EDITORIAL: Cut-price Potter is proof of some real marketing magic

Craig Smith, Editor, Marketing, Thursday, 26 June 2003, 12:00am,

How would you feel if the UK's biggest retailers started selling your product at half the recommended retail price from the day it launched? If you would be less than happy, the chances are you're working to a very different business model than that of JK Rowling and her publisher Bloomsbury.

By the end of the first day of sales for Harry Potter and the Order of the Phoenix, it is estimated that Rowling had another £7m to add to her £280m personal fortune. Such a level of wealth does offer a degree of financial security, but, in truth, Rowling does appear to be the sort of author who would genuinely be delighted that young Potter fans could buy the book at a knock-down price.

It will never be known whether price elasticity ever really came into play with Order of the Phoenix, such was the level of pre-launch hysteria and price-cutting among retailers eager to trade value for volume.

At launch last Saturday, Bloomsbury itself was seemingly the only supplier sticking to the £16.99 RRP - and that was because it had to.

Asda was selling the hardback book for £8.96, while Tesco was selling it at £9.97 in-store or £7.64 through Tesco.com. Amazon.co.uk was offering it for £8.49, while WH Smith had it on offer at £11.89.

The beleaguered independent book trade was putting a brave face on it all and at least staying in touch with this price point - at an average £11.99.

But this is not a tale of retail giants versus independents; launches such as that of Order of the Phoenix break all the rules of normal markets.

The book has already achieved record UK sales, set previously by Harry Potter and the Goblet of Fire, and shortages are predicted.

In such cases, various fingers of accusation are often pointed at the key players: they failed to anticipate demand; the threatened supply shortfall is merely a PR ruse; that millions were 'wasted' on advertising the launch, when demand was already too great.

The truth is that Bloomsbury and Scholastic, the book's UK and US publishers, have done as good a job at building levels of demand and meeting them as it is possible to do in this market.

Given that Tesco sold only 42,000 of the previous Potter book in its first week, the fact that it initially ordered and received 500,000 of Order of the Phoenix is an impressive chapter in its buying history.

As for the advertising, the massive outdoor campaign (see page 27) - reported to be the biggest ever for a single title - has not overcooked the launch, but proved to be the icing on the cake for what is undoubtedly a marketing achievement of the highest order.

This article was first published on Marketing