It’s Olympics time again and Network Seven has taken the reigns back from the Nine Network as our Olympics broadcaster. They’ve made significant changes in order to reach as many Australians as possible, and by extension maximise viewer ratings and advertising revenues.
Seven are attempting to learn from criticism of previous Olympics coverages, whilst adapting to the digital age where customers expect choice of viewing capabilities at the touch of a screen. In doing so, Seven are putting into practise the fundamental marketing theory of Segmentation, Targeting & Positioning.
Let’s have a look at the theory and practice in action.
Segmentation & Targeting
Segmentation is the breakdown of a market into groups of similar consumers who are consistent in their response to particular marketing. Targeting is the process of selecting the ideal customer segment(s) to target. The two go hand-in-hand.
Seven have cast a very large target for its Olympics broadcast: all Australians. This is unusual for most companies who generally have numerous competitors offering similar products – and who’ll use segmentation and targeting to carve out their target segment(s) amongst the wider market.
Given that Seven have sole broadcast rights in Australia, they effectively have a monopoly which allows them to cast such a wide target market.
This all-inclusive target market is aligned with the IOC’s goals regarding broadcasting across countries. According to the IOC’s ‘2014 Olympic Marketing Fact File, p.21 ‘Broadcast rights to the Olympic Games are sold principally to broadcasters that can guarantee the broadest coverage throughout their respective territories.’
Despite their monopoly, Seven still needed to identify consumer segments within the market and ensure their marketing appeals to all – by doing this they’re maximising the likelihood of more people watching more Olympics and therefore increasing ratings and advertising revenues.
The below table displays common segmentation strategies used by businesses:
Seven have released a number of ads for the games, this one in particular demonstrates their efforts to target as many segments as possible:
Observe the various age groups portrayed in the ad, the amount of gender diversity, and the many people from different walks of life. Then there’s the big one, Seven know that a unique aspect of Australian culture, perhaps the very definition of what makes many of us Australians – is that we come from another country, while still holding connections to our country of origin. This ad is primarily attempting to reach different segments of their target market (all Australians) via the Demographic and Geographic points of difference amongst us all.
Positioning is how a company portrays itself and its product in the market place, and therefore in the eyes of consumers. For example, Apple portrays itself as an innovator who’re not afraid to go against mainstream thinking. This marketing approach, backed up by the products and experience they provide consumers has worked very well – so well their products have actually become mainstream!
Apart from London 2012 where the Nine Network combined with Foxtel to win coverage rights with a $120 million bid, Seven have consistently been Australia’s Olympics broadcaster. Accordingly, many Australians already associate the Olympics with Seven.
However, Seven have taken the opportunity to reinvent their product and positioning this year by capitalising on technology to an extent that Nine didn’t in 2012. Nine received criticism in London 2012 for their selection of live events to cover and the lack of choice given to consumers. Meanwhile their counterpart Foxtel were praised for their Foxtel Olympic iPad app which gave viewer’s control – at the cost of full Foxtel Subscription.
The product positioning by Nine and Foxtel can be represented using the Positioning Matrix below:
Nine and Foxtel were appealing to different consumer segments. Nine’s free-to-air coverage with lack of choice and perceived lack of quality was for the Mass consumers. Whilst Foxtel appealed to the High End consumers paying for Foxtel subscription and accordingly receiving higher quality coverage with greater viewing choices.
This year, Seven are attempting to take both the above positioning strategies while improving the quality of each.
The Mass consumers are looked after with a choice of three free-to-air digital channels while all coverage is streamed free and on any device via the website or mobile app.
In a controversial move for a free-to-air broadcaster Seven are looking after High End consumers by providing the option of a $20 upgrade (much less than the cost of Foxtel subscription) on the streaming service which gives the choice of 36 live channels plus catch up coverage and replay on demand.
As the Sydney Morning Herald has put it “Seven’s Olympic streaming finally put viewers in control.”
So, will Seven’s strategies work? Will they ensure the massive cost of broadcast rights are recouped? The more important question might be – will Australians be watching, liking, commenting and sharing?
Time will tell, but from what I’ve seen Seven have the marketing mix right, and empowering consumers with technology is certainly a good move.
So, are you Coming to Rio? I’m already there!!
Author: Amal Amarsi
Iacobucci, D 2013, MM4 Marketing Management, 6th Edition
IOC’s ‘2014 Olympic Marketing Fact File’ retrieved 6 August 2016 <https://stillmed.olympic.org/Documents/IOC_Marketing/OLYMPIC_MARKETING_FACT_%20FILE_2014.pdf >