STRATEGIC MARKETING IN THE MEDIA...STRATEGIC MARKETING IN THE MEDIA 2 ... Different demands require different outcomes and differentiation is key to a successful marketing strategy

STRATEGIC MARKETING IN THE MEDIA


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How does Condé Nast segment their UK markets

and target and position themselves in the branded

magazine market?

Karen Ryan

[email protected]

Senior Lecturer

BA (Hons) Fashion and BA(Hons) Fashion Branding and Communication

Arts University Bournemouth


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ASSIGNMENT CONTENTS:

PART ONE

1.0 Introduction - Condé Nast Multi-Media Publishing

2.0 Literature Review – Evaluating Strategic Marketing Definitions

3.0 Definition of Market Segmentation, Targeting and Positioning

3.1 Nature of Market Segmentation

3.2 Choice of Target Markets

3.3 Positioning and Competitive Positioning

PART TWO

4.0 Reflection

4.1 Analyse Condé Nast’s Segmentation, Target Market and Competitive

Positioning in the UK

4.2 Factors Influencing Condé Nast’s choice of targeting strategy

4.3 Competitive Positioning

4.4 Formulate considerations and conclusions of Condé Nast

Segmentation, Target Market and Competitive Positioning in the UK

5.0 Appendices

Appendix I Competitors Financials

Appendix II Condé Nast Audience Profiles

6.0 Glossary

7.0 Reference List


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How does Condé Nast segment their UK markets and target and position

themselves in the branded magazine market?

1.0 Introduction - Condé Nast Multi-Media Publishing

Condé Nast International is the international arm of the New-York based publishing

company which produces many of the world's best known magazine brands. The

publisher is regarded in the industry as an ‘upmarket’ 1 publisher, and attracts more

than 164 million consumers across its 37 brands in 27 countries. Condé Nast’s mission

statement commits to delivering “influential, content and brand experiences for

discerning individuals who demand to be inspired” [Condé Nast 2017].

One of the first publishers to establish international editions; Condé Nast expanded its

most established brand: Vogue – launched in 1916 – to Vogue Paris in the 1920’s,

an Italian edition in the 1960’s, and later into further global and emerging markets.

The multi-media publisher currently has 124 magazines, close to 100 websites, and

more than 200 tablet and mobile apps. The publishers head office is in London and

has seventeen British titles with a global reach, including:

Ars Technical

Brides

Condé Nast Johansens

Condé Nast Traveller

Glamour

GQ

GQ Style

1 For the purposes of this essay ‘upmarket’ is also widely referred to as premium or

luxury within the fashion, beauty, lifestyle publishing market.

House and Garden

Love

Tatler

Vanity Fair

Vogue

Wired

World of Interiors


Fig. 1. Condé Nast Britain’s Brand Architecture (Amended from Conde Nast 2017)

In terms of Condé Nast’s competition, the most prominent publishers with similar

‘premium’ titles are notably Hearst and Time Inc. – who have grown over the last

decade through acquisitions and mergers – Hearst Communications [formerly Nat

Mags and Hachette/Lagardere titles] and Time Inc. [formerly IPC Media]. And to a

lesser extent – but also direct competition – Bauer Media, Immediate Media Co and

the Haymarket Media Group.

Recently Campaign Magazine [2017] reported the latest consumer magazine ABC

figures; with a decline in circulation for Condé Nast whose titles were down 8.9% on

the year. And of its competitors: Hearst titles were down 4.4%, Time Inc. were down

7.6% and Bauer Media were down 7.4%. The sixth monthly decline was largely seen

as due to the decline of a number of weekly titles, whilst luxury print and digital saw

levels of growth and stability.

Gillian Doyle in Understanding Media Economics explores the theories of the “reliance

on economies of scale, as opposed to economies of scope” and the relationship of

“focussing on a particular social group rather than the largest possible readership”

[2002, p.135]. Differentiating products and audience groups are key to understanding

these discussions and are explored in 4:3 Competitive Positioning Strategies.

In terms of differentiated product Condé Nast have the ability to adapt just as fast as

its competitors; and to date have introduced: Condé Nast Entertainment [2011],

expansion into education with the opening of The Condé Nast College of Fashion and


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Design [2015], and the launch of Condé Nast International - Luxury Conference [2015].

The forthcoming topics of 2017’s Luxury Conference include: New markets for the

luxury industry and the evolution of global trade routes; both equally significant in

terms of strategic development.

Condé Nast has recently partnered with a data first influencer platform, Influential and

IBM to “tap unstructured data for new insights to inform marketing strategies” [PR

Newswire 2016]. It is clear that Condé Nast have found success in widening their

portfolio from print to digital over the last ten years and are using new untapped data

to grow their target market and revenue streams.

This assignment looks at segmentation, targeting and positioning and how Condé

Nast uses these strategies to position themselves to an ever-wider audience across

multiple media channels; this essay focusses specifically on the UK market.

2.0 Literature Review – Evaluating Strategic Marketing Definitions

There are many definitions in academic theory surrounding the domain of strategic

marketing or marketing strategy. The terms themselves are under constant review by

academics over the decades; from the AMA to Day, Hunt and Varadarjan; to name

but a few.

Varadarjan [2009] in particular explores the fundamental theories of marketing;

examining the conceptual distinction between (1) marketing strategy and marketing

tactics and (2) marketing strategy and marketing management.

Segmentation, positioning and target marketing pertains to the first of Varadarjan’s

concepts: (1) marketing strategy and marketing tactics. However, alongside

Varadarjan, Webster [1991] explored a further definition between marketing strategy

and tactics; confirming three levels of strategy: (1) corporate, (2) business and (3)

operational. In terms of how to compete in a chosen market; the segmentation,

positioning and target marketing aligns to the business strategy under the definition;

marketing strategy, with market tactics aligned to the 4 P’s.


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In the last decade, The Chartered Institute of Marketing [2009], offered the following

definition for marketing: “Marketing is the management process responsible for

identifying, anticipating and satisfying customer requirements profitably.” It warns that

even for the smallest organisation [SME], to proceed without a marketing strategy is

done so at their peril.

A successful marketing strategy should be easily identifiable; leading to and from the

4Ps, Product, Price, Place and Promotion. Kotler, in his preface of Ries and Trout’s

revolutionary – and now classic book – ‘Positioning’ stated “there is one more step

before 4P planning can take place, and that is P, Positioning” (1980).

In more recent times marketers have extended this to the 7Ps, which is sometimes

referred to as the ‘marketing mix’ [The Chartered Institute of Marketing 2009] which

includes the additional: Process and Physical evidence; creating a simple platform on

which to develop successful marketing strategies.

Within this literature review, segmentation, targeting and positioning strategies will be

examined in order to formulate a reflection of Conde Nast’s position in Part Two.

3.0 Definition of Market segmentation, Targeting and Positioning

Bespoke, ready to wear and tailor-made are all frequently used in the fashion industry

to denote the specific requirements of a consumer, user or suitable market place. As

an analogy, this aligns itself to the description of strategic marketing and how targeted

sectors could have been reached in the first instance.

Different demands require different outcomes and differentiation is key to a successful

marketing strategy. In order to fully understand how to analyse a specific market, an

organisation must consider what Proctor [2002] described as “the three pillars of the

modern marketing strategy: segmentation, targeting and positioning” or STP.

Here is a simplified definition of the three processes which are examined in greater

depth in the subsequent sections:

• Segmentation – Research and analysis of consumer buying behaviour.


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• Targeting – Financial viability/return on marketing investment [ROMI].

• Positioning – To differentiate or stand out from one’s competitors.

Fig. 2 Stages in segmentation and positioning [Amended from Hooley, 2012, p.183]

Businesses implementing segmentation, targeting and positioning processes, are able

to operate more effectively, opening a strategic window and analyse their business;

this in turn can create positive opportunities which can lead to improved resources,

capabilities and financial returns.

3.1 Nature of Market Segmentation

If anyone can design a new product, how do they go about finding the most suitable

market for that product?

This section explores the known marketing management technique of segmentation;

which used to identify a suitable market, then becomes a segment.

According to Proctor “in order to establish a segmented market, research and analysis

of consumer buying behaviour should be carried out. Sectors can then be constructed

from the most common characteristics to produce a sector or range of sectors that

may be appropriate” [2002].


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Similarly, Hooley et al describe market segmentation as “how we marketers can divide

the market into groups of similar customers, where there are important differences

between those groups” [2012:183].

A segment, in itself should have some of the following characteristics: unique,

identifiable, distinctive and different. These characteristics establish a competitive

advantage against the competition within a similar market.

Proctor’s definition of segmentation is, “A market segment is a section of the market

which possesses one or more unique features that both give it an identity and set it

apart from other segments” [2002 pp189]. Hooley et al [2012] underpin market

segmentation as:

• Segments are to differ from one another.

• Segments are to be identified my measurable characteristics

• Segments are to be isolated/distinct

The key is to start by establishing common characteristics. As a business, if you can

establish enough common characteristics across current and future product areas you

can target market communications, platforms and media output effectively.

Proctor [2002] uses traditional examples of segmentation which are used to identify

the consumer market using the following variables:

• Geographic

• Demographic

• Geodemographic

• Psychographic

• Behaviour patterns

There is a shift however, for marketer’s not to rely on some of the above variables;

demographics alone are no longer thought as reliable, and an opportunity to use

advanced analytics to identify behavioural traits and establish segmentation is

prevalent.


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Joel Rubinson highlights in Marketing in the Era of Long-Tail Media [2008]

“behavioural analytics as blending research and marketing to become a dominant

force”, an insightful method in the age of digital. Social class is seen with less

importance in determining marketing behaviour. Lifestyle and geo-demographic;

including a classification of residential neighbourhoods [Acorn 2017] are seen as more

reliable characteristics [multiple variable a priori method], using classification

schemes: ACORN, Opinion Research Services [an independent social research

practice, working across the UK], and Warner’s ISC [Index of status characteristics to

determine socio-economic factors].

There are other variables used in segmentation to broadly group markets, which were

identified by Hooley et al [2012] and fall into three main categories:

• Background customer characteristics: demographics [gender, age, geographic

and subculture]; socio-economic [income, occupation, education]; consumer

lifecycle; personality characteristics; lifestyle characteristics.

• Customer attitudes: benefit segmentation; perceptions and preferences;

summary of attitudinal bases.

• Customer behaviour: purchase behaviour; consumption behaviour

communication behaviour; response to marketing mix; relationship seeking

characteristics.

Recently benefit segmentation [also referred to as first order segmentation] has

become the preferred market orientated approach to segmenting markets; as explored

in Weinstein’s Book of Market Segmentation [2004]. Benefit segmentation is

particularly useful when it comes to identifying specific gaps in the market [Weinstein,

2004], and the analysis of segmentation focuses more on buying behaviours and

motives than psychographic and attitudinal approaches [Proctor, 2002]. Weinstein

[2004] refers to “cultivating the long-term, benefit-seeking customer” which builds

loyalty and customer relationships that are strategically financially positive.

In modern marketing the focus on personalisation and the customer centric approach

has led to driving down sectors even further to ‘micro-segmentation’ or ‘one-to-one’


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marketing [Hooley et al, 2002 pp187]. This sub division into smaller groups can provide

even more sophisticated targeted markets on which to place a product or brand.

With a segment of the market having been established, a business must address how

it uses those segments to target their market and positon their product. Proctor [2002]

discusses the strategy of using a ‘single market segment’ [seen widely as a risky

strategy] but sometimes suitable for specific niche markets. Or ‘multiple market

segments’ [which spreads the risk in times of uncertainty] and provide a business with

the flexibility of re-addressing capabilities and resources.

In summary of the literature reviewed in this section, the benefits of segmentation are:

smaller companies can create a niche; it gives the company an opportunity to identify

any gaps in the market; in mature or declining markets, new growth can be sought;

segments can be matched closely to target markets; and lastly competitive

advantages are identified.

3.2 Choice of Market Targets

Once the market or market segments have been defined the marketer needs to decide

which consumer groups to target.

In order to target consumers, “the financial viability needs to be assessed and the

need for shareholders to be confident that they will receive a return on their marketing

investment” [Proctor, 2002]. It is clear however that it is not just a case of statistical

analysis but “subjective and highly creative process” [Hooley et al. 2012].

Hooley et al discuss the case for “choosing markets and industries where prospects

are attractive; but also, where they can establish a strong defensible position” [2012].

Other strategies commonly used to decide which target markets to approach include:

The mass marketing strategy; this is a risky strategy and Proctor [2002] refers to it

as ‘undifferentiated marketing’ in that it is marketed to a wide group of consumers with

little to differentiate them.


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The single segment strategy [Proctor, 2002]. As a current example, there is a

mattress brand: Eve. They sell one thing, a memory foam mattress. And they have the

tag-line ‘a revolutionary mattress’ and ‘the world’s most comfortable mattress’ [Eve,

2017]. Investing in prime-time TV advertising they have sold 45260 mattresses to date

by cutting out the middle man and selling online. They have also competitively

positioned themselves to take a chunk of `Tempur’s’ market; the only other branded

memory foam mattress. The branding is very slick and the marketing more akin to a

tech start-up, directed at the millennial’s. Eve will need to perform well within their

single segmented market in the future, as the specific nature of the product and market

would be difficult to re-position.

And the multi segment strategy [Proctor, 2002]. This strategy targets a range of

consumer segments within a product or brand architecture, and uses an extensive

range of resources and capabilities. Proctor & Gamble and Unilever are examples with

their products: Dove, Tetley, Ben & Jerry’s, Pampers, Gillette, all sit under an

extensive brand architecture.

The target market areas Hooley et al [2012] advise to be avoided, are paraphrased

here:

Peripheral business: which as the name suggest sits on the outskirts, making a ripple

more than a wave and uses unsubstantiated resources and time.

Illusion business: an area whose large and blossoming nature is initially attractive,

yet full of competition and difficult to defend long term.

And the dead-end business: an area which may have been undermined and should

probably look to exit from.

Core business is the target market companies are ideally looking to place themselves

within. An area of strength and growth, offering benefits and returns on investment;

suitably positioned and defensible to competitors [Hooley et al, 2012].

In terms of determining the market segment potential there are four groups of factors

to consider:


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• Market factors – market characteristics that influence the market attractiveness

[Hooley et al, 2012].

• Economic and technological factors – issues reflecting the broader economic

characteristics of the market and the technology [Hooley et al, 2012].

• Competitive factors – the competition to be faced within those markets [Hooley

et al, 2012].

• Environmental factors - the general business factors surrounding the market

or segment [Hooley et al, 2012].

Fig. 3 Factors affecting market segment attractiveness [Amended from Hooley et al., 2012]

The market factors described in Marketing Strategy and Competitive Positioning

[Hooley et al, 2012] crossover with Proctor’s, in Strategic Marketing, “Market factors

that influence choice of targeting strategy” [2002]. To understand these factors, a

product/brand is used as an example to illustrate Proctor and Hooley’s approaches:

• Stage of product-market maturity – e.g. Old Spice, an example of an older

brand in an over competitive market which through targeted marketing was re-

launched to appeal to broader and new segmented markets.

Market factors

Size; growth rate; life cycle stage;predictability; price elasticity;

bargaining power of buyers; cyclicality of demand

Economic & technological factors Barriers to entry and exiti; bargaining

power of suppliers; technology utilisation; investment required;

margins

Competitive factors

Intensity; qulity; threat of substitution; degree of differentiation

Business environment factors

Economic fluctutations; political and legal; regulation; social; physical

environment


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• Extent of buyer differentiation – Pedigree Chum appeals to a wider segment of

the market and has less opportunity for segmentation, the characteristics of the

consumer are similar and directed to a broad, economy driven, market.

• Market position – is dependent on identifying and exploiting unique segments,

such as niche brand Levi Root’s Reggae sauce; who developed his product

from a cottage food industry into a broad range of products, now available

widely.

• Structure and intensity of competition – Farrow & Ball, Little Greene, Zoffany,

Sanderson are all small paint companies, competing in a very similar market

where extensive targeting is needed to differentiate their products.

• Adequate resources –Proctor & Gamble and Unilever promote a wide range of

products in target markets with access to widening resources and capacity, this

offers them both flexibility when targeting new and existing markets.

• Production and marketing scale economies – Heinz Baked Beans and Coca

Cola are both examples of global products that reap the financial benefits of

large scale production and enormous marketing resources.

• Choice of segments – Mobile phone companies e.g. Nokia and Samsung have

to consider the positives and negatives of competing in such a large over

populated segment of the market and the competitive positioning alongside the

likes of Apple.

3.3 Positioning and Competitive Positioning

Positioning is primarily a marketing communications role and specifically targets and

promotes a product to sit within a segment where it is most likely to succeed in the

market.

Often a controversial area, positioning is largely defined by the consumer and how a

product is perceived, where it sits in the market, and its appeal. The challenge for the

marketer, is to analyse the target market and segments using positioning research to

correctly position a product. Thus, creating the effect that the customer thinks they

have chosen or switched to a particular product based on their own instincts.


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This idea relates directly with Ries and Trout’s Positioning, where they define

positioning as a “basic positioning premise…to touch base with reality…. retie the

consumer’s connections that already exist” [2001].

Proctor (2002) uses three concepts of positioning: functional – the need for a product

to significantly solve a problem or need. Symbolic – the idea of elevating one’s status.

And experiential – creating a sensory or cognitive experience.

Kotler defined “Positioning as a revolutionary idea, precisely because it cuts across

the four P’s, it informs the other P’s and adds consistency to them” (1980, p. 9). The

relationship between positioning and the four P’s correlates with Proctor’s definition

[2002]. In terms of promotion and price – the product should be in a sector which is

differentiated enough to sit away from its competitors; the product should be

identifiable in terms of defined characteristics; and placed where it can reach a

successful target market in order to provide enough financial gain.

Targeting and positioning strategies are interrelated and therefore success of

positioning is often proven when the product meets with the consumer’s expectations

and needs as outlined by Hooley et al [2012]:

• Market segmentation: identifying the most productive bases for dividing a

market, identifying the customers in different segments and developing

segment descriptions;

• Choice of target markets: evaluating the attractiveness of different market

segments, parts of segments [niches] or groups of segments, and choosing

which should be targets for our marketing;

• Competitive positioning: identifying the positioning of competitors [in the market

and in the target segments or niches], to develop our own positioning strategy;

• Iteration: understanding competitors positioning and the possible positioning

strategies open to us should influence our thinking about the attractiveness of

different market segments and the choice of market targets, and may change

the way we segment our market, leading to revised target choices and

positioning approaches.


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Kotler [1997] refers to errors that can occur with incorrect positioning: under-

positioning – seen as nothing special; over-positioning – too narrow an understanding;

confused positioning – frequent changes; and contradictory and doubtful positioning –

un-substantiated claims.

Fig. 4 Competitive positioning and market segmentation model [Amended from

Hooley, 2012]

In summary, the purpose of positioning is to achieve a distinct and desirable product

that targets similar markets as the competition but at the same time sits comfortably

alongside its competitors.

4.0 Reflection

4.1 Analyse Condé Nast’s Segmentation, Target Market and Competitive

Positioning in the UK

Condé Nast describe themselves as a multi-media publisher, they have been

extremely strategic with their segmentation, target market, and positioning of branded

titles to date, focussing on high-value core audiences.


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Condé Nast have formulated their marketing and branding strategy around building

strong titles and brands, which transcend their segmented lifestyle and niche target

markets to appeal to a larger geographic proposition; which reflects the publisher’s

success of their key titles in the UK, these translate across many geographic markets.

This area of the consumer magazine market is lucrative – by appealing to a wider

geographic audience, as it is not constrained by local or national issues.

In Understanding Media Economics, Gillian Doyle refers to this area of the magazine

publishing industry as “transnational readership segments” [2002 pp135]. With a focus

on consumer lifestyle magazines, the publisher’s segments differ across titles, yet the

target markets they are aimed at on the whole have a global appeal.

This could be said to give Condé Nast a competitive advantage in terms of its

approach towards its competitors: Hearst Magazines UK, Time Inc., Bauer Media

Group, Immediate Media Co and Haymarket [5.0 Appendix I - Competitors Financials].

The competition cover a much broader range of differentiated product using a pre-

dominantly multi segment strategy. They include weekly and monthly titles, local,

national and global markets, specialist and non-specialist audiences at a range of

cover prices and subscriptions. Condé Nast’s target market is largely dependent on

their identification and exploitation of unique segments or niches aimed towards the

‘upmarket’ or high-value core customer.

The following positioning map shows the publishers in terms of x = the availability of

titles weekly and monthly, and y = higher price ‘premium’ titles V lower price ‘economy’

titles in the UK market [Fig. 5 Ryan 2017]. The comparison between weeklies and

monthlies was used predominantly because of the recent wide spread reporting of an

8.4% decline of year on year of weekly sales [Campaign, 2017]. This was supported

by NRS data released in 2016, which established that 72% of UK adults consumed

magazines across print and online of which 41% consumed women’s monthly’s and

26% consumed women’s weekly’s [NRS 2017].


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Fig. 5 Positioning Map of Conde Nast Competition [Ryan 2017]

4.2 Factors Influencing Condé Nast’s choice of targeting strategy

In terms of Condé Nast’s market segment, on the print side their target market is an

older affluent/premium customer with 16 titles currently aimed at this target market in

the UK all available at a higher price premium and predominantly available as monthly

titles [Fig.6 Ryan 2017]. Where customers engage with digital platforms [social

media/mobile] the dominant audience segment is millennials and this has been

reflected in increased traffic, user experience and revenue (Conde Nast Media Pack

2017).

The number of Condé Nast UK titles are differentiated in terms of lifestyle and attitude,

and broadly fit into the categories: Fashion, Interior, Travel, Bridal and Technical. Each

of these titles has specific differences in terms of subject matter that drive the initial

segmentation e.g. a Vogue reader whose interest is principally fashion, beauty and

style; versus a Wired reader interested in the future of digital technology.

It is interesting to note when comparing data [Condé Nast Media Packs 2017] that the

household average income [HHI] and age demographic of Vogue and Wired is almost

identical, with the average readership age 35-37 [readership/unique users] and HHI of

£58 -100,000 [digital/print]. In relation to the Warner Index of Status Characteristics


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[ISC], Condé Nast also target the top three tiers of the index for the majority of its

current publications: Upper-middle, Lower-upper and Upper-upper or AB and ABC1

profiles [a socio-economic classification produced by the ONS] with a 35/75% split.

The figure below illustrates a comparative overview of Condé Nast titles [5.0 Appendix

II for a wider overview of Conde Nast Audience Insights].

Fig. 6 Condé Nast Publications: Audience Insights [Amended from Conde Nast 2017]

Whilst Condé Nast has relied heavily on traditional demographic, socio-economic and

life cycle characters [a priori method] – from data which they have collected from

general survey’s including: ‘Condé Nast Word of Mouth Surveys’ [conducted by NRS],

and the TGI survey [conducted by You/Gov]. Part One established that some of these

earlier segmentation methods can be less reliable to create specific segmented

markets alone.

Some of the most familiar variables Condé Nast use in their segmentation strategy to

broadly group their markets are: background customer characteristics, customer

attitudes and customer behaviour.


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Their background customer characteristics include: demographics [gender, age,

geographic and subculture]; and socio-economic [income, occupation, education].

With the advent of online analytics, they have been able to analyse data more

effectively using: consumer lifecycle; personality characteristics; and lifestyle

characteristics.

Fig. 6 Background customer characteristics [Amended from Hooley 2012].

In terms of their customer attitudes: benefit segmentation; perceptions and

preferences; and summary of attitudinal bases. Condé Nast have used data analysis

of benefit segmentation [the market orientated approach to segment its markets] to

focus on customer attitudes, and use this method to identify specific gaps in the

market. This method is referred to as first order segmentation [Hooley 2005] or post

hoc/cluster based segmentation.

And lastly Condé Nast focus on customer behaviour, including: purchase behaviour;

consumption behaviour; communication behaviour; and relationship seeking

characteristics. Purchase behaviour is particularly important in that it includes those

customers classed as innovators and those that demonstrate brand loyalty and this

can be established by analysing their print and digital markets. These behavioural or

relationship seeking characteristics are a significant segmentation variable which

relate directly to the relationship marketing stance that Condé Nast have adopted with

their products.


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In the last decade, Condé Nast have potentialised their network of subscribers to gain

a more detailed audience insight into opinions not always covered in their previous

general ‘word of mouth’ surveys. This development is called Condé Nast Catalyst:

Audience by Design and matches its distinctive audience segments with brand

advertisers in order to increase revenue over and above the cover price – which has

traditionally been seen as the major source of revenue for consumer magazines.

In Marketing in the Era of Long Tail Media, Rubinson (2008 pp302) discusses “a shift

from traditional approaches where survey research insights are translated into a media

strategy that is often demographically based” and later to “moving towards advance

analytics, this hi-lights the route Condé Nast have taken strategically in the last decade

and the trend many publishers are taking by actively harnessing their offline and online

data, to provide a more effective response to audience segmentation and targeting.

Many, including Condé Nast are investing heavily in online data analytics such as

Adobe Marketing Cloud, the previously mentioned Influencer/IBM platforms and

Condé Nast Catalyst: Audience by Design.

In a recent interview, Chris Reynolds, vice president of data and marketing analytics

at Condé Nast confirmed that the use of advance analytics, “enables us to segment

our audience and develop meaningful messaging for each market. Through detailed

profiles, we’re optimizing both our editorial and advertising messages to grow our

audiences in the digital age” [Adobe 2017].

The alignment of digital, offline, and survey data through analytics and audience

management is a critical aspect to Condé Nast’s success. “Advertisers love having

greater access to audiences through insight-based profiles,” says Reynolds. “These

audiences are high-quality engaged consumers, enabling advertisers to increase

basket sizes and attract more repeat customers” [Adobe 2017].

Recently in direct response to analytics of customer behaviour, Condé Nast

responded to declining sales of its ‘handbag size’ Glamour magazine by reverting back

to the original larger format. Condé Nast intention is to regain an advantage against

its rival Hearst, with its highly successful Cosmopolitan magazine. Condé Nast said “it

is making the change in recognition of print magazines becoming luxury products that


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consumers are more likely to read at home than carry around with them, reading

sections in short bursts between other activities” [Mintel, 2017]. Based on segment

performance this decision will surely influence the upward circulation of Glamour

magazine going forward.

4.3 Competitive Positioning

Unlike some of their publishing competitors, Condé Nast have successfully

established enough common characteristics across their current and future product

areas to use targeted market communications, platforms and media output effectively.

Condé Nast reduces it risks – long term – by positioning products towards similar

target markets with differentiated segments based on more specific geographic,

demographic, psychographic and behavioural segmentation variables [Hooley 2012

pp183].

This method of using more than one segment creates a ‘synergy’ [Proctor, 2002] and

allows Condé Nast to maximise its potential across manufacture, distribution

channels, workforce and use established segments to access new global markets.

And, where some of their competitors have a vast range of titles which span an array

of market segments and target markets, Condé Nast have established a specialist

and high-quality market. Their differentiated segmentation across niche titles leads to

a core target market: an affluent/premium customer. [5.0 Appendix II wider overview

of Conde Nast Audience Insights].

A large number of Condé Nast publications are identified in company data as having

a combination of loyal customers who are happy enjoy a long-term relationship with

the brand. This is a positive situation for Condé Nast to be in as some of their

competitors – with more diverse segmentation and wider ranging target markets –

attract exploiters and arm’s length customers which makes it difficult to develop any

long-term relationships.

Condé Nast also have the enviable position of having a long-established heritage

brand going back more than a century. In the customer’s mind this can be translated


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into feelings and attitudes of long established value and brand loyalty? “Familiarity

with a publication is more likely than any other factor to influence a consumer’s

choice of which magazine to buy” [Mintel, 2017] and this could be said to give Condé

Nast a distinct competitive advantage.

4.4 Formulate considerations and conclusions of Condé Nast Segmentation,

Target Market and Competitive Positioning in the UK

In conclusion, the fall in circulation of print magazines in the UK has continued in 2016

and shows no signs of slowing down. Mintel projects that the market will decline further

by 32% between 2016 and 2021, and publishers are being forced to adapt in order to

survive [Mintel 2017].

A loss of market share often brings with it a re-structure of an organisation and this

January 2017 it was announced Nicholas Coleridge the managing director at Condé

Nast Britain and president of Condé Nast International will step down after 26 years at

the helm.

For Condé Nast, the decline in print magazine circulation has motivated a shift to a

more focussed digital marketing strategy, but not at the risk of undermining the high-

quality print brands of their core target market.

Wide spread reporting in the 2015/2016 media press outlined the team changes; in

particular, the growth of the digital team [including head of digital, digital strategy and

video content]. The digital team works across titles with an integral approach to digital

and their editorial colleagues in order to effectively analyse and compare audience

data on and offline and generate customer engagement through digital channels.

Despite the strong performance of some individual publications – Vogue and Tatler –

some are critical that the diversification of channels into more digital formats [social

media/apps] will continue to dilute the audience for print magazines.

It is widely suggested that publishers would have more success pursuing both print

and digital channels, and given the strong preference Condé Nast consumers display

for the print format this would be sensible strategy to pursue. Condé Nast rather than


24

replacing print channels, has engaged with digital channels which seems to be

stimulating customer engagement and subscriptions.

At present Condé Nast target markets are relatively predictable and can make

progressive gains. Some titles such as – the previously mentioned Glamour magazine,

which saw some drop-in sales – have changed the format in order to regain the market

share.

It is clear from analysing audience insights that some titles could be nearing the

stage of product-market maturity and would benefit from an evaluative marketing

strategy fit for the 2020’s and beyond. The World of Interiors has a longstanding and

loyal customer base yet readership and circulation figures are low in comparison to

similar titles in the market, and could be re-positioned combining a print and digital

strategy to compete alongside Homes & Gardens, Elle Decoration, Country Living,

and Living Etc.

The forecast for media publications is challenging. The incremental increase of digital

sales, particularly in the UK and the analysis of consumer/customer data across social

media channels is dominating marketing channels.

There is increased competition and economic uncertainty ahead for Condé Nast and

as an organisation it will need to further analyse its segmentation according to

changing dynamics in the environment, comparing print and digital data on an ongoing

basis.

Condé Nast target markets are secure but with digital growth the millennials are

creating a new area of growth and micro-segmentation. This needs to be sensitively

aligned whilst managing their existing core markets, Condé Nast will need to carefully

consider their strategic positioning against their competitors in the future.


25

5.0 Appendix I Competitors Financials


26

5.0 Appendix II Condé Nast Audience Profiles


27

6.0 GLOSSARY

Term Definition

ABC’s Audit Bureau of Circulations

ACORN A classification of residential neighbourhoods

AMA American Marketing Association

B2B Business to business

B2C Business to consumer

CIM The Chartered Institute of Marketing

ISC Warner’s index of status characteristics

NRS National readership survey

ONS UK office for national statistics

ROMI Return on marketing investment

SIC Standard industrial classification code

SME Small to medium size enterprise

STP Segmentation, market targeting, differentiation, and positioning

TGI Target group index [marketing and media survey est. 1969]


28

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