Mass marketing was the ‘swinging sixties’ – TV advertising became King, this was the era of promotions, when breakfast cereals contained plastic toys, and in supermarkets there were people dressed up as Toocan Sam offering samples of Kellogg’s Fruit Loops (Hall 2014).
Marketing was COOL. Marketing was MAINSTREAM.
Now it’s the age of ‘ideas’ and the odds are that succeeding in the 21st century will not involve mass marketing. Mass marketing is well and truly DEAD.
So what does life after mass marketing look like?
Automaker Henry Ford was very successful at both mass production and mass marketing, advertising in every major newspaper and all kinds of publications (Tanner and Raymond 2012). Ford pumped out huge numbers of identical Model T automobiles and liked to joke that –
‘any customer can have a car painted any colour he wants, so long as it is black’.
While Ford’s success is commendable, times have changed.
Customers are evolving. They know more and they expect more. There are so many variations in the demography, psychology, and behaviour of customers that marketers need to segment, position and target at faster rates than ever before (Hall 2014).
The new world order is about managing heterogeneity, precision targeting, and brand positioning. Emphasis is placed on closely meeting the needs of the target market and winning over the hearts and minds of customers.
Segmenting and targeting customers, functions to enlarge customer bases by providing crucial information to successfully adjust offering components including – the offering itself, its price, or the way the offering is serviced or marketed (Tanner and Raymond 2012).
The role of segmentation, targeting and positioning has played out over the past years in the television market. Let’s take the example of the current trials and tribulations of Foxtel.
Traditional free-to-air TV stations, with their widely targeted array of programs aimed at meeting the needs of the entire population, lost significant market share to Foxtel in the mid 1990s.
Foxtel represented a TV package that provided the choice of over 100 different channels, with each channel focusing on a particular offering or style of program. Through segmenting its offering and tailoring its channels to the variations in subscribers and viewers, Foxtel was able to position itself as a leader in sports coverage particularly NFL and AFL, and buy the rights to a number of the world’s highest rating shows including Game of Thrones on HBO.
While Foxtel has enjoyed significant success, its world-leading pay television margins are under severe threat from subscription-video on demand services led by Netflix.
Media analyst Steve Allen from Fusion Strategy described Foxtel’s leading position as –
‘under pressure for content, under pressure for customers, under pressure for viewers, and under pressure for revenue’ (Robertson 2016).
Peter Tonagh has recently been appointed as Foxtel’s new chief executive at a critical turning point for the cable and satellite giant as it considers radical options to tackle competition and manage significant changes to its pricing model to attract more customers (White 2016).
Beyond the mass market of traditional free to air, and to a lesser yet still significant extent Foxtel, Netflix and alike have positioned themselves to meet the needs and desires of niche audiences around the globe including ethnic language and special interest groups.
Netflix as a low cost alternative to Foxtel has won market share through its innovative, straightforward user experience that meets the changing preferences on customers looking to access new and exclusive content ‘anytime, anywhere, and on any device’.
The stakes are high for Foxtel and the battle lines have been drawn, with an estimated 1 million plus subscribers since the launch of Netflix in 2015, will live content be enough to distinguish Foxtel in the market?
Hall, R 2014, Brilliant marketing: what the best marketers know, do and say, 2nd end, Pearson Business, Harlow, UK.
Robertson, A, 2016, ‘Telstra mat sell Foxtel stake as pay TV giant struggles’, ABC News, 18 March, retrieved 20 March 2016, <http://www.abc.net.au/news/2016-03-18/telstra-may-sell-foxtel-stake-as-pay-tv-giant-struggles/7259506>.
Tanner, J & Raymond, M 2012, Principles of marketing, Flat World Education, Washington, DC.
White, D 2016, ‘Telstra mulls Foxtel sell-off as Peter Tonagh takes pay TV reins’, The Sydney Morning Herald, 18 March, Business Day, retrieved 20 March 2016, <http://www.smh.com.au/business/media-and-marketing/telstra-mulls-foxtel-selloff-as-peter-tonagh-takes-pay-tv-reins-20160317-gnlej0.html>.