Main Differences in Promotion Strategies

Table of Contents

1. Introduction........................................................................................................... 4

1.1. Academic Background..................................................................................... 4

1.2. Key Terms........................................................................................................ 5

1.2.1. Film Promotion.......................................................................................... 5

1.2.2. Promotion Strategies and Tools................................................................. 6

1.3. Research Question and Objectives................................................................... 7

2. Literature Review................................................................................................. 8

2.1. Promotion Strategies and Techniques.............................................................. 8

2.1.1. Promotion as Part of Marketing................................................................ 8

2.1.2. Promotion Specific to the Film Industry................................................. 10

2.2. Comparison of US and Russian Film Promotion Tools................................. 11

2.3. Main Differences in Promotion Strategies..................................................... 15

3. Methodology........................................................................................................ 18

3.1. Research Design............................................................................................. 18

3.1.1. Research Approach.................................................................................. 18

3.1.2. Research Strategy.................................................................................... 19

3.2. Data Collection............................................................................................... 19

3.2.1. Interviews................................................................................................ 20

3.2.2. Questionnaires......................................................................................... 20

3.2.3. Secondary Sources................................................................................... 21

3.3. Methodology of Evaluation............................................................................ 22

3.4. Validity and Reliability.................................................................................. 23

4. Data Analysis....................................................................................................... 25

4.1. The American Film Promotion...................................................................... 25

4.1.1. Secondary Research................................................................................. 25

4.1.2. Survey Results......................................................................................... 27

4.1.3. Interview Results..................................................................................... 29

4.2. The Russian Film Promotion.......................................................................... 31

4.1.1. Secondary Research................................................................................. 31

4.1.2. Survey Results......................................................................................... 31

4.1.3. Interview Results..................................................................................... 34

5. Conclusions.......................................................................................................... 36

References................................................................................................................ 40

Appendices............................................................................................................... 44

Appendix 1................................................................................................................ 44

Appendix 2................................................................................................................ 44

Appendix 3................................................................................................................ 45

Introduction

Academic Background

Promotion has become one of the most important parts of marketing in the film industry. Film studios spend a lot of money to create a promotion campaign for new films. Without a good promotion strategy potential customers do not have accurate information or have no information at all about movies which are shown in cinemas. As a result, the number of viewers can be drastically reduced and the company loses money (Discovery Channel, 2011). Film studios rely on new blockbusters to compensate for the losses which they had on other films.

Hollywood has been dominating the global film industry since the early part of the 20^th century. The US cinema industry has developed innovative cinematic technologies; they also have large budgets for films and employ many professionals who work in the film industry and promotion. According to Screenvillie (2009) cinema attendance in the USA constitutes nearly 1.5 billion viewers per year while, by comparison, in Russia only 500 million.

Hollywood films are sold all over the world and very few countries can compete with the USA in that respect (Kerrigan, 2010). Russian films, on the other hand, are more popular in the art film world than with mass audience, which means far fewer viewers. Other than the low number of viewers, there are other problems in the industry that are related to lower business results, one is poor marketing and the other is the lack of export opportunities due to little demand from abroad (Gindilis, 2012, cited in Duvernet, 2012). According to Plakhov (2012) the Russian film industry is ready for any change that would help popularize Russian films worldwide.

Change and popularisation can take many forms, including improved promotion techniques. The aim of this dissertation therefore is to investigate the applicability of American film promotion practices to Russian film distribution.

There has not been much published research in the academic literature about Russian film promotion. In a recent article Van Gorp (2011) analysed Russian films made in post-Soviet Russia from the point of view of the importance of Russian national identity, however her work does not address film promotion strategies. In another recently published work Yakovenko (2011) is looking at how film markets in general are influenced by major players in the film industry with the main focus being on the aesthetics of film making rather than on the marketing aspect. Different aspects of the Russian film industry, including film promotion and distribution, were scrutinised by Barraclough (2013) blaming the government and the Ministry of Culture for not providing sufficient funding for those activities.

As is exemplified by the sources listed above previous research studies in general did not focus on film promotion. This dissertation therefore will be giving an overall picture of film promotion in Russia and aims to find new solutions to existing problems.

Key Terms

Film Promotion

Promotion is one of among the 4Ps in marketing: product, place, price and promotion. Promotion is important for all businesses because it helps potential customers to get to know their products and services. The strategies of promotion depend on the particular market, industry and on the mission of the company. A promotional mix includes three distinct media for promotion; they are ATL (above the line), BTL (below the line) and TTL (through the line). The line in this context describes “Focused marketing and level of interest” or “Awareness focused marketing”. Also “the Line” refers to the profit of the agency, for example, ATL advertisement being more profitable for advertising agencies because this kind of media is expensive (Broderick and Pickton, 2005). ATL is an advertisement visible in many places, such as, on TV, billboards or in the street. BTL includes sales promotion, sponsorship, public relations and direct media, and TTL represents a mix of ATL and BTL and includes corporate social responsibility and social media (Hackley, 2012). Branding also plays an important role in promotion because famous brands always attract more attention (Ailawadi et al., 2006). In this dissertation the focus will be on the different areas of film promotion, such as trailers and posters in theaters, television and radio advertisement, Internet advertisement which includes viral marketing and social media marketing, print advertisement in magazines and newspapers, merchandising and promotional tours of film creators and actors.

According to Kerrigan (2010) the film promotion includes pre-release, release and post-release strategies. The audience research should be done at the pre-release stage but the most important film promotional stages are the release and post-release strategies because only at these stages could filmmakers and distributors recover their money and some film companies do not have enough time or budget for audience research.

According to Elliott and Simmons (2011) companies all over the world use some basic types of movie promotion, such as trailers at cinemas, or on TV, print advertising on posters and in journals, merchandising which includes using T-shirts, books, games, toys and the Internet, such as YouTube, websites and online ads. Large and successful companies outside the film world are also contributing to film promotion, for example, “Pringles” launched a promotion campaign for the “Star Wars” series in 2004. The company created new packaging for their products which depicted the main characters of the film (Marketing Week, 2005).

The word-of-mouth advertisement is one of the most common ways of promoting films (Duan et al., 2008). Many people prefer to hear about new movies from their friends or read reviews written by professional critics. Potential customers are also visiting websites such as www.rottentomatoes.com or the Russian website www.kinopoisk.ru which also publish professional reviews (Addis and Holbrook, 2008). Since Internet promotion started to develop from 1999 many film promotion companies created their own websites where they use pictures, games and trailers to attract viewer attention (Zufryden, 2000). However, there are many professionals in the film industry, who do not yet take advantage of this type of film promotion.

1.2.2. Promotion Strategies and Tools

According to Armstrong and Kotler (2009) product promoters should choose from a mix of strategies, pull promotion or push promotion. For a successful business it is important to know who the potential audience is, what their needs are and what the right time for delivering the goods is (Armstrong and Kotler, 2009). For the marketing manager, too, it is necessary to know who his customers are, how to make contact with them and what kind of messages they want to see. A manager should be able to design a clear marketing strategy using the following steps, - segmentation, targeting, positioning and differentiation.

The term ‘promotion’ in this dissertation is used interchangeably with ‘marketing communications’ which includes four main categories such as advertising, personal selling, public relations and sales promotion (Broderick and Pickton, 2005). These tools of marketing communications and promotion will be described in this dissertation because this theory is more in line with the views of the author, compared with others.

Research Question and Objectives

The question this research will be answering is the following:

· What are the strategies and tools in the US film promotion that could potentially be applied to Russian film distribution?

The specific objectives underpinning this research are the following:

1) to give an overview of promotional tools and strategies in general and in the film industry in particular,

2) to analyse US film promotion through examples,

3) to review the Russian film industry with a focus on the promotional aspect,

4) to compare different ways of promotion in the two countries,

5) to summarise a list of strategies that can benefit the Russian film industry.

The Hypothesis of this dissertation is trying to support is the following:

If some of the release and post-release strategies - as practiced in the US - were adopted by the Russian film industry, filmmaking would be far more profitable.

Literature review

In the literature review part of the dissertation theoretical models, concepts and ideas drawn from different sources will be examined and critically analysed. Opinions presented in the form of books, journal articles, conference papers and websites that have been specifically concerned with issues of film promotion will be used as source.

First, promotion strategies and techniques in general will be reviewed followed by an analysis of those specific to the film industry. Next, a comparison of US and Russian film promotion will be made in order to highlight the main differences between them. In summary, opinions and conclusions will be drawn to support the propositions set forward in this dissertation.

As mentioned in the Key Terms section, the terminology of marketing communications and film promotion is interpreted differently by a number of authors. In this present chapter, a conceptual use of terms will be used in order to make arguments clear and logical.

The above research objectives will be described and summarised in the conclusion of the literature review section of the dissertation.

Promotion Strategies and Techniques

Promotion as Part of Marketing

Marketing is a management process of communicating, creating, delivering value for customers and managing relationships in ways that satisfies customer needs and benefits the organisation. The marketing mix includes four Ps, such as product, price, place and promotion. The word ‘promotion’ is used interchangeably with ‘marketing communications’ in the academic literature, which influences behavior and attitudes to persuade and inform customers about products, ideas or services (Barnes et al., 2009).

According to Armstrong and Kotler (2012) marketers should have full knowledge of their customers and market in order to provide a successful business. They should follow steps, such as market segmentation in order to separate the market into specific groups of customers, targeting the most appropriate segments of the population, positioning their products in the minds of their customers and differentiate in order to create a competitive customer value.

Successful marketers should choose between pull and push promotion strategies, which are the two basic types of promotion mix strategies. Pull strategy means inducing customers to buy the product by spending a lot of money on consumer promotion and advertising. Push strategy means using trade promotion and sales force to push products to distributors who promote these to the end user. Push strategy is used by business-to-business companies, while pull strategy is used by business-to-consumer companies. However, most companies provide a combination of both (Armstrong and Kotler, 2012).

The promotional tools, often referred to as promotional mix, have quite differing definitions in the literature. For example, Armstrong and Kotler divide tools into the following three groups, above-the-line, below-the-line and through-the-line (Armstrong and Kotler, 2005). Above-the-line is an example of mass media advertising in their interpretation, and below-the-line is an example of direct advertising. Social media and corporate social responsibility are examples of through-the-line media advertising (Hackley, 2012). Broderick and Pickton (2005) would agree thatthe term marketing communications is used interchangeably with promotion and are describing all communications with the target audience. However, these authors have set up a different classification of the promotional mix, or as they call it marketing communications mix, grouping all tools/techniques under four headings: advertising, public relations, sales promotions and personal selling. As to the definitions of the terms ATL, BTL and TTL, they said that while ATL includes advertising promotions, mainly commission-paying media, BTL encompasses all other forms of promotions, other than advertising. They also added that below-the-line promotion has limited usefulness because it incorporates a broad range of promotional activities. This dissertation will focus on the theories and classifications of Broderick and Pickton because they are the most adaptable to the dissertation hypothesis and clearly structure the main promotional tools within four groups, which can be adopted for Russian release and post-release film promotional strategies.

The above authors complement each other and further interpretation of their ideas will be described in more detail. The dissertation will focus more on particular parts of film promotion strategies such as release and post-release film strategies referring to marketing communication tools as listed by Broderick and Pickton (Appendix 1).

Promotions Specific to the Film Industry

As a way of introduction to the promotion tools specific to the film industry, first we will look at a set of views about the nature of success, then we will move on to a variety of promotional methods that can lead to success.

According to Addis and Holbrook (2008) motion-picture success includes five key variables, which are industry recognition, popular and critical buzz surrounding the film, marketing clout, critical and popular evaluation and market performance. These variables should be considered when film companies release new films in order to make satisfactory profit.

All these variables are important, but as the focus of the dissertation is marketing, and within it promotions, one variable will be emphasised only; the marketing clout. The main purpose of marketing communications, that is promotion, is to raise awareness and make the film attractive to wide audiences.

According to Kerrigan (2010) film marketing begins already at the stage of product development, continues through the formation of the project idea and goes into the distribution and exhibition stages. Film marketing incorporates the role of the actors and filmmakers including directors, screenwriters and others, as well as the script and genre of the film, age rating, release and post-release strategies. When films are finally released, marketing them is necessary at first in the pre-release stage, which is identifying the target audience, then a release strategy should be set up which is followed by a post-release strategy. This dissertation will focus on the last two stages, namely the release strategy and post-release strategy. These two are the most important to making the film a box office success.

The most widely used tools for film promotion are the press, the Internet, television, radio and billboard advertisement (Elliott and Simmons, 2011). Internet is a key tool no marketer can do without. Nowadays more and more people prefer to look for information on the Internet. According to Zufryden (2000) a film’s success at the box office can be predicted by monitoring the film’s website activity.

According to Duan et al. (2008) one of the most popular techniques of promotion is the word-of-mouth advertisement, which stimulate the sale of a product. In the film industry the role of the word-of-mouth promotion is of key importance since it directly influences the financial success of any film. Duan et al. also emphasises the importance of online reviews of professional critics, wikis, blogs, film websites and many others.

Brand is also important in attracting consumers, both as film audiences and as customers of certain products, and its success could be connected to techniques used by the promoters (Ailawadi et al., 2006). For example 20^th Century Fox and other film studios use logos on posters, on merchandise and movie trailers. This is done to create an association between product and producer in the viewer’s mind. According to Lindstrom (2012) a large number of companies not associated with films use films and their stars to promote their products. For example, the cosmetic brand Sephora used the film The Runaways to promote their products on the stars of this film. Works of Ailawadi et al. shows that consumers identify products by brand while Lindstrom says that people identify brands by celebrities.

Film marketing can be a very risky business. Film promoters can spend millions and get little in return. Often film promoters are faced with the pitfalls of film marketing. Sometimes the advertising campaign can be characterised by a lack of focus, which means that a large amount of money which was spent on advertising gets wasted on audiences who will never see the film. Another pitfall is underestimating the audience, for example advertising could be only hype and audiences will avoid falling prey to this (Discovery Channel, 2011). This all point to the fact that promotion tools need to be very carefully selected.

Comparison of US and Russian Film Promotion Tools

The most powerful country in the film industry nowadays is the USA, in the light of statistics. According to Screenvillie (2009) cinema attendance exceeds more than 1.5 billion viewers per year. In comparison, cinema attendance in Russia is less than 500 million viewers per year. It is not a good result for a country with such big population as Russia.

One of the reasons for the low numbers is the poor quality of films. Another reason could be that potential viewers in Russia are not informed well enough about films in general because of the lack of film promotion campaigns (Barraclough, 2013). In his article Barraclough analysed the problems of Russian film promotion and he concludes that the Russian film market is still in its infancy.

According to Chapron (2012, cited in Barraclough, 2013) it is the Hollywood films that dominate the Russian box office, taking 15% of the total box office revenues. Barraclough’s research clearly demonstrates the problems of Russian film promotion, which are in line with the views of the author of this dissertation, namely that Russian film industry should adopt some of the US release and post-release film promotion strategies in order to become more profitable.

The next paragraphs will be following the way promotional tools are structured by Broderick and Pickton bringing in cultural-political aspects that have an influence on Russian filmmaking.

Advertising: According to Marich (2013) Hollywood film distributing companies spend between $30 to $50 million for domestic promotion campaigns alone. US promoters use a large number of strategies and tactics to promote new films in a creative way, such as displaying posters with attractive women and exciting movie trailers. Teaser campaigns are used at large national events, such as Super Bowl championship events which are held only once a year and attract huge audiences. Marich also formulated the promotion slogan that creativity generates interest. And it could be added that interest generates profit.

Most of the time Russian film promoters use only basic advertising techniques, such as print advertising, trailers and others, as they generally have a small budget. In Russia there is also a cultural-political element that we should consider. In her work Van Gorp wrote about the government’s involvement in promoting and favoring and financially supporting some directors over others (Van Gorp, 2011). The Russian government and the Ministry of Culture organise a free promotional campaigns for these directors and their works on prime-time television advertisements, print advertisements and popular Russian magazines and journals.

Sales promotion: American promoters use “high concept” marketing most frequently, which is a plan for promoting films successfully (Wyatt, 1994). An example is the musical called Grease, featuring John Travolta, which was promoted before its first showing at movie theatres through famous stars who played in this film and who were known by the audience of all ages. This was supplemented by a merchandising campaign for items, such as CDs with music from the film, special products with pictures of film stars on it and other similar items. The “high concept” of film promotion nowadays is used by many film promoters but in a completely different way because all films are unique in their own way.

According to Barraclough (2013) the problems of Russian film promotion are closely tied with the monopoly of favoured directors financed by the state. Most of the film companies in Russia cannot afford good sales promotion for their films because of a limited budget. Moreover in Russia the funds available for film promotion and distribution are small, and therefore the number of viewers is low as a result. Internet advertising and social media should be used more regularly by Russian promoters, although they do include different online platforms, projects and websites for promoting films.

Public relations: Advertising can be complemented by using sponsorship schemes. US film promotional campaigns are generally sponsored by multinational companies, for example, Pringles who teamed up with Lucasfilm production to create a promotion campaign for the last episode of Star Wars. There were lightsaber stickers inside the Pringles cans with prizes attach to them, such as a chance to visit Lucasfilm studio. The campaign was supported by $1 million television advertising. It was a successful promotion campaign for both parties with large profit margins (Marketing Week, 2005).

For Russian filmmakers product placement on popular goods is a widely used method of promotion. International companies spend a lot on placing their products into films while only Russian companies sponsor Russian films with focusing viewer’s attention on their own products (Puchkov, 2009). American studios such as 20^th Century Fox open affiliated companies in Russia, so that they can distribute their films without having to pay any foreign taxes. This can be a good example to follow for Russian film industry because of the Americans’ long history of successful film promotion. Another way of promoting films is to organise different competitions through social media websites in the release or post-release stages (Morgan, 2008). Russian film promoters have not yet this cost effective way of promotion.

Personal selling: As discussed above American films dominate the Russian film market and they have affiliated companies in Russia. US film promoters do effective direct sales and their films are often featured in international exhibitions (Puchkov, 2009).

Russian film promotion is largely limited to festivals such as the one in Cannes, where only those Russian films are featured which were funded by the Ministry of Culture or by the Cinema Fund (Barraclough, 2013). According to Romanova (2012, cited in Duvernet, 2012), director of the state organisation responsible for the Russian film promotion, domestic films should be made available to wide international audiences by providing financial incentives to Russian filmmakers. Yakovenko (2011) also wrote about the importance of international film festivals in the promotion of Russian films abroad. She misinterprets the status quo because those Russian films that are not recipients of Ministry of Culture or Cinema Fund funds are not represented on foreign festivals at all. Russian film promoters therefore should follow the Hollywood film promotion techniques as much as possible.

According to Bachurin (2012, cited in Duvernet, 2012) Russian promoters do not need extra funds, only more skills in promotion. The other author Plakhov (2012) said that one of the biggest problems of Russian film promotion is the absence of clear government policy.

As a result of comparison of the US and Russian ways of film promotion it could be concluded that American film promotion has shown a continuous development because it is creative, interesting and unique. Russian film industry does not seem to value the importance of promotional tools which could be effectively used.

Main Differences in Promotion Strategies

In charting the main differences the author’s approach will be a combination of business and cultural policy issues. In this part only those examples of release and post-release strategies and their tools will be considered which could benefit Russian film industry and make it more profitable with minimal costs.

Release strategies: In most cases Russian film promoters use the same techniques as the Americans, for example trailers on TV and in the cinema, billboards, printing advertising. The biggest American film studios started to add the term “3D” and feature it in trailers regularly after premiering 3D film Avatar. It is a popular practice by many Hollywood film studios (Abrams, 2010). Also this technique was adapted by Russian promoters. The quality of 3D between American and Russian films is quite different but the strategy of promotion is the same, by attracting audience attention through new technology.

In 2009 a social media website Kickstarter was introduced with a view to provide platform for sharing ideas and raise finance for film projects. By financial contribution ordinary people will become part of the film making process as well as the release strategy. The first Russian film which is being made in such a way is called 28 Panfilov’s Soldiers raised $300.000 so far and this sum still increases daily (Shalopa, 2014). The benefit of such a system is that films featured on this and similar online platforms do not need wide promotional campaigns.

The Minister of Culture Medinskiy proposed an increase of taxes for foreign films thereby aiding the Russian film industry and encouraging more Russian films to be shown in cinemas (Yampolskaya, 2013). This proposal was strongly criticised by moviegoers in Russia. This situation shows the involvement of the Russian government support of the film industry and its promotional campaigns while in the US it is a business of producers, promoters, distributors and film studios. Russian film industry also has specialists in these areas; however, the most famous films in Russia are supported only by government finances.

Post-release strategies: There is a big difference in the post-release promotion strategies between the two countries. American distributors and promoters have a clear strategy of film promotion, which is manifested, for example, in selling DVDs and Blu-ray of the film, selling to TVs and merchandising (Rennhoff and Wilbur, 2011). In Russia, on the other hand, promoters ignore post-release promotions because they think that it is not profitable. Russian films which are shown in cinemas are available on Russian TV channels and DVDs in shops. Mahlknecht (2012) agrees with the importance of post-production strategy citing plenty of examples used by American promoters, such as merchandising. For Russian people it is a novelty because only books and posters are used for advertising, not products like the once listed above.

Film award shows are also a good way to promote films after their release. In the US these awards are popular, for example the Oscars ceremony. Once nominations for best film or others are announced box office sales increase exponentially. Examples are the films Finding Nemo or Nebraska. The Russian Association of Film Critics created a national film award called Georges and in the voting process all people in Russia can take part (Belik, 2014). It is a popular way of film promotion because people are made to be part of the process and they view the films and they give their nominations.

Another effective way of post-release film promotion is making a sequel to very successful films. In the US, only those films which double their earnings with regards to the original budget can be eligible for a sequel (Gong et al., 2012). For Russian films which have sequels this formula is not applied, for example Mikhalkov’s film, Burnt by the Sun whose budget was $2.8 million and box office success amounted to only $2.4 million worldwide. According to Gong’s et al. formula this film was not eligible for a sequel but in 2010 in Russian cinemas released Burnt by the Sun 2. The budget of this film was $45 million and it earned just $7.5 million in the box office (KinoPoisk, 2014). Sequels do not need a big promotional campaign because most of the audiences know already about the film. The sequels of Russian films will be generally unpopular if the main film was unpopular.

In summary: An overview of promotional tools and strategies in general and in the film industry was given in the first part of this chapter. The analysis of US film promotion through examples and a review of Russian film industry with a focus on the promotional aspect were done in the second part by comparing their respective promotional tools. Finally a comparison of the different ways of promotion in the two countries was presented in the last part of the literature review chapter.

Both countries use pull strategy in film promotion mostly because it is business-to-customer kind of strategy. Sometimes films studios do not pay for distributors and promoters and create a promotional campaign by themselves, but doing this is ineffective. Also promoters of both countries use market segmentation, targeting, positioning and differentiation to create an effective promotional campaign.

It is clearly seen from the review that for Russian film promotion a definite change in release and post-release promotional strategies and the tools used should be made. At the release strategy stage the following tools should be applied and much more widely used by Russian film promoters: advertising, such as product advertising on big events; Internet advertising, which is the overlap of advertising and sales promotion, social media and film websites; public relations, for example sponsorship and right product placement of non-film companies who also provide financial backing to the promotional campaigns; international and domestic exhibitions, which is an overlap of personal selling and sales promotion.

Post-release strategy with the related tools, which is not yet customary in Russia, should be applied by Russian film promoters. Sales promotion, such as merchandising and Internet advertising could increase film’s attendance rate and create a chance for filmmakers to get a return on their finances. Also Russian filmmakers and promoters should apply the American formula for making sequels.

All the strategies and tools that were listed above could be applied to Russian film promotion based on the experience of the US film industry. They would make the Russian film industry far more profitable than it currently is. Russian film promoters and distributors should meanwhile think of ways by which they can make savings in their budget not only in terms of film release promotion but also in their post-release campaigns. And finally, Russian promoters should always remember that creativity generates interest.

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