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Similar products offer surprising sales potential
When German publishing house Gruner + Jahr (G+J) launched the first issue of the German edition of National Geographic magazine in 1999, a lot of head-scratching ensued. G+J were already publishing the similar magazine Geo – and now they were competing with themselves? We’ll outline why it can be a valid strategy to offer two comparable products and what banks can learn from this!
Top dog welcomes the competition
Geo started out in October 1976 and immediately became top dog in its market sector. From the first issue on, the magazine with the eye-catching green cover stood for a riveting and sophisticated type of journalism with high-quality coverage of a wide range of topics, background articles on science and research and some truly stunning photography. The formula proved to be an instant success.
Along came National Geographic: First published in 1888 as the official journal of the venerable National Geographic Society, more than a hundred years later a German edition was in the works. The Hamburg-based publisher G+J added the title to its portfolio. The widespread expectation was that the new magazine with its attractive layout would lure readers away from Geo. This train of thought was actually a decisive factor in G+J’s strategy. If readers would flock to the new magazine, they would at least be still buying a Gruner + Jahr product.
The plan worked. Today, National Geographic ranks alongside Geo, quality-wise. The latter may have lost its unique position on the market, but G+J is now selling a combined 330,000 copies of two magazines with similar direction instead of just 217,000 copies of Geo.
Twins as successful daughters
It may appear out of the ordinary in the publishing field, but this model has been commonplace in other industries for quite a while now. Should a car manufacturer not be offering e-cars only because some customers will choose this alternative over a petrol engine? Of course, the question is absurd – of importance is the number of cars sold, not the engine powering them. Or, in the example above, the number of magazines sold by a publisher. Whether this magazine is called Geo or National Geographic is really of secondary importance.
Banks can learn something from this, too. Of course, the financial markets are already brimming with different products and services. But why leave all the clever ideas to the FinTechs, when these ideas could enhance your own portfolio and your own revenue? This is not about stealing someone else’s concepts, it’s about diversifying. And that includes revamping classic bank services for the digital age and bringing them to the attention of new customers.
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