengthening the brand will be implemented with

their respective tactics. These tactics will be carried out in an ethical manner that will align with

B&N’s mission and values and the values of Daniel’s Ethics Initiative. The plan will be

implement over B&N’s fiscal year and will start in May of 2016, and the overall strategic

quadrant that B&N should be in for this plan is retention steal-share. Financially, these

initiatives will be reached by reallocating funding to strengthen the marketing and online

presence and will be measured through increase in same store sales and changes in market share.


Agenda Executive Summary.............................................................................................................................................. 2

Agenda ....................................................................................................................................................................... 3

State of Business .................................................................................................................................................... 4

Vision and Branding Position ........................................................................................................................................ 4

Target Customers ............................................................................................................................................................... 5

Value Promise and Competitive Advantage ............................................................................................................ 6

Recent Results ..................................................................................................................................................................... 7

Business Challenge & SWOT Analysis ........................................................................................................................ 8

Big Picture Analysis.............................................................................................................................................. 9

Goals and Objectives ......................................................................................................................................... 11

Strategic Initiatives & Tactics ........................................................................................................................ 11

1. Attract Competitor’s Customers ........................................................................................................................... 11

2. Defend Against a Competitive Product ............................................................................................................... 13

3. Strengthen the Brand ................................................................................................................................................. 14

GOST Diagram ..................................................................................................................................................... 15

Ethical Decision-Making Framework ......................................................................................................... 15

Financial Implications ...................................................................................................................................... 17

Cost of Plan ......................................................................................................................................................................... 17

Success in Achieving Objectives ................................................................................................................................. 18

Risk and Contingencies .................................................................................................................................... 19

Incentives and Messaging ............................................................................................................................................. 19

Nook vs Kindle ................................................................................................................................................................... 20

Adjusted branding and related advertising ........................................................................................................... 20

Milestones ............................................................................................................................................................. 21

Summary ............................................................................................................................................................... 22

Works Cited .......................................................................................................................................................... 23

Appendix ............................................................................................................................................................... 26


State of Business

Vision and Branding Position Taking a look at Barnes and Noble’s mission statement will give insight into their current

vision and branding: “To operate the best omni-channel specialty retail business in America,

helping both our customers and booksellers reach their aspirations, while being a credit to the

communities we serve (Barnes & Noble, 2012).” Given that the mission statement is mainly

focused on retail business, the focus of this analysis will assess Barnes and Noble as part of the

market in the book category. Barnes and Noble carries and sells traditional paperback and

hardcover books, digital books, the Nook digital book device, and a book-publishing branch. To

compliment these products Barnes and Noble also sells games, toys, music, magazines,

educational materials, and accessories and gifts (Barnes and Noble Inc, 2012).

Barnes and Noble has a unique brand and position. B&N is positioned as a retail store as

opposed to primarily books. To stay competitive in a market with businesses like Amazon,

increasing foot traffic and driving sales must be the focus (Alter, 2015). In a recent interview

with B&N CEO the current direction was unveiled, “…Mr. Boire is leading a push to rebrand

Barnes & Noble as more than just a bookstore by expanding its offerings of toys, games, gadgets

and other gifts and reshaping the nation’s largest bookstore chain into a ‘lifestyle brand’ (Alter,

2015).”

For the B&N image and brand as a whole, the company does not have a specific sign or

symbol other than their traditional Barnes and Noble label that is distinctive with green and gold

colors. The Nook has a more modern look with a letter “n” as the recognizable symbol. There is

room for development in this graphic design and artistic area. The in-store activities and

programs create an experience style of branding and are a current focus and priority as CEO


Boire stated, “We believe we have further opportunities to create these one-of-a-kind

experiences that are unique and make our stores a community destination (Wharton University of

Pennsylvania, 2015).” This goal of providing community throughout the B&N stores aligns with

their mission statement and goal of being a great retailer that helps customers and suppliers reach

their goals while being a part of the community (Barnes & Noble, 2012). By offering creative

opportunities for customers to participate in store events Barnes and Noble is attempting to be

known as a brand of community and experiences. The following visual shows the emotional

relationship and thinking that the average customer currently has with B&N and how that

relationship should ideally look.

Target Customers In Barnes and Noble’s mission statement, they claim their broad target category as

America (Barnes & Noble, 2012). Taking a look into their digital books a clearer market

segment can be found. The Nook is designed to appeal to women and children and according to

Barnes and Noble’s CEO, the market is specifically, “a woman with 2.3 kids. (Owen, 2011).”

The Nook’s features are appealing to that target market since parents can record themselves

reading a book to the child and they can listen to the recording while they follow along with the

Currently Do: I buy books

online

Current Belief: I like shopping

from my home Consumer Proposition:

B&N has online shopping and great in-store experiences

Desired Belief: I like customer

service and the experience at

B&NDesired Do:

Purchase books and attend

events at B&N


book. Additionally, the size and shape of the Nook fits easily into a woman’s purse (Owen,

2011). Other target markets Barnes and Noble is reaching out to are “avid readers” and

“technophobes (Owen, 2011).” Barnes and Noble prides themselves in offering free technical

support for the Nook in their stores as a service to their customers. The attempt to reach avid

readers is being done by using celebrity endorsements who are also in the writing field along

with other highly acclaimed authors who will be appealing to a person well-versed in literature

(Owen, 2011).

After analyzing what Barnes and Noble has to offer, their main benefit is that they offer a

large variety of books and great customer service. The dynamic benefic is the community and in-

store events that Barnes and Noble provides through having actual physical stores. These

qualities are hard to compete with in the online bookstore world, and the variety of material

B&N can offer is not readily available in small local bookstores.

Value Promise and Competitive Advantage

𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉𝑉 = 𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵𝐵 𝑁𝑁𝐵𝐵𝑁𝑁! + 𝐴𝐴𝐴𝐴𝐴𝐴𝐵𝐵𝐵𝐵𝐴𝐴ℎ𝑉𝑉𝑒𝑒𝑉𝑉𝑃𝑃𝑒𝑒𝑃𝑃𝑃𝑃𝑉𝑉 𝑃𝑃𝑒𝑒𝑉𝑉𝐴𝐴𝑃𝑃𝑉𝑉𝐴𝐴 + 𝑊𝑊𝑉𝑉𝑉𝑉𝐵𝐵 𝑃𝑃𝑖𝑖

The above value equation describes what B&N has to offer that will attract users. When

consumers want a physical location that enables them to browse and discover books, they go to

B&N. In the retail environment, customers can actually hold the book in their hand and turn the

pages to decide if they want to buy it. When they have made their purchase decision, they can

take the product to the cashier and own it immediately; there is no need to wait for the book to be

shipped.

B&N also provides more than just books to service other retail customer education and

entertainment needs by providing educational toys, music, community events, and other products

and services. On top of all of this, B&N has a special relationship with Starbucks coffee to offer


a café within their bookstores where customers can truly relax and enjoy B&N products even

within the store (bn.com).

Retail is the key element of B&N’s competitive advantage as their 648 physical

bookstores located in the US form the last remaining, large, national bookstore chain. The retail

segment includes other business assets but the brand is strongest with the physical locations

because no competitors reach the US books market on this physical scale (Barragan, 2016). The

challenge with retail is that it commands higher prices, which makes competing with Amazon on

price difficult (Newman, 2012).

Recent Results The good news is that the overall B&N

brand is strong and their educational toys are a

promising diversifying opportunity (Barragan,

2016). The chart to the right demonstrates how

B&N has been performing in terms of revenues

and profit margins. B&N’s biggest advantage, their physical stores, is also the overall book

market’s biggest segment providing 73% of the market’s value. Even better news is that this

market is expected to grow nearly 1% between now

and 2019 (MarketLine, 2015).

However, the bad news is that B&N same

store sales are down, and Amazon is starting to

introduce their own stores. (Macauley, 2015) The

chart above shows B&N’s five-year stock price

history. There is an alarming downward trend,

Figure 1 Barnes & Noble Revenues and Profitability (MarketLine, 2015)

Figure 2 Barnes & Noble 5 year stock price history (Google.com)


reflecting that B&N performed -43.18% last year (2015). In response to this, B&N has made a

number of changes to bail out. First, they have spun off the Education division to in order to

focus on improving the customer experience of their retail spaces. (Greenfield, Barnes & Noble's

Big Problem -- and What to Do About It, 2013) Second, they have cut losses from the Nook by

outsourcing the manufacturing to Samsung. The idea is that these cash saving moves can help

B&N focus on improving the retail experience to hedge against Amazon’s creeping in the retail

environment. (Barragan, 2016).

Business Challenge & SWOT Analysis STRENGTHS. The strengths of B&N are that they have two methods for distributing

their goods, either online or in store. Competitors like Amazon cannot do that because they are

primarily online retailers (Phillips, Henry, & Van Der Wal, 2007). The strong presence of being

in a brick and mortar store helps with the availability of books since a customer can receive the

book immediately. The fastest shipping possible for online retailers takes days to arrive. Another

strength for B&N is their name since they are the last standing big brick and mortar book store.

They are known for their books and discounts and continue to attract customers. Many customers

value the ambiance that is found in B&N, the ability to smell coffee nearby and walk through the

aisle looking at all the books.

WEAKNESSES. B&N is only available in America, meaning overseas they are not able

to compete with other book retailers. This also limits their customer base to only those living in

the US. (Greenfield, A Solution to Barnes & Noble's International Problem, 2012). Another

weakness for B&N is that though it may take longer to buy online, many people do not want to

leave the comfort of their home to buy in store. People are accustomed to the routine of buying

online and receiving the order on their doorstep within a few days.


OPPORTUNITIES. B&N has the opportunity to grow globally, and as mentioned

before, but should test if having a location overseas is profitable. If it is deemed too costly in its

current situation B&N could also make the Nook available overseas to test if the B&N brand is

transferable. (MarketLine, 2016). B&N has a great chance of rebranding their company to grow

their general brand awareness. They could first modernize their logo to be adaptive so the brand

can be easily recognizable. An example of modernizing would be utilizing the “&” sign to make

a distinctive mark (Lynch, Figgins, & Hill, 2012). B&N can also rebrand the physical stores to

offer more services such as hosting book signings and other events.

THREATS. B&N has many competitors, the biggest being Amazon. Amazon is used

worldwide and available to everyone with access to the Internet (Kline, 2015). Many people

would rather not leave the comfort of their home when they have an option of staying and having

items delivered to them. This makes B&N’s brick and mortar stores less appealing because of

how quick and easy online retailers are. Another threat is price wars; B&N offers discounts and

an example is their military ID discount. These discounts are only available in stores, meaning

Nook military users cannot use this discount; threatening their choosing to the next low priced

retailer. The last threat is piracy. Illegally downloaded books are all over the Internet making the

purchase of books unnecessary. This is a threat that B&N cannot solve. Please see appendix

figure A for a table displaying the SWOT analysis.

Big Picture Analysis The fundamental entity of B&N, according to their website is: “… a Fortune 500

company, the largest retail bookseller in the United States, and a leading retailer of content,

digital media and educational products in the country (Barnes & Noble, 2016).” This implies that


they attract volume by promoting their dynamic benefit of having a physical location for

customers to browse and purchase books.

B&N is a competitor in the “Bookselling” category, which is divided into the selling of

physical titles (hardcopies) and digital titles (e-books). According to MarketLine: “The physical

segment of the books market includes atlases, dictionaries, encyclopedias, text books,

guidebooks, musical scores, maps, fiction and non-fiction. The digital segment of the books

market consists of electronic books (or e-books) which can be read on computers or other

electronic devices (MarketLine, 2015).”

B&N’s core competency is their physical locations. When comparing the recent demise

of competitor, Borders, B&N strengths are clear. Of book retailers, B&N is the best at research;

enabling the business to predict market shifts, most important of which is the rise of the digital

bookselling environment. In addition, B&N has better service, which includes being able to offer

Starbucks coffee to make customers more likely to visit their stores than competitors’ (Sanburn,

2011, Noguchi, 2011, Evans, 2011). Their business objective is to increase same store profits by

creating a retail bookselling experience for consumers that Amazon cannot touch, effectively

stealing 5% of Amazon bookselling revenues in 2016.

In order to help B&N realize this short-term business objective, B&N’s marketing

objective is retention of multi-brand users. Therefore, B&N’s new target customer B&N is a

most avid reader: Michelle. She is an educated woman who is financially well established and

likes to read books in print every couple of months (Zickuhr & Rainie, 2014). She is hand loyal

to B&N as she occasionally wanders into the local store to browse for new reads but often buys

off of Amazon. B&N will improve her customer experience so that she returns to buy from B&N


stores more often. This will convert her into a head loyal brand ambassador who recommends

shopping at B&N to her friends who otherwise would purchase from Amazon.

The source of volume (strategic quadrant) for B&N in this plan is steal share from

Amazon. Amazon is leading in the bookselling category, but B&N can overtake them with their

strategic assets. With conveniences like in-store pickup (implying free “same day shipping”), in-

store browsing, discovery, and discussion of books; and a digital component (the Nook), many

customers will be more likely switch to purchasing from B&N more often. Please see appendix

figure B for diagram of the Big Picture Analysis.

Goals and Objectives With the threat of Amazon making B&N go extinct, the primary goal of this Marketing

Plan is to increase same store profit growth by 5% throughout fiscal year 2016 by stealing share

from Amazon online sales. To do this, B&N needs to increase foot traffic in the stores by

attracting Amazon customers with benefits they can’t get online.

The secondary goal of this plan is to generate 10% more of all sales from online retail.

This secondary goal will help B&N establish themselves as a long term competitor in the

bookselling category with a two solutions for both of the category’s segments.

Strategic Initiatives & Tactics

1. Attract Competitor’s Customers The first strategic initiative of this plan is to attract competitor’s (Amazon’s) customers

(Calkins, 2012). These customers already know who B&N is, and sometimes visit the locations,

but do most of their purchasing on Amazon’s website. This is our primary initiative for success

because the books category is only growing slowly, and Amazon is the biggest player. That

means the largest steal share potential lies with Amazon’s visitors instead of the population in


general. B&N will benefit twofold: by gaining new purchases, and stealing those new purchases

from their main competitor, Amazon.

To carry out this initiative, B&N will use two tactics: incentives and messages. On the

incentive side, B&N will offer purchase discounts to members based on likely purchase data.

Amazon is using their endless amounts of data to drive purchases. B&N can collect data as well

by leveraging their membership capabilities. (Yakuel, 2016). For example, when a member has

read the first book in a series (say, Harry Potter and the Sorcerer’s Stone) B&N will offer them

the rest of the Harry Potter series at a discount. This model can be adapted for an author’s entire

works as well. Another incentive would be a price matching option, exclusively for B&N

members, for identical books found on Amazon’s website. This will help ensure that multi brand

customers purchase from B&N because they can get the same price in-store that they can on

Amazon, and to purchase from B&N more often because they are incentivized to become loyal

members.

The second tactic for this initiative is messaging. Every B&N marketing message from

this plan revolves around the dynamic benefit: having actual stores. A web user whose behavior

identifies them as a potential book purchaser will be served B&N ads recommending the

customer to visit the store and enjoy real customer service and real book browsing rather than an

impersonal website. Visitors to B&N.com will be served messages that recommend pickup in

stores for faster and free shipping. They will also be rewarded for picking up in the store with

exclusive discounts on other items in the store including free Starbucks coffee. This should

encourage customers to spend more time in the store and not on Amazon’s website.


2. Defend Against a Competitive Product The second strategic initiative for B&N is to defend against a new competitive product,

Amazon’s Kindle (Calkins, 2012). Even though Amazon has managed to place themselves as the

e-reading leader, B&N has the potential to overtake them. Part of the reason the Kindle is more

successful when compared to the Nook is the user interface each uses. Many of the complaints

for the Nook are about the menus and options that are difficult to navigate, whereas a Kindle is

more straightforward and simple. Before B&N can defend against the Kindle and effectively

leverage the membership with Nook sales, the user experience needs to be improved. Once the

user experience is enhanced, the Nook can easily become a sales-generating product for B&N.

B&N has an opportunity to not only increase sales, but also membership subscriptions,

with the Nook product. Nook owners can automatically become B&N members for life for free,

just because they’ve purchased and own a Nook device. The lifetime membership for Nook

owners can also be expanded to include the same incentives explained in the primary initiative to

make purchasing from Amazon, and using their Kindle, less appealing.

Nook owners will receive the eBook version of every hardcopy they purchase from B&N

for free. This will further boost the appeal and use of the Nook device over a Kindle. In addition,

customers can count on the promise that a book will never be out of stock because B&N will

always have the digital version available to a hardcopy purchaser as they wait on their bounded

book (Trachtenberg, 2013).

Finally, for these tactics to work, B&N will need to raise customer awareness of the

benefits of the Nook over the Kindle with an advertising campaign. This advertising should

emphasize the dynamic benefit of the experience and atmosphere that B&N offers.


3. Strengthen the Brand The final strategic initiative will be to strengthen the brand loyalty of multi brand

customers (Calkins, 2012). By building customer brand loyalty, B&N can emphasize their

dynamic benefit (in-store experience) and ensure that customers prefer their brand over Amazon.

Based off anecdotal observations, many people prefer Amazon’s web interface to B&N’s and

will simply purchase where it is easier. Because B&N’s current website is outdated, the tactic

that will help B&N be successful in the online brand loyalty game is a website overhaul. B&N

should create a clean and simple web experience that is responsive and user friendly. A few user

experience aspects that B&N can mimic from Amazon would include page load speed,

personalized customer-shopping experience, enhanced product searching, and recommending

similar products based off other users as well (Say, 2013).

The second tactic for strengthening the brand loyalty of multi brand B&N customers is

emphasizing the beneficial events often held in store. B&N can leverage these events to become

a community-meeting place for book clubs and other groups within the surrounding community

(Wharton University of Pennsylvania, 2015). By strengthening the brand and improving

customer experience online B&N can increase traffic both to the store and online. Please observe

the GOST diagram below that will outline the marketing plan goals, strategic initiatives, and

tactics.

To effectively acquire customers from their competitors, B&N will need to drill

down on the customer data they already have and perform any further market research

necessary. Then B&N can launch a new advertising campaign and redesign their

membership program. B&N should implement an integrated marketing communications

plan to spread awareness of the changes they are making in store. This will increase

consumer awareness and potentially increase first mentions of the brand by at least 30%.


From there the marketing communications should convince multi-brand users of B&N’s

better experience and increase this decision by 40-60%. The overall effect of the IMC plan

will increase weekly foot traffic to the brick and mortar stores and result in same stores

sales to increase by 5% every year.

GOST Diagram

Ethical Decision-Making Framework Within the Daniel’s Ethics framework, the main ethical principles are integrity, trust,

accountability, transparency, fairness, respect, rule of law, and viability. Barnes and Noble has

ethics built into their mission statement and company framework. The values that they claim for

their entire company encompass ethics with consistent use as a cornerstone for company culture

and success (Barnes & Noble, 2012). The strategy initiatives recommended will fall within these

ethical principles.


Integrity will be displayed within the methods of attracting competitor’s customers by

holding true to promotional incentives and being clear about the rules and exceptions to any

sales. Trust will be built within the B&N brand through providing quality products. With the

offer of a free digital copy with every hardcopy purchase, customers will know that the brand is

guaranteed to follow through on its promises. Accountability will be displayed through being

upfront and open about where products are coming from, and by sourcing those products

ethically. B&N has a solid product supplier code of conduct and that will continue to be

implemented through all rebranding initiatives (Barnes & Noble, 2012). Transparency will be

displayed within the strengthened membership program. Customers will be made of the data is

kept in their personal profile as a B&N member.

Since many companies attempt to gain customers by aggressively showing all the

negative attributes of their competition, B&N will use tactics that draw attention their positive

and dynamic benefits. This will show fairness in their dealing with competitors.

Respect will be upheld in all store events, as customers will come from various cultural,

social, and financial backgrounds. Rule of Law will be adhered in all store locations across the

country. As each state has varying laws each store leadership team will be compliant to their

individual regulations pertaining to in-store and community events in addition to daily store

functions. Viability will be the end result of all of these ethical principles. When B&N is able to

base their business off a consistent and accountable system they will gain customers who will

stay with them long-term because they know their needs and wants will be met satisfactorily.


Financial Implications Cost of Plan

As indicated by the MarketLine report, the book industry is continuing to grow

(MarketLine, 2015). Despite this growth B&N continues to see a decrease of in-store sales

(Barnes & Noble, Inc.). B&N will need to reevaluate funding in their marketing department to

allow for the necessary market research to be completed. Often times, market research ranges

from $30,000-$100,000 depending on the information needed (Glantz, 2015). B&N should

allocate $75,000 as a minimum for research to be conducted, which should include analyzing the

data B&N already has on current customers, and utilize quantitative analysis methods

(surveys/focus groups) to generate data on the current customer opinion.

Costs for redesigning a website can range from $40,000 to $110,000 based on the

complexity of the design (WepageFX, 2016). Since the current website is a bit of a mess, B&N

should budget the full amount for the redesign as $110,000. The costs for a new website would

include world class and responsive design for up to 250 pages for customer content, copywriting

for 25-50 pages, and up to 150 keywords for search engine optimization (SEO). This would also

include full development of database integration and agile e-Commerce functionality

(WepageFX, 2016). Redesigning the website will be part of the new communications, and is

included as a subset of the advertising costs.

Other advertising costs would include print (newspapers, magazine, etc.), email, and

SEO. B&N should also budget for pay per click marketing and email marketing to current and

potential customers. Since B&N allocates a certain budget for designing and copywriting, the

focus of this plan will be the cost of running the ads. Average costs for magazine ads are around

$250,000 in the US, newspapers average approximately $113,000 per ad, pay per click and email

marketing varies from $0.05-$3.00 per qualified visitor, and SEO costs are included in the


redesign of the website (WebpageFX, 2016). Magazine and newspaper ads should every other

month, with a total cost of $2,178,000 between the two. If pay per click and email marketing

draws 1,000 customers each month, and the cost per customer is around $2.00, overall cost

would be $2,000 per month and $24,000 per year.

Overall, implementing a new plan to increase foot traffic to B&N’s brick and mortar

stores will not be cheap. The total cost for the initial changes that need to be made being

$2,387,000 for the first year. After the website update has been made, however, the following

years’ costs will drop as the website will only need minimal upkeep and updates. Please see

appendix figure C for graph of financial implications and projections.

Success in Achieving Objectives B&N’s success will be measured by increase in same store sales and changes in market

share. Currently, B&N owns a small portion of market share in comparison to the dominance

Amazon has on the market. As shown in the image below, B&N holds a very small 8% versus

Apple’s 11%, and an even greater difference compared Amazon’s 74%.

(Kozlowski, 2015)


The goal for the first year would be to increase B&N market share across all mediums

(eBooks, paperbacks, hardcover, etc.) by at least 4%, overtaking Apple, and shrinking Amazon’s

market share. If B&N is able to continue steal share from Amazon, they could increase their

market share to at least 20% if not higher over a five-year period.

Success of this marketing plan can also be measured by an increase in sales over the next

five years. An increase of 5% each year would result in a total change in revenue by $1.1 million

or more (see Appendix for more information). As this is only an estimate based off 2015 sales in

the retail stores, there is potential for larger growth that was has been calculated. By continually

measuring change in market share and sales revenue, B&N can track which techniques are

working and which are not, and then future tactics can be calibrated off this.

Risk and Contingencies Incentives and Messaging

The risks of discounting bulk purchases are that B&N could get into a price war with its

competitors and could potentially lose both customers and money. Another risk is that once

customers start using these discounts they will continue to only buy bulk purchases at below

price from B&N (Casey, 2012). The contingency of getting into a price war is that B&N would

need to emphasize or work harder on their competitive edge. B&N would need to host events at

physical stores to attract customers away from the online competitors (Simister, 2013). If

customers are only buying from B&N because they are discount shoppers, B&N would need to

increase prices in other bestselling items to recoup prices or they would need to only offer a

specialty. If there is a new book release, B&N should only discount that series as a bulk.


Nook vs Kindle The risk of offering the Nook version of a book free when customers buy a hard copy is that

publishers may be upset that they are not receiving profit from eBook sales and may just stop

distributing eBooks to B&N. The risk of advertising is that it can also become costly to ensure

that the proper details and research is done. Also if a bad campaign is made then it may turn

customers away or create a bad image for B&N (DeSelm, 2013). If publishers do get upset and

stop distributing eBooks, B&N will have to reimburse the publishers and discontinue the offer,

or B&N will have to preorder all eBooks from the publishers to continue the service. In the event

of a bad campaign, B&N will need to hire a new advertising team to properly handle the

previous campaign and then create a new one that can attract customers.

Adjusted branding and related advertising The biggest risk with redesigning a website is that it could not appeal to the customers.

There might be issues with the overall design or inventory being listed incorrectly (Owoh, 2016).

If B&N decided to take the simple look to the website customers may think the page is bland and

old fashion. If redesign issues occur and customers do not like it, B&N will need to hire new web

designers and market analysts to assess the needs of customers in online shopping. The risk of

B&N holding book events is that people may not want to leave the privacy of their home to

attend. Another risk is that others in the store may feel that the atmosphere of B&N has changed

into a more energetic rowdy place. If people do not show up to book events, B&N would need to

target places or people that are already holding book clubs. If people are driven away because the

atmosphere of B&N has changed, they will need to assess which group of people brings is more

profit and continue to provide what they want.


Milestones For the initiative of attracting competitor’s customers, the tactic of discounts will begin

May 2016. The first step would be to research how much of a discount B&N can offer without

hurting the company, what kinds of discounts customers would want, and how much of a

discount is enough to steal from competitors. Then starting in June, B&N will begin testing these

discounts in select locations to see how well it could work or if further research must be

conducted. After resolving any issues in the testing phase B&N will begin to implement in

August and at the same time B&N will also start researching its customer base on how they

would like to receive messages and in what content they would be interested. Implementation for

both the discounts and messages will last three months before finally analyzing the effects.

In the initiative of defending against competitive product, B&N will need to create an

advertising campaign. For three months, starting in May they will conduct research to ensure that

B&N has all the necessary information collected about their target market. Then for another

three months, the marketing team will begin creating the campaign. Afterwards they will then

test and launch the campaign and then at the end of the fiscal year, B&N will analyze the effects

of the campaign and then decided to keep it, remove it or update it.

The last initiative of strengthening the brand will consist of two tactics: redesign the

website and hosting events. The research for the website will begin mid-way during the research

for the advertising campaign so the two teams can work together and share information on the

campaign with the website. Like the campaign, creating and testing will follow after and take

three months each to conduct. The launch will begin in March of 2017 and a month later reports

on the launch and customer reviews will then take place. Research to host events will begin in

October, after the research on messages is finished. This allows overlapping information about

customers’ attitude toward in store opportunities to be shared. Testing and creating will follow,


and then implementation will begin from March and last two months to ensure a throughout

implementation. Please see appendix figure D for a GANNT chart of milestone implementation.

Summary Since Barnes and Noble is the last standing book retailer struggling to compete with

online competition, by utilizing this marketing plan to compete in customer retention and steal

share from competitors, they can be in the lead in sales and market share. Implementation of this

plan would cost Barnes and Noble time, money, and resources at a high cost, but the outcome is

projected to increase revenue and give Barnes and Noble a foothold in the market again.

Implementation does not come without risk, but by utilizing the contingency plan and following

the milestone chart, the plan can be implemented with a sure direction. Barnes and Noble can

rise to the top of the competition with Amazon if strategy is implement in the near future and

tracked and adjusted as the implementation process occurs. Overall, Barnes and Noble is a great

family retailer that has a chance to survive the hit it has taken from companies utilizing

technology and rising above traditional sales techniques.


Works Cited Alter, A. (2015, 12 3). Barnes & Noble Wants to Become More Than Books. Retrieved 4 18, 2016, from The New York Times: http://www.nytimes.com/2015/12/04/business/media/barnes-noble-wants-to-become-more-than-books.html?_r=0 Barnes & Noble. (2012). Core Values. Retrieved 4 19, 2016, from Barnesandnobleinc.com: http://www.barnesandnobleinc.com/jobs/core_values/our_core_values.html Barnes & Noble. (2016). For Investors. Retrieved from Barnes and Noble Inc: http://www.barnesandnobleinc.com/for_investors/for_investors.html Barnes & Noble Inc. (2014). Barnes and Noble 2014 Annual Report. Retrieved 2016, from barnesandnobleinc.com: http://www.barnesandnobleinc.com/documents/bn_annual_report_2014.pdf Barnes & Noble. (2012). Our Mission. Retrieved 4 13, 2016, from Barnesandnobleinc.com: http://www.barnesandnobleinc.com/our_company/mission/our_mission.html Barnes & Noble. (2012). Vendor and Product Compliance Requirements. Retrieved 4 19, 2016, from barnesandnobleinc.com: http://www.barnesandnobleinc.com/for_publishers/Vendor_Guidelines/vendor_and_product_compliance_requirements.html Barnes & Noble, Inc. (n.d.). Barnes & Noble 2015 Annual Report. Retrieved April 22, 2016, from http://www.barnesandnobleinc.com/documents/bn_annual_report_2015.pdf Barnes and Noble Inc. (2012). Our Company. Retrieved 4 13, 2016, from barnesandnobleinc.com: http://www.barnesandnobleinc.com/our_company/our_company.html Barragan, N. (2016, Feb 12). Barnes & Noble: 84% Upside Potential Within 2-3 Years With A Base-Case Scenario. Retrieved from Seeking Alpha: http://seekingalpha.com/article/3890756-barnes-and-noble-84-percent-upside-potential-within-2minus-3-years-base-case-scenario Casey, K. (2012, October 8). Why Offering Discounts May Be A Major Mistake. Retrieved from http://quickbooks.intuit.com/r/marketing/why-offering-discounts-may-be-a-major-mistake/ DeSelm, N. (2013, October 24). Risks In Advertising: When Does It Pay To Take Creative Risks? Retrieved from http://villing.com/articles/risk-in-advertising/ Evans, E. (2011, February). Why is Barnes & Noble performing well as a business while Borders has filed for bankruptcy? Retrieved from Quora : https://www.quora.com/Why-is-Barnes-Noble-performing-well-as-a-business-while-Borders-has-filed-for-bankruptcy Glantz, D. (2015). Let's Talk Price: How Much Does Research Cost? Retrieved April 19, 2016, from Market Connections: http://www.marketconnectionsinc.com/eNewsletter/lets-talk-price-how-much-does-research-cost.html


Greenfield, J. (2012, August 21). A Solution to Barnes & Noble's International Problem. Retrieved from http://www.forbes.com/sites/jeremygreenfield/2012/08/21/a-solution-to-barnes-nobles-international-problem/#7baf018f2117 Greenfield, J. (2013, Feb 6). Barnes & Noble's Big Problem -- and What to Do About It. Retrieved from Forbes.com: http://www.forbes.com/sites/jeremygreenfield/2013/02/06/barnes-nobles-big-problem-and-what-to-do-about-it/#5f0c0757308f Kline, D. B. (2015, October 31). Barnes & Noble's Nook Is Fighting a Losing Battle Against Amazon.com Inc. Retrieved from http://www.fool.com/investing/general/2015/10/31/barnes-and-nobles-nook-is-fighting-a-losing-battle.aspx Kozlowski, M. (2015, October 9). What market share do Amazon, Apple, B&N Kobo and Google have selling eBooks? Retrieved April 22, 2016, from Good eReader: http://goodereader.com/blog/e-book-news/what-market-share-do-amazon-apple-bn-kobo-and-google-have-selling-ebooks Lynch, J., Figgins, K., & Hill, K. (2012, Mach 12). Barnes & Noble Rebrand. Macauley, R. (2015, November 3). Amazon is opening its first bookstore today—in a mall where a giant Barnes & Noble used to be. Retrieved from Quartz: http://qz.com/539792/amazon-is-opening-its-first-bookstore-today-in-a-mall-where-a-giant-barnes-noble-used-to-be/ MarketLine. (2016). Barnes & Noble, Inc. SWOT Analysis. New York. MarketLine. (2015). MarketLine Industry Profile: Books in the United States. London: John Carpenter House. Newman, R. (2012, June 7). Barnes & Noble's Convoluted Defense of Pricey Books. Retrieved from US News: http://www.usnews.com/news/blogs/rick-newman/2012/06/07/barnes--nobles-convoluted-defense-of-pricey-books Noguchi, Y. (2011, July 19). Why Borders Failed While Barnes & Noble Survived. Retrieved from NPR: http://www.npr.org/2011/07/19/138514209/why-borders-failed-while-barnes-and-noble-survived Owen, L. (2011). Who Is The Target Audienc Of Barnes & Noble's Nook Tablet? Retrieved 4 13, 2016, from GIGAOM.com: https://gigaom.com/2011/11/07/419-who-is-the-target-audience-of-barnes-nobles-nook-tablet/ Owoh, B. (n.d.). 11 Common Web Design Mistakes (Blunders). Retrieved from http://www.hongkiat.com/blog/11-common-mistakes-blunders-in-web-design/ Phillips, H., Henry, A., & Van Der Wal, C. (2007). Strategic Report for Barnes & Noble, Inc. Gotham Global.


Sanburn, J. (2011, July 19). 5 Reasons Borders Went Out of Business (and What Will Take Its Place). Retrieved from Time: http://business.time.com/2011/07/19/5-reasons-borders-went-out-of-business-and-what-will-take-its-place/ Say, M. (2013, September 24). 6 Things Online Retailers Can Learn From Amazon. Retrieved April 18, 2016, from Forbes: http://www.forbes.com/sites/groupthink/2013/09/24/6-things-online-retailers-can-learn-from-amazon/#332d0aea53b8 Simister, P. (2013, March 19). How To Survive A Price War. Retrieved from http://www.differentiateyourbusiness.co.uk/how-to-survive-a-price-war Trachtenberg, J. (2013, June 30). How to Rescue Barnes & Noble? Here Are Ideas From Five Experts. Retrieved from Wall Street Journal: http://www.wsj.com/articles/SB10001424127887323689204578573891816525774 WebpageFX. (2016). The Cost of Advertising Nationally Broken Down By Medium. Retrieved April 22, 2016, from WebpageFX: http://www.webpagefx.com/blog/business-advice/the-cost-of-advertising-nationally-broken-down-by-medium/ WepageFX. (2016). How Much Should a Website Cost in 2016? Retrieved April 22, 2016, from http://www.webpagefx.com/How-much-should-web-site-cost.html Wharton University of Pennsylvania. (2015, 12 18). Knowledge@Wharton. Retrieved 4 18, 2016, from knowledge.wharton.upenn.edu: http://knowledge.wharton.upenn.edu/article/can-barnes-noble-avoid-borders-fate/ Yakuel, P. (2016, January 18). Is Amazon's First Brick-and-Mortar Bookstore the Future of Retail? Retrieved April 19, 2016, from Entrepreneur: https://www.entrepreneur.com/article/254072 Zickuhr, K., & Rainie, L. (2014, January 16). E-Reading Rises as Device Ownership Jumps. Retrieved from Pew Research Center: http://www.pewinternet.org/2014/01/16/e-reading-rises-as-device-ownership-jumps/


Appendix Figure A.

SWOT Analysis Table

Strengths • Multiple distribution channels • Immediate availability • Established brand • Ambiance in stores

Weaknesses • Only available in America • Customers prefer online shopping to

avoid leaving their home

Opportunities • Grow globally • Grow digitally • Rebranding

Threats • Competition from online retailers • Price wars • Piracy

Figure B.

Big Picture Analysis

\

Fundamental entity: Book Retailer

Category: Books

Core Competency: Better at predicting market shift and better service

Goal: Increase same store profit growth by 5% throughout the 2016 fiscal year

Retention Steal Share

Business Objective Marketing

Source of Volume


Figure C.

Financial Implications

Projected Yearly Increase in Revenue

Year Revenue 2015 4108243 2016 4313655 2017 4529338 2018 4755805 2019 4993595 2020 5243275 2021 5505439

Figure D.

0

1000000

2000000

3000000

4000000

5000000

6000000

2015 2016 2017 2018 2019 2020 2021

USD

($)

Year

Barnes & Noble - marketing plan

Marketing

Transcript of Barnes & Noble - marketing plan