Category management, a program that teams Borders with publishers to conduct market research, has been a success in the areas where it has been fully implemented, Borders Group executives told analysts in a conference call. In one example, Greg Josefowicz said, sales in the cookbook category increased by double-digit rates in the first quarter. He said the program, underwritten by publishers, provides a "more formal framework" for Borders's suppliers to act as "trading partners." So far, the program has been applied to three book categories—cooking and romance, both underwritten by HarperCollins, and a part of the children's department, underwritten by Random House; approximately 250 distinct categories have been identified.
Michael Spinozzi, executive v-p, chief marketing officer, said that the fees paid by publishers to underwrite the program are "flexible, depending on the size of the project." In the case of HC and Random, the investment was significant and estimated at over $100,000. Spinozzi said, that "as research accumulates, the cost will go down or disappear altogether."
In these partnerships, the publisher will be called the "lead supplier," though Borders has the final say on what specific books to buy and where to place them. Category management "creates an environment where we can avail ourselves" of a wide range of information, said Josefowicz.
