Pricing Strategies And Customer Loyalty Programmes In The Liberalised Book Market

PRICING STRATEGIES AND CUSTOMER LOYALTY PROGRAMMES IN THE LIBERALISED BOOK MARKET Bachelor Thesis Presented to the Faculty of Business August 2009 Supervisor Prof... This thesis provide

PRICING STRATEGIES AND CUSTOMER LOYALTY PROGRAMMES

IN THE LIBERALISED BOOK MARKET

Bachelor Thesis Presented to the Faculty of Business

August 2009

Supervisor Prof Pieter Perrett

Abstract

With the liberalisation in 2007 of the Swiss book market, booksellers were able

to set their own prices This thesis provides information about the approaches used in the book market relating to pricing strategies and customer loyalty

programmes, and offers a brief overview of eBooks

A qualitative approach was used for the data collection, and face-to-face

interviews were used as well as telephone interviews The methodology used was based on the current market conditions, and the findings are presented anonymously The sample consists of booksellers, wholesalers, publishers and authors in the German-speaking regions of Switzerland

The findings indicate that, regarding pricing strategies, the recommended retail price is most often used as a starting point Customer loyalty programmes take various forms, ranging from customer loyalty cards to organised events for a target audience In Switzerland, eBooks remain a niche market and the overall sales volume is marginal owing to the low level of demand

In conclusion, the Swiss book market has remained fairly stable since its

liberalisation, but a minority of actors are experimenting with pricing strategies and customer loyalty programmes The major hurdle at the moment is insecurity about the potential reintroduction of the fixed book price

I understand that if at any time it is shown that I have significantly

misrepresented material presented here, any degree or credits awarded to me

on the basis of that material may be revoked

Acknowledgements

I would like to take the opportunity to thank all the people who have supported

me with their knowledge and advice during my Bachelor thesis

I would like to thank Mr Sven Michal from the State Secretariat for Economic Affairs SECO for providing me with the opportunity to write my thesis on a topic currently at the top of the political agenda In addition, he has been very

supportive and encouraging throughout my research period

I also want to thank my supervisor, Prof Pieter Perrett, for his guidance

throughout the research period and for his enthusiasm regarding the thesis topic He has always been accessible and provided valuable advice

Prof Dr Oliver Bendel, Prof Ralf Wölfle and the many interviewees deserve special thanks; without their valuable contribution and practical insights into the book market, this thesis would not have been possible

Finally, my deepest gratitude goes to my family, who supported me during this research-intensive period and provided me with an enriching environment

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I List of Figures

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II List of Tables

III List of Abbreviations

DRM Digital Rights Management

ICT Information and Communication Technology

IT Information Technology

ROI Return on Investment

RRP Recommended Retail Price

SECO State Secretariat for Economic Affairs

1 Introduction

1.1 Introduction and Purpose of the Thesis

With the liberalisation of the Swiss book market by the 2nd of May 2007,

booksellers were able to set their own prices Today, although the free-market conditions still hold, some politicians and booksellers would like to reintroduce the fixed book price to protect the variety of books and the structure of the book market in Switzerland

Research awarded by the SECO and conducted by the University of Applied Sciences Northwestern Switzerland indicated that the prices of books did

change to a certain extent over the researched period, the researchers found out that the book prices increased (Binswanger et al., 2008) To determine the practices of booksellers regarding pricing strategies and customer loyalty

programmes in the liberalised book market, the author received the mandate to collect information and present findings regarding pricing and customer loyalty programmes

Consequently, this thesis aims to provide an insight into the book market in terms of pricing strategies, customer loyalty programmes and eBooks in

general

The topic was first explored through a review of related literature; at a later stage, empirical investigations provide a practical framework of what the book market actually does To provide an overview, it was decided to focus on

authors, publishers, wholesalers and booksellers of the German-speaking

regions of Switzerland

Finally, this thesis concludes with recommendations for booksellers, publishers and authors, as well as for policymakers

The following three main research questions will be answered in the study:

• What type of approaches are used regarding pricing?

• How do booksellers bind their customers with customer loyalty

programmes?

• What is the current stage of eBooks in the market?

1.2 Legitimisation and Justification

Because of the uniqueness of the Swiss book market and the current insecure environment, it is vital to provide research findings for the above-mentioned research questions

If we look at the research undertaken on an international basis, several studies have investigated book prices, but hardly any have examined the motivations and approaches used in pricing Gaining knowledge about the actual movement

of prices in the book market is essential, but gaining an understanding about the incentives and conditions is vital in order to make recommendations and forecast the market

The unstable political and legal environment makes it even more important to look closely at the reasons behind price changes and customer loyalty

Moreover, as already indicated, it is essential to obtain insights into eBooks, as these could change the structure of the book market as a whole

1.3 Modus Operandi

The current thesis is built upon three pillars The first pillar provides an overview

of the theory and definitions regarding pricing strategies, customer loyalty

programmes and eBooks In the second part of the thesis, an empirical

collection of the findings will be illustrated to answer the research questions

In the final part, a discussion will evaluate the findings, and recommendations will present some approaches to solutions The thesis will close with a

conclusion

Qualitative and quantitative research methodology are the two main categories

of research literature Qualitative approaches are more widespread in textbooks and in practice, but there are issues about the superiority of qualitative over quantitative research, owing to the complexity of certain research areas(Flick, 2009)

In section 3, detailed information is provided regarding the conducted research

theoretical overview of pricing in general, covering price determination, adjusting strategies and international pricing

price-At the end of this section, specific information is provided regarding the pricing process used by the book industry, with the focus on the publisher

Pricing and customer loyalty are closely connected Even if the price of a

product is high, the customer may be happy, and the product will be successful

in the market (Scott, 2007)

Internal and external factors influence decisions regarding the pricing of a

product or service; therefore, the pricing process involves a great deal of

learning and observing This section presents an overview of pricing objectives, the nature of demand, the influence of costs, competitors’ pricing and pricing methods

2.1.2.1 Pricing Objectives

It is essential for a company to study the external and internal factors that

influence the setting of pricing objectives External factors, such as

governmental regulations, cannot be influenced by the company On the other

hand, internal factors, such as the mission statement of a firm, are to a large extent determined by the company itself

Pricing can be see as a process for all product lines or for each individual

product It is important to understand the various relationships between sales volume and revenue, as well as competitors’ prices and the costs relating to producing and promoting a given product, as seen in Fig 1, below All these factors determine the end profit

sensitive

Figure 1: Price to Profit

Penetration, or so-called market leadership, is used to gain a market share, and companies may use economies of scale to achieve this objective It is therefore essential that customers are price sensitive, so as to increase sales volume in order to compensate for the lower price without losing revenue and profit

Product-quality leadership is the objective that connects the price of a product with its brand and image If the image of a brand is high, marketers can set a higher price by charging a premium (Sandhusen, 2008)

The skimming objective involves setting a high introduction price when a new product enters the market It may be used if customers have a high desire for the product and are willing to pay a premium price to obtain it This objective helps companies to refinance their expenditure relating to innovation and

research regarding the newly introduced product Furthermore, owing to fierce competition, a company may use pricing to survive (Havaldar, 2005)

The generation of store traffic and speeding up penetration are other pricing objectives used by companies Increasing store traffic involves presenting

certain offers to encourage customers inside the store, where they are then likely to buy additional products and services

Finally, there are various other pricing objectives that cannot be easily

categorised As an example, governmental organisations have other objectives than making profit, such as social welfare (Marn et al., 2004)

2.1.2.2 Nature of Demand

2.1.2.2.1 Price Elasticity of Demand

This indicates how the demand for a certain product changes in response to a change in its price Price elasticity is also dependent on the substitute goods that are available: if there are more substitute goods available, the price tends

to be more elastic Another factor is that essential goods have a lower elasticity than those that are more luxurious (Mankiw & Taylor, 2006)

2.1.2.2.2 Income Elasticity of Demand

This elasticity shows how the demand changes in respect to a change in

consumers’ income In this case, it is imperative to consider the necessity of a product, since in general, luxury goods have a high income elasticity of demand because people buy such goods only if their income rises On the other hand, the demand for inferior goods, such as “value” or own-brand supermarket

products, declines if customer income rises (Sloman, 2005)

2.1.2.2.3 Research Regarding Books

A study of the Danish book market concluded that the demand for books is elastic and that the income elasticity of demand is 1.97, means that the book is

a luxury good This leads to the conclusion that, when book prices rise, total turnover will decrease On the other hand, books are also perceived as a

convenience good owing to the fact that, if someone cannot afford a book, it can still be borrowed from a library (Hjorth-Andersen, 2000)

Fishwick (2008) indicated that publishers must provide higher discounts

because of the liberalisation of the UK book market The low price-elasticity of demand makes it possible for publishers to raise the list price to compensate for

such discounts Moreover, because each book is identical in every store, it has high price-sensitivity

In addition, the price sensitivity can vary significantly between booksellers, as shown in a study of Barnesandnoble.com and Amazon.com, in which the price elasticity of demand for the former was found to be much higher than for the latter (Chevalier & Goolsbee, 2003)

In conclusion, the price elasticity of demand for books appears to be unclear Furthermore, income elasticity, if assumed to be elastic, can be offset against the fact that people can borrow books at no or low cost

2.1.2.3 Influence of Cost

The costs incurred by a product or service play an essential role in the pricing process For simplification, costs can be placed into two categories: fixed and variable costs

Regarding the cost structure of an industry, two main distinctions are made: volume intensive and price sensitive Volume-intensive industries, such as the airline industry, have a high level of fixed costs for each unit On the other hand, the consumer electronic industry is seen as a price-sensitive industry, because

of the high level of variable costs In a price-sensitive industry, a price change leads to a fairly big change in earnings, while in a volume-intensive industry, this happens to a lower degree because of the high level of fixed costs (Jain, 1985)

Economies of scale has the effect of reducing long-term average costs per unit when production increases It is also important to note that economies of scale

can be achieved not only in the production process but also regarding

transportation (Blauwens et al., 2007)

Costs need to be considered during the pricing process, and the cost structure should be shared with peers Furthermore, the supply chain should be

evaluated according to costs (Barnes et al., 2005) A reduction in costs, for example, can be achieved through print on demand (Anonymous, 2002)

It is also crucial to charge for services provided, which can lead to extra

revenue, and as a result the core product’s price may be lowered while the profit level remains the same (Wiersema, 2009)

2.1.2.4 Competition

Companies need to know the market conditions in order to determine the

correct pricing strategy As a rule of thumb, the greater the competition in a market, the lower the level of autonomy for the company in determining the prices for the relevant product or service (Brassington & Pettitt, 2006)

Observing the relative prices of competitors in the market is essential, as the results of such observations can be used to develop historical patterns

regarding price Moreover, in-house price strategies can be set against the benchmark of those of competitors (Hiebing & Cooper, 1994) A balance

between low and high prices is essential: if the price level is high, competitors could enter the market with low-priced products and build up a market share relatively quickly In the case of generic products, i.e those with little

distinctiveness, small changes in price could result in the customer changing supplier (McDonald & Keegan, 2001)

A study of bestsellers and other books found that the more competitive the market, the closer the prices are to each other Another study indicated the opposite, that is the standard deviation was found to be higher if there was more competition in the market (Png, 2000) Regarding online bookshops, the competition was found to be high for hardcover books but low for paperbacks (Clay et al., 2000)

2.1.2.5 Pricing Methods

Apart from value-based methods, other techniques used in the business world include cost-based pricing, which is based on the costs incurred in producing the product, and competitive pricing, which involves basing prices on those charged by competitors (Wood, 1985)

Figure 2: Cost-Based and Value-Based Pricing

Source: (Nagle & Holden, 2002)

In Fig 2, which shows the difference between cost-based and value-based pricing, it can be seen that these methods use different starting and ending

points to one another Value-based pricing progresses according to the

customer’s perception of value

2.1.2.5.1 Cost-Based Pricing

The mark-up pricing method is one of the simplest and most elementary pricing methods The company adds a certain return to the unit costs (Kotler & Keller, 2006)

Target-return pricing sets the price according to a target-return on investment Because the demand volume cannot be determined with absolute accuracy, companies need to know when they are break-even, which is when the

companies make no profit or loss It is important to note that a small change in the margin can have a tremendous effect on the break-even volume (Hisrich, 2000)

2.1.2.5.2 Value-Based Pricing

Perceived-value pricing differentiates itself from the methods already discussed

by expressing how a customer sees the value of a product or service

Therefore, this approach focuses on the value seen by the customer rather than

on the cost incurred by the seller Because the perceived value can change over time, adjustments to and re-evaluations of the perceived value should be occasionally conducted (Baily et al., 2005)

A cost-based pricing approach may create hidden profits, i.e profits that are available but, owing to the “wrong” choice of pricing strategy, are not exploited

To access the true value of a product, it is possible to evaluate the real value with the Value Decoder Model in Fig 3

Figure 3: Value Decoder Model

Source: (Mohammed, 2005)

Other approaches regarding value-based pricing may also be taken Value pricing encourages the customer to perceive that the price charged for the product or service is lower than the perceived quality (Balster, 2002) Probably the best known type of value pricing is the “every day low pricing” (EDLP)

strategy as used by the US retailer Wal-Mart It is an aggressive strategy that uses comparisons with other competitors Furthermore, value pricing can also take the form of high–low pricing, in which the store uses normal prices but runs regular promotions for the products (Brunn, 2006)

2.1.2.5.3 Competition Pricing

Going-rate pricing involves charging the most widespread price in the market It

is a simple strategy to use, because no sophisticated calculations are needed,

and it leads to so-called price peace There is a distinction between native and sophisticated going-rate pricing; native means that the price is at the same level

as that of competitors without taking into consideration costs and demand Sophisticated going-rate pricing sets the price in a defined segment in which the company is able to consider to a certain degree conditions of demand and costs (Van Looy et al., 2003)

of money off if, for example, the bill is paid within a certain period of time

Quantity discounts are available if the customer buys a larger quantity of the product, and seasonal discounts provide a reduction in the price if the item is bought off peak

Allowances provide the retailer with money for promotion, and participation in

an advertising and sales support programme leads to an additional reduction in the list price (Armstrong & Kotler, 2006)

Segment pricing involves charging different prices for different groups of

customers; this is possible primarily because of the different price elasticity of demand (Baker, 2000) One example of this is the pricing technique used by the Stadttheater Bern in Switzerland, which provides several categories of prices for the same play (Bern, 2009)

Psychological pricing takes customers’ emotions, feelings and value

perceptions into consideration Many products, such as jewellery, will sell better

if the price is high, and odd–even pricing is often used This method involves pricing a product at, for example, CHF 299, which is perceived as being in the area of CHF 200 rather than CHF 300 (Brassington & Pettitt, 2006)

Promotional pricing uses two methods: an actual change in the product and a change in the quantity of the product or its composition Table 1 lists various promotional-pricing strategies.

Table 1: Promotional Pricing

Approach Description

sold together at one total price Multiple-unit Several units of the same product

sold at one total price

or on a given amount of stock Introductory offer Discounted price for the launch of a

new product Special event Price changes for featured items

time of year

Source: (Sullivan & Adcock, 2002)

Bundling can have a positive impact on sales if the customer is able to choose which product he or she would like to bundle rather than being required to

choose between fixed bundles (Hitt & Chen, 2005)

Geographical pricing indicates that the price for a product varies between

different regions The reasons for this include relative location, market factors, the macro-environment and retailers’ pricing policy The cost of delivering the

product and the level of local competition play an important role in geographical pricing (Bhatia, 2008)

International pricing involves a careful analysis of the foreign market and the cost structures in a country In addition to shipping costs and production costs, governmental regulations and the level of inflation are also key factors (Doole & Lowe, 2008) Pricing strategies need to be carefully planned to avoid parallel imports that could hurt the company and would weaken its partners abroad (Mühlbacher et al., 2006)

As bookshops tend to use the various strategies and approaches mentioned above, this section provides an insight into the pricing strategies undertaken by publishers The pie charts given in Figs 4 and 5 show possible cost structures for novels and scientific books The examples on the next page is related to the German book market, therefore the VAT is given by 7%, in Switzerland the VAT

is 2.4%

Figure 4: Cost Structure of Novels

Source: (Wulf, 2005)

Figure 5: Cost Structure of Scientific Books

Source: (Wulf, 2005)

In the figures above, we can see clear differences between scientific books and novels, with one of the largest discrepancies being related to the profit margin Novels have a higher profit margin compared to scientific books Moreover, publishers receive only 56,5% of a scientific book’s RRP (recommended retail price) and 45% of that of a novel Normally, novels involve a larger number of publications, but at a lower price, whereas this is vice versa in the case of

scientific books

The compensation for the authors is the so-called royalty The royalty is mostly indicated as a percentage value of the RRP and also depends on the number of publications Moreover, the royalty is most of the time based on the RRP

Nevertheless, there are two major approaches in which the percentage base is not used: zero-royalty and grants Because the author is eager to publish his or her work, the author may accept that no royalty will be given In addition, grants, for example from governments and foundations, may subsidise the publishing

of a book

Today, it is common to use a combination, in which the author receives

royalties only when the book sells a certain number of publications A flat-rate fee is used in other cases, in which the author receives a payment for each page or article; in this case, the publisher takes on the risk of the publication failing

Very popular authors also receive advance payments, which can range from a few thousand Swiss francs to several million Swiss francs This again bears high risk for the publishers

Figure 6: Calculation Steps for Publishers

Source: (Wulf, 2005)

As we can see in Fig 6, publishers use a number of steps to arrive at the final price This is a difficult task because of the reliability of the data In calculations are based largely on guesswork and experience; with further calculations at the later stages, the data becomes more feasible, and the publisher is able to

determine the final price of a book, the so-called RRP

Post-calculation takes into account the actual revenue and costs incurred to determine the overall success of the book title

Interestingly, it is the bestsellers that gain the most from discounting and wider exposure in non-traditional outlets such as supermarkets (Fishwick, 2001)

There is an emerging market for e-publishers, who use standard methods for eBook pricing such as those based on the number of words or pages of their eBooks (Rachel, 2009a) However, the pricing of eBooks is a topic of debate between publishers, authors and agents For instance, Amazon.com prices its eBook bestsellers at $9.99, providing a 60% discount on these compared to a 45% discount on physical books This may lead to Amazon.com dominating the online business, possibly hurting the royalties and profits of publishers and authors (Rachel, 2009b)

2.2 Customer Loyalty Programmes

customers Offering special rates for regular customers is another approach to making customers happy and increasing sales at the same time (Kühnle, 2007)

In a financial downturn, it is even more important to retain existing customers, and LPs are good tools for determining the buying behaviour of customers In the UK, the Clubcard offered by the large supermarket chain Tesco makes it possible to track £4 out of every £5 spent using one

It is assumed that if an LP is available only to a selected group, these

individuals will be more willing to share personal information with the company (Klein, 2008) Easy access to the programmes is important for the success of

an LP, and emotional factors and financial rewards should also be considered

Moreover, the sales force should be included and educated in the operation of the LP (Kreutzer et al., 2007)

Recently, markets have been flooded with all types of LPs with the aim of

increasing the retention rate of customers Nevertheless, few customers are 100% loyal to a store or brand, with most dividing their loyalty among a set of brands and stores (Cook, 2008)

Loyalty cards have three functions: identification, memory and reward

Moreover, saturation decreases the efficiency of an LP, and customers may manipulate the system or lose interest (Anonymous, 2005)

Research shows that customers have a high preference for rewards Their first preference is for gift certificates, followed by cash back, and discounts in third place It is also important to provide lower rewards initially and increase rewards when a customer achieves higher levels of the programme (Jakobson, 2004) A programme should be introduced through all distribution channels of the

business (Mark, 2000)

2.2.3 Success Factors for a Loyalty Programme

A customer loyalty programme has two main goals, the first being to increase the sales according to an increasing purchasing level and/or usage level The second goal is to build a bond between the store and the customer Customer loyalty programmes may also increase cross-selling, database building, public relations and many more activities (Yeshin, 2006)

The success of an LP is dependent on several factors, as indicated in Fig 7

Figure 7: Success Factors for Loyalty Programmes

Source: (Butscher, 2002)

In the above figure, it is clear that an LP needs to be carefully planned in terms

of its design, its reward structure and how it is marketed Moreover, customer characteristics must be evaluated and considered, since the introduction of an

LP will provide no benefits if the customer does not like such a system

Market and firm characteristics also play an important role It is therefore

essential for a company to assess the market and develop an LP that is

compatible with the company’s image and resources

While the software used to maintain an LP is a key factor, it is important not to build the LP around the software, since the software should be built for the LP, not the other way around Only with this approach can the LP be unique and suit the company (Compton, 2005) Moreover, use quantitative and qualitative data helps to understand the customer better (Bhavna, 2005)

Providing the customer with improved status, savings or awards can increase the probability of success of the LP significantly (Kelly, 2003)

Research shows that the sales growth over the last ten years for retailers

without a loyalty programme was around 2.3%; if an LP was in place, sales grew by on average 4.3% It is important to note that the introduction of an LP in Switzerland sometimes requires millions of Swiss francs Another problem is that LPs primarily influence the short-term behaviour of the customer rather than the long-term behaviour Moreover, it is not always important to use an LP

to develop a database of customer behaviour, since payment by credit card or cheque also provides information about the customer and can be used to

evaluate behaviour Cash payment presents difficulties in this regard, but it still may be possible to obtain data through using, for example, the customer’s phone number or address (Michael et al., 2007)

A study conducted in the USA revealed that four out of ten LP participants quit the programme The main reasons given were dissatisfaction regarding the reward structure, difficult redemption and changes to the rule structure Men are also 38% more likely to drop out than women (Jodi, 2003)

Overall, customer loyalty programmes that increase the value of a product and its visibility are worth implementing, even if the programme simply helps to place the business on a level playing field with its competitors (Dowling &

Uncles, 1997)

2.3 EBooks

Smartphones could help to distribute eBooks in general There are many

examples of success, and travel books and phrase books in particular are very popular on devices such as smartphones (Craig Morgan, 2009)

The exact size of the eBook market is unclear, and the major problem is

developing easy-to-use devices Furthermore, the pricing strategies of

Amazon.com regarding eBooks raise concerns among publishers as regards compensation (Jeffrey & Geoffrey, 2009)

EBooks also mean that books can be published that would not otherwise be published in the traditional way; nevertheless, the target market of a book

needs to be evaluated very carefully (Hall, 2009)

The book industry needs to ensure it does not make the same mistakes as the music industry and must find ways to use the new technologies for their own benefit It is not a question of the traditional book disappearing, it is more a

question of new capabilities and ways of interacting Furthermore, the pricing of eBooks should be driven by cost structures and customer demand rather than

by comparisons with the traditional book (Olson & Anand, 2009)

In the itemised economy, everything has its price; the internet provides the customer with the opportunity to buy only the item that is truly needed, but

knowledge of the technology is required to use it (George, 2005) Therefore, eBooks offer the opportunity to buy individual chapters of a book

EBooks provide a range of opportunities for pricing, including pay per view, pay per use or component and subscription-based payment Moreover, the eBook market can be split into many segments such as consumer, professional and corporate (Dillon, 2001)

One final issue is piracy Since just one day after publication the entire contents

of a book may be found online, publishers need to balance digital rights

management (DRM) and promotion of the product Moreover, a new test for traditional publishers is emerging in the form of electronic publishing, which provides new opportunities for both authors and publishers This could lead to the demise of traditional publishing companies (Burk, 2001)

3 Empirical Results

In the preceding sections, a selection of approaches regarding pricing

strategies and customer loyalty programmes was examined Some insights into eBooks were also provided

In the present section, the data collection and the sampling will be exemplified Subsequently, the findings will provide an insight into the approaches used by Swiss bookshops and publishers It is important to note at this point that the findings provide only an overview of the strategies and programmes used

The emphasis here is on the approaches used by market players in the

German-speaking regions of Switzerland Political opinions about the

liberalisation of the book market are not part of this thesis

As already specified in the methodology section, data was collected through interviews The majority of the interviews were conducted face-to-face, while telephone interviews were also used to collect information

The author’s experience of the greater willingness of participants to take part in

an interview rather than complete a questionnaire is also the observation of other researchers It is also observed that interviewees are more reluctant to provide answers in a questionnaire (Saunders et al., 2007) Furthermore,

interviews provide the opportunity to evaluate and assess the interviewee

alongside gathering data (Cohen et al., 2007)

Moreover, owing to the insecure political environment and the competition in the market, it was beneficial to visit the bookshops personally in order to obtain an insight into the stores and the people working in them

Because of the nature of the market itself and the current market conditions, it was essential to perform face-to-face interviews, and through conducting the interview in person, a certain level of trust could be established

3.2 Sampling

Owing to the topics brisance and political debate, it was agreed by all the

interviewees and the supervisor and client that the findings would be published anonymously

The interview partners were chosen carefully in order to provide a good sample For the thesis, the interviewees were placed into three categories

Table 2: Sample of Bookshops

9 Small Full Assortment Rural

Source: Author

In addition, interviews were conducted in Switzerland with three publishers, two authors and one wholesaler, as well as one library

The basis for the categories is explained in Table 3

Table 3: Description of Characteristic

Characteristic Description

Small 1–5 employees inclusive of the owner

Medium 5–10 employees inclusive of the owner

Large 10 and more employees inclusive of the owner Specialised The bookshop specialises in one or more

specific book types, such as law and business Full assortment The bookshop does not focus on specific book

types Rural < 10’000 inhabitants in town/village

Urban > 10’000 inhabitants in city/town

Source: Author

4 Research Findings

All the findings illustrated in this section are based on the interviews conducted during the research period To aid understanding, the section is divided into four subsections: general observations, pricing strategies, customer loyalty

programmes and eBooks

Overall, all customer segments are served in the interviewed bookshops;

nevertheless, there are some findings specific to the customer structure of small

programmes in the liberalised book market, the author received the mandate to collect information and present findings... regarding pricing and customer loyalty programmes

Consequently, this thesis aims to provide an insight into the book market in terms of pricing strategies, customer loyalty programmes and. .. examined the motivations and approaches used in pricing Gaining knowledge about the actual movement

of prices in the book market is essential, but gaining an understanding about the incentives