Marketing Segmentation Memo

Marketing Segmentation Memo

To: Courtney Smith, Senior Originals Marketing Manager.

From:
Date: 27th August 23, 2021

Subject: Hulu’s Marketing Segmentation

From my comprehensive market analysis of Hulu, I found several aspects that need to be into consideration in the marketing campaign efforts. I find it critical to provide you with the company’s segmentation and marketing techniques new market segments that should be considered and recommendations for reaching the target market. Hulu is one of the most successful and popular online entertainment brands. The company’s growth has not come easy. Besides marketing, the success of Hulu has been attributed to factors such as easy to use interface, free subscriptions, and customer-centric image (Hulu, 2021).  With advancing technology, the global media industry is changing rapidly. There is a growing demand for more content among the consumers with an increase in paid subscriptions platforms. Hulu also has seen incredible audience growth due to many factors such as a wide variety of content, high-quality videos, original programs, fewer advertisements, and better shows among many others.

Market Segment Analysis

Hulu’s current primary target audience includes people who consume video content online and thus their ads are majorly targeted on apps and places like YouTube and Facebook which are used by 18–40-year-olds very frequently. According to research, approximately 12.3 million Americans above the age of 18 use Hulu and other online streaming services (Sanson & Steirer, 2019).  Most consumers watch their shows on Hulu because it has programs that are updated seasonally like breaking bad, designated survivor, and shooter. The most probable reason for watching the programs on Hulu is because they are not available on free to air TV and that there are no advertisements compared to YouTube and the other services (Snyman, 2019). They are also convenient with varieties that consumers can watch in whatever mood that they may be in. Through their original content creation, Hulu also offers them something different and unique to watch unlike those on free-to-air television which is usually repetitive. Recommendations from friends and family are what most influence the viewing choice for most younger Americans while viewers above the age of 45 are may refer to proficient news and reviews. However, younger audiences prefer paid subscription content on Hulu and other platforms.

Research shows that the younger generation (18- 40 years) is more inclined to free to paid subscription services, unlike the older people who split watch the free to air TV (Sanson & Steirer, 2019). Whether it is theirs or borrowed, the only people who would not have the paid subscription services are those who do not know about them, or they are not sure of to use them. Most people in the older generation have never had Hulu or anything closer to it as they watch free to air every night. They would potentially get the subscription services with the help of their grandkids, but at their age, they are probably comfortable with what they have.

Hulu is a wide-ranging streaming service that tries to have something for everyone. As such, it is the number one choice for people who plan to subscribe to only one service. The primary segment of Hulu is people who can afford the bills. To make that bar easier to reach they offer a fourth subscription tier, mobile-only, in some less-developed nations (Arditi, 2021). Still, people have to be able to afford the subscription, the equipment to watch, and internet service (unless they only watch with their phones or tablets at public WiFi access points). At one time individuals also had to have a credit card to subscribe, but it is now possible to have an account that is entirely funded with prepaid cards or to buy a subscription through some mobile providers. About the only audience that they write off altogether are those who object to adult content being available on the service. Hulu does not offer any out-and-out porn, but they have a lot of programming that is not intended for children.

New Market Segments

To diversify and build its target market consumer base in the U.S, Hulu needs new customer segments. Among the most underserved customer segments are women. Hulu should establish its target segment as women between the age of 25–54 living in specific geographic regions. To serve this target segment, Hulu needs to include women’s shows. They can market their products on social media platforms by telling them the type of programs they should buy, including cooking, entertainment, drama, and reality shows, and work within their budget (Sanson & Steirer, 2019). Hulu can provide the optimum mix of 15s and 30s, then implement frequency caps – something a lot of people do not do and results in viewers seeing the same ad over and over. Hulu needs to manage the frequency of their advertisements to extend the life of their creativity as much as possible. Hulu can then dynamically allocate their ads to viewers matching their desired behavior, demographic and programming characteristics based on their inventory, and what other advertisers are buying those shows.

Hulu should also focus on the age group of 35-44 because it is the largest going segment by approximately 24% according to research (Snyman, 2019). The projected growth of Hulu makes this segment a target market in the United States. Nonetheless, this segment has been generalized to have children and Hulu offers the best streaming options for children. Children are equally a target market for Hulu and the company must continue capitalizing on services that attract children. Hulu should invest more in children’s programs and educational programs. For instance, they can add a Kids tab on the log-in screen of their website. This will be very significant for many families since it will completely separate children’s content from adult content.

Recommendations

The identified market segment for Hulu is attractive enough to justify an extended marketing campaign for the company.  This is because ages 18 to 40 are the highest internet users and for the fact that the internet is the most widely used form of technology in the world. What Hulu should consider is employing behavioral segmentation and provide customized content to subscribers daily on an automated basis (Arditi, 2021). Machine learning would be effective in helping them learn about this segment through their streaming behavior. Hulu should store the gathered information to segment consumers into groups according to their actions. This will allow them to offer the users with more personalized consumer experience.  For instance, Hulu can analyze what users have watched in the past few months and used the information to pick content recommendations and favorite genres for them to watch.

The desire of the younger generation to watch any content what they want at their preferred time is their main driver for subscribing to Hulu though the attraction of free services and ability to avoid advertisements are registered strongly. Most of them argue that if the advertisements were reduced, there would be more chances for an increase in viewership. Despite internet connection being one of the major barriers to viewing the paid subscription services, most people would want to access more online content e if the prices were reduced and if the availability of more services were increased (Sanson & Steirer, 2019). As such Hulu needs to reduce its prices and provide a wide variety of content for this market segment.

 

 

 

References

Hulu. (2021). Hulu Help. Hulu.Com. https://help.hulu.com/s/article/what-is-hulu

Snyman, J. H., & Gilliard, D. J. (2019). The Streaming Television Industry: Mature or Still Growing?. Journal of Marketing Development and Competitiveness13(4), 94-105.

Arditi, D. (2021). Streaming TV: The Golden Age of TV and Flow Interrupted. In Streaming Culture. Emerald Publishing Limited.

Sanson, K., & Steirer, G. (2019). Hulu, streaming, and the contemporary television ecosystem. Media, Culture & Society41(8), 1210-1227.

 

 

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