Juul Moller: The Internet Impact
Consumer Behaviour
Friday, February 5, 2016

Table of Contents
Introduction 4
Situation Analysis 4 SWOT Analysis 4 Strengths 4 Weaknesses 5 Opportunities 5 Threats 6
Assumptions & Missing Information 6
Problem Statement 7
Development & Evaluation of Alternatives 7 Alternatives 7 Alternative One: Build an e-Commerce platform 7 Pros 8 Cons 8 Alternative Two: Strategic Partnership with NSM 9 Pros 10 Cons 10 Alternative Three: e-Textbook Options 11 Pros 12 Cons 12 Alternative Four: Client Focused Strategy 12 Pros 13 Cons 13
Alternatives Matrix 14 Index 14
Conclusion 15 Solution Objectives 15 Recommendation 15 Build an e-Commerce platform 15 Strategic Partnership with NSM 16 Client-focused strategy 16
References 18

Introduction
Dag Juul Moller is the owner and president of Juul Moller Bokhandel, a bookstore located in Norway. Dag speaks to Dagfinn Nettland, a master of management student at the Norwegian School of Management. Dagfinn was enrolled in a course that required students to take an existing company and analyze how it could use the internet as a sales channel and source of information. Dag was interested in the fact that the required textbooks weren’t available until several weeks into the course. Some students purchased their books using Amazon.com, others resorted to using other bookstore websites. Some students had purchased other products through the internet with minimal savings due to the costs associated with customs and sales tax. Although Dagfinn wanted to continue working with Juul Moller, he was concerned that some students would stop buying from Juul Moller and use the internet instead.
Situation Analysis
SWOT Analysis
Strengths
* Historical and “close” relationship with the Norwegian School of Management (NSM) and the student union * Strong experience and competence in business and management literature * Juul Moller advises individuals and companies on different books regarding various aspects of business and management * Three stores situated at the NSM * Agreement with NSM granted Juul Moller the ability to have stores on campus * Juul Moller is the Student Union’s largest source of income
Weaknesses
* The cost of one of the bookstores at NSM is expensive due to the large amount of staff, high rent, and little sales * Lack of competent staff at NSM bookstores resulted in students venting their frustrations with the staff. * Logistical issues which resulted in the unavailability of books * Extended waiting times for books associated with the various logistical problems * Students resort to purchasing textbooks from online resources because Juul Moller doesn’t have an e-Commerce platform * There is no “real” tangible value in purchasing textbooks from Juul Moller as opposed to Amazon.com or alternative suppliers
Opportunities
* Provide Students at NSM with an e-Commerce website in order to conduct transactions online * Improve the logistics at Juul Moller through strategic partnerships * Positioning Strategy: Juul Moller can position itself as the “go-to” bookstore for all student needs * Juul Moller can offer incentives such as membership plans, buyback programs etc. in order to entice NSM students to buy from them * NSM students need a reason or desire to purchase from Juul Moller * Juul Moller can conjure an exclusive partnership with NSM in order to be the exclusive supplier of textbooks to the school
Threats
* Juul Moller would often receive late or unreliable specifications from NSM. Faculty members would change the requirements without informing the bookstore * Logistical issues lead to greater issues with being able to deliver books in an efficient manner to the school and students * Students can substitute Juul Moller with other suppliers such as Amazon.com, and other bookstores that are selling online
Assumptions & Missing Information
Some assumptions were made in order to address the issues facing Juul Moller. The first assumption is that Juul Moller currently has little or no online presence. They are not engaging in any tactics or strategies online in order to attract students from NSM. The second assumption is that the agreement among NSM and Juul Moller is not an exclusive partnership. The agreement allows other bookstores and suppliers to negotiate partnerships with NSM. If this is assumed, then Juul Moller has the opportunity to substitute the past agreement with an exclusive partnership or something akin. The third assumption is that Juul Moller only provides business and management literature to NSM. They do not provide any office supplies or other student necessities at the bookstore. The fourth assumption is that the two IT staff members at Juul Moller have the pertinent e-Commerce knowledge and are able to setup, create, and maintain an online platform. An important detail that wasn’t included was the possibility that Juul Moller supplies books to other schools and that they do not have a client/student inclined marketing strategy. The possibility that students are lacking a connection to Juul Moller and are therefore looking to alternative means is also missing from the case, but will be assumed.
Problem Statement
How can Juul Moller continue to compete in a rapidly changing market and how can they use the internet to satisfy student needs at NSM?
Development & Evaluation of Alternatives
Juul Moller must integrate new solutions in order to compete with the increasing presence of substitute textbook suppliers. The following is a list of possible alternatives with their advantages and disadvantages, and a recommended course of action.
Alternatives
Alternative One: Build an e-Commerce platform
There is an increasing amount of online competition that is surfacing and becoming an issue for Juul Moller. Currently, Juul Moller only services student’s textbook needs through on-campus bookstores at NSM. Some of these locations are costing Juul Moller a large sum in order to maintain. They do not partake on the internet through any type of e-Commerce platform. Students are looking to these alternative suppliers (e.g. Amazon.com) in order to purchase their textbooks. Although the savings are minimal, their need for convenience and control over the situation is achieved through this practice. Juul Moller will need to develop and implement an e-Commerce platform in order to maintain and attract students at NSM. This would include providing accurate and up-to-date inventory levels at the bookstore. Students would then be provided with the opportunity to purchase all of their textbooks from one single source. Juul Moller would be able to retain their current customers while competing against alternative suppliers. Juul Moller will have to evoke the feeling that they are the “all-in-one” resource for textbooks. During the development of the e-Commerce platform, Juul Moller could also develop a brand personality. This brand personality would help students attribute characteristics to the bookstore creating a new perspective. This could help Juul Moller better connect with students and their lifestyles through analyzing their psychographic and behavioral cues. The development of a brand personality could assist the brand equity of Juul Moller. Though the main objective is to provide students with an online platform, so much more can be achieved as well.
Pros
* This would provide students with the ability to purchase all of their textbooks from one resource * The convenience of having an e-Commerce website would assist Juul Moller to compete against Amazon.com and other online bookstores * Online marketplaces trade 24 hours a day. You don’t have to operate a physical store to make a sale (Edwards, 2012) * Cost savings associated with less staff as a result of having an online presence * “Better visibility of your customers buying behavior online… [such as] age and location demographics, initial search terms, related items they are interested and much more” (Edwards, 2012, para.8) * Slemp (2013) states that price is the primary reason students bypass the college bookstore with students’ inclination to purchase online a distant second
Cons
* Labor associated with uploading product descriptions and stock control could be as time-consuming as a brick-and-mortar store (Edwards, 2012) * Lose the ability to speak to customers directly and upsell other items (Edwards, 2012) * Large amount of time wasted during the development of an e-Commerce platform * Marketing strategies implemented through the e-Commerce platform may not be successful (e.g. Students do not associate with the brand personality)
Alternative Two: Strategic Partnership with NSM
The agreement between NSM and Juul Moller is negotiated every five years. The main benefit of this agreement is that Juul Moller is awarded the right to have locations on-campus. The main problem with this is that NSM can negotiate agreements with other bookstores and potentially partner with the competition after the expiration of the agreement. For example, the student union attempted to attain other booksellers the last time the agreement was negotiated. Other bookstores expressed interest, but Juul Moller was the only bookstore to agree to the conditions. Juul Moller could instead opt to form a strategic partnership with NSM in order to be the exclusive supplier of textbooks. This alternative would be well suited due to the long-standing relationship with NSM. Juul Moller and NSM have a historical bond that goes back to Dag’s father’s college days. Juul Moller is also the largest source of income for the Student Union at NSM. This could be used as an advantage in order to entice NSM to partner with Juul Moller.
Arrangements between the two entities could include Juul Moller providing a catalog of textbooks prior to classes to NSM. NSM could then select a range of books and required amount in order to more accurately stock inventory. This could also work vice-versa, in which NSM would provide Juul Moller with a list of required textbooks prior to classes. The main point is that if a strategic partnership was arranged, this would make both parties liable for any issues that arise. Some teachers at NSM fail to provide Juul Moller with adequate information in a timely manner. With the partnership, both entities are responsible for providing students with the required resources. This could also help Juul Moller deal with logistical problems with suppliers in a timelier manner as well as providing students with their textbooks when they need them.
A prominent example of this is Amazon who started partnering with various colleges and universities (Roston, 2015). Amazon is one of the most competitive players in the textbook marketplace and many students turn to Amazon to get their textbooks (Roston, 2015). The company partnered with Purdue University, the University of Massachusetts, and the University of California in order to provide students with exclusive services, specific textbook needs and other student materials (Roston, 2015).
Pros
* Exclusive access to student deals and services customized to meet student needs * NSM would need to provide textbook order requirements more accurately due to the fact that they are now partners with Juul Moller * Improved line of communication could allow for greater accuracy in inventory levels * NSM can exemplify the long-standing relationship with Juul Moller in order to connect with the students at the school (e.g. this could assist in the creation of a brand personality)
Cons
* A strategic partnership would be difficult to obtain due to how much time it would take to form * Negotiating an arrangement that both parties will agree upon may be costly and time-consuming * Strategic partnerships involved sharing knowledge and resources. NSM or Juul Moller may be reluctant to sharing trade secrets. * Implementing and managing a strategic alliance may be difficult because each alliance partner has a different way of operating * “Students are leaving the school-sanctioned bookstore because of better pricing elsewhere, and this loss of customers is driving schools to more closely examine their textbook affordability” (Slemp, 2013, para.4). * Textbook affordability could be addressed through vigorous negotiations with Juul Moller and suppliers
Alternative Three: e-Textbook Options
Some students at NSM prefer buying their textbooks online due to the convenience and cost-savings. Although they may require textbooks for certain classes, they may want cheaper and more convenient options. Juul Moller could provide students with the opportunity to purchase online copies of textbooks. As explained earlier, the behavior of students is changing and adapting to suit an online world. Students want convenient methods of purchasing their textbooks online, and e-Textbooks are the perfect alternative to classical means. These textbooks could either be accessed through an online portal or another method. The aim of this measure is to provide students with a quick and low-cost alternative to hard copy textbooks. NSM has been known to change the required textbooks for some classes in the past. By implementing this alternative, students won’t have to wait weeks for their textbooks. Students have motivational conflicts between two alternatives. Either they choose to purchase a textbook from Amazon or another resource or from Juul Moller. This type of “Avoidance-Avoidance” conflict can be overcome by emphasizing the benefits to choosing one alternative over another. By providing cost-savings and time as benefits to students, Juul Moller can overcome this conflict.
Pros
* Students are purchasing e-Textbooks as an alternative to textbooks (Weil, 2010). * “The best thing about downloading a textbook is that you don't have to stand in line at the university bookstore or wait for a package to arrive in the mail. When you purchase an e-textbook, the file is accessible within minutes, so it’s perfect for those who leave class prep to the last minute” (Boris, 2012, para.7). * Logistical issues might be reduced by using e-Textbooks because it’s just a matter of providing students with a digital copy of the textbook * Students are provided with greater control over how they buy their textbooks
Cons
* Juul Moller would have to negotiate with book suppliers and publishers in order to provide online/digital copies of the textbook * There is a high chance that students can just go to the publisher's website in order to obtain the digital textbook * Some students will still want to have a hard-copy textbook * The return on investment and increase in sales may not be worth the amount it will cost to implement this strategy
Alternative Four: Client Focused Strategy Juul Moller can implement a client-focused strategy in order to retain students and provide a competitive advantage. Incentives could be used in order to entice students into purchasing their textbooks and other materials from Juul Moller. These incentives could include something like a membership plan (free for students) to Juul Moller. By doing this, Juul Moller can create an environment in which the student feels as if they are the number one priority, not just another customer. Student members could be provided with discounts or other incentives if they shopped at Juul Moller. Data could also be collected about the students that would reveal certain spending habits and other details in order to customize marketing strategies. If the student was a member they could be eligible to participate in buyback programs. This could allow students to sell their textbook at Juul Moller for store credit in order to put towards other textbooks they may need. This would provide students with the opportunity to save on textbooks while getting rid of their old books. The membership plan could act as a reinforcement to purchase from Juul Moller rather than the alternatives. Juul Moller could implement a fixed-ratio learning schedule in order to reinforce student’s purchasing decisions. For example, if a student purchased three textbooks, they would be provided with a discount of 40% off of their next book.
Pros
* Students might find the discounts appealing and may continue to purchase their textbooks from Juul Moller * Buyback program could incentivize students to sell their old textbooks and purchase more textbooks from Juul Moller * Membership plan and buyback program could act as a competitive advantage over Amazon and other bookstores * “Customer-focused business helps organizations build a loyal customer base. Customers are more willing to purchase from companies that they feel consider their needs when they create products and services” (Brookins, n.d., para.2).
Cons
* Students may not appreciate or find the client-focused strategy appealing and may continue to use alternative suppliers * Membership program/system may be costly in regards to developing or purchasing a system that can track customers * unprofitable in the long run to implement membership plan * Customer needs are always changing, you will need to continue to pour in resources to keep up with consumer demands (Brookins, n.d.).
Alternatives Matrix
Index
Cost: 0=$25000 +, 3= No Cost
Implementation Time: 0= Year +, 1= 7-12 Months, 2= 3-6 Months, 3= <2 Months
Return on investment: 0= No return, 1= little return, 2= Good return, 3= Lots of return Decision Matrix Table | | Build an e-Commerce platform #1 | Strategic Partnership with NSM #2 | e-Textbook Options #3 | Client Focused Strategy #4 | Cost | 2/3 | 2/3 | 1/3 | 2/3 | Implementation Time | 2/3 | 1/3 | 1/3 | 2/3 | ROI | 3/3 | 2/3 | 3/3 | 2/3 | Increase in Sales | 2/3 | 2/3 | 1/3 | 2/3 | Total | 10/12 | 7/12 | 6/12 | 7/12 | Increase in Sales: 0= No Increase, 3= Large Increase

Conclusion
Solution Objectives
The following objectives would need to be achieved in order to compete against other bookstores and motivate the student population at NSM to purchase from Juul Moller. Building an e-Commerce platform would satisfy the students desire to purchase their textbooks online. A strategic partnership with NSM would allow Juul Moller to negotiate pricing and exclusivity with the students at NSM. Implementing a client-focused strategy would allow to create an environment in which the students feel as they are the priority.
Recommendation
After careful analysis of the proposed alternatives, a combination of methods will be used to compete in a rapidly changing market environment. Although all alternatives achieve a similar goal, not all will be used due to the costliness and time consumed implementing the alternative. Therefore, a decision was made to incorporate three alternatives in order to create the best solution for Juul Moller. These alternatives are; building an e-Commerce platform, a strategic partnership with NSM, and integrating a client-focused strategy.
Juul Moller is facing a complex issue that is placing their business at risk. The increase in online competitors is creating a hostile environment in which Juul Moller is losing business. Students at NSM desire control over their environment and want the ability to purchase their textbooks with ease and convenience.
Build an e-Commerce platform
It is imperative that Juul Moller implements an e-Commerce platform due to the increasing amount of online competition. They do not partake on the internet through any type of e-Commerce platform. Students are looking to these alternative suppliers (e.g. Amazon.com) in order to purchase their textbooks. The use of an e-Commerce would provide students with more control over how they would like to purchase their textbooks. Students would be able to purchase all their textbooks from one resource increasing the profitability of NSM. Juul Moller could evoke the feeling that they are the “all-in-one” resource for textbooks. Students would be provided with increased convenience and information through an online platform. It would also provide better visibility of buying habits and what they are interested in.
Strategic Partnership with NSM
The agreement among NSM and Juul Moller is negotiated every five years, therefore, NSM can arrange to deal with other bookstores. Juul Moller and NSM can form a strategic partnership in order to benefit both parties. Juul Moller could attain exclusive rights to supply NSM with the necessary books while NSM gains monetary assistance to the student union. The arrangement could allow Juul Moller to better predict textbook needs. An improved line of communication could allow greater accuracy for inventory levels. This would reduce the number of frustrated students.
Client-focused strategy
A client-focused strategy would make students feel as they are Juul Moller’s number one priority. The use of something like a membership plan for students could build loyalty among students by providing certain incentives. This could entice students to purchase all of their textbooks from Juul Moller instead of going to other suppliers. If the student was a member they could be eligible to participate in buyback programs. This could allow students to sell their textbook at Juul Moller for store credit in order to put towards other textbooks they may need. This would provide students with the opportunity to save on textbooks while getting rid of their old books. The membership plan could act as a reinforcement to purchase from Juul Moller rather than the alternatives. Juul Moller could implement a fixed-ratio learning schedule in order to reinforce student’s purchasing decisions. For example, if a student purchased three textbooks, they would be provided with a discount of 40% off of their next book. Further advantages such as data about spending habits and customer information (e.g. demographic, psychographic, behavioral) could be collected and used for further marketing strategies.

References
Boris, C. (2012). 4 pros and cons of e-readers vs. textbooks. Today. Retrieved from http://www.today.com/parents/4-pros-cons-e-readers-vs-textbooks-2D80556082
Brookins, M. (n.d.). What Are the Advantages & Disadvantages for Every Company Becoming a Customer-Focused Business? Chron. http://smallbusiness.chron.com/advantages-disadvantages-company-becoming-customerfocused-business-26150.html
Dahl, D.W., Solomon, M., White, M. (2013). Consumer Behaviour: Buying, Having, Being. New Jersey, USA: Pearson.
Edwards, P. (2012). Online Versus Offline: The Pros and Cons of Online Retail. Business to Community. Retrieved from www.business2community.com/consumer-marketing/online-versus-offline-the-pros-and-cons-of-online-retail-0205608#XR8hHO6FuvkBCvXZ.97
Roston, B.A. (2015). Amazon partners with 3 campuses in bid to entice college students. Slash Gear. Retrieved from http://www.slashgear.com/amazon-partners-with-3-campuses-in-bid-to-entice-college-students-02367172/
Slemp, J. (2013). Why Students are leaving the College Bookstore (According to College CFOs. The Akedemos Blog. Retrieved from http://www.akademos.com/blog/2013/04/why-students-are-leaving-the-college-bookstore/
Weil, E. (2010). How Students Really Buy Textbooks. New York Times. Retrieved from http://www.nytimes.com/roomfordebate/2010/07/25/the-real-cost-of-college-textbooks/how-students-really-buy-textbooks