The Management Press

TMP (The Management Press) is a specialist business publisher; commissioning, printing and distributing books on financial and business management. It is based in a small town in Arcadia, a high-cost economy. Sixty per cent of the company's sales are made through bookshops in Arcadia. Thirty per cent of TMP's sales are through mail order generated by full-page display advertisements in magazines and journals. Most of these sales are to customers based outside Arcadia. The final 10% of sales are made through a newly established website which offers a restricted range of books. These books are typically very specialized and are rarely featured in display advertising or stocked by general bookshops. Most of the online sales are to customers based in Arcadia. High selling prices and high distribution costs makes TMP's books expensive to buy outside Arcadia.

In the last decade costs have increased as the raw materials because of paper is extremely expensive in Arcadia and the trees used to produce it are becoming scarcer. Online book sellers have also emerged who are able to discount prices by exploiting economies of scale and eliminating bookshop costs. In Arcadia, it is estimated that three bookshops go out of business every week. TMP itself has suffered three years of declining sales and profits. Expenditure on marketing has been reduced significantly in this period and further reductions in the marketing budget are likely because of the weak financial position of the company.

Overall, there is increasing pressure on the company to increase profit margins and sales. Despite the poor financial results, the director has stated that 'bookshops need all the help they can get and management journals are the heart of our industry'.

However, the marketing director is keen for the company to re-visit its business model. He increasingly believes that TMP's conventional approach to book production, distribution and marketing is not sustainable. He wishes to re-examine certain elements of the marketing mix in the context of the opportunities offered by e-business.

The marketing director is convinced that investing in e-business is essential for the survival of TMP. 'We need to consider what unique opportunities it offers for pricing the product, promoting the product, placing the product and providing physical evidence of the quality of the product. Finally, we might even re-define the product itself'. He feels if the company fails to grasp these opportunities, then one of its competitors will, and 'that will be the end of us'.

Required:

(a) Determine the main reasons for the adoption of e-business at TMP and identify potential barriers to its adoption;

(b) Evaluate how e-business might help TMP exploit each of the five elements of the marketing mix (price, product, promotion and place) identified by the marketing director.