Developing a segmentation framework and targeting strategy for an entertainment company
The home video distribution division of a major U.S. motion picture studio was seeking to better meet the needs of, and emotionally connect with, the DVD shoppers who purchase its products. As was the case with many categories dominated by big box retailers, DVDs had become price-driven and undifferentiated versus other product categories. In addition, major shifts in technology and the entrants of new formats and players (Blu-ray, Redbox, Netflix, Hulu, etc.) were dramatically reshaping video entertainment from a consumer perspective. Despite these shifts, the company inherently believed the DVD category maintained unique attributes that could be leveraged to create a unique visual shopping experience, new in-store excitement, and ultimately, more consumption.
Segmenting consumers in a new way that took into consideration not only who watches movies most often, but also how, when, and why they engage with movies was at the heart of the project, which was led by a current FullSurge partner in a previous role. Looking at consumers this way required a significant mindset shift for the client because its entire business revolved around a “retail model”—getting people to buy more physical DVDs and Blu-rays from big box retailers. This model was in stark contrast with consumer behavior, which was increasingly migrating toward digital online solutions, such as streaming and downloading movies. As such, the segmentation framework needed to consider both the attitudes consumers had toward the category and the behaviors that characterized purchasing and consumption. Several attractive target segments were identified that capitalized on the trends toward new consumption habits while still being true to the company’s basic business model. The segments were also "made real" for the company by illustrating the kinds of lives the segments lead and the things that are important to them when it comes to entertainment and leisure time.
The new segmentation framework and targeting strategy fundamentally changed the way the company goes to market. It helped to better position it as a valuable partner to their channel customers by virtue of helping retailers drive positive traffic flow patterns and increase “dwell time” and purchase behavior. From a consumer perspective, it helped increase the relevance of a category (i.e. product format) that was under siege from competitive alternatives.