Ingram Entertainment Inc.: A Case Study of the Importance of Audience
Research in Marketing Foreign and Art Films
Submitted to the
Mass Communication and Society Division
Association for Education in
Journalism and Mass Communication
1996 Convention of AEJMC
Melanie J. Meadows
Middle Tennessee State University
Send correspondence to:
Melanie Meadows, c/o Dr. John V. Bodle, Middle Tennessee
State University, P.O. Box 64, Murfreesboro, TN 37132 (615) 898-5871.
Submitted by: Melanie Meadows
Middle Tennessee State University
Submitted to: Mass Communication and Society Division of AEJMC
for the 1996 Convention in Anaheim
Ingram Entertainment Inc.: A Case Study of the Importance of
Audience Research in Marketing Foreign and Art Films
This case study discusses the use of audience research to help mass
communicators target niche markets.
This case study looks at ways audience research can help mass
communicators target their message to a desired market segment. In specific, the
study examines the marketing practices of Ingram Entertainment Inc., a large
video distributor, to determine whether the company should use audience research
to redirect its current marketing message to the foreign and art film niche
market. The findings include low-cost secondary research methods that may assist
in directing the message to the desired demographic market segment.
The study concludes with suggestions for ways for Ingram to apply
the data to its current marketing program. These suggestions are also useful to
other mass communicators attempting to market films, videocassettes or other
products with limited human and financial resources.
Send correspondence to:
Melanie Meadows, c/o Dr. John V. Bodle, Middle Tennessee
State University, P.O. Box 64, Murfreesboro, TN 37132 (615) 898-5871.
Ingram Entertainment Inc.: A Case Study of the Importance of
Audience Research in Marketing Foreign and Art Films
America's obsession with movies began in the early part of this
century and is today woven into the very fabric of our culture. The appeal of
entertainment films is limitless due to the fact of their variety, and each film
genre (e.g., action, romance, comedy) attempts to reach and appeal to a
different audience. The foreign and art film genre is gaining the attention of
video retailers due to the recent success of several Oscar-nominated films
(e.g., Eat Drink Man Woman, The Madness Of King George) and other art titles
with well-known stars and directors, such as Roman Polanski's Death And The
Maiden, which starred Sigorney Weaver and Ben Kingsley (Gutman, 1995).
This film genre has special promotion needs, as many are produced by
independent, smaller studios and do not have the advertising budget afforded to
more mainstream titles. However, as evidenced by the success of the film
mentioned above, the audience for these films exists. The task is to find a way
to effectively reach this audience.
This study will consider Ingram Entertainment Inc.'s effort to reach
an audience for their foreign/art film market. Ingram Entertainment is the
world's largest distributor of videocassettes. This case study will critique
Ingram Entertainment's efforts to market these films and match the appropriate
mass communication message to the most receptive (target) audience. Many of the
issues facing Ingram are generalizable to others attempting to identify and
reach a potential niche video market.
Before Ingram can tailor its marketing communication to the foreign
and art film audience, it is important that the company know exactly who this
audience is. Unfortunately, with regard to marketing films, distributors tend to
rely on intuition and past experiences rather than actual audience research
(Jowett & Linton, 1980). According to the information obtained from company
insiders (Stufflebean, 1995; Adams, 1995), Ingram Entertainment uses this
approach to marketing its foreign and art films. With regard to marketing
communication for video product for sale to rental outlets, Ingram's tactic is
to generate the highest sales possibleDregardless of genreDand the company does
not attempt to segment the foreign and art film viewer from the general,
mainstream movie renter (Adams, 1995).
Chaffee and McLeod's coorientation theory recognizes the importance
of knowing one's audience. Their theory suggests that for the receiver to
effectively understand the message, some shared meaningDcoorientationDmust exist
between the sender and receiver. Therefore, according to the coorientation
model, the sender must know its audience (receiver) to communicate a message to
which the intended audience can relate and by which this audience can be
persuaded (Chaffee & McLeod, 1968). Coorientation, as a goal of audience
research, is an imperative not only to Ingram Entertainment's efforts to market
foreign and art films, but to the video distribution industry as a wholeDwho
would collectively benefit from an increased audience for this film genre.
While coorientation theory states that common ground between the
sender and its audience is necessary to effectively communication your message,
it is a message that often falls on deaf ears with regard to marketing foreign
and art films. This is because the entertainment industry decision makers tend
to focus their marketing efforts only on the high-cost blockbuster movies
produced for mass appeal, they limit the types of movies that become available
to the public (Phillips, 1975). Therefore, this becomes a self-fulfilling
prophecy: Movies that are not designated as "hits" are not afforded the lofty
promotion and marketing budget, hence killing much chance of effectively finding
an audience (Daly, 1980). While the situation is similar in television
programming, this marketing technique may change in the future, as many
production companies are becoming a part of the global economy and it is
becoming necessary to tailor programming to suit the tastes of other cultures
(Cantor and Cantor, 1986). While it is encouraging that broadcasters are
realizing the need to broaden the choices with regard to television programs
(1986), it seems unlikely that Hollywood will pick up on this trend. In Europe
magazine, Lauren Ptito reports that American films are wildly popular in Europe
(Hollywood movies taking a 57 percent share of 1989 ticket sales in France),
while European films seem to find an audience only among affluent intellectuals
in America (Ptito, 1994).
The traditional stereotype is that foreign and art films attract a
"highbrow" audience comprised of the more highly educated ranks of society. In
her article on European video, Ptito cites a representative of Blockbuster
Video, the Florida-based mega entertainment chain, who states that European
films are most popular in affluent, white-collar areas and college towns and
that "the typical European film watcher is educated, well-off financially, and
does not mind reading subtitles" (1994). These assumptions have also been used
to identify audiences musical tastes, in which case the stereotype has been
reflected in actual behavior. Dimaggio and Useem (1978) reviewed over 200
studies of arts participation and found opera, symphony and ballet attendees
were dominated by wealthy, well-educated professionals, while the popular arts
such as jazz and pop music events were attended at similar levels by all social
classes. Their findings indicated that education seems to be the most reliable
determinant of arts involvement.
These class-based audience assumptions have been challenged (Davis,
1982), but further literature indicates that a "taste hierarchy" still exists
with regard to entertainment choices, though it is difficult to classify
(Peterson, 1994). While these class-based assumptions have been widely used to
gauge audiences in the past, the literature suggests that audiences today have a
much more varied range of tastes than in the past, as it is prestigious not only
to be knowledgeable about the elite arts, but also to be familiar with a wide
range of popular and folk culture (Peterson & Simkus, 1992). This phenomena has
been called "fragmented audiences" (Neuman, 1992). Due to this audience
fragmentation, it has been further suggested that the time may be upon us to
identify more useful ways to define and measure markets (Peterson, 1994).
In summary, the stereotyping of highbrow audience as the affluent,
well-educated intellectual seems to have some grounding in actual habits
(Dimaggio and Useem, 1978), but the literature warns us against failing to
recognize that an audience for highbrow entertainment may be scattered or
fragmented across many socio-economic borders (Peterson, 1994). As Chaffee and
McLeod point out in their coorientational model, it is important to communicate
your message to the audience that understands it and will be receptive. With
this in mind, the literature would suggest that it would be advantageous to
concentrate communication efforts regarding foreign and art films to the
upper-income, well-educated members of society, while remembering that movies
are mass communication and films of all genres can find an audience among many
different types of people.
In a June 1995 interview with Video Business Magazine, David Ingram,
Ingram Entertainment's President and CEO, says "The video business is has been
over-distributed; there are too many distributors chasing too little business.
It is likely that there will be further consolidation, and it's hard to say
whether this will come through bankruptcies or acquisitions or some of both." In
this uncertain industry, Ingram Entertainment enjoys close to one third of the
national distribution market share, making it a leader in the industry (Ingram
Entertainment, 1995). The industry environment could be described as
oligopolistic (McCarthy & Perreault, 1984), with Ingram Entertainment being
one of the lead players.
According to Ingram's Vice President of Advertising, Ingram's
largest competitorsDBaker and Taylor Video of Morton Grove, Illinois; ETD/Best
Video of Houston, Texas; Major Video Concepts of Indianapolis, Indiana; Sight &
Sound Distributors of St. Louis, Missouri; Star Video Entertainment, Inc. of
Jersey City, New Jersey and VPD, Inc. of Sacramento, CaliforniaDare not posing a
formidable threat to Ingram in this product category and, apparently, they are
not making any aggressive efforts to target the foreign and art film niche
market (Wiel, 1995). Ingram could capitalize on the apparent lack of interest by
pursuing this market segment. This could provide a means for the company to fill
a void in the market as well as distinguish itself from the competition.
This study will now pose questions to determine whether it could be
beneficial for the company to use market research to tailor its mass
communication efforts to this market segment.
Based on the review of literature, it can be concluded that film
distributors tend to rely on intuition and past sales to form marketing
decisions (Jowett and Linton, 1980). In this case, it would logically follow
that the same principles apply when a film is released to videocassette and sold
to retail outlets. Therefore, it is hypothesized that video distributors also
would be likely to base marketing decisions on intuition and sales rather than
formal market research. To determine the answer, this case study will probe
Ingram Entertainment to find out whether the company is currently using audience
research methods to identify potential markets for foreign and art films, or
whether the marketing tactics are based mostly on intuition and past sales
Furthermore, to the extent that Ingram Entertainment does not use
audience research in their attempts to market foreign and art films, this study
will provide a road map for others seeking a cost-effective way to improve a
company's knowledge of its audience. Could audience research assist Ingram
Entertainment's efforts to reach the foreign and art film audience? Would such
an approach be cost-effective in relation to the size of this niche market and
its total sales potential? This study will attempt to answer these questions,
and should provide insight to mass communicators who are trying to decide if
audience research would be useful to help them reach a niche market.
But before we can find the answers to these questions, we must
investigate the company's current marketing practices concerning the foreign and
art film genre.
To answer the research questions presented above, an investigation
was made of Ingram Entertainment's current practices with regard to marketing
videocassettes in the foreign and art film genre. It should be noted that Ingram
Entertainment's distribution business is not limited to videocassettes. The
company also distributes music and spoken-word audio cassettes, CD-ROM software,
laser discs, video games and a variety of electronic hardware and accessories.
Possibly due to its large variety of products and its position in the middle of
the retail chain, this company does not invest much time or money in audience
research. According to Ingram Telemarketing Representative Kelly Adams
(1995), Ingram EntertainmentDone of the largest distributors of videocassettes
in the countryDuses no market research. Relates Adams: "Ingram has no feed
forward, and it's feedback is just the buy levels." In other words, Ingram uses
no formal research on the front end, and the only way the company determines
audience interest in the product is by the quantity sold to the retailer.
Although the company does not employ formal research methods, Ingram
has made some intuition-based attempts to know more about the foreign and art
film audience. For instance, Ingram knows that, while mainstream film rentals
are "actor-driven," foreign and art films are "director-driven" (Adams, 1995).
This information may be used to encourage video retailers to set up displays
that highlight films by a well-known director from this genre (e.g., Roman
Furthermore, Ingram believes foreign film is a more mature, affluent
market. These customers are more likely to want cultural exposure instead of
merely escapist entertainment. They are usually white collar professionals,
educated, affluent and well-traveled. Foreign films offer these viewers an
opportunity to learn about another culture and possibly gain some knowledge of a
country they are planning to visit. (Adams, 1995).
In summary, Ingram has made an attempt at knowing more about the
foreign and art film market, but, as noted through personal interviews (Adams,
1995; Stufflebean, 1995; Wiel, 1995), the company's assumptions are based more
on stereotypes and intuition than actual research. In the past, Ingram made an
effort to market foreign and art films with a specialty publication, but this
effort did not involve formal research either (Stufflebean, 1995). Until the
summer of 1994, Ingram produced a monthly specialty publication titled Ingram
International and Art Films. Unfortunately, this magazine did not generate
enough sales to sustain the advertiser support necessary to continue it. Before
then, the publication was known as Tamarelle's (named for a former employee
because the publication was her brainchild). In order to decide which Ingram
customers would receive Tamarelle's, the editor compiled a list of video stores
located in college towns within our sales regions (Stufflebean, 1995) to follow
the assumption that the intellectual college crowd would be more attracted to
this film genre. While the research has indicated that this assumption is at
least partially true (Peterson, 1994), this method proved to be ineffective. As
mentioned earlier, the piece was later renamed and redesigned, but ultimately it
was dropped altogether because the company could not find a way to make it
profitable for advertisers.
Thus far, this study has determined that three conditions exist at
Ingram Entertainment which prohibit any widespread use of audience research.
These conditions are generalizable to any company attempting to market a product
with limited resources.
1. Limited human resources. Ingram only dedicates one
full-time telemarketing representative to the foreign film genre.
2. Limited financial resources. Since the foreign film genre
only accounts for 2.5% of Ingram's total sales in the
product line (Adams, 1995), the company is not willing to incur
expense of formal audience research.
3. Chain of persuasion is long. To successfully market this
film genre, it is necessary to capture the attention of several
in the sales chain. First, the studio and distributor (Ingram)
market the film to the sales representatives, who in turn must
the film to the retail outlets, who, finally, must convince the
consumer to rent it (Adams, 1995). If this chain has one weak
enthusiasm toward these films could break down and marketing
would be lost.
Now that the extent of Ingram's current knowledge of this audience
has been concluded and the barriers to audience research identified, ways in
which the company can improve communication to the foreign and art film market
can be determined. Ingram Entertainment can then be used as an example for
other mass communicators who are also seeking to improve their message to niche
Redirecting The Message
It has been established that Ingram makes no use of formal market
research, but does make some assumptions about its foreign and art film
audience. This section will assess the validity of those assumptions, as well as
identify ways that Ingram could improve its communication to this audience by
taking advantage of existing market data. These findings are generalizable to
others marketing films, videocassettes and other products because the market
data is available to institutions with limited human and financial resources.
As indicated in the literature review, Ingram's assumptions about a
more mature, affluent and intellectual audience for foreign and art films has
been supported by research on motion pictures audiences and related topics.
Therefore, Ingram has matched its message to a strong market segment for this
film genre. However, the company has not utilized market research data in a
systematic way to attempt to reach potential foreign and art film
buyers/renters. The company is hesitant to use market research because this
genre is has a relatively low overall sales potential (Adams, 1994) and there is
only one full-time (as noted earlier) employee dedicated to marketing this
genre. Ingram's overall success shows that the company is not suffering due to
lack of market research, but previous literature review suggests that, given the
proper attention, this film genre could provide a profitable niche market that
is as yet untapped.
Given the barriers discussed earlierDhuman resources, financial
resources and lengthy chain of influenceDIngram's ability to use market research
to promote the foreign and art film genre is limited. However, if some
cost-efficient ways to enhance communication to this market were identified, the
company could see the benefit of improved sales in this genre without a large
investment of money or human resources. Some suggestions for low-cost ways
Ingram could improve its communication to this market segment include the
Questionnaires. Ingram's marketing representatives could
develop a customer questionnaire for retailers to help them
their store would profit from stocking an increased number of
and art films. Home Visions national account manager Peter
their research has shown in average turns-per-copy per genre,
foreign film segment is the only one that has increased (Bessman,
This suggests that the customer interest is present.
results can be used by Ingram marketing representatives and sales
to help convince retailers to buy more foreign and art video
Then Ingram can provide follow-up to show that this is the place
the foreign product. The questionnaire form could be included
marketing communications as Ingram's weekly advertising
Entertainment PreviewDa technique other marketers could follow as
After receiving the questionnaire in their weekly magazine,
would photocopy it, pass it out to their customers, then mail the
results back to Ingram.
U.S. Census. Whether you're selling fishing poles or
renting foreign films, the U.S. Census provides a detailed
the lifestyle habits in every region of the country. Ingram could
the census to find the sales regions with a large concentration
readers, high education levels, travelers, high income levels,
(Dunaway, 1993). This would help them to direct their
the areas where the consumers have the demographic
have been described of people who are enjoy foreign and art
instance, Ingram marketing representatives can make a zip code
of retail customers (i.e., video stores) and then determine which
these zip codes are in an area that is demographically suitable
promote foreign and art films (e.g., the areas that have a high
concentration of travelers, avid readers, high income base,
Annual Survey Of Buying Power. Since affluent people have
been identified as likely to watch foreign and art films
Useem, 1978), this survey, which provides demographic and income
information by county, could be helpful to identify counties in
particular sales regions where the sales representative should
push this genre. Again, areas with a high concentration of people
foreign and art film demographic could be identified and compared
Ingram's sales regions. Then the company can determine which
its current account base could benefit from increased promotion
foreign and art films. The information could again be used by
sales representatives to persuade these accounts to purchase and
more foreign and art films. Other secondary research publications
CACI) provide a similar service, but breakdown the demographic by
Computer programs. A variety of computer software, such as
Promo-Star, is available to assist in breaking down surveys and
research data (Dunaway, 1993). Ingram and others could use this
to break down the information in a timely manner, using little
sources. For example, the company would first gather a list of
or county/city names with the demographic characteristics that
target audience (i.e., foreign and art films). These would be
the computer with a listing of video store addresses in this city
zip code. The outcome would be a mailing list of video stores
located in areas with a high concentration of the target
In light of Ingram's limited time and funds available for marketing
foreign and art films, this study proposes that the company initiate two methods
to give the marketing of this genre a shot in its promotional arm. First, the
company should put out a monthly listing of new titles in this film
classification; not a full-fledged publication, but a flyer to be mailed to
video stores by specific sales regions. In an attempt to reach the stores with
the most potential consumers in this targeted audience segment, the mailing list
should be created using the lifestyle and consumer purchasing data bases.
Existing (or new) computer programs could assist with this task. If this flyer
improves sales, this increase would provide evidence to woo back advertisers and
reinstate publication of a monthly sales magazine that would be a way for Ingram
to increase advertising dollars as well. This time, the mailing list will be
created using actual market research and letting the advertisers know that may
encourage them to give it a chance. Second, Ingram should produce a marketing
packet that will go out to all field sales representatives. This packet should
include a market snapshot of the foreign and art film audience, created by using
the free secondary research tools identified earlier. For instance, this packet
would include demographic information broken down by Ingram's sales regions (as
noted earlier). The sales representatives can use this information to persuade
retailers to buy these films and develop a reputation as the place to get the
elusive titles their competitors may not stock. The sales reps could show the
retailers that there may be a high number of foreign travelers in their area or
other lifestyle information that could help convince the retailer that their is
a local customer base for these films that their store could tap into by
stocking these titles and doing a little grassroots promotion.
While these attempts to improve foreign and art film marketing may
seem thin, this approach may be best for companies that cannot afford to place a
great deal of time or money into a relatively small market niche. However, if a
company such as Ingram can make these minor enhancements, it is possible to
realize a sales increase that will make a difference on its bottom line and
improve its image to retailers by providing another service to its customers.
Mass communicators in all fields should consider these low-cost methods to
ensure that any marketing materials are reaching their intended audience.
Since Ingram currently uses no market research, questionnaires and
secondary research methods would be beneficial to Ingram or other marketers. A
practice of targeting messages and making the most of any communication efforts
can improve the overall effectiveness of the message.
Obviously, it is beneficial for any company to develop a niche
market within its industry to create or enhance a sales base. Ingram
Entertainment has such a niche market and, while profit potential within this
market is currently low (Adams, 1995), Ingram could benefit from primary and
secondary research (e.g., consumer questionnaires, U.S. Census, lifestyle data
services, etc.) by using these methods to create mailing lists and find the
regional sales areas with the demographic population that would be most likely
to rent foreign and art films. Any towns that have "art house" cinemas are
strong to targets (Bessman, 1995). By becoming the supplier of a retailer's
foreign and art film product, Ingram also gets a "foot in the door" with the
customer and making it easier for them to switch to Ingram for all their product
By using marketing research to promote the foreign and art film
genre, Ingram not only increases its sales and customer base, but also builds a
compelling argument that could be used to lure advertisers to support future
publications. Additionally, the company should take satisfaction in the
promoting a genre that offers culture and education in many films.
The primary and secondary research methods described
earlierDconsumer questionnaires, U.S. Census information and lifestyle data
servicesDcould be useful by any mass communicators who want to reach a specific
market segment, but must develop their strategy with minimal financial
resources. This study offers generalizable suggestions for audience
identification which could lead to a variety of other prospects for inexpensive
 Oligopolistic is the market condition characterized by an
inelastic demand curve and a few large players that tend to copy each other. In
this environment, it is beneficial for firms to carve out a niche market and
seek a loyal following of customers.
 Kelly Adams is responsible for all of Ingram's marketing
communication with regard to foreign and art films. I was referred to Adams by
at least three Ingram associates, who described him as the most knowledgeable
person about this film genre in the company.
 C. Stufflebean was formerly Ingram's Advertising Coordinator
and produced the foreign and art film publication.
 Turns-per-copy is the number of times a particular copy of a
movie is rented. This is widely used in the industry to determine the
profitability of a movie.
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