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International Practice


Workshops of the Ukrainian Book Project. Workshop "Strategic planning in publishing sphere"


In what way one can plan the publishing house activities for several years in advance?

26 publishers from Vinnytsia, Kyiv and Kharkiv have attempted to do this an the seminar "Strategic planning in publishing sphere’ which was held on 19-20 October 2006 at the International Foundation "Vidrodzhennia" (renascence).

"Strategic planning in publishing sphere" – is the ninth workshop held by Book Marketing Research (BMR, Krakow, Poland) within the framework of the "Ukrainian Book Project" (the workshops already held in Kyiv, Lviv, Kharkiv as follows: "Marketing in publishing business", "Books Distribution Management", "Books Promotion in publishing sphere").

The majority of publishers continue to think inductively i.e. they wait for the interesting book to appear and plan their activity after having found it. Yatzek Vlodarchyk of BMR suggested a different approach – deductive. First of all we have to identify the stage we’d like our publishing house to advance to in the future, and then we have to plan how to achieve it and then go back to the level of the publishing plan. The easiest way to do it is to take the strategy of the publishing house activity as a basis – the issue that was considered in detail at the workshop.

The workshop has started with setting up the scope of planning for the future i.e. identifying the basis for the long-term planning (5-10 years), medium-term planning (2-3 years) and short- term planning (1 year). The traditional European time interval for short-term planning is one month. It is a bit more complicated with the Americans – they plan one year ahead with ten days detailing. In the medium-term planning the time interval is one quarter and in the long term – two years. That is, if we want to work professionally we should now draft the monthly plan for 2007, the quarterly plan for 2008-2009 and two year plan for 2010 and so on. Besides, at the end of 2007 we have to detail our activity for January 2008 and the first quarter 2010. Sounds a bit imaginary, however, we should not avoid it.

Development of the business plan and identifying of the planned profit were determined by BMR consultants as the first stage. As a rule this is the responsibility of the financial director of the publishing house. Based on the business plan the marketing department shall draft the marketing plan that will focus on how we should work in order to generate the planned income. Finally, the editor–in-chief is involved who is marking the books in the publishing plan that have to be published in order to achieve the planned income.

The marketing plan may refer to the activity of the whole publishing house, a new field in which the publishing house would like to work, or the separate publication that needs significant investments.

The first page of the marketing plan has a striking similarity to the diploma paper since it has to cover aim and scope of the plan, market research methods used in internal and external analysis as well as the list of persons responsible for the marketing plan.

Then the situation analysis should be accomplished based on external market research (market segments, selecting and research of the targeted market, identifying what kind of books the readers require, competitors’ analysis etc.) Internal data that should be taken into account include sales volume within the last two years on the highest rated items and sales through distributors (that are responsible for 80% turnover), analysis of the logistics and discounts system.

The next stage would be SWOT analysis of both the publishing house and the books i.e. the determining of the strong and weak points of either publishing house activity or of the book: and also external and internal capabilities and threats. On the basis of such analysis the publishing projects are divided into: development projects, stabilization projects, speculative projects and challenging projects. SWOT analysis of the entities would help compare our publishing house with competitors and the SWOT analysis of the books would help compare our books with competitors’ books.

In the long-term planning we should determine the strategic goals. Do we show preference for the market goals – i.e. achievement of the desired sales volume and the market share, getting the better of the competitors, drawing in the particular group of the customers etc? Are we interested in financial goals - gaining the desired profit, return of the debt capital etc. May be we are more focused on promotional goals – improvement of the company image, TM promotion, introduction of the new product etc. Or we should admit that we pursue the personal aims.

The medium-term planning is based on the marketing mix. It’s worth beginning with the product description: targeted market for the product, the essence of the product and its best utilities, trade mark of the publishing house, the quality and the content of the product, terms of cooperation with authors, planning of the book expense and the book life period.

Then, based on the package description (volume, format, covers, graphics, covers wording etc.) one has to move to setting forth the price policy of the publishing house – sales terms, price, credit conditions (if any) and discount system.
The next step would be planning of the promotion campaign and distribution. The publisher should not forget about control over the distribution scope and expenses (sales volume, titles assortment, distribution intermediaries, physical distribution expenses etc.) Timeframes should be planned both as external factor (determine the optimal publication date) and the internal factor (books publishing schedule).

One should remember the psychology of the clients’ behavior and that of the associates (the planned structure of the publishing house, exchange of information, reporting system)

The successive part of the strategic plan should contain budgets and time-tables of the different publishing divisions, the forecasted loss and profits and foreseeing risks in the activities. What we all remember from the marketing course for publishers is that the most risky is the publication of the books of the new field and for the new client whereas, the less risky would be working in the customary familiar field with the familiar ("old") client.

In order to make it all reality the participants of the workshop have received the structure of the strategic plan and two programs simulating the activity of the publishing house. All they have to do now is to insert their publishing expenses and the distribution expenses into the program and see the profit point (if it will exist) and possible financial result.

The instruments controlling the success of the strategic plan include economic indices, budget restrictions and time limits. The economic indices include the rate of the inventory rotation, indebtedness rotation, and financial fluidity. The budget restrictions shall indicate the limiting financial indices: the lower indices would cause the publishing projects to roll up leading to closing down the publishing business. The time limits indicate likewise- how many years it is planned to work?

How much time would be needed to master the new field or to enter it etc.

Nothing is eternal in this world, thus the procedure of changing the strategic plan should be envisaged by way of applying pessimistic and optimistic scenarios. In the pessimistic option all expenses for the presence in this field are indicated and fulfillment of the plan by only 20% is envisaged. In the optimistic option the plans will be on how to deal with surplus profit.

Practical sessions of the workshop as usual provided advice to the publishers as to cooperation with "Empicom" in Ukraine (the Polish mega store system buying the "Bukva" (Letter) book store network).

Apart from participating in the workshop the publishers had an opportunity to get individual consultations on the publishing strategy.

In December we plan to repeat this workshop in Lviv (7-8 December 2006).

In 2007 the Ukrainian Book Project and BMR are planning new workshops in Kyiv and Lviv: "Management in publishing" (for publishers), "Successful sale of the books in the book stores" (for book store associates) and "Market research" (for publishers).

BMR – is Polish consulting company that works in Central and Eastern Europe since 1993 specializing solely on the book market. BMR cooperates with Polish and foreign publishers and promotes establishing contacts between them. BMR provides advisory services, conducts research into the book market, and holds workshops and training courses and also supports publishing portal: http://wirtualnywydawca.pl/.

BMR Director: Yatsek Vlodarchyk.

The project is being implemented under support of "ÌÀÒRÀ" Program by the Ministry of Foreign Affairs of the Netherlands, International Foundation "Vidrodzhennia" (renascence) and Fund for Central and East European Book Projects, Amsterdam.

Iryna Kuchma, Coordinator of the Ukrainian Book Project,
Manager of the Program "Social capital and academic publications"
International Foundation "Vidrodzhennia" (renascence)




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  Expert's Column  
The president of the Ukrainian Publishers and Booksellers Association, the head chairman of the expert committee of Ukrainian National Council of culture and spirituality at the President’s Office

Oleksandr Afonin

Highly respected Viktor Andriyovich! Ukrainian Association of book publishers and distributors addresses you with a question that needs your immediate personal intervention, because, as the experience shows, this problem can totally overcome your Decree “About some measures for development of book publishing business in Ukraine” (March 21, 2006) and lead to a serious crisis in one of the branches of publishing business – book trade, which is in very critical condition already.


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MATRA PROGRAMME,
NETHERLANDS MINISTRY
OF FOREIGN AFFAIRS
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