Expanding your consumer franchise

Folio: The Magazine for Magazine Management, Annual, 1992 by Reed Phillips, Chris Fodor

But that 's just the beginning. Among the examples of more sophisticated efforts are Gruner Jahr's sales of child-development toys by direct mail; National Geographic's sale of games; Modern maturity's promotion of pharmaceutical products, vitamins and life insurance; and teen magazines like Teen, Sassy, and Tiger Beat merchandising suitably styled and priced items.

Does your book have it?

All magazines were not created equal: Some are natural springboards for a variety of products, while others produce bellyflops.

People, for example, does not lend itself easily to a wide range of product extensions. "Its subject matter is diverse and perishable," says former circulation executive John Squires, who is now consumer marketing director at Entertainment Weekly. "It doesn't have the reference value that makes so many magazines appropriate for product extensions."

A magazine's suitability for product extensions is determined by its editorial content, demographics, reader involvement and image. Established magazines have years of credibility stored up with consumers and advertisers. But new magazines, on the other hand, "have very little brand equity," says Squires. Circulation size and market penetration are other important factors. Specialty titles lack substantial customer bases, but often achieve much greater market penetration than mass circulation titles.

A strongly identifiable market niche can compensate for other deficiencies. American Baby, for example, which is primarily controlled circulation, has been very effective in exploiting its market of new mothers - despite the lack of a paid subscription list. It has started such new products as spin-off magazines, cable television shows, sampling packages, and single sponsorships.

Five steps to success

Too often, publishers get involved with launching product extensions without gaining the full commitment of their organizations.

Based on his experience with a 150-title manuals business, as well as two spin-off titles, Clare Thain has identified five factors critical to success. "First," he says, "the publisher must realize that subscription techniques are important, but nevertheless need to be augmented by direct marketing techniques. Second, you need to put one individual in charge, someone to make it happen. Giving this person the proper incentives is critical to the venture's success. Third, once you have made the commitment, you will need to set up an independent operation and endow the division with an operating budget. Fourth, do not give side products secondary priority: Like any new venture, they must be given your best shot. Finally, you must try and try again: expect an 80 percent to 90 percent failure rate."

Two final questions to ask before jumping in: First will the planned product compromise the image of your franchise in any way? And, second, will the line compete with your own advertisers? It may be okay for Modern Maturity to sell life insurance or for Golf Digest to sponsor golf schools, but if a woman's magazine were to start its own line of cosmetics, it might lose advertising from beauty companies.