The Shri Ram School, Moulsari Campus

Subject: Business Management

Topic: Marketing
Class: IB 11
Name……………………………….. Sec………….. Date……………

Waterstones

Waterstones is a private limited company operating over 200 bookshops in the UK as well as a few outlets
overseas. Waterstones is also engaged in e-commerce, selling books through its own website. The company
enjoys strong brand awareness, as well as brand loyalty.

Waterstones’ own website seems to contradict its status as a larger retailer with the declaration: 'Waterstones:
Your local bookshop'. The site goes on to explain: 'Waterstones is changing… The local aspect is hugely
important to us, and the "one size fits all" approach is firmly in the past. No two Waterstones bookshops are the
same, with each shop tailoring its range to reflect the trends and interests of their local market.' (Waterstones.
(https://www.waterstones.com/help/about-us/44)com) The company’s aim seems to be to appeal to a market
segment interested in a more personal shopping experience.

An advertising campaign developed for the 2012 Christmas shopping season focused on slogans such as: 'A
browser. Much better to be one than to use one.' and 'Books you can’t put down are much easier to find when
you can actually pick them up.' This campaign seems designed to respond to the challenges all booksellers are
facing with new competition from Amazon, as well as e-books read on devices like Kindles. Waterstones’ effort
to appeal to customers is multipronged. The company has added its own cafés, called Café W, to many of its
stores, encouraging consumers to see going to the bookstore as a leisure activity. Waterstones also brings
potential customers into its stores by holding fee-based events, such as author talks.

A more unusual move to appeal to customers began in 2014, when the company opened three smaller retail
outlets that did not use the Waterstones name. Instead, the shops are named after the town where they are located
and hence give shoppers the impression that they are independently run: Southwold Books in Southwold, The
Rye Bookshop in Rye, and Harpendon Books in Harpendon. The three shops are a fraction of the size of most
Waterstones stores. The shops are located in relatively affluent areas where potential customers may prefer to
believe they are purchasing from independently owned bookshops.

Some observers have criticised Waterstones, saying it is trying to masquerade as an independent bookseller,
while others appreciate the company’s sensitivity in adapting their shops’ appearance to local communities. Still
others are just confused as to why the company would not want to use its powerful brand name on all its stores.
The company has explained that it hopes that the independent looking shops will serve as a reminder that
Waterstones managers are allowed the flexibility to choose what books are sold in the shops where they work,
thereby adapting the offerings to the local community.

(a) Define market segment. [2 marks]

(b) Describe two advantages of e-commerce for a company like Waterstone. [4 marks]

(c) In light of changing consumer preferences, discuss Waterstones’ choice not to use its corporate brand name
for all of its shops. [10 marks]

Source:app.kognity.com/schoolstaff/app/business-management-hl-2016/book/exam_style_questions/7824/29948

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