The exploitation of niche markets : an evaluation of Huisgenoot's standalone titles in an already competitive consumer magazine market

Coetzee, Nerisa (2013-03)

Thesis (MBA)--Stellenbosch University, 2013.


The high costs of new product launches have forced consumer magazines globally to launch brand extensions as part of new product strategies. Costs can be reduced radically by using renowned brands and utilising their marketing and distribution competencies. The economic recession and a rapid leaning towards non-print media have caused a sharp drop in advertising as well as consumer spending in the print magazine industry. Nevertheless, tablet devices and ground-breaking technology offers opportunities for traditional media to grow. The product life cycle and the growth-share matrix for a mature brand such as Huisgenoot validate the necessity of new products and brand extensions to remain sustainable. Huisgenoot is the largest magazine in South Africa with a circulation of 281 045, reaching 2.2 million (AMPS 2012, Jul 2011 – Jun 2012) readers on a weekly basis. Publishers felt it necessary to develop a brand extension strategy to leverage the brand even further and to avoid stagnation of the title. However, although profiting from parent brand value sounds promising, the global failure rate of extensions is still great. Extending existing brands and launching new products is crucial to increase profits. Brand extensions address neglected consumer needs and simultaneously confront competition in the market. However, launching new products is costly, risky and time consuming. In 2010, Media24 decided to leverage content, one of its most valuable assets, by introducing additional standalone magazines (line extensions) for one of its strongest brands, Huisgenoot. Are magazines exploiting niche markets catering for the changing needs of the South African consumer and advertiser? What is the impact of Huisgenoot’s standalone titles on the business of Media24 Weekly Magazines in an already competitive consumer magazine market? This research report explores specifically Huisgenoot’s line extensions in order to evaluate if an extension strategy has long-term sustainability for the title or if it is inducing a cannibalisation effect on the core magazine brand. Growth of the extensions will be measured by analysing profit, circulation and point of sale data. A critical analysis of the current extension strategy will also be completed. The report also includes an overview of the South African media landscape, identifies the core brand (parent brand) values of Huisgenoot and includes interviews with important role-players within the publishing business. This was done by conducting a literature overview, completing a reader questionnaire and doing in-depth interviews. The qualitative data was supported by secondary circulation and advertising data. The researcher concludes by making recommendations to ensure sustainability in terms of Huisgenoot’s future line extensions.

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