Building Brand Value the Playboy Way by Susan Gunelius

Author:Susan Gunelius
Language: eng
Format: epub
Publisher: Palgrave Macmillan
Published: 2008-12-31T16:00:00+00:00

FACING A SEGMENTED MARKET

As the 1970s neared an end, Playboy was faced with a segmented market that it wasn’t prepared to handle. Until this time, the brand succeeded by providing a variety of experiential products to consumers and allowing them to control those products and personalize them. In the 1970s, external influences such as the macro environment and new competition would force the market to segment itself organically. People changed, society changed, and the Playboy consumer market changed. Its niche had grown and by necessity split into smaller groups or subniches with varied wants and needs for the brand. Playboy was not prepared to recognize and adapt to a segmented marketing strategy.

When Penthouse debuted in 1969 and immediately began to steal market share from Playboy magazine, it was clear that the frontal attack was working and a segment of Playboy customers were going to shift to the new product that was better able to meet their specific changing needs. Playboy’s ill-conceived attempts to counter the attack lacked in long-term strategy and focused instead on short-term tactics. Rather than analyzing the changing market and creating demographic and behavioral segmentation strategies, Playboy jumped to make changes that failed to achieve the objectives expected. Instead, core consumers were confused, advertisers were outraged, and the reactionary tactics delivered negative results.

Had a cluster analysis been conducted in the early 1970s, customers could have been grouped based on similar characteristics and measurable objectives could have been defined for each segment with effective marketing tactics developed accordingly to meet those objectives. To describe further, a cluster analysis is a technique used to organically segment customers based on existing characteristics. Those characteristics can be based on demographic and behavioral traits. The goal of a cluster analysis is to group customers so all members of a specific group are as similar to each other as possible. By nature of the process, each group will be distinctively different from the next. In other words, a cluster analysis allows marketers to separate customers into unique segments with unique needs, wants, and expectations.

Segmentation allows marketers to create targeted messaging and positioning and create strategies that meet both short- and long-term objectives related to those specific segments. Rather than using an all or nothing approach, a segmented approach would identify gaps, opportunities, and threats allowing Playboy to focus on the most profitable segments and maximize return on investments. Unfortunately, that’s a strategy the company wouldn’t recognize or fully employ for many more years.

During the 1970s, Playboy still acted on many of Hugh Hefner’s whims. The brand champion had extricated himself from the daily operations of Playboy Enterprises, but he still controlled major decisions. That disconnect, and an overall lack of long-term strategic thinking, would make it impossible for Playboy to redefine itself and reposition its iconic brand in the 1970s. Unfortunately, the worst was yet to come. The 1980s would bring a new set of far-reaching problems to both Hugh Hefner and the Playboy brand.

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