Many years ago, as a young man, I set up a bookshop in my small home town near Manchester, England with some friends. The bookshop was never as commercially successful as we’d hoped. With hindsight, the reason for the failure was that our small town, so close to a big city, was not in the right position to support its own bookshop at that time. Years later, I learnt that big businesses undertake a demographic analysis in order to choose sites for their retail operations. They carefully assess which locations and communities have the right number and type of customers to produce the profits they require.

We didn’t evaluate the size of the market objectively; we just looked around our town, saw no bookshop and decided to open one. The market was not quite right for our product at that time. In setting up the first bookshop in the town we thought we had found a gap in the market.

What we should have asked is the question: is there a market in the gap? Or more precisely, is there a big enough market to achieve the sales we need?

We were focused more on our own enthusiasm to sell books, rather than the size of the market and customers’ needs and habits. Because of this, our business was fundamentally flawed.

The strategic marketing problem was that there weren’t enough customers in the town to support their own bookshop and many book buyers were still in the habit of travelling into Manchester to buy their books.

Frustrated, we tried all kinds of operational marketing techniques to sell more books, but we were swimming against the tide. We distributed leaflets, advertised in the local newspaper, and we gave away bookmarks. But none of these efforts fixed the fundamental problem. This is another example of strategic marketing trumping operational marketing. Get the fundamentals right and operational marketing is relatively easy. Make a mistake of strategic marketing and you will always be on the back foot.

As a footnote, although the bookshop was never as commercially successful as we had hoped, I have absolutely no regrets. For one, our definition of success was not entirely about making money. It was a cultural project to make books available, and a community enterprise involved in spreading the word and empowering people. Secondly, I learnt a tremendous amount about business in that enterprise, through the mistakes we made, and the successes we achieved. I learnt about cash flow, contracts, taxation, accountancy and managing people. I learnt about the importance of strategic marketing over operational marketing. The experience made me hungry to learn more about business, which I did over many subsequent years. I continued to learn from managing more commercially successful enterprises, from business school and from my consultancy clients. In the long run, the bookshop experience made me a better entrepreneur.

Key Points

Strategic marketing is about the ‘big picture’ questions:

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