Risotto- Moleskin Research

name: consumers don’t buy notebooks, they buy moleskin

- Production includes notebooks, planners, diaries, sketchbooks, and albums.

- ‘Legendary notebooks’ – used by a lot of famous artists and novelists. E.g. Vincent van Gogh, Pablo Picasso and Ernest Hemingway.

- The Moleskine brand is synonymous with culture, travel, creativity, memory, imagination and personal identity. 

- characteristics of the Moleskine consumer: able to appreciating arts Literate creative interests, attitudes and adventures

- Personalities of Moleskine consumer: Uniqueness Confident Outgoing Common traits Brand loyalty High needs of cognition

- consumers = Innovators – creative; usually have wide range of interest. • Believers – strong attachment of traditional things. E.g. notebooks; journals. • Experiencers – outdoor recreation; social media; technologies. 

- they provide traditional product for real conservatism and believers, and the cutting-edge product 

- Moleskine has been good example of a brand that fully grasps the concept of the market segmentation. They have been using an effective approach to target their consumers which share the desires of the product that allow them to be creative in a sophisticated way

- Marco Beghin (Moleskin's president) “we let our fans speaks for themselves. We wanted to create a relay of stories to become the ambassadors, interpreting the message”

- active for the communities and lots of user-generated content, from either artwork to fiction to video. Has also launched a mobile app that will allow users to write or draw on their iphone and ipad as they would in an actual notebook. With these social Medias, moleskine has been encouraging its fans to post their sketches, paintings and collages, in order to creating a community of user-generated content and supportive feedback.

Moleskine’s identity as a brand without a country fits, as well, with its origin story, which is printed on ecru paper and slipped inside most of its products.

The incredible margins of selling luxury paper goods:

Moleskine’s operating margin, its profit as a percentage of revenue, was 41.7% last year. That compares favorably—indeed, very favorably—to the luxury brands the company considers to be peers, like luggage-maker Tumi (19.7%), fashion firm Prada (27.2%), and beauty-product boutique L’Occitane (16.7%). It’s not hard to see why. The raw goods of Moleskine’s paper products, which represent 93% of the company’s revenue, are cheap compared to most luxury wares, so there’s more room to mark up the price.

Wrap your head around that for a second. Here is the company acknowledging that it doesn’t so much sell notebooks as it does a sense of identity and culture. But that’s the essence of luxury brands: they don’t sell physical goods so much as the notions that the goods are supposed to represent. These intangibles—”culture, design, imagination, memory, and travel,” according to the company’s bankers—are a better business to be in than paper.

Moleskine, by the numbers

Moleskine breaks down its products into three categories:

- 93% of revenue comes from 635 varieties of paper products, including the classic notebooks and related items like diaries and planners. The best-selling product is Moleskine’s classic hardcover ruled notebook, which generates 9% of sales.

- 7% of revenue is generated from a newer line of non-paper goods that includes pens, backpacks, and glasses. That’s not much, but Moleskine only started slapping its logo on these products in 2010.

- 0.4% of revenue—or pretty much nothing—comes from Moleskine’s nascent digital unit, which includes an app for the iPhone and iPad. Moleskine projects this will grow, but it’s hard to imagine the company will or should do much of a digital business.

Moleskine customers break down this way:

- 78% of sales are classified as business-to-consumer, though almost all of that business is wholesale, relying on large retailers like Barnes & Noble (7% of all sales) and Waterstones to reach people. That’s clearly a liability as brick-and-mortar retail stores are mostly struggling.

- 16% of sales are business-to-business, with more than a thousand companies paying to put their logos on Moleskine products. It’s a classy gift that could grow more popular if the Moleskine brand grows in stature.

- 4% of sales occur on Moleskine’s not-very-good website, which it is planning to overhaul. Another 3% of sales occur on Amazon, which may be a more promising way to grow the online business.

- 2% of sales occur in Moleskine retail stores, which it only recently began opening: four in China and five in Italy. More are scheduled to open in New York’s Time Warner Center and Beijing’s Sanlitun Village, among other places.

Finally, Moleskine’s sales by region:

- 53% of sales are in Europe, the Middle East, and Africa, its largest market, but that’s down from 63% in 2009, reflecting expansion in other markets. Recently, sales have been struggling in Italy and Spain (of course) but doing better in France and the UK.

- 36% of sales occur in the Americas. That’s lower than one would expect for an English-language luxury brand, but the company hopes that having its own retail stores will help Moleskine the way they did Apple. A promising sign is that brand awareness of Moleskine in the United States rose from 7% in 2007, when it was really a European brand, to 56% last year, according to the company’s own research.

- 11% of sales are in the Asia Pacific region, which has seen the greatest growth since 2009. The company attributes that to expansion in Australia and South Korea. Asia is also where Moleskine charges the most for its products, according to UBS, with prices in China and Japan almost double what the company charges for the same products in Italy.