100%(1)100% found this document useful (1 vote) 380 views27 pages17 Capital Magazine Case
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INSEAD
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This case was written by Reinhard Angelmar, Professor of Marketing, INSEAD, with the assistance of
‘Wolfgang Munk (MBA 1992) and Thierry Azalbert (MBA 1992). It is intended to be used as a basis
for class discussion rather than to illustrate either effective or ineffective handling of an administrative
situation.
Copyright © 1994 INSEAD, Fontainebleau, France. 594-022-1
INSEAD
Capital (A) Bee
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This case was written by Reinhard Angelmar, Professor of Marketing, INSEAD, with the assistance of
Wolfgang Munk (MBA 1992) and Thierry Azalbert (MBA 1992). I is intended to be used as a basis
fof class discussion rather than ty illustrate ether efocve or ineffective handling of an administrative
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Copyright © 1994 INSEAD, Fontainebleau, France. !
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\ | INSEAD 1
It is the end of July 1991 and most Parisians are preparing to leave on holiday. But not Dr.
‘Andreas Wiele. He, as project and executive manager, and the other members of the Prisma
Presse team developing a new business magazine called Capital, have other things on their
mind. The zero issue of Capital went down well with the focus group they have just been
watching over closed-circuit TV. The problem is the market itself. The economic situation is
bad - advertising in business magazines has dropped by about 20% since the beginning of the
year and circulation is still stagnant. Should they go ahead with the planned launch in
September, or postpone until the economic situation improves? If they do launch, key
marketing decisions still remain to be taken: the magazine's price, its distribution and
communication policies.
Prisma Presse: Gruner+Jahr’s French Subsidiary
Prisma Presse, with offices in the center of Paris close to the Champs-Elysées, was founded in
1978 by the then 41-year old Axel Ganz as the French subsidiary of Gruner+Jahr Exhibit 1),
the German publishing company headquartered in Hamburg, itself a subsidiary of the multi-
‘media Bertelsmann group. Trained as a journalist, Axel Ganz had already held various senior
positions with leading magazine publishing companies.
During its 13 years, Prisma Presse has launched six magazines and acquired two more,
increasing the circulation of the latter by a factor of three since taking them over in 1989. All
Prisma Presse magazines are among the leaders in their segments (Exhibit 2). This compares
favorably with the industry average: of a total 173 new consumer magazines launched between
1987 and 1990 in France, only 119 (69%) were still going at the end of 1990. This enviable
track record has eared Axel Ganz such sobriquets as "magazine alchimist" and “man with the
‘Midas touch".
With a 1990/91 turnover of F2 billion (Exhibit 3), Prisma Presse has become the second
biggest magazine publisher in France. It concentrates effort on text and layout in its magazines,
and outsources such activities as documentation, photography, printing and distribution.
Prisma Presse is structured around the individual magazine (Exhibit 4). Each is headed by a
duo consisting of an executive editor and an editor-in-chief, jointly responsible for editorial
policies, staffing, circulation and revenues of the magazine. The executive editor, often
working on two magazines, is specifically responsible for financial results, while the editor-in-
chief, usually assigned to one magazine only, is specifically responsible for execution of
editorial policy. Each magazine has its own staff of journalists, art team, and advertising
department. The advertising departments of the different magazines compete vigorously for
business, sometimes against other Prisma Presse magazines. Coordination of advertising policy
is one of the tasks of the corporate advertising business manager.
The staff of a successful magazine is regarded by management as a poo! of talent from which
inside members of future magazines are recruited. For example, Prima was the breeding
‘ground for subsequent women's magazines. These insiders usually account for about half of the
staff of a new magazine, They are used especially on the art team, because the visual concept
across the range is basically the same. Outside recruitment brings in journalists with knowledge
in content areas like economics, business, fashion, cooking, and travel
con ©1984 8EAD, oct Fre
