Marketing: The Marketing Mix in Waterstones

Background Information

Waterstones is a British-based company that deals with books. It was started by Tim Waterstone at the beginning of the 80s and has become one of the largest books companies in Europe. Waterstone became a subsidiary of the HMV group towards the end of the last millennium and has since acquired two more bookstores in the United Kingdom. These bookstores are Dillon’s and Ottakars. The mission of the company is to be the leading high street bookseller, giving clients the widest choices possible, high-quality value and high-quality advice from its well-informed bookselling team.

Environmental factors affecting the marketing of the Waterstone books

There are environmental factors that are affecting the marketing of Waterstone books. These factors can be looked investigated by conducting a PEST analysis of this company. PEST analysis looks at the Political Economic Social and Technological environment within which a company is operating (NetMBA, 2009, pg 3). Starting with the political environment, it is imperative to note that the United Kingdom is a liberal country where people enjoy their rights to the fullest. This means that there is freedom of speech, movement, expression and association in the country. One of the political freedoms that can affect the marketing of Waterstone books is the freedom of expression. This is because where there is freedom of expression, people are more likely to express themselves in various ways without fear. In a country where the levels of censorship are low and the freedom of the press is very high, booksellers find it easy operating in such an environment because there is a wide variety of literature that people are yearning to buy. The low censorship levels and the high levels of the freedom of the press is one of the political factors that have had positive effects on the marketing strategies of Waterstone. This is because there is a huge supply of literature and the demand for the books is high especially because there are many areas that writers can tackle without fear. The second political factor that has had an effect on the marketing strategies of Waterstone books is the regulations by the government (Lorenzo, 2006; pg 78). The cost of operation by booksellers in the United Kingdom is very high and this has affected the marketing ability of the Waterstone. This is because, these costs that have been driven up by government regulations and high taxations, force the prices of the books to skyrocket to levels that a good percentage of the people in Great Britain cannot afford. When the price of a product is above the spending power of most of the people in the country, the demand for that product goes down and this creates a negative effect on the marketing strategies of a company (Lusch, 1987; pg 23). This is the same scenario that Waterstone is facing in the United Kingdom due to the costly government regulations.

The second environmental factor that is affecting the marketing of Waterstone books is the nature of the economy. Economic environmental factors are the most important in the marketing of any product because they are the one that have the heaviest impact on the returns made by any marketing strategy (Fahey, 2000; pg 56). Waterstones operates in a country where a large percentage of people have high levels of disposable income meaning that the spending of these people in luxuries such as books and journals is also high. This has a positive impact on the marketability of the books that this company sells. The company is also able to store the high end books that are very expensive because of the knowledge that there exist a good percentage of people with the ability to buy the books. These high end books are the ones that are important in the generation of revenue because of the high levels of income they generate. The marketing executives at Waterstones find it easy operating in the Great Britain because there is an able populace that is ready to consume the wide variety of high quality books that the company offers. However, this economic factor came to haunt the company during the 2008 recession which had a toll on almost all the economic sectors in the world. Books are considered as luxuries and are only afforded by those that have tidy surpluses to dispose off. During the economic recession, the amount of disposable income was very low and the consumer power went down. This means that the demand for luxuries like books also went down and Waterstone was one of the companies that were affected by the diminishing consumer power during the just ended economic recession. However, in case of an economic boom, the books sector is one of the areas that reap from the increased consumer power especially in a country that has a good reading culture (Levitt, 2004).

The third environmental factor that has been affecting the marketing of the Waterstone books is the nature of the society. Social factors usually influence the marketability of any product (Brian, 2000; pg 56). One of the social factors that can have an impact on the book markets is the reading culture of a society. A society that has a good reading culture will consume books faster than a society that has a poor reading culture. The reading culture in the marketing environment that this firm is operating in is average though experts claim that the reading culture is going down especially because of the effects of the digital revolution. Before the digital revolution took shape, the reading culture in the United Kingdom was very good and this had a positive impact on the marketability of books. However, the rise of the internet has really affected the reading habits of the Britons especially the young generation who would rather do other things on the internet and with their digital gadgets rather than read books. This is why the marketing of books that target the younger generation by the Waterstone has been an uphill task. However, the reading culture among the older generation is still intact and this is where the company has a ready market. The other social factor that has had an effect on the marketability of books is the dynamics of language. This is one factor that has influenced the marketing of books by this company. English is the global lingua franca. The language is used by very many people allover the world. 90 percent of the books that Waterstone stocks are in English. Most of the others are in French with Spanish taking a negligible percentage. The English factor has really influenced the marketing of books positively because the company gets orders from allover the world (Levitt, 2004). Though it is physically present in the United Kingdom only, the online presence of this company has really helped it to tap the global English market. The biggest overseas market of this company is in the United States of America, Canada, Australia and the Anglo-African countries.

The fourth environmental factor affecting the marketability of the books stocked by Waterstone is technology. The development of e-books and e-libraries has been one of the greatest impediments to the marketing of books by Waterstone. This is because most publishers are making their books available online meaning that the market for the hard books is diminishing. Waterstone may have an online shop but the problem with online selling is that there is a lot of competition from already established online stores like the Amazon. The development of book reading gadgets is another technological factor that has affected the market of books that are sold by Waterstone. The most popular book reading gadget is the kindle and the rate at which the kindle is becoming popular among book lovers is going to have more impact on the marketability of books. The kindle is vey popular among the youth in both the United States of America and the United Kingdom.

Market segmentation and segmentation methods

To be able to conduct its marketing in a way that will create a competitive advantage, Waterstone must apply business level strategies that are efficient enough to ensure that the company taps into very wide market. This means that the company must adopt marketing strategies that will ensure that a very big population is covered and served. Market segmentation is a process where a firm divides its market into different segments based on the consumer ability. This is in recognition of the fact that there exist different social classes and people with different tastes. The ability of the company to serve the tastes and the consumers of different social classes is one of the factors that can contribute into improved revenues due to the creation of the much needed competitive advantage (Estelle, 1999; pg 40). The best way in which the company can segment its market is by using the business level strategy of differentiation. Differentiation means that the company will avail the same book in different packages targeting different classes and tastes of the consumers. For example, to tap into the low end market, the bookseller can package a book using very cheap materials to ensure that the price of the book remains low and affordable to the low end consumer. The same book can be availed in hardcover for the high end consumers; it can be availed online for the digital savvy consumers and also in the e-book readers for the consumers that like gadgetry. This is one product that has been differentiated in four ways to target different classes of consumers. This differentiation will ensure that the company caters for different tastes and consumer abilities. The ability of the company to create as many segments as possible helps it to survive in a competitive environment by ensuring that the depth of service offered is maximized. The other way in which the bookseller can segment its market is by creating different types of bookstores. It is important that the company improves its presence in the major streets in the up-market and in the downtown. The pricing of the book should vary with the location of a store. The books in the downtown stores targeting the low end customers should be made available at a cheaper price while the books in the up-market stores can go at a higher price than the normal because the up-market ones target clientele with a high spending ability. The lowering of the prices in the low end market will be compensated by the inflation of the prices in the high end market. This will be advantageous because the company will have sold a significant higher volume of books without incurring losses.

Buyer decision making

There are various factors that influence the decision making. One of the strongest influences is advertising and marketing. Buyer decisions can be motivated by external factors like advertising. The second thing that influences the buyer decision making is the pricing. Most consumers are very price conscious and are not wiling to spend high amount of money on some things. There are products that are so necessary that the buyer is forced to part with a tidy some of money but there are other products that the consumers will be cagey while making decision. For Waterstone, one of the factors that can help it in influencing the buyer decision making is pricing. As tackled above, creating different segments in the market can help the company to use price to influence the decision making by the consumers. The buyer decision making process at the Waterstone high retail street may differ with its online presence because the online presence serves three purposes at once (Brian, 2000). Online, the company is advertising, positioning and packaging the product simultaneously. The web is very influential and is bound to influencing buyer decision making more easily than at the physical retail stalls. The problem with online purchases is that they tend to be more expensive than at the retail streets and very few people can make the decision to buy online.

Marketing Mix

The marketing mix used by Waterstones has different variables. One of the variables in the marketing mix is brand positioning. Brand positioning is a powerful variable because it is the one that ensures that the products are exposed to the potential customers (Bradford, 2000; pg114). In the process of positioning, Waterstone has been using its powerful website to give its products a global online presence and this has been one of the most effective marketing strategies. The other method of positioning has been conducted through acquisitions of stores to ensure that the company is present in as many market segments as possible. The other variable that the company has used in the marketing mix is pricing. Pricing strategies have worked for the company because differentiated prices have enabled the company to sell higher volumes of books than the competition.

Problems facing Waterstones

There are various problems that are facing Waterstones. One of the problems is the poor reading culture especially among the young people due to internet revolution. The internet revolution has also made books available on the internet and on e-readers and this has created a huge competition in the market with Waterstones lagging behind well established online booksellers such as the Amazon. The other main problem facing Waterstones is the economic uncertainties that keep on affecting demand for books due to unstable buyer power. The last problem that Waterstones is facing

Is the high cost of operation in the Great Britain due to the stringent government regulations. All in all the environmental factors that have been mentioned above have had more positive effects in the marketing strategies of this company


Bradford, D. (2000), Simplified Strategic Planning. NJ: Chandler House.

Brian, T. (2000). The 100 Absolutely Unbreakable Laws of Business Success, Chicago: Koehler Publishers.

Estelle, M. (1999). Demystifying Competitive Intelligence, Cambridge: CUP

Fahey, L. (2000). Macro environmental Analysis for Strategic Management, NJ: Westport Publishing.

Levitt, T. (2004). Marketing Myopia, New York. Rutledge

Lorenzo, M. (2006). Strategic Planning II. New York.Willey

Lusch. V. N. (1987). Principles of Marketing, Kent. Kent Publishing,

NetMBA (2009).Marketing and the Global Economic Crisis. Web.

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