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Market Segmentation - UK Newspapers


Introduction and Background

The printed newspaper, regional or national, delivers news, current affairs at home and abroad, and expert opinion. Readers expect content to be well-written, informative and authoritative. Newspapers are well suited to the online environment. Not only do they have a wealth of content, but generally they have that content in a digital form which is relatively easy and viable to re-purpose for digital platforms.

Britains are heavy consumers of media. The percentage of the adult population in the UK which reads at least one national daily paper is 55% and 60% read at least one Sunday paper. In response, newspapers have expanded to provide a broad range of services going way beyond the traditional territory of news, sport or features to create supplements with the look and appeal of magazines, directories of classified advertising and a growing range of specialist titles. UK consumers clearly have a good appetite for news and the Internet provides another effective news-service medium which can reach the consumer easily at work and is instantly and frequently updateable.

The UK national newspaper market is a substantial segment of the overall media industry. In 2000, some 4 billion national newspapers were sold. Only television and the substantial regional newspaper industry received more advertising spend than national newspapers.

National newspapers remain an extremely effective way of reaching a large number of consumers with the style and content of the political and editorial stance of the different papers allowing targeting of different consumer demographics. The increasing use of newspaper supplements also allows further consumer targetting via advertising.

The UK national newspaper market has been in volume decline for several years. The number of daily newspapers sold per annum has declined by 20% from 5.0 billion in 1962 to 4.0 billion in 2000. For Sunday newspapers the decline is even more severe - a drop of 44% over the same period.

Until recently, advertising revenues had been growing at a healthy rate, partially offsetting the ovedrall decline in circulation volumes. However, the national newspaper industry, like other media sectors, has been severely affected by an overall fall in advertising expenditure. A number of national newspaper groups reported falling advertising revenues during 2001, and reacted with cost-cutting measures including job losses and reductions in online activities. On the whole, the national newspaper sector has been more severely affected than local and regional newspaper groups.

Customer Needs and Wants - Defining the Segmentation Variables

Any segmentation analysis must taken account of customer needs and wants, since markets will define themselves around the way in which customers "consume" the newspaper product. These needs and wants change over time. Successful newspapers respond to such changes in the design and delivery of their product. The table below identifies eight main types of customer segmentation and how they may apply to the national newspaper industry:

Customer Segmentation Type Comments
Physical characteristics In what physical format do customers prefer their newspapers? Size, colours, type of paper; layout and style? In the UK the main physical differentiation between newspapers has centered on whether the paper is "broadsheet" or "tabloid". All national newspapers carry colour content and display advertising.
Geographical area Where do national newspaper readers live? Is there difference in demand by UK region; or between city and rural populations? How can or should newspaper content by amended to take account of regional differences? This is an important issue. The UK has a thriving regional and local newspaper industry that provides competition to national titles, particularly in Scotland and the North of England.
Demographics How does newspaper readership differ by socio-economic grouping? Do lifestyle characteristics (e.g internet usage) influence consumer demand? To what extent do different demographic factors (level of disposable income, educational background etc) influence factors such as cover price, editorial style and content format?
Usage Characteristics Where are newspapers read, for what purpose, at what time? Is the daily national newspaper primarily a source of news or should it be positioned more as a source of information and/or entertainment?
Benefit Areas What are the key benefits that consumers require from newspapers? To be better informed? To be entertained? To be challenged? Having identified these, how shoiuld a newspaper best address the different benefit areas of the target buyer group?
Financial Factors (inc pricing) Which consumers pay for national newspapers? How much are they asked to pay? Who else funds the creation of the paper? What are the key price-points? Are consumers responsive to changes in price ("price-elasticity") or they generally loyal to a particular title and, therefore, relatively price-inelastic?
Buyer Behaviour Who are the loyal newspaper readers as compared with "casual" readers? How often do readers switch newspaper titles? How can new readers be recruited? Is there a significant difference between buyers and readers (in other words - those who read, but do not buy!)
Characteristics of related products How is the extension of other media channels (e.g. digital tv and radio, Internet) impacting the demand for newspapers and their content and style? How should the online versions of each newspaper title differ from the printed version?

How the UK National Newspaper Market Segments Itself

Using the segmentation types set out above, it is possible to identify certain segmentation variables that are considered most important in the UK national newspaper market. The market is broadly divided into three types of newspaper:

Newspaper Type / Segment Comments
Popular Mass-Market

The readership of the popular mass-market newspapers is male biased and predominantly from the C2DE socio-economic grouping. Daily newspaper titles in this segment include The Sun, The Mirror, the Daily Record and the Daily Star. The predominant physical format for the popular mass-market is "tabloid" style. In terms of price points, there is relatively little difference between the main titles. The Sun and the Daily Star are both priced at 30 pence, whereas The Mirror and the Daily Record have a 32 pence cover price.

There are five main popular mass-market titles published on a Sunday, the largest of which are the News of the World, the Sunday Mirror and the Sunday People. Each of these three is published in tabloid format at a 65 pence price point.

Popular Mid-Market

Readers of popular mid-market titles are mainly from the ABC1 socio-economic grouping with a bias towards C1. There are only three daily titles in this segment - the Daily Mail, the Daily Express and the Evening Standard (an evening paper distributed around London). These titles also publish in tabloid format with a cover price of 40 pence for the Daily Mail and 35 pence for the Daily Express.

The Mail and Express both publish Sunday editions with a cover price of 1.10 (Mail) and 1.00 (Express).

Quality / Up-Market

Quality or Up-Market titles also draw their core readership from the ABC1 socio-economic grouping, but with a higher proportion of A's and B's than a popular mid-market title..

There are six national quality daily newspapers all of which publish in "broadsheet format": The Daily Telegraph (cover price: 50p); The Times (40p); The Guardian (50p); The Scotsman (40p); the Financial Times (1.00) and the Independent (50p).

The Times and the Telegraph are the leading Sunday Quality newspapers, followed by The Observer and the Independent on Sunday./

We have provided recent data and a brief commentary on the circulation performance of each Daily and Sunday national newspaper in a supporting page to this revision note. Click here for the data.




E-mail Steve Margetts