Karen Brown By Gediminas Sumyla

Overview of company Company’s mission is to provide travelers with reliable and honest recommendations, both in terms of where to stay and what to see. “We believe that travelers should maximize the value and enjoyment of travel-based on personal preference.” – Karen Brown Karen Brown believes that since vacation time is precious, it is important that each day delivers and meets expectations of the trip: “We believe that where one stays matters. That one’s vacation day does not end when one checks into a hotel, but, rather is often the beginning of some wonderful memories.” – Karen Brown

Company’s vision Karen Brown’s vision was to select a special few from many properties and destinations that she has seen. Company also will remain proud on of themselves on seeing everything that they recommend and pass it to the customers. Company wanted to attract new customers and improve its margins as well as maintain the integrity and quality of its content.

History Karen brown started with first published book in 1977 and today celebrating 30 years in publishing. In 1977 she printed 10,000 copies and promised to sell them door to door. Karen Brown started shipping books right from college dorm room. She shipped 200 copies to top editors to review the book. She sold all of her books with a minimum marketing possible. Followed by this success Karen Brown published second book in 1980 and third in In 1985 there were three women who ran the business. One of them covered each country and visited all the inns in it every year for up-to-date, annual editions. By 1999, they were covering 10 countries and California with 13 book titles.

History (cont’d) In 1998, Karen Brown sold over 135,000 books, which generated over $1 million in revenues and $300,000 in net income. Until 1994, book sales had increased at about 10% per year.

Management team Karen Brown – the owner and founder of the company. Main figure in the company. Also owns Seal Cove Inn. Clare Brown – Karen’s mother. She was a travel consultant for many years, specializing in planning itineraries using small countryside hotels. Now her expertise is available to a larger audience - the readers. June Brown – researcher who’s love of travel was inspired by the National Geographic magazines that she read as a girl in her dentist's office. June hails from Sheffield, England and lived in Zambia and Canada before moving to northern California where she lives in San Mateo. Nicole Franchini – research team member. She received a B.A. degree in languages from William Smith College and the Sorbonne, Paris and has been residing in Italy for the past 17 years. Currently living in the countryside of Sabina near Rome with her family, she runs her own travel consulting business. Debbie Tokumoto - manager and director of operations. She takes care of the “Karen Brown Team”; oversees the management of the office on a day- to-day basis; coordinates the editorial production of guides and will most likely be the person who answers customers’ calls or s and addresses their questions or concerns. She takes great pride in customer service and business wouldn’t survive without her.

Stakeholders Customers: Karen Brown built trust and quality of her book content, so customers were exceptionally valuable part of her business. Partners: hotels and travel portal online, which helps benefit company from information and services they provide. Travel portal “MOTS” (real name wasn’t mentioned due to anonymity): placed Karen Brown’s content on the web to millions of new customers.

Goals and strategies Goal of website: “Our goal with our new website is also to extend the “Karen Brown World” to embrace areas we have not yet covered in our published guides.” – Karen Brown Karen Brown also wanted to attract new customers and improve her margins and increase profits by selling more books directly through the website. Karen Brown decided to improve her existing site and to become part of Yahoo! Shopping netwrok. By paying $300 per month Karen Brown outsourced all the e-commerce transactions. Other improvement of website such as hotel news, tips of the day, property of the month, postcards from the road, and romantic inns and recipes.

Strategies (cont’d) Karen Brown researched how the Web was affecting traditional publishers and how travel publishers were using it. She also recognized that she might be left behind as mote people migrated to the Web and as travel-related sites established relationships with content providers. She decided to target high-volume travel-related sites and expose her book content to millions of potential customers. Karen Brown hoped that expanding her presence on the Web might increase her brand recognition and sell enough books to outweigh any cannibalization of existing book sales.

Industry and market Companies including Karen Brown struggled with the tradeoff between going to the mass market with licensing and distribution deals and protecting the authenticity and integrity of Karen Brown’s Guides in which she took pride. Channels of book sales were shifting in the late 1990s. The advent superstores like Barnes & Noble and Amazon.com gave rise to new marketing challenges. When shifting to the Web publishers had to decide whether to charge for their content or give it away. Most of the publishers were seeing no return from their web sites.

Industry and market (cont’d) The proliferation of free content on the web fueled consumer perception that online content should be free. Most on-demand content and monthly fees were very little which brought net loss to companies from just credit card transactions. Very few publishers operated profitable web sites. In the late 1990s, book sales over the Web exploded. Online book selling was the fastest growing channel of distribution for books. Some studies suggested that Internet book sales would grow to over 25% of total sales by 2005.

E-Commerce opportunities Advent of affordable technologies, such as e-books and print- on-demand technology, could change publisher’s core business processes. The Internet allowed publishers to focus on their core competencies – creating content and marketing – and take advantage of emerging technologies in printing and distribution. The Internet also created new marketing techniques to generate excitement. (Electronic promotion kits, table of contents, book covers, interviews with authors) It also enabled publishers to forgo bricks-and-mortar retail outlets, so they could conceivably bypass the middleman and sell direct to customers. Internet enabled small, niche publishers to place their product on equal footing with the largest houses. Growth of online travel bookings.

E-Commerce initiative Karen Brown thought that licensing her content to high0traffic travel-related site could expose millions of people to her books and name. That’s what she wanted. Karen Brown signed licensing agreement with major online travel site. She granted this company a perpetual worldwide fully paid license to Karen Brown books published in the next three years. Travel company placed all or part of books content on the web site. Neither party paid the other party under this agreement. All revenues came from sales of advertising on the web sites they served. Company advertised each other in their websites and Karen Brown books.

Perspective analysis Technological drivers of change Karen Brown felt pressure to expand but did not know in which direction to grow. As more people turned to the Web for travel information and to book flights and hotels, and as other travel publishers placed their content on the Web, she decided she needed to use the Web to maintain and build her business. Karen Brown spent 20 years building reputation and was reluctant to relinquish control of her content and publishing, but sales showed minimal growth and she needed a change. In order to grow her business she needed to give up some control of her book content.

DSIR Karen Brown’s travel guides were high-quality for affluent and discriminating traveler. Her books had a unique personal touch. She had a good reputation and trusting customers. All of this made her product exceptional and more people used it and spread the word about amazing experiences the more people wanted to get her product. There were lot of travel information online and people needed something unique and luxurious.

Competitive risks Other travel publishers started rapidly placing their content on the Web. Karen Brown didn’t have the choice if she wanted to compete and expand. Biggest competitors were: B & B Channel, Moon Travel Guidelines, The Lonely Planet and Fodor’s. All of them co-branded, partnered or licensed their content to travel sites. There was a need to change in order to succeed.

Missed opportunities Karen brown could have focused more on building her business through her website. She could have advertised major travel companies for online bookings, promoted her products and sold other products needed for traveling like maps and favorite travel gear. She also could have combined her content with major online booking sites so people after they found right information could buy tickets right away in the same web site.