Radio City: from general to specific

At Radio City, market strategy is to tell everyone what radio is like.

Makes sense in a country where, in many urban homes, the radio is quietly gathering dust in the corner.

Not that the radio does not have potential. All India Radio covers 90 per cent of the country and there are an estimated 150 million radio sets in the country, outnumbering television sets 3:1. The television scenario changed once satellite television came in, in the early nineties. And, at Radio City, India's first private FM station, the plan is to duplicate that extraordinary success.

It helps that Radio City, a venture promoted by Music Broadcast Private India Ltd (MBPL) which holds FM radio licences in six cities, including Bangalore, is supported by STAR, which will supply content and also provide sales and marketing support to MBPL's investments in radio.

Right now, as the medium is quite new, Radio City is not looking at any particular segment to target, and is trying to create a brand name. Says Sumantra Dutta, chief operating officer, Radio Division, STAR India, "What we are looking at is the first mover advantage. We are the first private FM radio station in India, and we plan to cash in on this."

The idea is to create the brand and then to move on to specific target programming. Radio City's market strategy is backed up by six months of intensive research in Bangalore. One theme that emerged was the city's preference for music, not English chart busters alone, but popular numbers. Currently, all Radio City's programs are music based and the channel is also training its own radio disc jockeys. However, in a bid to broaden the channel's appeal, other aspects, such as beauty tips on the "11 o' Clock Show" and horoscopes on the "Breakfast Show" have been incorporated.

And, though government policy is quite restrictive, John Catlett, chief executive officer, Radio Division, STAR India, puts things in perspective. "Here we have the freedom to broadcast music depending on the taste of the audience. In fact, the restrictions are not as strict as in some other countries. For example, in Britain, if you have a licence for a jazz radio station, then you can play only jazz." Comments a Delhi-based media analyst, "It is too early to draw an accurate profile of radio audiences, and therefore Radio City's aim is to appeal to everyone. It is a way of testing the waters."

At the same time, sources say that intensive research is being carried out to ascertain demographic profiles of radio listeners, so as to enable more targeted programming in the future. It is an idea that makes a lot of marketing sense if advertising - the major revenue source for radio - is what Radio City is looking at in the future. The ability to offer advertisers access to audiences with distinct demographic profiles is one of the key advantages that TV has over radio.

So, the key marketing challenge that Radio City faces is to turn the attention of the urban consumer to radio as a source of entertainment. Turning eyes and years away will be the key to success in an industry where the major revenue model, at present, is advertising. Paradoxically, radio currently has only a 2 per cent share of the total advertising pie in India. Globally, depending on country, radio has a 5 per cent to 12 per cent share of the advertising cake. On the higher side are countries like the United States, with 13 per cent, Canada, with 12.7 per cent and Spain, with 9.1 per cent.

However, in revenue terms, money from advertising has gone up. Revenue from commercials on AIR, including on Vividh Bharti and Primary Channel (including FM) rose from Rs 393 million in 1990, to Rs 808.4 million in 2000, representing a growth of about 7.5 per cent per annum.

A clear advantage that radio has is that it can easily target city-based audiences. This makes sense if the advertiser, like a food chain that is opening an outlet in Bangalore or Mumbai, wants to target a specific audience. In such cases, it does not make much sense to advertise on TV, and the print medium is too expensive.

Radio is the best bet for such small-scale promotions. Evaluates Gopinath Menon, executive media director, TBWA Anthem, "Radio advertising is aptly suited for local promotions, and once audiences can be targeted, it has tremendous potential to eat into local mediums."

So the next time the friendly neighbour hood bar opens, you might hear about it on radio, rather than see it on the billboards.

And for STAR the challenge is to be there to grab the opportunity and run with its first mover advantage.

© 2001 agencyfaqs!