Stories which portray market research as the hero of marketing aren’t always easy to come by. Market research is an important component of marketing but it frequently plays a back seat role. We argue that market research provides the bedrock, the intelligence, which allows the more glamorous components of marketing (price, product, promotion and place) to take centre stage.
Without good intelligence, a marketing strategy could be misplaced and may not even be developed.
This brings us to an interesting article in the Financial Times on Tuesday of this week which specifically highlights market research as one of the factors resulting in Disney’s upturn in fortunes.
In summary, the Disney Channel was languishing amongst its key audience of kids under the age of fifteen. It commissioned research which showed that the proponents of Disney where parents who believed that, just like broccoli, Disney is good for you. It appears that kids were not so sure. This prompted Disney to revaluate its audience and focus more on the kids rather than the parents. Moreover, it segmented its audience and found a group of kids aged between 9 and 14 whose interests were not fully satisfied by any of the entertainment channels. This group offered a welcome gap which Disney has been able to fill.
The story is a good one because we can all relate to it. Sure, it is an example from a consumer market, but the principles are the same for every market. These are:
Step 2 – fully understand the different needs (and unmet needs) of your customers and potential customers – in other words, segment your market
Step 3 – develop and deliver products and services which are closely aligned to those different needs.
Sounds simple, doesn’t it. We don’t think it is difficult if the starting point is good market research.
How Disney made broccoli cool
By Joshua Chaffin
12th September 2006 Financial Times
Ten years ago, the Disney Channel was considered a Magic Kingdom backwater. The cable channel reached just 14m homes with a programming line-up that was little more than a dumping ground for Disney’s animation studio and other departments.
These days, it stands out as one of the jewels of the Disney palace. The Disney Channel has been the top-rated children’s network for the past year and a half, elbowing aside rivals such as Nickelodeon and the Cartoon Network. On the strength of that performance, it now commands among the highest fees in the industry from cable operators, who beam it into 89m homes.
The turnround has been a case study in how to use intensive consumer research to gain a better understanding of the market. As well as helping Disney Channel to outpace its rivals in terms of audience ratings, the research effort – combined with trial and error and a bit of luck – has also helped it emerge as a creative engine in its own right and thereby breathe new life into an established brand.
Traditionally, Disney has relied on its animation studio to develop characters and stories that are the lifeblood of its various businesses, from theme park attractions to consumer products.
While the animators have gone fallow over the past decade, forcing Disney to pay $7.4bn earlier this year for rival Pixar, the cable network has sprung to life. A new series of homegrown hits have become stars across the Disney universe. Its biggest may be this year’s High School Musical, a made-for-television movie that has become a phenomenon. A love story, it focuses on a sports jock and a nerd who defy their disapproving friends to audition for the school musical (think of Grease updated for the text-messaging set, and with only an “implied” kiss at the end).
With a budget of just $4.5m, it has gone on to draw more than 37m viewers. It has also sold 2.4m DVDs, lured millions of viewers to the Disney Channel website and produced the top-selling album of the year.
“We have gone from being the stepchild to the favourite son,” says Gary Marsh, the Disney Channel president who has been with the division since the lean years of the late 1980s.
The transformation began in earnest a decade ago when Robert Iger, Disney’s chief executive, recruited Anne Sweeney from rival Fox Television. Ms Sweeney knew Disney Channel since her days at Nickelodeon, where she led the Viacom network’s international ex-pansion. She was also familiar with it as a parent. It is fair to say that she did not hold it in the highest regard.
“My kids had never watched the Disney Channel and we’d had it in our home for years,” Ms Sweeney recalls.
Nonetheless, she knew the power of the Disney brand and saw potential in the company’s recent moves to convert the network from a subscription service such as HBO, in which viewers paid a monthly fee on top of their regular cable bill, to a basic offering.
The conversion would require a fundamentally different approach to programming and marketing. A subscription service is built around big events – such as boxing bouts or a hit series like The Sopranos – intended to remind customers of its value come bill time. By contrast, a standard service must be more consistent in its offerings.
Before they could develop that programming, Ms Sweeney and her team felt that they needed to better understand not only the Disney Channel and its competitors, but Disney itself. “I felt like I needed to go to school to understand what made Disney tick,” she says.
They began an exhaustive research campaign. It was something that had never been done at the channel, which did not even subscribe to the Nielsen ratings service, the most basic barometer of viewer preferences.
Trying to get intelligent feedback from viewers as young as three years old may sound like an exercise in futility. Yet according to Eleo Hensleigh, who joined the Disney Channel in 1996 as senior vice-president of marketing, that is not the case. Some of the studies were as simple as placing toddlers in a room full of toys and waiting to see whether they would watch a programme or play with the toys. “They can tell you a lot even without telling you anything,” Ms Hensleigh says.
What they discovered was not encouraging. While children raved about Disney’s theme parks, they used words such as “broccoli” when asked to describe Disney Channel. That made sense since in the subscription days the marketing strategy was aimed at cheque book-wielding parents. Essentially, Disney’s pitch to parents was that the network was good for their children, even if it was not a lot of fun.
Gradually, a strategy developed to change the focus and make the network first and foremost for children and about them. “More and more, kids demand what they want,” explains Rich Ross, who Ms Sweeney recruited from Nickelodeon six months after her arrival and is now president of Disney Channel Worldwide.
To appeal to them more directly, Mr Ross began to segment Disney Channel’s programming by age. He created Playhouse, for example, for the youngest children. This was done not only to protect them, but also with the knowledge that a nine-year-old, for example, finds nothing so uncool as having to hang out with their six-year-old brother.
Disney also decided that it had to differentiate itself from the competition. While Nickelodeon was increasingly relying on animation, Disney began to develop live-action dramas. Also, it tried to emphasise the notion that Disney Channel – much like Disneyland – was a place for children as well as their parents. At the time, Nickelodeon was cultivating a more defiant, kids-only swagger.
Mr Marsh describes the network’s self-consciously wholesome tone this way: “I can get a laugh out of an underarm fart any time I want. It’s easy. Our challenge is to get comedy out of our characters and our stories.”
Not everyone at Disney appreciated Ms Sweeney and her team’s efforts to break out on their own. While Disney Channel had not been highly regarded at the company, it was at least appreciated as a free promotional vehicle for different divisions. Mr Iger winces at the memory of those internal battles, and Ms Sweeney ultimately credits him with giving her political cover.
It helped that after a period of experimentation, Disney Channel began to deliver steady hits. The channel’s sweet spot has been a new demographic group that Disney’s researchers were quick to identify: the Tweens. These are 9- to 14-year-olds trapped between childhood and an increasingly fast-arriving adolescence.
Or, as Mr Ross puts it: “If you’re a girl, you have your lip gloss in one hand and your stuffed animal in the other.”
