Read the success story below and answer the activity that follows.

The Case of ABS-CBN Network

ABS-CBN is a dominant player among the Philippine television networks today. But it
was not always this way. In fact, once upon a time, it started life as the least watched
television network in the country!

This is a brief account on how the least-popular television network transformed

into a media powerhouse and how they used marketing strategy to get there.

In 1986, after the People Power revolution, ABS-CBN was practically reborn TV
network having finally been freed from nearly 14 years of government control under
Martial Law. Immediately, they put together a pool of local and international television
shows and began broadcasting.

But by the end of 1986, ABS-CBN was the last placer among the five networks back
then. It was a severe blow to the company’s pride and they vowed to turn the tables from
then on. In fact, they wanted nothing less than to be the number one network in the
country.

To better understand their circumstances back in 1986, it would help to understand

the environment then. For one thing, cable TV was nearly unheard of. It would be years
before the advent of VCDs, much less DVD players. There were no mobile phones and home
computers were a rarity. Everybody went to the movies if they wanted a treat (and air
conditioning). Home video was a luxury that was only available to the upper-income earners
(via videotape players). For much of the country, home entertainment options were limited
to TV, radio, and reading materials.

It will also help to know who the key players were in the television industry. These
were:

 GMA 7 – this television network was the acknowledged darling of the upper and
middle class. It provided them with quality TV shows especially top-rated programs
from Hollywood. By all intents and purposes, GMA was the market leader for the
middle and upper-middle classes.
 RPN 9 – this television was the runner up for the middle-class viewership. They also
provided local and international programming that was similar to that of GMA 7.
 PTV 4 – the government network. People joke that nobody watches its public service
programming and that it only gains viewership whenever there is a basketball game
or a boxing match. It is because they have broadcast rights to the games of the
 Philippine Basketball Association regularly bid for the rights to broadcast popular
boxing matches.
 IBC 13 – the undisputed market leader. While GMA-7 dominated the upper-class
viewership, IBC-13 dominated the mass market. It was the popular channel among
the so called “masa” thanks to its predominantly local TV shows that featured the
most popular actors and actresses.

So ABS-CBN entered the industry that was essentially dominated by two networks:
GMA-7 for the upper end and IBC-13 for the broad market. The problem that was that
ABS-CBN had no clear identity and no clear message to tell TV viewers that could answer
the questions of “why should I watch you in the first place?” To get out of this rut, the
network needed to formulate a marketing strategy.

The first step for them was to do a SWOT Analysis. SWOT stands for Strengths,
Weakness, Opportunities, and Threats. It is a way of cataloging the environment that will
allow you to spot potential avenues for strategy formulation. ABS-CBN first drew up a list
to their strengths, which included:
 Nationwide reach
 Huge financial resources, courtesy of its parent company Of course they would also
draw up a list of their weaknesses, which include:
 Lack of clear position or identity in the market
 No loyal advertisers

The basic framework for any marketing strategy is summarized by the mnemonic of
STP: segment, target, and position. First, identify the available market segments. Next,
select or target the most promising market segment among the available options. Finally,
position your product to that best suit the needs of the targeted market.

Because ABS-CBN wanted nothing less than market leadership, they really had only two
possible courses of action: compete directly with GMA-7 for the higher income class
segments or compete directly with IBC-13 for the broad market. This was the
segmentation phase.

A quick scan of the strengths and weakness of these two competitors revealed
that:
 GMA-7 was well managed and cash –rich, which means that any attempt to
compete with them would be a long and arduous battle.
 On the other hand, while IBC-13 was very popular with the viewing public, things
were not so good behind the scenes: artists were unhappy because they were
not being paid enough or even on time, a lot of complaints versus the
management and the production quality, so the shows were pathetic.
 Therefore, in terms of which network to target, it became clear that ABS-CBN
would have a better chance if it competed directly with IBC-13. This was the targeting
phase.
Finally, with a clear market segment to target, ABS-CBN addressed the key
question: What does the broad market, the “masa”, want?

The answer came through market research which quickly revealed a key insight: the
broad market watched IBC-13 simply because their favorite stars were all there. In fact,
this market did not even care whether or not the TV shows were good or not, so long as
their favorite stars were there. It was a star-oriented behavior. This led to the final peg
in the marketing cycle, the position. ABS-CBN also realized that they had to position
themselves as the network of stars.

Now that the core marketing strategy was in place, it was time to plan the details
and the tactics that would flesh it all out.

By matching their strengths with the opportunities that the competitor scan
revealed, ABS-CBN soon came up with a strategy for competing against IBC-13.
 Use its key strength, namely its huge financial resources, to lure the
unhappy stars of IBC-13 toward its own camp with very attractive
compensation packages.
 Use its financial resources to build better quality programming.
 Relaunch itself as “The Star Network”, the network that you go in order to
see your favorite stars.

The strategy worked. Through shrewd negotiations and promises that they would
become stars in their own shows, ABS-CBN managed to practically siphon all of the most
important TV stars of IBC-13. Soon, almost literally, there was nobody left in the once-
popular TV network.

As the revamped channel rebuilt itself, it also took advantage of an opportunity

that it had: the ability to ride on the success of its sister radio station, DZMM, which was
a popular medium for getting news. By turning its popular radio newscaster into TV news
personalities, they transformed TV news – which used to be a stodgy and droll affair
among the TV networks—into a popular infotainment medium. Viewers finally got to see
what their favorite radio newscaster actually looked like. These newscasters too become
TV stars in their own right.

In 1986, ABS-CBN finished the year in last place. By 1987, they became the number two
network in the country and by 1988; they became the number one TV network, from last
place to number one in just two short years. This was a truly amazing turnaround and it
was made possible through the shrewd use of the principles of marketing.
Group Assignment

FM radio is still very much alive and well in the Philippines, driven primarily by urban
areas and a growing interest by middle class markets in talk shows and curated music
programming. It is no surprise that FM radio’s “primetime” happens to be during rush hours
in the morning and in the evening when people are trapped in their vehicles as they brave
the traffic.

Your group is hired to rebrand, relaunch, and to create a concept for a new FM radio
station that is meant to compete with other stations in the market.

You are tasked to do the following:

1. Identify key competitors that you would be going against.
2. Identify who your typical audience will be.
3. Present your station concept, complete with station ID (the radio slogan) and what
will set it apart from other stations.