Stan Australia Marketing Strategies - Case Study Example

STAN AUSTRALIA MARKETING STRATEGIES By Student’s Name Code+ course name Instructor’s Name University Name City, State Table of Contents Introduction 4 Situation analysis 5 Product 5 Promotion of the ‘old product’ 6 Promotion in Stan 6 Pricing 7 Pricing strategies 8 Place 9 Market objectives and strategies 10 Recommendation 11 Conclusion 11 References 13 Executive summary Australian market just like other markets is a market that has a wide coverage and especially for the information distributing companies. This industry has many players and especially competitors in the market. This can be explained from the well-structured systems that the country has in terms of IT and enhancement of technology. In this report, we will focus on a media company in Australia that is known as Stan, a company that is highly regarded though a new player in the market. Stan is a media company based in Australia. Introduction In Australia there are several streaming companies. However, a new entrant in the market by the name Stan has emerged. Stan is an Australian streaming company and is known for offering subscription to unlimited viewing of their selected movies and other TV shows (Zhang 2005). It was originally supposed to launch in the new market on February of 2015 however it was instead launched on the 26th January 2015 which is the Australia day. This helped the company to relate well with the potential customers in the new market. In addition, the company was able to reach many people during the launch as many people related the launch with the holiday. Stan is a company that is owned through a joint venture of Nine Entertainment Co. and Fairfax Media. The joint venture then formed a company known as StreamCo that then owned Stan. These companies in the joint venture invested heavily to help Stan establish them in the market. In addition the investment would help Stan compete well in the market with the already established and large companies in the company. Both of the companies put up AU$50 million each. This money was given to StreamCo for establishment in the market in August 2014. The service had well-made structures that it prepared even before its launch. This is due to the nature of the business. In this industry all the streaming companies must therefore have some agreements with other media companies who own the broadcasting rights. The agreement between the media production companies and the streaming companies is to allow the streaming company to air the other companies content. The service was later bundled with some subscriptions to other media companies like Fairfax Media's newspapers, The Age and The Sydney Morning Herald. As discussed earlier the market is full of competitor and the main competitors in this industry include Australian streaming companies that are very popular in the market like Quickflix and Foxtel also known as Seven West. Other companies also include Media joint venture Presto and an American based streaming firm called Netflix. Situation analysis During the launch the company attracted so many viewers and especially many subscriptions on the day of launching. During the day, the major programming announcement was a premiere season of a programme that is very popular called Better Call Saul and the exclusive rights to air the Breaking Bad that was previously aired on a competing company the Foxtel. It is good to note that there are also other factors that need to be considered while airing of the contents is concerned. This is as crucial as it was recorded that the highest rate of piracy for the Breaking Bad was recorded in Australia. It had the highest rate in the world. Stan also holds the rights to air another major show in Australia the Transparent and Mozart in the jungle (Parker, Philip 2006). There are several factors that affect the prices of these two commodities including supply and demand, inventories and stocks, and inflation. However, Stan films and shows and Foxtel shows differ due to the number of subscriptions due to the demand of their shows (Blythe 2006). Product It is good to note the main factors that separate Stan from its competitors in the market the characteristics that make it stand out. It has no contract with the subscribers and hence it is free for the subscribers to cancel their subscription at any time the customer wishes. The company does not have any ads running on their platform and hence all their airtime is on films and other shows in the T.V (Berkley 2007). The main feature that helps the company attract so many subscribers is the fact that it has a free 30 day trial that gives the subscribers free service for a period of 30 days. After the expiration of the 30 days the customer can either subscribe upon payment of the fees or else leave the service without any consequences or strings attached. The company also has a cheap subscription of $10 a month. This amount allows the subscribers to view as much TV and film content. The management of Stan Australia was carefully chosen to make it a good leader in the market (Turner 1993). This company has exclusive rights in the industry to Breaking Bad making it a popular company in the market. Similar to the other competitors in the market like Netflix and Presto and Foxtel, the company will enter market to produce their own films and as noted the process has already started (Yannopoulos 2007). Promotion of the ‘old product’ For the old product we will focus on Netflix as it is more established in the market. The old product has had a good method of promotion and marketing of their products. Netflix uses a different way to promote their products. In this case the old product uses flyers, posters and billboards to advertise their products. In this case the company is able to reach many people and a greater population. However, some of the methods are good but may be out-dated from the marketing point of view. This compared to Stan who uses the modern technology like the internet may not be a very good way of marketing. The other companies are also well known for promoting their products in the newspapers which is a good way to advertise as it reaches to many people as compared to the flyers and billboards. Promotion in Stan Stan has adopted digital way of promoting their products unlike the other companies in the industry. In addition, the company uses the internet platform to advertise their products as well as getting into partnerships with other television stations for them to advertise their product. The company also uses radio and newspaper promotions to advertise their programs and encourage more subscriptions. The company’s popularity has risen in a high rate as according to the company its subscription has reached up to 100,000 by March 2015. However they reported that most of their customers are on a trial period of 30 days subscription where later they will need to subscribe to the paying for their viewing. The company targets to have 400,000 subscribers at the end of the year (Ferrell & Hartline 2014). Pricing Pricing is a great factor that Stan should take into consideration. Pricing methods for goods and services are very necessary to a business. This is because all the businesses which sell their products must attract customers and maintain their customers. Therefore this means that Stan must consider their pricing which is now the case as it has the lowest prices in the market at $10 for subscription. Different products are priced differently and once the price is raised the response of the customers is different. There are three main ways that help the businesses to increase the amount of their profits. There are several strategies that Stan should consider when reviewing their prices. The strategies may include business owners cutting on costs to increase their sales, as well as finding more profits through the usage of a better pricing strategy (Upshaw 2007). In addition, for the businesses to prosper or even stay viable in the market the major thing is to increase the sale and even if the prices are very low and the sales don’t increase, the businessmen must find a way to maintain the customers that they have. Pricing strategies The marketing manager of Stan seeks to make the best pricing strategy in the market. This is no different from the managers of the other products in the market. Some of the strategies used in the selling of the films and shows in streams include the following elements. They are the strategies that the marketing manager of Stan requires to consider (Kotler & Armstrong 1991). Cost-Plus strategy: This is a strategy especially used or the Stan products. In this strategy, the production costs are first calculated and determined. The production cost then gives the management a chance to set the target profit margin that they seek to achieve, and this then leads the price being set. This does not really work well for Stan as they are not a big company and hence not a price leader in the market. In most cases, this strategy works best when the business taking this strategy is much larger than the competitors’ or the competitors are the price takers. It may also be appropriate if it is applied to a monopoly. This therefore, makes it not a good strategy for Stan to consider (Smith 2013). Targeted Return strategy: In this strategy the accumulated investment costs are calculated in the company and determined properly. This therefore helps the business to set a target of how much they should achieve in a given period of time. This is a strategy that should be used by Stan as it is a good strategy that will help them get back their investment in the set period of time. This is because; they set a price that helps the business to get the required rate of return on investment every financial year. In addition, for this strategy to work Stan must set a rate of return on the investment, depending on the time they set to cover their cost of investment (Johnston , Gibson & Recorded Books, Inc 2003). Value strategy: Stan should improve the value of their products and hence their shows and films should be of high quality. This is the best strategy that the company should use. This is because, by the use of this strategy even the customers’ needs are well taken care of. The value received by the customers of a business is also a crucial factor to consider. The value is calculated and a proper pricing is applied accordingly. The higher the value of a commodity, the higher is the price of it (Blythe 2003). Psychology: Stan realises that the psychological factors in a company by the customers is very necessary. In addition, the management has to provide a feature that has a positive impact on the minds of the customers. A good example of the psychological factors is the free subscription on a 30 day trial period. Psychological factors and other emotional impacts are also used when determining final price of a commodity (Cinquini, Stefan 2014). Place Product positioning is another factor that the company requires to consider. It is the only way that the team will use to attract more subscribers to the company considering the competition in the market. It is the way that the team will use to make their products more visible in the market as compared to other products that are in the market. Stan uses their strong though new brand in the market to attract more subscribers this also has resulted from the business agreements that the company has with major film producers. The streaming of the popular shows also has come a long way to increase their presence in the market and hence will lead more subscribers. A good product positioning improves brand loyalty and consumer confidence in the product in the market. This will therefore translate to higher profitability. Marketers should, therefore, make sure that their products are greatly positioned so as to give the advantage against their competitors. The market mixes in Stan will, therefore, require to be designed so as to accommodate the positioning (Bercaw & United States 1926). Market objectives and strategies According to the strategic plan of Stan, the company plans to be the leading company in the industry. The company plans to go global in 5 years’ time and hence improve its positioning. The company aims at reducing the pricing and be the market leader with the lowest prices. Currently at only $10 it has the lowest pricing in the market which makes it a formidable competitor in the market. The company has some Strength considering it is co-owned by media giants in the market and that increases the competitive advantage (Collins & Liberal Party of Australia 1977). The company has already established the required relations with the necessary links in the market that will enable it stream the best programs in the country and the shows that sell well to the viewers. The management has also set proper structures that make the company have efficient operations that reduces the production cost and hence leads to higher profit margins. Understanding the target market of the organisation is also another crucial factor that the company has ensured that it well covered. Through this understanding, the company is able to compete and increase subscriptions (Australian Teachers of Media & Cinemedia Corporation 1999). The basic law in economics suggests that price is affected by supply and demand. The higher the demand of a product the higher the force that drives prices of a good up. It also dictates the higher the number of suppliers in the market, the high there is supply and hence the prices are driven down due to completion. Therefore, Supply and demand of commodities affects the prices since the marketing managers set the prices based on the competitors’ prices and the frequency of their sales. When the supply increases, the prices go down due to the competition in the market. This is similar to all the companies in the market. However, if the demand for a particular show or film increases, the prices of subscription to the company hosting it also go up (Butler, McNamara & Fitzgerald 1999). Recommendation Stan requires thinking of a better way to survive in the market. This therefore means that in addition to a good marketing strategy that Stan has adopted, the management also requires a good pricing strategy. The strategy therefore means that the pricing must be above the cost of production but still remain competitive in the market. Adopting a good pricing strategy for the marketing managers of Stan will be very essential, since businesses may either overprice or even under-price the products, which makes them loose money. Therefore for Stan to survive in the market comfortably it has to find a balance in their pricing especially due to the competition. Some market researchers may feel that the $10 is too low and hence under-pricing occurs. However, this will only mean a growing number of subscriptions and will only be economical if the pricing is above the production cost. An increase in price causes the customers to move away from the products. In addition, a decrease in price causes more sales though at a lower price, which may result in low profits or even losses. However, setting of prices is not just a thing that depends on one factor and it affects other issues in the economy. Conclusion Stan requires having good strategies to approach the new market as compared to what the ‘old’ product have been using. It is clear that Stan has the best strategy and has approached the market in a very professional way. The reduction of the subscription fee and the one month trial period has gained a competitive advantage to the company. The introduction of the new product in Australia requires Stan to also have a good management to control the marketing. Marketing is the main factor that Stan should consider as their main focus at the start of their business. Marketing is led by the strong management team. Marketing is crucial to introduce the films and shows to the customers and to encourage subscribers. It is salient to note that this department of marketing is very paramount since without proper marketing the plan will just be in papers and will not be implemented. Stan has realised this and hence has a strong management that is carefully selected from the many who had applied to join the team. Experience is a factor and therefore the team members are well experienced in this work (Leong, 1933). References Australian Teachers of Media., & Cinemedia Corporation (East Melbourne (Melbourne, Vic.)). (1999). Australian screen education. Carlton South, Vic: Australian Teachers of Media Bercaw, L. O., & United States. (1926). 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