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Interpret Market Trends and Developments

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Executive Summary

This report was commissioned to investigate the consumer behavior, characteristics of buyers, and potential buyers of a leading men’s magazine, namely Playboy Magazine, which is distributed in 150 countries around the world. A detailed examination of the product’s benefits and features has been undertaken to identify the magazine’s quality, virtue, and unique selling points. An introduction into the Playboy brand and the founder ‘Hugh Hefner’, are discussed to provide a well-rounded understanding of the foundations in which playboy are built upon.

When analyzing the characteristics of the target market, three market segments (as stipulated by Roy Morgan Value Segments) were identified to describe the existing and potential buyers of playboy magazine. These groups included: “look at me” ™, “Young Optimist”™ and Something Better”™. These value segments identify how people think, their aspirations, self-images, and their overall general behavior which in turn can determine and predict the purchasing behavior of Playboy magazine. Other factors that influence buyer behavior include Cultural, Social Psychological, and Personal factors.

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Based on these findings, an emotional focus of appeal for the product was chosen.

Playboy utilizes an emotional appeal to shape the minds of young men, by stimulating the consumers’ emotions, social and psychological needs through the promotion of the “Playboy Philosophy” and content of the magazine. The report concludes with an examination of the products past and present sales performance and market position in order to predict future marketing direction and trends of the magazine.

Introduction

Aim

This report sets out to examine the consumer behavior, characteristics of buyers, and potential buyers of a leading men’s magazine, namely Playboy Magazine, in order to design an innovative promotional strategy aimed at:

  • Maximizing sales
  • Increasing market share
  • Successfully introducing the product
  • Increasing product popularity

Scope and Rationale

The report covers an analysis of the Playboy brand, the founder, and its core tangible product; the Playboy magazine, its features and benefits to the consumer; its target segment; the market place, the factors influencing consumer behavior; the purchase motivators and the magazine’s performance history until today.

The introduction looks at the development of the brand and its founder in order to illustrate how these elements combined, created the Playboy Philosophy, which set the foundation for the brand’s reputation and recognition, as well as producing one of the largest-selling men’s magazines in the world. When examining consumer behavior and the purchase motivators, the focus is placed on how the social, cultural, and psychological factors significantly influence the product purchase decision, and how these key components determined the business’s overall marketing focus of the appeal.

The report concludes with an analysis of past sales performance in conjunction with an examination of the current buying and behavioral trends of the magazine. These characteristics are strategically examined to forecast future sales performance of the magazine, to determine the most suitable direction of marketing efforts as we move into the 21st Century, and to create an effective promotional strategy to support this.

Sources of Information

The report will be researched on the World Wide Web, using credible and relevant sources including:

  • The official Playboy website
  • Journals and articles Market Research websites
  • The American Audit Bureau of circulation website
  • The official American Magazine Publishing industry website.

In addition to these sources, consumer behavior class handouts have also been studied and utilized.

Product Findings

What Is Playboy

Playboy is one of the most recognized and popular consumer brands in the world. Playboy began as an American men’s magazine, founded in Chicago, Illinois in 1953, by Hugh Hefner. Hefner raised $8,000 to produce his first issue which featured Marilyn Monroe on the cover and sold over 50,000 copies.

The original name for the magazine was “Stag Party”, but Hefner was forced to change it as it was challenged as a trademark infringement by Stag Magazine. The name “Playboy” was suggested by a friend, and the famous Rabbit Head symbol designed by Paul Arthur in October 1953, was conceived to reflect the entertainment aspect of Playboy. To reinforce the sexual humorous connotation aspect, the bunny head dons a tuxedo to promote sophistication, but also the frisky and playful element of the magazine.

The Man behind the Magazine

When Hugh Hefner was in the conceptual stages of the magazine, it was about ‘the good life’. It’s about the freedom of having fun. Sexual liberation is part of that but so are stylish cars, luxury goods, and beautiful women. The magazine created a lifestyle and that in turn has created a brand about ‘the good life’. This set the parameters for Hugh Hefner’s reputation and the brand, as he became known to the public as the “supreme bachelor of all time”, and the ultimate “lifestyle entrepreneur”.

He has forever changed our world by breaking the boundaries related to sexuality, age, and gender. He created a revolutionary magazine with naked women and great articles in a time when sexuality was not even appropriate to talk about. “I don’t think people understand that Playboy had a big role in the movement for sexual liberation in the 1960s and 1970s in the US. I don’t think people know how much Hefner was involved in freedom of expression. ” (Markus Grinde. 2008)

Playboy Today

The magazine is now owned by Playboy Enterprises, Inc. (PLA) founded by Hugh Hefner.

Playboy Enterprises, Inc. is a media and lifestyle company that markets the brand through a wide range of media properties and licensing initiatives. The Company has three divisions which are described below.

The media company holds a presence in nearly every medium, creating content for distribution via television networks, websites, mobile platforms, and radio. Through licensing agreements, the Playboy brand appears on a wide range of consumer products in more than 150 countries as well as in retail stores and entertainment venues. However, for the purpose of this report, the focus will be placed on Playboy’s first tangible product ever produced – Playboy Magazine.

The Product

Playboy magazine content contains nudity (including pictorials and centerfolds), award-winning fiction and investigation articles, and short stories by notable novelists such as Arthur C. Clarke, and Ian Fleming.

Playboy also features monthly interviews of notable public figures such as artists, architects, economists, composers, film directors, journalists, religious figures, politicians, athletes, and race car drivers. In terms of the magazine’s sexual content; women featured in the magazine are portrayed to be just a “playboy accessory” and the advertisements’ reinforce this by attributing female characteristics to the items they sell. For example, a full-page advertisement for a sports car assures the reader that this car is not only “the smoothest pleasure machine” on the road and that having one is a “love-affair,” but most importantly, “you drive it—it doesn’t drive you.

Circulation

Today Playboy magazine circulates 2. 6 million copies in the U. S. with an approximation of 4. 5 million nation-specific versions of Playboy published worldwide.

These versions are tailored to suit the social and cultural values, attitudes, and beliefs of each country where the magazine is sold in order to ensure the appropriateness of its content and to meets with the needs of each target market. The map found below shows the countries where Playboy magazine is published as of 2007[update]. The dark pink indicates the countries where regional editions of the magazine are produced today, the lighter pink indicates the countries where regional editions Playboy were published but were ceased.

Market Profile

Playboy Enterprises falls into the media industry.

The Company together with its subsidiaries through which it conducts business, as a media and lifestyle company competes against the following media groups:

  • Private Media Group (PRVT), LFP Inc.
  • Vivid Entertainment Group,
  • Penthouse Media Group, Inc.

In contrast to Playboy Magazine, these companies’ products are generally heavier on the “graphics” and lighter on the writing, setting Playboy apart. Below is a revenue comparison of Playboy and its industry competitors (2008 last quarter).

  • Industry publishing periodicals revenue = $250,000,000.
  • Penthouse Media Group revenue = $335,000,000
  • Playboy Enterprises (PLA) revenue = $235,000,000
  • Vivid Entertainment Group revenue = $12,340,000

While Playboy is technically a media company, its unique content separates it from traditional media and publishing corporations. It isn’t limited to pornographic material and, as such, doesn’t exclusively compete in the adult entertainment market. This allows the magazine to appeal to other magazine’ genres, hence widening its market share. These magazine market groups include:

  • Lads mags (known as men’s mags in the U. S)
  • Erotica pornographic market
  • Lifestyle magazine market.

The Printing/Publishing Industry in which playboy magazine competes, shares the market with the following magazines:

  • Maxim
  • Men’s Health
  • Rolling Stone
  • GQ
  • Esquire
  • Men’s Journal
  • Sports Illustrated

In the early 1970s, the magazine sold up to 7 million copies a month, however in more recent times its market share has significantly dropped, clearly evident by the dramatic amount of revenue loss that has been reported. “In the third quarter of 2008 alone, the publishing sector of Playboy Enterprises Inc. lost a massive $1. 3 million. ” (www. time. com). While Playboy is still the best-selling men’s magazine, (current circ. 2. 6 million) its market share has been eaten away by its competition, such as Sports Illustrated, Penthouse, and Maxim.

The publication is kept alive because apart from its historical importance to the Playboy brand, it is said to be much-loved by Hefner, who is still its editor in chief today.

Target Market

Demographics

Playboy’s target group is formed by young men aged between 18 and 45. Around half of them are married, the other half have girlfriends. They have above-average standards of living and spending power. They are predominantly found in income classes A, B1, B2 and C. and they live mainly in the west of the country, in the urbanized areas of the U. S. The below table is the demographical background of Playboy readers: he/she has an income above average and is a well-off city person with higher education.

Psychographics

Activities | Interests | Opinions

Playboy men are young and independent. They have a materialistic and positive attitude to life, they are very conscious of quality and brands and sensitive to fashion and trends. Their lifestyle is geared towards pleasure and enjoyable experiences.

Churches, political parties, and trade unions have little influence on this group. They have a high disposable income, which they spend easily on expensive brand products. “Playboy readers typically are also quick to acquire new technical products, such as DVD players, digital video cameras, computers, and mobile phones. They smoke and drink more than average but also exercise more than average. They have a wide range of interests. They devote much attention to clothing, body care, sports, going out, and holidays. ” (www. goliath.ecnext.com) They have an above-average interest in cars and fashion and they like to distinguish themselves from their peers by using goods and services of high quality.

They easily borrow money to acquire these goods and services.

Market Segments

Market segments arise when people with the same purchase behavior can be grouped into similar segments. As stipulated by Roy Morgan Values Segments*TM the following market segments can be identified within the Playboy target market. These segmented groups identify how people think, their aspirations, self-images, and their behavior which in turn, can determine their purchasing behavior.

Market Segment “Something Better”

People who fit into this market tend to be ambitious and individualistic, with the aspiration to own or earn more than what others have, or what they have currently attained and achieved in life.

People falling into this segment have one ultimate goal: To be better than anyone else. The tendency to value their ‘image (appearance and public prestige)’ by being perceived as wealthy, successful, and overall better-off in comparison to others generally outweighs their financial standing. It is noted by Roy Morgan™ that people of this group would financially overstrain themselves just to appear better-off than others. Given that these people are highly aware of what other people ‘think’ of them, and their nature to compare themselves to other people around them; it would seem that the purchasing behavior of this group would be very similar in nature.

This line of thinking motivates these people to make purchases based on which brands, products, cars, luxury goods, and living areas are perceived as the ‘right’ ones, most reputable, desirable and highly respected according to the socio-economic group they are trying to embody. (Levine, M, and Benjamin, C 1997)

Value Segment “Young Optimists”

“This pattern of thinking is associated with young professionals and students who highly value achieving a good career, overseas travel, an active social life, having a sense of fulfillment, and a chance to enjoy an outgoing lifestyle. These types of people are generally found to live in inner-city and urban lifestyle settings. ” (Levine, M, and Benjamin, C 1997) They are conscious of the image they project and want to make the right choices in life. They are busy planning careers, attending university, thinking about the future, and want to experience all life has to offer.

Given that playboys proportion of readers are young, idealistic, university students who want the most they can get out of life, make this group an appropriate fit in terms of values and attitudes towards their approach to life. Playboy caters to this group of people through promoting its philosophy, social culture, and the ‘Playboy’ way of living, as described in the psychographics section earlier. In addition, this segment identifies that the people within this group are heavy readers of magazines which promote image and style, interests in movies, music and celebrity gossip, whilst providing technological-savvy information (based on the fact that Gen Y people have grown into a world of technology), which signifies to the playboy marketing team, that these people would be the right market to target.

Value Segment “Look At Me”

The Look At Me© pattern of responses tends to be associated with hedonism, “being very active socially, they prefer a party to staying at home. They like to be seen as “outrageous” and taking part in “cool” or “hip” activities. They tend not to get involved in social or political issues. Sport, leisure, and fun are too important to be interfered with by longer-term commitments. ” (Levine, M, and Benjamin, C 1997) These people fall into the group of potential buyers of the magazine, purely for the fact that the magazine is perceived to be the “cool” thing to buy and read according to their peers. As the magazine is perceived by this age group to be ‘cool and hip’, they would aspire to live the playboy lifestyle.

However, given the nature of their spending habits, (burning up money, with no real focus on conservative saving) these people may not be able to ‘really live’ the playboy lifestyle (luxury cars, Rolex watches, expensive apartments) rather, they will try and mimic this type of lifestyle to the best of their ability. When it comes to the reading preferences of males from this group, they tend to read magazines covering topics such as cars, girls, sports, games, and technology. Given that Playboy covers each topic stated above in their monthly publication, makes the magazine very appealing to this segment. Factors influencing buying behavior “Buying behavior is the study of when, why, how, and where people do or do not buy products. It blends elements from psychology, sociology, social anthropology, and economics. ” (Sandhusen, Richard L.: Marketing, 2000)

There are many surrounding influences which impact on the purchase decision of a product. These factors influence the buying behavior of Playboy Magazine in various ways. The buying decision process is a systematic set of steps a consumer goes through when making a purchase. A typical playboy reader will recognize a need to purchase the magazine when the monthly issue hits the news-stand. There is no information search or evaluation of alternatives as the playboy reader finds everything he needs in the magazine (luxury cars, luxury goods, expensive, sexual content, lifestyle reviews) as discussed in the target market analysis of this report.

The factors influencing consumer’s buyer behavior are personal, social, cultural, and psychological.

Psychological Factors

For the insecure young man with time and money on his hands who still feels uncertain about his consumer skills, Playboy magazine supplies an authoritative guidebook that tells him not only who to be; it tells him how to be it. He is told; “this assertive, self-assured weskit is what every man of taste wants for the fall season. ” (www. religion-online. org). what to be and how to be it are both made unambiguously clear.

Personal Factors

Personal factors such as age, income, lifestyle, and personality influence the purchase decision.

Given Playboy’s philosophy is geared towards young materialistic who value highly active lifestyles, expensive goods, and care greatly about their public image, drives young male consumers towards purchasing the magazine which in turn, buying into the playboy philosophy/lifestyle.

Cultural Factors

The magazine has had a significant impact on American society. Young college students were severely affected by Hefner’s magazine as it provided an outlet for sexual tension and repression. The population had been taught the specific roles for every person in the community; the women were homemakers, the men were workers, the minorities were ignored.

Hefner contradicted pre-set roles by making these every day women sex symbols through his nude spreads In Playboy. Hefner was able to directly connect with this generation as he too was inhibited as a child from expressing himself independently. The magazine’s impact on society was intensified by the youth’s rebellion from family life. This made Playboy an icon for the rebellion. “I never intended to be a revolutionary. My intention was to create a mainstream men’s magazine that included sex in it. That turned out to be a very revolutionary idea. ” Hugh Hefner (www.askmen.com )

Social Factors

Heffner’s’ “revolutionary idea” (Askmen. com) sparked interest in the younger generation for many reasons, including religion, family life, and rebellion.

Christianity dominated America at mid-century, yet this magazine displaying sinful pictures appealed to the youth, raised on these conservative principles. The magazine established the difference between sin and purity, a sensitive subject around religion. College students were asking questions and Hefner’s magazine provided answers. Hefner really was the leader of the modern sexual revolution. “The responsibility for character formation has shifted from the family’s set of values and beliefs towards the peer group and to the mass media peer groups. ”(www.religiononline.com)

Product Performance (Past and Present)

The best-selling Playboy edition was the November 1972 edition, which sold 7,161,561 copies.

It is estimated that one-quarter of all American college men were buying the magazine every month. Playboy today is still the largest American selling men’s magazine selling about 2. 6 million a month in the U. S. A. However, since reaching its peak in the 1970s, Playboy has seen a decline in circulation and cultural relevance because of competition in the field it founded – first from Penthouse, Oui (which was published as a spin-off of Playboy) and Gallery in the 1970s; later from sexual content videos; and more recently from men’s mags such as Maxim, and FHM. In 2008, CNN noted that the magazine, which at peak circulation boasted 3. 1 million magazines sold, recently “came in 200,000 short of its 2. million rate base — the minimum circulation a magazine promises to advertisers”.

The above-tabulated information has been formed into a graph below to highlight the gradual decline of Playboys publishing division over the past three years while comparing the company’s performance of all three revenue sources: Entertainment (Multimedia) and the Licensing Division (Merchandise, Retail, Events, etc).  The company has restructured itself in order to cut down on excess administration costs. There are now only two divisions in Playboy: Media and Licensing. By integrating the publishing and entertainment businesses, the company hopes to cut costs, thereby streamlining operations and helping to make its magazine profitable once again.

In response to playboys overall sales performance, or lack thereof, Playboy has attempted to re-assert its hold on the 18–35 male demographic through slight changes to the content and focusing on issues and personalities more appropriate to its audience — such as hip-hop artists being featured in the “Playboy Interview’. In true Playboy revolutionary and risque spirit; the magazine was the first men’s magazine to release a pair of 3-D glasses with their March 2010 issue. This recent PR stunt generated a lot of media attention which again, even if just for a short moment, placed playboy in the spotlight and at the forefront of people’s minds. Another PR stunt that Playboy has pulled out recently was the famous Cartoon Character who appeared on the front cover of the November 2009 issue. It’s a first for the magazine, which has had everyone from Marilyn Monroe (first edition) to Cindy Crawford to the Girls of Hooters and McDonald’s and even the likes of Jerry Seinfeld on the cover. But it’s never had a cartoon character before a spread. The pictorial featured no actual nudity and instead, offers Marge in racy lingerie, will be marketed at an 18-25 year old demographic. Scott Flanders, New CEO of Playboy Magazine says “the idea is to attract readers in their 20s to a magazine where the average reader’s age is 35”. (www.huffingtonpost.com) The comparison between the magazine’s first issue until today signifies a major culture shift in the way playboy is marketed to the consumer (the young consumer)

Clearly, Playboy is hoping to attract not only controversy but a younger audience who these days, would statistically much rather log-in to a website than buy a magazine. Jimmy Jellinek, Playboy’s Editorial Director said in a recent media & publishing conference “Playboy competes not only with other men’s magazines but also with the proliferation of racy images of women on the Internet. ” Although Playboy is moving their brand in line with the current trends of the digital world, it is safe to say they have not yet given up on finding new ways to recreate value in the magazine. As stated by Hugh Hefner “This particular picture is one example of how books and magazines are different (than computer images),” Hefner added. You can hold it in your hands, save them, and as Dad used to, put them under the mattress. ” Hugh Hefner (www.nydailynews.com) Clearly, this latest PR stunt was designed to reposition the brand by highlighting the tangible benefits of print as opposed to digital, and differentiating the magazine amongst its competitors by attempting to yet again, revolutionize the men’s magazine industry. In conclusion, although the magazine is lacking a younger audience at this present moment and plunging into a financial nosedive, Playboy hopes this cover along with the 3D glasses concept will reverse its downward trends in newsstand sales and subscriptions

Shifting Values and Emerging Markets

The demand for luxury goods is increasing as developing worlds, economic growth raises which in turn, so does the income of their citizens (society gains more spending power). All this amounts to one thing: a new marketing opportunity for Playboy. It is clear that Playboy’s influence on the consumerism and lifestyle choices of the United States is powerful. At the beginning of the Playboy era when the bunny logo first showed itself, women asserting their sexuality were not nearly as accepted as it is today, and the average woman wouldn’t have associated themselves with the Playboy image. Now, the Playboy lifestyle has become more mainstream (Playboy reality Tv show, merchandise, clothing) and it has penetrated American society.

Economies are developing and with them so are social norms. As progressive values begin to undermine the traditional, Playboy magazine has a fantastic opportunity to accelerate consumerism in developing countries. By helping to push along the adoption of progressive values, the company can persuade markets for its products into emerging out of the woodwork.

Strategy Shift

Playboy has historically been a fee- and service-based company, with ad revenues in 2005 making just 9% of the company’s overall revenue. This is highly unusual for a media company; “newspapers derive an average of 70% of their revenues from advertising; magazines, 50%; and other media companies, 35%.

Playboy was the exception to this rule, as its adult content was generally thought to have an ‘inelastic demand curve’” (www.thetimes.com), which has allowed the company to charge higher subscription and newsstand prices for its magazines and videos. Now, however, with domestic TV and publishing revenues falling, the company is attempting to pull more money out of advertising by changing its internet content to be friendlier to a wider demographic. Because of the new need for additional ad revenue, overall economic growth has a multiplier effect on Playboy’s income, as more money in the economy means more advertising spending. Focus of Appeal

Based on an analysis of the target market psychographics’, the market segments that form this existing pool of purchases for this product and their purchase behavior suggests that an emotional focus of appeal has been utilized to target the Playboy consumer. Playboy utilizes emotional appeal as it stimulates the consumer’s emotions, social and psychological needs. In reference to the target market and influential factors described earlier, Playboy appeals to a highly mobile, increasingly affluent group of young readers. Playboy utilizes the emotional appeal by culturally shaping the minds of young college students and encourage them to purchase the magazine, through the promotion of the “Playboy philosophy. ” This focus of the appeal is further evident given that playboy is now directing much of their marketing and promotional efforts towards the younger market. Conclusion

Provided the aim of this report is to examine the consumer behavior, characteristics of buyers, and potential buyers of Playboy Magazine, the following conclusion have been drawn. Clearly Playboy’s astonishing popularity is not attributable solely to pin-up girls. The magazine appeals to a highly mobile, increasingly affluent group of young readers, mostly between eighteen and thirty, who want much more from their reading than sexual content. When profiling the target market to determine the consumer behavior of potential and existing consumers, three value segments (as identified by Roy Morgan), make up the pool of purchasers for this product. These groups were: “Young Optimist”™, “Look At Me”™ and “Something Better” ™. These value segments identified one key characteristic in common: Image.

Playboy male readers (Given that males make up 81% of total readership) need a total image of what it means to be a man, and Playboy try’s to speak to those needs and more specifically how to be a male, thus appealing to the psychological needs of the consumer. In terms of current performance and trends, due to the increase in men’s magazines and online saturation, the company’s publishing businesses have seen a dramatic decline in revenue over the past 3 years. In response to playboys overall sales performance, or lack thereof, Playboy has attempted to re-assert its hold on the 18–35 male demographic through slight changes to content and focusing on issues and personalities more appropriate to its audience.

The corporate restructuring will also allow Playboy to realize the earning potential of the world’s number one men’s magazine. Furthermore, worldwide economic growth is changing the social values of more conservative societies around the world, creating new markets for Playboy’s previously taboo products.

Bibliography

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Cite this Interpret Market Trends and Developments

Interpret Market Trends and Developments. (2018, May 28). Retrieved from https://graduateway.com/consumer-behaviour-essay/

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