Analysis of the market

Executive Summary

Teenage magazine, our focus, has seen a decline in the past years and continues to be in the decline stage. It faces competition from both direct and indirect competitors. Indirect competitors include internet and modern technology such as iPods and iPhones, which are readily accessible by teenagers. Presently, teenagers are technologically minded and spend more time accessing the latest technology, rather than reading traditional magazines. Direct teenage magazine competitors in the entertainment and lifestyle categories are 'Sugar', 'Top of the Pops', 'Bliss', 'Shout' and 'Mizz'. However, other categories exist such as comics and education (e.g. FirstNews and National Geographics Kids). Nevertheless, this report aims to introduce a new teenage magazine with an educational content in order to add value to the existing market.

Total circulation of teenage magazines has decreased year-on year, considering figures from 2002-2008. 'TeeNWorld', our innovative magazine, aims to capture the age group of 11-14. Since the purchasing power of this age group is relatively low, parents are included as our target customers. 'TeeNWorld' is an education magazine for both boys and girls. Moreover, the analysis of the market indicates that the existing market does not fulfil the boys' needs and therefore we aim to capture the interest of both genders.

Our potential gap in the market is education for all. Therefore the content of 'TeeNWorld' is 50% current world news, 30% entertainment and Sports, 7.5% technology, 7.5% Science, medicine, art and other educational subjects and 5% customer feedback and interaction. Research has proven that, in the UK, about 80% of all magazines are sold via newsstands and about 20% are sold within subscription. 'TeeNWorld' would capitalise on this medium of sales, while also making the magazine available online and by access via iPhones.

In developing our pricing strategy, our main aim is to capture an excellent market share rather than huge profit, in our first year of operation. Factors such as price range of present magazines on the market, current economic down-turn, environmental analysis (PEST), adopting skimming strategy due to the proposed quality of 'TeeNWorld' magazine, and the need to cover our expenditure, are critically evaluated and considered.

In dealing with communication and advertising, TV adverts are avoided due to teenagers spending less time watching TV. Mainly, Internet (e.g. social network sites such as Facebook, YouTube, MySpace, and Bebo) and iPhones appear to be more logical and ideal media. These also favour our proposed budget of 117,000. Daniel Radcliff (Harry Porter) and Emma Watson represent perfect teenage icons and are carefully chosen as a marketing advocate for 'TeeNWorld'.

ANALYSIS OF THE MARKET

Competition

Presently, the most serious threats for teenage magazines come from the indirect competitors, such as internet, computer games and mobile telephones. This has resulted in a significant decrease in sales, circulation, and magazine closure (Exhibit 2.1, 2.2).

Six magazines closed between 2004 and 2007, comprising more than half of the entire sector in 2004. The names are, 'Elle Girl', 'Sneak', 'Smash Hits', 'CosmoGirl!', 'It's Hot!' and 'TVHITs!' (Appendix A, Exhibit 2.2). There are only a few titles still available today. Top teenage magazines in the UK are 'Sugar', 'Top of The Pops', 'Bliss', 'Shout' and Mizz.[2]

The market leader is currently 'Sugar', with the highest average circulation in 2008. The current selling price of 'Sugar' is 2.45. It is a teenage lifestyle title, focusing particularly on teenage girls with its content based upon fashion & beauty, music, celebrities and real-life stories[3].

To survive in this decreasing environment, 'Sugar' has made some innovations since 2006. In January 2006 it was published in compact 'handbag-sized' format, in October 2007 a new poster campaign was launched, and in December 2007 sugarscape.com' was opened (a social networking and social bookmarking site for readers of 'Sugar' magazine). The circulation for the remaining magazines has decreased by 60% since 2002. Circulation of 'Sugar' went down by 2.3% in 2008 as well. Only 'Top of the Pops' (TOTP) is growing and its circulation has increased year-on-year since 2002. (Exhibit 2.1)

TOTP was launched by BBC Magazines in 1995 as a monthly magazine aimed at teenage girls. It is the only one from entertainment titles existing today in print form. The currently selling price of Top of the Pops is 2.20.[4]

Buyers & Buying Habits

The Youth TGI 2007 Survey report indicates the buyers and buying habits in relation to teenage magazines, based on a sample of around 6000 youths. Teenagers are classified into two groups: 11 to 14 and 15 to 19 years old. Parents have a significant influence in the purchase of magazines in the age group of 11 to14, whereas 15 to 19 year old teenagers tend to purchase the magazines themselves.

The survey reveals how magazines were obtained, indicating that 57% were bought by teenagers and 32% were bought by parents (the remaining percentage was obtained by other means, such as borrowing a friend's copy).

Also, family size contributed to the purchase of magazines. In a higher household composition, teenagers tended to buy magazines themselves. In contrast, it is the parents within the smaller households who tended to purchase them.

Of the teenagers who bought magazines, more were female than male. Social class was not a differentiator, since there was no significant difference in purchases between the different class categories (see Appendix A, Exhibit 2.2)

Consumer research in a sample group of teenagers reveals that approximately half of the group agrees that most teenage girls prefer spending time on the internet rather than reading magazines, whereas two-thirds of the group agrees on the similar case for teenage boys.[5]

Advertising through traditional channels within the teenage and pre-teen magazine market has relatively little significance. Overall, main media advertising was down by almost 13% to 203,000 in 2008/2009. The biggest individual spender was Bratz magazine from DC Thomson, with a total expenditure of 153,000 in 2008/2009 (33,000 less than in previous year). In addition, the number of sub- threshold advertisers declined from 12 in 2007/2008 to 11 in the year ending June 2009, with an expenditure more than halving to 50,000 in 2008/2009.[6]

Places of Purchase

According to Key Note, about 80% of all magazines in the UK are being sold through newsstands, while the remaining 20% are sold on subscription. About 27.3% of the newsstand market is attributed to large supermarket chains such as Sainsbury's, Marks & Spencer, Waitrose, Tesco and ASDA. Other outlets such as newsagents and petrol stations cover 72.7% (Key Note, 2009).

Prices for Existing Magazines

Teenage magazines typically range in price depending on their period of issue (e.g. weekly, monthly) and the type of magazine (comic, lifestyle, entertainment)[7]. Usual prices for weekly teenage magazines vary from about 1.10 (First News) to about 2.45 (Sugar).

PEST Analysis

Political factors

The fact that Internet plays a significant role in the lives of teenagers can make one anxious about the way they are targeted through the medium. Web sites gather information about teenagers, such as their home address, age, and email address in exchange for gifts and downloads.[8]

On 29th September 2009 the government launched the new UK Council for Child Internet Safety (UKCCIS). UKCCIS will unite over 100 organisations from public and private sectors, reporting directly to the Prime Minister. It will also help to improve regulation and education around internet use and will ensure that parents and children will have their voice in the development of Child Internet Safety Strategy.[9]

The UKCCIS published a research report "Parents and Internet Safety", which was released in August 2009.

The above could be considered a good sign for the teenage magazine market since less availability of internet access will create more time and interest for reading paper magazines.

Economic factors

In 2008, the UK economy became affected by the recession. As a result, the Gross Domestic Product (GDP) fell significantly (36% lower than in 2007), while unemployment increased and consumer spending weakened. The saving ratio rose as consumers became more cautious in their spending and banks became more cautious in their lending.[10] (See Appendix B, Exhibit 4.1, 4.2, 4.3)

These current economic difficulties have affected the amount of money parents give to their children (aged between 8 and 15) as 'pocket money'. The average amount of 'pocket money' was 6.13 in 2008, which was in a decrease of 23.5% in comparison with 2007 - this was its lowest level since 2003 (Exhibit 5.1).[11]

The research also indicates that parents are prepared to pay for their children's expenses such as mobile phone bills and music downloads. Also children nowadays tend to ask for large presents rather than to save for them. As a result, children are more likely to have 'pocket money' available to spend on less expensive purchases, such as magazines and comics.

Pocket money for children at the age of 8 to 11 is about 4.34 per week, which is approximately half the amount for age group 12 to 15, who were given 7.66 per week (Exhibit 5.2).

Social factors

Keynote research based on the report "The Good Childhood Inquiry", published by the Children's Society in February 2009, indicates that children's lives in the UK have become more difficult. Factors such as family break up, unprincipled advertising, income inequality and too much competition in education make teenager's lives more difficult[12].

Teenagers in the UK are also becoming increasingly environmentally aware. According to a study carried out by the UK Social Investment Forum in 2008, 76% of teenagers expect to make an impact on social and environmental issues in the future[13].

Technological factors

Teenagers today are becoming increasingly 'technology-savvy' and Internet plays a significant role in teenagers' lives. Social-networking sites like Bebo, MySpace and Facebook allow friends to stay in touch and are very popular among teenagers.

BMRB International's annual Target Group Index (TGI) for 2009 indicates that 91.3% of adults who live with at least one 10 to 15 year-old had a computer in their household. Moreover, at least one computer is likely to be for the child's sole use.

Identification of gaps in the market

Identified Gap

First, based on our market research and mainly by analysing competitors, we identified that most teenage magazines target girls. Top teenage magazines target girls between 11-14 years old. There is lack of magazines available for boys.

Secondly, from analysing our consumers, we can see that teenager's tastes and preferences are changing radically. They prefer socialising rather than spending time reading magazines or watching TV. Our PEST analysis indicates that teenagers today are very 'technology savvy'. Internet plays a significant role in their lives; especially among teenagers aged 15-19. Internet offers both privacy and the possibility of interactivity and shared communication. Existing magazines no longer can fully satisfy their needs. This group also chooses to read more grown up magazines, "Kids getting Older Younger".

And the last, there are only two main classifications in Teenage magazine market: entertainment magazines and lifestyle magazines. Their content is generally based on news in fashion & beauty, music and celebrities gossip. There is no category for educational magazines, which will appraise teenagers of the news in the world.

Filling The Gap

Since all top existing magazines are about lifestyle and entertainment, there is no magazine containing news about current issues targeted to teenagers. As a result, teenagers are not very aware about national and international affairs.

A magazine needs to be introduced to give teenagers information about the world in their 'easy language'.

Moreover, all magazines need to be on top of technology all the time. They need to reach teenagers through the latest gadget they are using, like Internet and iPhone etc.

The Target Market

Our targeted customers are teenagers in the lower age group of 11-14 years old and their parents. Targeting both the teenager and the parents is important because the parents often buy the magazines for this age group. Education is an important issue for parents. Parents are prepared to spend money on their children's education.[14]

The greatest potential competitor will be the award-winning weekly newspaper for kids "First news", which targets children from 7-14 years. It shows that there is a market for this type of magazine[15]. A new magazine can add value to existing products, but with some "new to the world" parts.

Marketing Mix Plan

The Target Customer

The target customer group of TeeNWorld is divided into two groups. Firstly the teenagers between the age of 11-14. Their characteristics are investigative, social, intellectual skills with self consciousness and having an influence on the purchase decision-making. Secondly, parents from A,B,C1, and C2 social classes with a good job, high educational qualifications, and responsibility who aim to highlight the positive in their children and to enhance a strong vision for them.

The mainstream concept of TeeNWorld magazine engages with the modern family in the UK, aiming to create a strong link between parents and their children and strengthen their relationship with its global and educational content. It aims to take the teen's attraction to more global issues. Thus they can ask and share the knowledge with their parents.

Since the existing teenage magazines are more likely to focus on lifestyles and entertainment, TeeNWorld aims to fill the gap of educational magazines for teenagers in the UK with its extensive educational content and the promotion of learning as a fun and to be enjoyed by all.

Product

The characteristics of TeeNWorld Magazine are based on the "Kids getting Older Younger" phenomenon, analysing the contemporary issues with an appropriate language for the teens with the aim of matching up their interests with their parents. TeeNWorld is covering a broad range of topics including national and international affairs, business, science, technology, entertainment and education. The content of the magazine covers 50% news and 50% entertainment, including a broad range of topics.

The content of TeeNWorld Magazine:

  • 50% News and education including national and international affairs - gathered and simplified for teens. The news is supplemented with background information to create a better understanding for the teenagers.
  • 20% Entertainment (incl. celebrities, events, mangas and animes)
  • 10% Sports
  • 7.5% Technology
  • 7.5% Science, medicine, art and other educational subjects differentiated in each issue
  • 5% Customer feedback and interaction

The main strategy of TeeNWorld is to fulfil the educational teenage magazine gap in the UK market.

To reach our target audience, to get much closer to them and really interact, that is the direction our market needs to go if it going to survive.[16] The TeeNWorld website will allow the reader to do so much more than a traditional portal and will give them much more control than the traditional site. For example, they will have the opportunity to write their own article. They can select the topic they are interested in, make research, write it, and it will be published. Also, the web site will be a place where they can get together and socialise through a network (similar to Facebook, Bebo and Twitter). They will be able to upload video clips like on Youtube. Moreover, we will have our pages on each of these sites.

In the "Introduction Stage", TeeNWorld will use a PUSH strategy. The main objective in this stage is to increase sales in the short term. In the next stage, the "Growth Stage", TeeNWorld will follow a PULL strategy in order to pull teenagers towards the product. Our major aims are:

  • building a brand, gain publicity and teenagers attention,
  • creating a unique position and identity in the market,
  • long term growth and diversification

Price

The price strategy for TeeNWorld magazine is skimming price strategy. This strategy is chosen because the product indicates quality that is based on the reliable information that represents its quality. Since the customer target group includes parents who are more likely from the upper social class, it might be concluded that they are prepared to pay more money for the education based magazine since their children's education is an important aspect for them as proved in the previous section. As a result, a positive branded image will remain for the introducing product.

Usual prices for teenage magazines vary from about 1.10 (First News) to about 2.45 (Sugar). A monthly magazine can be priced higher because it is a monthly expense for the customer rather than weekly. The quality also contributes to the potential for a higher price.

The main issue is that the customer of the teenage magazine has to gain an item that is supposed to have greater value to the customer than the money paid. Therefore the magazine conveys an emotional value to the customer that is caused by the additional item that is included in the magazine and the content that is well targeted to teenagers aged 11-14. Regarding all mentioned aspects, the monthly version of the magazine will cost 5.99.

Communication

Promotional Planning

The starting point of our promotional planning is a clear understanding of our promotional objectives, which are first of all to create awareness and encourage product trial. So an inquisitive teenager aged 11-14 who is seeking to become cultured and aware of world affairs will know that TeeNWorld exists to fulfil their needs and they should try it. Also we want their parents, who are looking for a complete development of their children, taking into account their education and personality development, to know that there is an educational magazine TeeNWorld and to encourage them to try and introduce our magazine to their children. We are going to use "Pull" promotional strategy to send our message direct to teenagers and parents.

Teenagers' familiarity with online and mobile communications has an important impact on our marketing strategy. Teenagers aged 11-14 spend more time online and less time watching TV. So we will also send our message via internet (e.g. social network sites such as Facebook, YouTube, MySpace, Bebo) and mobile phones. Social Network sites are extremely popular today and users spend a relatively large amount of time on these sites. The UK is in third place for using social networking sites[17] (Appendix C, Exhibit 6.1, 6.2, 6.3). We are not going to use TV as our channel of advertising, which will save a considerable amount of money because the absolute cost of TV advertising is considered to be the highest[18]. However, we would like to make sure that we will appear as an iPhone application on the IPhone commercial. Also to deliver our message to parents we will send our message via Press (newspapers & magazines), using daily and Sunday newspapers. We will use daily newspapers such as Daily Mirror, Financial Times, The Guardian, and Daily Mail for prestige and reminder advertising. We will use Sunday newspapers because we are actually targeting a family based purchase decision. Also we are going to use Outdoor advertising to prolong advertising effect from other media. Our posters will be displayed in the underground, train stations, bus stops and on buses.

We will use Internet as a PR tool, creating blogs in social network sites. That will benefit both teenagers and us, because it will give teenagers a good opportunity to communicate and discuss the magazine. Then we can understand better what the public is saying about us, so we can use our blogs to collect feedback.

Budget

References

Books

  • Adrian Palmer "Introduction to Marketing" 2nd edition Theory and practice
  • Chris Fill "Marketing Communications. Engagement, strategies and practice" Fourth Edition p. 456, 556, 610
  • Articles

  • ProQuest, TEEN MAGAZINES, Noel Bussey,Campaign.Teddington:Aug 24, 2007.pg. 35, 1 pgs
  • Warc Best Practice April 2009, article "Should you advertise on social network websites?"
  • Databases

  • Key Note, Teenage and Pre-teenage magazine 2009
  • Mintel, Teenage magazines UK March 2008
  • GMID, report 'Consumers Lifestyle in the UK', Tweenagers, Teens
  • GMID, UK Country Fact file report, Economy
  • Web sites

  • Teenage Magazines Market Assessment, 2007
  • Retrieved from: http://www.bharatbook.com/Market-Research-Reports/Teenage-Magazines-Market-Assessment.html
  • Sugar Magazine, Retrieved from: http://www.sugarscape.com
  • http://www.bbcmagazines.com/content/magazines/topofthepops/
  • www.firstnews.co.uk
  • Hachette Filiphacci website, Retrieved from: http://www.hf-uk.com/
  • Teenage-Lifestyle/Magazine Subscriptions, retrieved from: http://www.newsstand.co.uk/237-Teenage-Lifestyle/MagazineSubscriptions.aspx ,
  • Teenage-Entertainment/Magazine Subscriptions, retrieved from: http://www.newsstand.co.uk/236-Teenage-Entertainment/MagazineSubscriptions.aspx ,
  • Teenage-Comics/Magazine Subscriptions, retrieved from http://www.newsstand.co.uk/235-Teenage-Comics/MagazineSubscriptions.aspx
  • www.dcsf.gov.uk, Press notice, search 29 September, 2008, 'Government launches New UK Council For Child Internet Safety' report (opened 09:40, 01/12/2009)

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