Optimize Price in the Publishing Industry


A National History Book Publishing Company was debating the merits of implementing a price increase across their line of books (See Figure 1). The client maintained a single retail price point of $21.99 for over 80% of their 15,000 titles. The company had not implemented a price increase in over ten years and was unsure of whether the current market landscape would accept a price increase. The market had become increasingly complex with the rise of Amazon and e-commerce overall. Additionally, the publisher sold many of the books in “Mom and Pop” book stores in which they perceived they already had a high out-of-pocket.

The RML Approach

Focus Groups

What do consumers look for when considering buying a book?

Online Survey

What are consumers comfortable with paying when purchasing a book?

Client Value Mapping

How do we ensure we are in the right position versus the competition?

Execute, Monitor, Report & Adjust

How do we ensure we can implement and sustain changes
successfully in the marketplace?

The Challenge

The client wanted to maintain the current strategy of a single retail price to ease execution across channels and the overall market. With limited point-of-sale data, history of price changes and corresponding customer feedback, it was difficult to initially assess the market sensitivity to a price increase. The specialized nature of the book offerings and limited competition made the assessment increasingly difficult. With flat revenue over the past three years, Revenue Management Labs (RML) was called in to examine the feasibility of implementing a price increase across the entire portfolio.

1. Online Survey

The purpose of the online survey was two-fold: identify the most important factors influencing a book purchase decision and determine consumers’ willingness to pay.


MaxDiff analysis, an approach for obtaining preference/importance scores for different variables, was used to determine the factors influencing a consumer’s book purchase decision. Respondents were shown five sets with 5 attributes (of 9 total) that could influence a book purchase decision (See Figure 2). RML leveraged industry research and worked directly with the client to identify 9 relevant attributes. MaxDiff was used over traditional Likert rating scales because of the advantage of overcoming scale bias, halo effects, and the fact that it is more engaging for the respondent.

Willingness to Pay

Willingness to Pay analysis was used to evaluate the price points at which most respondents are comfortable. This method provides an easy visual of the percent of respondents willing to pay certain prices and the impact of raising or lowering prices. The output data was used to create elasticity demand estimation for the books.

Price Sensitivity (Van Westendorp)

Another technique utilized to understand pricing and price sensitivity was the Van Westendorp Price Sensitivity Meter. This method is a gauge of consumers perceptions to a products’ price. Contrary to the Willingness to Pay, it allows respondents to enter prices manually based on four questions:

  • At which price would you consider one of these books to be so cheap that you would have doubts about its quality?
  • At what price would you consider one of these books too expensive that it is not worth purchasing?
  • At what price would you consider one of these books is a bargain?
  • At what price would you begin to consider that one of these books is getting expensive, but you still might buy it?

The results were compiled to create a chart displaying the optimal, indifferent, lower and upper range price points (See Figure 3). The circle in red displays the significant increase of respondents that found a price over $25 was either expensive or too expensive. The purpose of this circle is to identify where large volume drop-offs are likely to occur.

2. Focus Groups

Two focus groups were conducted in separate markets across the United States. To ensure we were conducting the focus groups in average consumer markets, the location was selected based on the following criteria:

  • Not the home market of the publisher
  • Average sized market ($ Sales & # of books sold)
  • Not a distribution center
  • Representative of the average customer profile (based on previous market research)

To match the consumer profile of the company, participants were required to have purchased a history book in the past six months and closely fit the demographic profile. Participants were shown and asked questions about the factors influencing their book purchase decision. As well, the participants were shown different versions of the history books to evaluate the importance of physical factors when making a purchase.

3. Perceived Value Maps

The results of the online survey were amalgamated as part of the client’s perceived value mapping sessions. The goal of a value mapping session is to assess how consumers view the client’s product versus competition (price and value attributes). Results of the MaxDiff were used to incorporate the importance of price compared to the perceived value of all other attributes. The Focus Group results allowed the client to enter the mind of the consumer. The results of the session are shown in the Value Map Figure 4. In the results below, the client has the second-highest price with a clear advantage in terms of perceived value. This shows that even with a price increase there is still enough excess value for the client to maintain their competitive edge.

The Result

+$2 Price Increase
+10% Revenue Increase

The client was able to implement a price increase for the first time in ten years. They were also able to better understand the wants and needs of their consumers based on the survey and Focus Group findings. They implemented a price increase of $2 across all titles and, as a result, have seen over a 10% increase in both revenue and profit without adversely impacting volume or market share.

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