Reader's Digest marketing strategy and competitive positioning analysis

¶ … Digest

Strategic Management

A condensed analysis of the marketing situation at Reader's Digest

Once upon a time, Reader's Digest was one of the most widely read middlebrow publications in America. Subscriptions peaked in 1984, when more than seventeen million readers in the United States subscribed, and another eleven million worldwide (Historical Perspectives of the Reader's Digest, 2008, Focusing on the Words). The publication offered short human interest articles, some of which were excerpted from larger works, at relatively low subscription prices to consumers desiring to appear literate but who felt pressed for time. Reader's Digest today largely conforms to that format and the magazine's traditional subject areas continue to define its current offerings: the latest edition includes a list of tips about making a Halloween costume for a child, advice on how to talk to your child's teacher, some inspirational stories about kind deeds, and advice how to make healthy choices at a restaurant.

Macro Environment (PEST)

Economic

Reader's Digest core audience tends to be older. However, Baby Boomers have seen reductions in their investment funds, due to the recent credit crisis. This leaves them with less disposable income. Baby Boomers often have more trouble getting new jobs, and thus they are more likely to trim costs such as magazine subscriptions to the home, rather than take on a new job to pay for extras, particularly if similar content is available online.

Social -- demographic -- cultural

While Reader's Digest pledges to support diversity, most of its news stories, recipes, and content tend to focus on issues relating to parenting, health, diet, and inspirational stories. Its subject matter is so broad-based, it does not have a clear, core audience other than the rapidly shrinking Boomer market. Niche publications have grown more popular, given the political and social fragmentation of America, a trend partially spawned by the Internet. One possible plus, however, is that people also have less time to become politically and scientifically aware of the trends that affect their lives, and Reader's Digest condensed format could cater to that trend. The 'greening' of publications and the drive towards digitalization, evident in Reader's Digest shift online will hopefully be rewarded through added interest.

Technology

The ubiquity of online media has prompted the magazine to reduce its rate of print publications to 10 from 12 publications a year, and cut its print subscriptions in favor of digital advertising. This will also allow for greater segmentation, as it can more easily create "digital single topic editions, mobile applications, e-reader products and videos" of specific interest to segments of its core consumer base, and hopefully draw more advertisers who wish to target their publications online (Bell 2009). It can also feature general articles and condensed stories to suit the desire of readers still seeking the Reader's Digest compressed form that tells them 'everything they need to know.' Through the online website, searchers can select what stories interest them the most.

Industry environment (Porter's Five Forces)

Reader's Digest is currently in a medium with very low barriers to entry -- virtually anyone can start a blog about parenting or eating healthfully, and online condensed books already exist, through Project Guttenberg and Google Books. Reader's Digest claim to fame in was always its compression -- it still features politics and ideas articles in shortened format, although what makes this distinct vs. Time or the New York Times Magazine, or even USA Today is unclear. All of these publications are also available online, and the Times has struggled with creating a premium content site, in tribute to the difficulties of finding a profitable business model. Currently, Reader's Digest has no brand identity or core product that is uniquely its own its current incarnation. It must find a more solid consumer base and define a unique niche and service, in light of the wide access to new markets and wide of distribution of its other competitors.

Power of suppliers

As a print publication, Reader's Digest had to pay for the physical production of its works. In its new format, it is only at the mercy of its Internet content providers and the advertisers that support its website. Advertisers have great power determining content, but may shy away from supporting a magazine with an older demographic that is holding onto its shrinking retirement funds. Thus far, premium content sites have not thrived online, and given Reader's Digest's middle class, older demographic, a premium content site is unlike to draw a large following.

Power of buyers

Buyers also have considerable power in the magazine market, given the wide variety of alternative media, even for older adults

Possible substitutes

The recent demise of many Conde Nast publications, including the venerable Gourmet, suggests Reader's Digest lifespan may be limited, unless it creates a more compelling and attractive site. Whether its core demographic of Internet users will be attractive to advertisers remains an open question, especially if more effective but challenging ads and hard-to-read-typeface prove alienating for these consumers.