30 Chapter 3 - Personal relevance as an integral part of the marketing mix 3.1 Background of the South African music industry. Marketing as a tool to improve the fortunes of the industry is not realized.
The Importance of Personal Relevance in the Marketing Mix The example of BMG ' s use of reality television shows Big Brother and
This is to be able to use this technology within the limits of the law to expand the possibilities for online retail. Understanding the Napster issue will serve as an example to the local industry of the importance of online retail as part of the marketing mix.
Retailers Need To Practice Differentiation and Branding Strategies
Due to lack of differentiation, there has also been a distinct lack of branding strategy by retailers. Due to over-reliance on price and product advertising and lack of company-focused marketing, companies cannot establish any brand identity.
Methodology and Scope .1 Methodology
Scope of the Study
The scope of the study of the retail industry will be limited to K wa Zulu - Natal, although an examination of the South African market will be included as it is relevant to the purpose of the study. The online industry will be examined in terms of the global market as the internet knows no borders and the international industry is a serious competitor to the domestic industry.
Dissertation Outline
The influence of Big Brother and Pop Idols is examined in terms of their effect on the industry. This chapter will also examine the marketing efforts of other major recording companies in terms of their declining market share.
On Line Music Retail 2.1 Introduction to the Industry
On-line Music Retail Situation Analysis
The agenda of the other companies (Universal, Sony, Warner and EM!) must be questioned. If this purchase is completed, the download price will be refunded to the buyer.
Internet Security
Ultimately, we, the authors, have come to a collective decision not to expose ourselves, our employers and the conference organizers to lawsuits,” Felten stated. 34;We sent the letter because we felt an obligation to the Watennark licensees who volunteered to send their valuable inventions to SDMI for testing." Oppenheim said the RIAA “strongly believes in academic freedom and freedom of expression” – concerns that have recently been raised by critics of the SDMI position.
On-line Consumer Needs
This gives the company a huge base of online distribution that any label will want for their music. 34;We hope we can have Sony and Universal music through MusicNet, as there is clearly a consumer desire to have an integrated music experience. Brick and mortar stores will not fade away, as there will always be a consumer who relies on the "touchy feely" factor, that is, the consumer who buys an album because of the artwork, sleeve notes and recording quality.
Listens are impulse buys that depend solely on the skill of the salesperson to match consumer tastes to a new artist. In 1995, Daniel Chetty, formerly Look & Listen's top seller, accounted for 900/0 of the total SA sales of an unknown artist, Jonata Brooke, purely on the basis of enjoying the album and playing it to customers. Moreover, since the Internet knows no borders, international companies will be able to capture significant shares of the local market.
Summary
There is a real possibility that today's Record Companies will become the most important players in tomorrow's retail market. The largest unit sales are on the Black Market and are almost entirely limited to tape. Traditional black music and church choirs remain almost exclusively in the realm of cassette sales.
Black market music piracy is rampant and according to Stuart Rose, local RISA piracy investigator, piracy represents around 30% of total units sold in the Kwa Zulu - Natal and Eastern Cape regions. In the Transkei, this figure is estimated to be around 80% due to poverty levels. Piracy in the rural areas of the province is much higher due to the prevailing economic conditions, along with the lack of manpower on the ground to police these areas.
Market Share SA Music ndustry
After a TV advertising campaign, there is always a rush of demand and the album is always out of stock, as the sales departments are not aware of the potential demand. Conversely, because sales departments do not provide accurate feedback on dealer demand, they are often blamed for not providing marketing with information critical to determining inventory levels. With a two-week production delay due to CD factories not being able to handle the volumes, the absence of this information can cause huge production backlogs.
Big Brother and Pop Idols as examples of Personal Relevance
BMG South Africa did one better than the rest of the world with the release of "Hectic - The Big Brother Dance Album". Most people probably already had most of the songs because the album was filled with popular, well-known songs. New Zealand started the concept in 1998, and due to the success of the project it was extended to the rest of the world.
The fmal 10 are then put in front of a live audience, perform one track a week and at the end of the show the public is invited to vote and the least favorite contestant is eliminated, until only one remains. The public is clearly tired of the age-old tactics used by Record Companies to sell products that are not radically different from their predecessors. The following graph shows the strength of the top 10 retailers in South Africa in terms of their market share.
SA NUsic Sales by Retailer March 2002
Jet Music
With the demise of Nash Music, top staff from that company were offered jobs and introduced to the Jet style of business. The Jet success is mainly due to the ability to listen to the customer. It was found that many customers did their shopping during a lunch break, and it was often not possible to listen to the album due to time constraints.
Due to the discounts offered to Jet Music as a wholesaler, they were able to undercut all competition by such large margins that it was no longer viable to continue. Only Chatsworth showed a decline. 180/0) in the past year, which is mainly due to the high levels of piracy in that township. The marketing plan is constantly evolving, and staff from the most basic entry-level position to the owner are invited to offer suggestions.
Rytbmic Beat
Rythmic Beat has been able to establish a great relationship with East Coast Radio, who actively support Rythmic Beat in terms of advertising and promotion. In the same vein, it appears that Rythmic Beat will strike a deal with Mr. Price to provide a similar service. The fact that there are over 200 Mr Price stores will make Rythmic Beat one of the largest independent retailers.
Rythmic Beat is a success story because of its ability to pursue "in-your-face" marketing strategies. Unlike many other retailers such as Musica, Makro, Game and CNA, Rythmic Beat was able to move away from advertising product and price. Because of the extra interests, such as the listening stations, a visit to Rythmic Beat is more of an experience than a chore.
Limitations of Rythmic Beat
Record companies return 50% of the ad cost in free inventory to the advertising company. This is partly due to the lack of a Musica brand, along with a lack of consumer loyalty. They are concerned about suppliers and are currently looking at alternative methods of supply, provided these suppliers can remain within the law.
They don't feel like they've reached their target market efficiently and are looking for new opportunities. Nick Stemp is frustrated with the major record labels because he believes they are too focused on the major national retailers. He believes the industry would be better served if it had the freedom to source its own product abroad, rather than being limited in its dealings with local companies, which he believes are moving too slowly in a fast-paced environment. changing market.
Summary
Jet Music has clearly identified their market and realized that it is not a sophisticated market and it is easy to confuse. However, they are limited to the South African market and have little opportunity to expand beyond their existing market. They also limit future prospects with their reluctance to get involved in the online industry.
They have realized that the best way to attract customers is to make themselves part of their target market's everyday life. They have taken the concept of personal relevance and been able to incorporate it into a retail business. Rythmic Beat is currently the only retailer in South Africa that actively markets the store rather than product and price.
Conclusions and Recommendations
- Conclusions
- Recommendations
By correctly identifying and understanding their target market, they have been able to grow by large percentages. Rythmic Beat's success is that it has been able to attract customers to a location that is far from significant transient commerce. BMG on the other hand has been able to exploit the Jet and Rythmic Beat approach.
Additionally, they have been able to capitalize on the success of reality television shows that rely on public involvement. The most important aspect to reveal is that by creating a degree of brand identity, Rythmic Beat has been able to take on its more famous. 34;More Americans downloading music" retrieved on July 16, 2002 from the world wide web via www.usatodav.com.
Questionnaire
I O. Do you operate within the current distribution channels or do you purchase your own distribution channels. I3. Do you have a long-term strategy, or do you prefer to review the strategy when opportunities arise. 3 l. Is your sales force the right size for your business, do you ever have a situation where customers are kept on hold.
Glossary of Terms
Limitations of this Study
