Growth of Private FM Radio in India

Details

Case Code : CLMC-009
Publication date : 2005
Subject : Marketing Communications
Industry : -
Length : 04 Pages
Price : Rs. 100

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Key words:

FM Radio, Initiative Media, Lowe Group, Radio Mirchi, Radio City, ACN ORG-MARG, Entertainment Network India Ltd (ENIL) and Indian Listenership Track.

Note

1: This caselet is intended for use only in class discussions.
2: More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.

 

Abstract:

The caselet examines the nature and growth of FM radio in India. It provides details of one of India’s leading private FM radio operators - Radio Mirchi, its operations and business strategy. The caselet also describes the sales promotion campaigns developed by Radio Mirchi to provide an experience to the target audience, especially the youth, and position it differently from the other FM players.

Issues:   » Nature of FM radio industry in India   » Role of sales promotions and contests in promoting a FM radio channel   » Revenue generation for FM players   » Programming formats and strategies Introduction FM radio has gained popularity in India, especially with the entry of private players. A survey was conducted by Intellect (Research & technologies unit of Initiative Media, a part of Lowe group) -- ‘Radio Track 2003’ in Mumbai, Delhi, Kolkata, Bangalore, and Chennai with a sample size of 1,200 respondents to study the impact of radio and its penetration among four key target segments -- housewives, students, business executives (car owners), and business executives (non-car owners).

The survey found that the frequency of listening to the radio as well as the number of radio listeners had increased over the previous past two years. Delhi registered the highest growth rates in terms of new listeners at 35%. The percentage of heavy listeners also increased from 11% prior to the entry of private FM players to 63% after their entry. In Kolkata, the percentage of radio listeners increased from 20% to 75%, and the percentage of heavy listenership increased from 5% to 19%.

Questions for Discussion:

1. Radio Mirchi is the leading FM channel operator in India. What benefits would Radio Mirchi offer to advertisers as an alternative to other traditional advertising media?

2. Advertising is one of the major sources of revenue for a radio channel. How can Radio Mirchi ensure that its programming and promotional efforts help increase its ad revenues in the best possible manner?

3. What challenges do FM players in India have to face to increase revenues and sustain profitability?