Recommended
More Related Content
Similar to Group 3 Term Project
Similar to Group 3 Term Project (20)
Group 3 Term Project
- 1. Market Summary Our mission is to build brand value by delivering electronic devices that are simple, affordable, and are eco-friendly. Our main points of differentiation are sound quality, superior usability, and battery longevity. We will provide both the hard and soft products that satisfy the needs of a variety of customer segments through our website, and offer our physical product through various retail channels.
- 2. Market Demographics Needs: A simple component under one hundred dollars with full download and one track options Trends: Population prefers data downloads and is not overly concerned with album covers and linear notes Growth: a decent portion of the market would love a high-fidelity format at any price.
- 18. Five year projection:
Editor's Notes
- Our mission is to build brand value by delivering electronic devices that are simple, affordable, and are eco-friendly. Our main points of differentiation are sound quality, superior usability, and battery longevity. We will provide both the hard and soft products that satisfy the needs of a variety of customer segments through our website, and offer our physical product through various retail channels.
- While marketing the hand held digital music players we decided to send out a survey to ask the consumer a few questions about themselves and what they expected in a good quality product. We had an 82.7% response rate which meant people took the time to complete the surveys. Understanding customer behavior is the basis of a good marketing strategy. Market research allows companies to question customers and potential customers on their tastes, habits, and preferences, and then use the resulting data to make informed marketing decisions. In our survey results we found that 55% currently own hand held music players and 79% have received their hand held music players as gifts. Our survey also indicated that 59% consumers prefer the prices under $100 and 63% wanted a good sound quality. We also found out that 79% purchase music at least once a year and 55% purchased music whenever they heard something they liked. We also found very interesting was 57% purchased their music and audio at Target/Walmart and Best Buy. By using the web for this survey, we found this to be by far the fastest growing marketing method, partly because it is fast and relatively inexpensive, but also because response rates tended to be higher. It is estimated that two thirds of all households have answering machines, and many people screen their calls to avoid talking to solicitors. Also, when people are contacted on the telephone, nearly half refuse to participate in the survey. Mail surveys encounter a similar problem, with over a third of Americans refusing to fill out the most recent census, even though law requires it. Online respondents on the other hand, usually agree to be surveyed beforehand, and they can fill out surveys at their leisure, leading to very high response rates.
- The positive factors that enhance our chances of succeeding in this venture: Product - unique product with enhanced audio that delivers phenomenal sound quality through upgraded components Distribution - complimentary service, digital music for sale via website, which ultimately will increase sales by offering an alternative to the major platform companies Survey - Cost effective digital vehicle, large target population and comparable information that provides current relevant and specific market research Backing company - a benchmark start - talented and motivated team of top students who have demonstrated exceptional participation throughout all areas of the course, and thorough substantive research to reference for our final presentation can use our independent/fresh look to distance us from establishment There has not been a truly successful competitor for Apple's iPod, consumers may be ready for more choices which makes this a good time to come out with a new product We can be the independent/cheaper alternative to big companies – could shoot for inner city and college campuses Acquiring a breakout artist and growing with artist/band. The market for digital music is very large, which means we have a great opportunity to acquire a loyal customer base The music industry is moving toward digital sales and many consumers dislike MP3 format Surveys are the way of the future for marketing new products – our primary source information gives us the unique opportunity to adapt to the current market
- The factors that might negatively affect our success: Unclear industry position and a complicated product involves intangibles and service aspects. Due to our enhanced audio specifications, the player will be more expensive to produce - which will increase the retail price The large file format causes storage issues As a start-up venture, we may not command the finances necessary to offer different size options, acquire a talent/act/band for breakout and leave adequate funds for advertizing We lack the marketing and business experience to take on big platform companies Perceived environmental responsibilities for discarded physical media Extremely successful competitor, Apple, currently has the majority of the market The weak economy has lead to decreased retail sales as consumers become more conscious of their spending According to our survey, it appears that most consumers are satisfied with their current player's sound quality (our biggest pitching point) Most New, upstart companies fail within five years new innovations in digital music could hit the market ahead of our own item Keeping technologically up to date with finance-heavy competitors
- Apple is the industry leader, but many are unsatisfied with the sound quality of MP3 format Sony came out with a high quality alternative, but failed to leverage the point of differentiation, and joined the herd of MP3 players We hope to lead the non-MP3 music revolution by providing a player that provides “Apple quality” library management and “Sony quality” sounds!
- In Miller and Washington’s article, it suggests the trend in sales of recorded music in CD format have declined steadily over the last few years as consumers increasingly have moved toward digital downloading. According to eMarketer (www.emarketer.com), digital music revenues in the U.S. and worldwide have been, and are projected, as follows: United States Worldwide • 2006: $1.9 billion $ 2.9 billion • 2007: $2.8 billion $ 4.5 billion • 2008: $3.7 billion $ 7.0 billion • 2009: $4.5 billion $10.7 billion • 2010: $5.2 billion $12.9 billion • 2011: $5.7 billion $14.8 billion Miller, R., & Washington, K. (2009). CHAPTER 20: RECORDED MUSIC. (pp. 117-121). Richard K. Miller & Associates. Retrieved June 25, 2009, from Business Source Complete database.
- Our key points of difference are the sound quality, the availability of low cost or high storage devices to meet the consumer’s budget, our wide selection of music drawn from publishing contracts with established artists and publishers as well as exclusive contracts with our own new bands, the ease of our library management system, and the longevity of our product’s battery power.
- We are going to take a wide stance on positioning leveraging our premium product for high end luxury consumers we will provide a smooth and accessible digital interface. We will also take a penetration stance by providing a lower cost product with limited storage that will allow price sensitive consumers to enjoy our ease of navigation and wide selection of high fidelity music.
- Offering a variety of options for our handheld digital music playing device allows us to meet the needs of the audiophile listener, but without neglecting an opportunity to penetrate larger markets. as a response to the survey, where we learned that consumers want an affordable product and prefer to spend under $100, this player will have basic features but still comes with our advanced headphones for enhanced audio. similar to basic but will allow for larger storage and comes with our advanced headphones. this is our signature player, with advanced technology for crystal clear sound, even larger storage capacity, and also comes with our signature enhanced audio headphones.
- The deals for acquiring rights from record companies to sell their masters on the Internet, or on our product, vary in accordance with the quantity and quality of the records being provided. For instance, payment of substantial advances and a high royalty can be expected for the catalog of an important label. On the other hand, many indie labels as well as unsigned artists will usually be happy to license their music for no payment up front. That’s the idea behind our product – PAY THE ARTISTS LATER. The digital music service will seek the broadest possible rights to enable it to deliver music in a variety of ways or to experiment with different delivery models to see which will catch fire with our users. However, the content provider may wish to strictly limit the manner in which its masters may be used. For instance, Apple Records still refuses to allow anyone to sell downloads of individual tracks by The Beatles. Another important deal point will be deductions from royalties. Services will try to deduct transaction costs such as credit card processing fees, content storage and bandwidth, bad debts, fees paid to distribution agents or other service providers, and performance royalties. We will try to reduce these deductions by, for instance, insisting that all costs be prorated in proportion to the amount of content subject to the license divided by the total amount of content on the service. We can also demand that downloads and streams be offered at certain minimum prices because the provider has an interest in preventing displacement of record sales at traditional outlets. We may also insist on additional fees to cover artists’ royalties and mechanicals.
- Taking a demand oriented approach, we used a Target Pricing strategy, adjusting the features of our product to achieve the target prices which are comparable to competitors. The higher price on the high-end model will cover additional costs and will provide status-conscious consumers with the sense of a better quality product—which it is! The online music song rates should attract many buyers.
- Our logo works the synergy between the crystal clear idiom and popularity of quartz crystal healing to our advantage Modern companies and organizations are capitalizing on the use of social networking .com’s like FaceBook. Our company wants to be seen as catching the newest college and indie sensations before major labels, so we want to be where those markets will find us, that equates to FaceBook. Unsigned artists could be paid very cheaply - and it would promote the idea of being a college friendly player. What we would need to do is have a killer team of talent scouts, because we wouldn't want to sign just anyone. We will sign distribution deals with unsigned artists - like a 60-40 deal. They own the rights to their own music and we distribute them via our product and market them. We will include albums FREE OF CHARGE with the music players. This way we offer free music and we promote talent.
- We plan to enter the market through retail channels such as Best Buy, Wal-Mart and Target. Our website will offer downloadable music that is a paid music publishing service Eventually we may consider dropping retailers and strictly selling the product directly though our website to be able to control pricing and costs. We plan to periodically analyze our product's sales and market position.
- To generate a favorable return within our first two years of sales and successfully compete with Apple Inc. for a significant share of the digital music player market.
- T hese projections have been made after a thorough analysis of past performance of other providers and considering our expectations of future factors. Our exceptional marketing and promotion strategies will enable us to sell the anticipated two million players by the third year. Considering such factors as the weakened economy and our current lack of reputation in this market, we anticipate a slow start to sales. But by the fifth year we expect a recovered economy and a distinguished reputation which will enable us to position ourselves as one of the best digital music player providers.
- Introducing a new digital music player in this already ‘crowded’ industry will not be an easy task. We will need to attract many consumers who may be loyal to other brands. Advertising will begin a few months in advance, with extra emphasis on internet advertising including advertising in social networks such as Face Book. The player will be released on Black Friday, a day when many consumers are willing to spend money.
- ASCAP, the American Society of Composers, Authors and Publishers. (n.d.) A Bill of Rights for Songwriters and Composers . Retrieved June 24, 2009 from < http://www.ascap.com/rights/ >. Lee, H. (2009, June 18). Hand Held Audio Survey. Retrieved June 24, 2009 from <http://www.surveymonkey.com/s.aspx?sm=kZew5SRmIBLWS1kRUl2U_2bw_3d_3d>. Miller, R., & Washington, K. (2009). CHAPTER 20: RECORDED MUSIC. (pp. 117-121). Richard K. Miller & Associates. Retrieved June 25, 2009, from Business Source Complete database. ZUNE TAKES OFF THE GLOVES AND PUTS ON MASKS. (2008, March 31). Brandweek , Retrieved June 25, 2009, from Academic Search Complete database. Apple Inc., AAPL (2008, November 5). 10-K Wizard SEC Power Search . Retrieved June 10, 2009, from < http://phx.corporate-ir.net/phoenix.zhtml?c=107357&p=irol-sec >.