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Differentiation Value: Case

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Chan David
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32 views1 page

Differentiation Value: Case

Uploaded by

Chan David
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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A magazine publisher consistently encountered price

resistance from media buyers.


Since the magazine generated 11% more circulation than
its nearest competitor (1,550,000 vs. 1,400,000) media
buyers would pay no more than an 11% premium to run an
advertisement
They argued that the value of the magazine’s quality was
reflected in the number of subscribers drawn to it.
The nearest competitor charges $25,000 for a full-page
Differentiation advertisement.

Value: Case RESEARCH

Further investigation suggested that the magazine had


better writers and more interesting articles, nicer
photography generating more interests in ads, and a more
motivated customer base (2.1 versus 1.8 readers per copy,
14.5% versus 9.2% interest in ads, 2.2% versus 1.6%
motivated to act upon seeing ads) and wealthier readership
($200 versus $180 sales per customer. It was also generally
understood that, for magazines, 20% of all motivated
customers would actually end up buying the advertised
products. Margins on sales generated via magazines are
typically in the 20%-40% range.

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