Marketing manageemnt ISBM / IIBMS / IIBM / ISMS  / KSBM / NIPM /SMU / SYMBIOSIS / XAVIER / NIRM / IGNOU  MBA - EMBA - BMS - GDM - MIS - MIB DMS - MMS - DBM - PGDBM - DBA  www.casestudies.co.in aravind.banakar@gmail.com  ARAVIND 09901366442 – 09902787224
 

Marketing manageemnt ISBM / IIBMS / IIBM / ISMS / KSBM / NIPM /SMU / SYMBIOSIS / XAVIER / NIRM / IGNOU MBA - EMBA - BMS - GDM - MIS - MIB DMS - MMS - DBM - PGDBM - DBA www.casestudies.co.in aravind.banakar@gmail.com ARAVIND 09901366442 – 09902787224

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ISBM / IIBMS / IIBM / ISMS / KSBM / NIPM ...

ISBM / IIBMS / IIBM / ISMS / KSBM / NIPM
/SMU / SYMBIOSIS / XAVIER / NIRM / IGNOU

MBA - EMBA - BMS - GDM - MIS - MIB
DMS - MMS - DBM - PGDBM - DBA

www.casestudies.co.in
aravind.banakar@gmail.com

ARAVIND 09901366442 – 09902787224

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Marketing manageemnt ISBM / IIBMS / IIBM / ISMS  / KSBM / NIPM /SMU / SYMBIOSIS / XAVIER / NIRM / IGNOU  MBA - EMBA - BMS - GDM - MIS - MIB DMS - MMS - DBM - PGDBM - DBA  www.casestudies.co.in aravind.banakar@gmail.com  ARAVIND 09901366442 – 09902787224 Marketing manageemnt ISBM / IIBMS / IIBM / ISMS / KSBM / NIPM /SMU / SYMBIOSIS / XAVIER / NIRM / IGNOU MBA - EMBA - BMS - GDM - MIS - MIB DMS - MMS - DBM - PGDBM - DBA www.casestudies.co.in aravind.banakar@gmail.com ARAVIND 09901366442 – 09902787224 Document Transcript

  • KAZIAN GLOBAL SCHOOL OF BUSINESS MANAGEMENT MARKS: 80 COURSE: DBM SUBJECT: MARKETING MANAGEMENT(RE-EXAM) N.B: 1} Attempt all the Questions 2} All Questions Carry Equal Marks Name: Kajrolkar Shailendra Rajaram Reference Number: KH00109-10229 ____________________________________________________________________________ C as e 1 ( 2 0 M ar ks) 19 9 7 s a w t h e U S $19 bi llio n m er ge r of G u inne ss a n d G r a n dM et t o f or m D ia ge o, t he w or ld’ s la r g est dr ink s com pa ny . G u inne ss w a s t he g r o up’ s t op - s ellin g be v er a g e a ft er Smir no ff v o dk a , w it h a n est im at ed g lob a l v a lue o f U S $1. 2 bill i on. M or e t ha n 10 m illi on gla ss es o f t he w or ld’ s m os t po pula r st o ut w er e s old ev er y da y , pr ed om in a nt ly in G uin nes s’ s t op m a r k et s: r es pec t i v ely , t h e UK , I r ela nd, N ige r ia , t h e U SA an d C am er oon . H ow ev er , t he f a mou s da r k s t o ut w it h t he w hit e, cr ea m y h ea d w a s c a u sing s om e st r at eg ic c onc er ns f o r D ia g eo. I n 199 9, fo r t he f ir st t im e in t he 24 1- y ea r his t or y of G uinn ess , s a le s f ell. I n ea r ly 2 0 0 2 D ia g eo C EO P a ul W a ls h a nno u nc e d t o t h e gr ou p’ s c onc er ned sha r e hold er s t hat glo ba l v olum e gr ow t h of G uinn ess wa s d ow n 4 pe r c ent in t h e l a s t s ix m o nt hs of 20 0 1 a nd , m or e a la r m ingly , s a le s w e r e a ls o do wn 4 pe r c en t in it s hom e m a rk et , Ir ela nd. H ow s hou ld D ia ge o a ddr es s f a llin g sa les in t he c ent ur ies - old br a n d sh r oude d i n I r is h m y st iq ue a n d t r a dit ion? Th e c h an g i n g f ace o f t h e I ri sh b e e r m ark e t T h e Ir is h w er e v er y f o nd of bee r a nd ev en f on der of G uinne ss . W it h clo s e t o 2 0 0 lit r es per ca pit a dr unk ea c h y ear — t h e eq uiv a lent o f one pin t p er pe r s on per da y — Ir ela nd r a nk e d t op in w or ldw ide p er c a p ita b eer co nsu m pt io n, a hea d of t h e C z ech R epu blic a nd G er m a ny . B eer a cc ount e d for t w o- t hir ds o f a ll a lco hol bo ug ht in Ir ela n d in 20 01 . S t out le d t he w a y in v olu me sa les a nd a cc oun t ed f or 40 pe r c ent of a ll b eer v a lu e s a le s. G uinn es s, f ir st b re we d in 1 75 9 i n D u bli n by A r t hur G uinn es s, enj oy ed l eg end a r y st a t u s in Ir ela nd, a nat ion a l s y m bol a s r es pe ct ed a s t h e g r e en, w hit e and go l d f la g . I t wa s by f ar t he m ost pop ula r a lco holic dr ink in I r e la nd , a c co unt ing f or ne a r ly one o f e ver y t w o pin t s of bee r s old. It s nea r e st co m pe t it or s w er e B ud we ise r a nd H einek en, Wh ic h h el d 1 3 per c ent a nd 12 per c ent o f t h e m a r k et r es pec t i v ely . H ow ev er , t he s pec t a c ular e co nom ic gr ow t h of t he Ir ish ec on om y s inc e t h e m id- 19 9 0s ha d op en e d u p t he t ra dit ion a l d r in k ing m a r k et t o new cult ur es a nd t h e t r a dit ion a l dr ink in g m a r k et t o new cult u r e s a nd inf lu enc es , a n d e nco ur a ge d t h e t r a v el -f r iend ly Ir ish t o t r y ot her dr ink s. B eer a nd in p a r t ic ula r s to ut w er e gr a d ua lly los in g p op ula r it y com pa r ed w it h w ine or t he r e ce nt ly la unc hed R T Ds ( r e a dy -t o- dr ink s) or F AB s ( f la v our e d a lc oh olic bev er a ge s) , w hich t he y o un ger
  • ge ner a t ion of dr ink er s c ons ider e d t r e ndie r a nd ‘ h ealt hie r’ . A s a E ur om o nit or r epo rt ex pla in ed: Y o unge r co nsu m er s c ons ider d a r k b eer s a nd s t o ut t o b e o l d f a shio ne d dr ink s, w it h t he pe r c eiv ed s t o ut or a le dr in k er bein g a n o ld, s l ig ht ly ov er w eight m a n a n d t hus not in t une wit h im a g e co ns ciou s y o ut h cu lt ur e. B eer s a le s, w hic h onc e a cc ount e d f or 75 pe r c en t o f a ll a lc oho l bo ug ht in I r e la nd , w e r e ex p ect ed t o dr op t o c lo se t o 50 pe r c ent by 2 00 6 , w hi le st o u t s a les w er e f or eca s t t o dec r e a se by 12 per ce nt bet w een 2002 a nd 2 00 6. G i vi n g G u i n n e s s a b o o s t i n i t s h o m e m ar ke t Wi t h G u inne ss a lon e a c cou nt ing f or 37 per ce nt of D ia ge o’ s v olu m e in t h e m a r k et , G uinn ess / U DV Ir ela nd w a s one o f t h e f ir s t t o fe el t he p a in c a us e d by t h e de clin i n g p opu la r i t y of be er a n d i n p a r t icula r st ou t . A Eur om onit or r ep or t in F e br uar y 200 2 ex p la ine d h ow t h e pr o f ile of t h e G u inne ss d r in k er , t y pica lly m e n a g ed 21 - p l us, w a s a f f ec t e d: T h e a v er a g e a ge of G uin nes s dr ink e r s is r is ing a nd t his is br ing in g a bout t h e w or r y ing f a ct t hat t he s iz e o f t he G uinne ss t a r g et a ud ienc e is f a llin g. T h e r a t e of de clin e is lik ely t o qu ick e n a s t h e nu m ber of les s br a nd loy a l, non - s t o ut dr ink in g y o unge r c ons um er s in cr ea s es . Th e r ep o r t c o n t i n u ed : I n Ir ela n d, in pa r t icu la r , t he con sum er ba se f or G uin nes s is s hr ink ing a s t h e m a j or it y of 18 t o 24 y e a r o lds c ons i st e nt ly r ej ec t st o ut a s a pr od uct r elev a nt t o t heir ge ner at ion , opt ing in st ea d t o co nsu m e la ger or sp ir i t s . Ef f ec t iv ely , on e- t h ir d of y oun g I r i sh m en a n d ha lf o f y oun g I r i sh wo m e n ha d r epo rt ed ly n ev e r t r ied G uinn ess . A G uin nes s e m p loy e e p r o v ide d a n ot her ex pla n a t ion. G uinn es s is s im i la r t o c of f ee in t ha t w hen y ou’ r e y oung y ou d r in k it [ c of fee ] w it h su ga r b ut w hen yo u’ r e o lder y ou dr i nk it wit ho ut . It ’ s g ot a sim ilar a cqu ir e d t a st e a nd o nce y ou ’ r e ov er t he init ia l hu r d le, y ou ’ ll f a ll in lo v e w it h it . I n a n a t t em pt t o lu r e y oung d r in k er s t o t he s om ew hat ‘ a c quir ed’ G u inne ss t a s t e ( 40 pe r cen t o f t h e I r ish p opu la t ion w a s un der t he a ge o f 2 4) D ia ge o ha d inv es t e d m ill io ns in dev elo p in g p r odu ct innov a t ion s a nd br a n d b ui ldi n g in I r e la nd’ s 10 , 000 p u bs , c lubs a nd sup er mar k et s. P ro d u c t i n n o v at i o n s U nt il t h e m id- 19 9 0s m ost G uinn ess in I r ela n d w a s dr unk in a pi nt gla s s in t h e loc a l p ub. T he la un ch o f pr oduc t inno v a t ion s in t h e f or m o f a new c oolin g m e ch a nis m f or dr a f t G u inne ss a n d t he ‘ w id get ’ t e chnolog y a pp lie d t o c a ns a n d bo t t le s a t t em pt ed t o m ode r n iz e t he br a n d’ s im a ge a nd r e spo nd t o inc r e a sin g co m p et it ion f r om ot h er loc a l a nd im po r t e d st ou t s a nd la ge r s . ‘ A p e r fe ct h e ad ’ fo r c an n ed G u i n ne s s’ I n 19 8 9, a nd a t a c ost o f m or e t ha n ₤ 1 0 m il li on, G uin nes s, d ev e lo pe d a n d ing en io us ‘ w idg et ’ dev ice f or it s ca nne d dr a f t st out in ‘ of f- t r a de’ ou t le t s su ch a s
  • su per m ar k et s a nd of f - lice nce s. T he w idg et , pla ced i n t he bo t t om of t h e c a n, r elea se d a ga s t hat r epli ca t ed t h e dr a f t ef f ec t . A lt ho ugh o v er 90 p er cen t o f b eer in I r ela n d w a s s old in ‘ on- t r a de’ p ubs a nd b a r s, sa les of bee r in t h e c hea per ‘ of f -t r a de’ c ha n nel we r e s low ly gain in g i n im por t a nc e. T he G uin nes s br a nd m ana ger a t t he t im e , J ohn O ’ K e eff e, ex p la ine d ho w hom e dr ink e rs c ould n o w enj o y a s m oo t h er , cr ea m ie r hea d s im ilar t o t h e on e obt a i ned in a pub t h a nk s t o t he ne w w id get t ec hnolo gy : Wh en t he c a n is o pene d, t h e pr es su r e c a us es t he n it ro gen t o be r ele a s ed a s t h e w idge t m ov es t hr ou gh t he b eer , cr ea t ing t he c la s sic dr a f t G u inne ss sur ge. N ea r ly 10 y ear s l a t er , in 199 7, t h e ‘ f loa t i ng w idg et ’ w a s in t r o duc ed, w hic h im pr ov e d t h e ef f ect iv en es s of t he d ev ic e. A co l d e r p i n t I n 199 7 G u inne ss D r a ft Ex t r a co ld wa s la unc hed i n I r ela nd. A n a d dit iona l c hil le d t a p s y s t em co uld be a dd e d t o t he s t a nda r d b a r r e l in p ubs , a llow in g t h e G uinn ess t o be s er v e d a t 4oC r at he r t ha n t h e nor m a l 6oC . B y s er v in g G uinne ss a t a co oler t em per a t ur e G uin nes s/ U DV hop ed t o m ut e t h e bit t er ta st e o f t he s t out and m a k e it m or e p a la t a ble f or y o ung er a dult s , w h o w er e inc r e a s ingly a cc ust om e d t o dr ink ing c hi lle d la ge r , pa r t ic ular ly in t h e su m m er . A co o l e r i m ag e fo r G u i n n e s s I n O c t ober 199 9 t he w id ge t t ec hnol o gy w a s a p pl ied t o lon g- s t e m m ed bot t le of G uinn es s. T he la u nc h wa s s up por t ed by a U S $ 2 m ill i on T V a nd out do o r bo a r d ca m p a ign . T h e pa c k a ging— w it h a cle a r , s hiny p la s t ic wr a p, d es igne d t o l o ok lik e a pint c om plet e w it h c r e am y h ea d —w a s qu it e a de pa r t ur e fr om t he t r a dit ion a l G uinn es s loo k . T h e o bj ec t iv e w a s t o r e pos it ion G uinn ess a long s ide c e r ta in s im ila r l y p a ck a ge d la g er s a nd R T Ds a n d of f er y o unge r a dult s a m or e f a s hion a ble wa y t o d r in k G uinn es s: s t ra ight f r om t he bo t t le . I t a ls o ga v e G u inne ss ea sie r a c cess t o t h e gr ow ing num ber of club s a n d ba r s t ha t w er e le ss lik e ly t o s er v e t r a dit io na l dr aft G uinn es s, wh ich c ould be m inut es t o p our . T he R T D s , by c ont r a s t, ha d a s helf - lif e o f m or e t ha n a y ea r a nd w er e d ru nk s tr a ig ht fr o m t he b ot t l e. H ow ev er , f in a nc ial a n a ly s t s r e ma ined s k ep t ica l a bo ut t he G uinn es s pr odu ct inn ov a t io ns, w hic h ha d no s ignif ic a n t po sit iv e im p a ct on sa le s o r pr of it a bilit y : T h e la t es t ne ws a bo ut t he s uc ces s of t he r ec ent ly int r odu ce d i n nov a t ions su gge st s t ha t t hey n ot h a d a no t a bly m at er ia l im p a c t on G ui nnes s br a n d pe r f o rm a nc e. B ran d b u i l d i n g Eu r o m on it er e st im at ed t ha t, in 2 000, D ia g eo i nv es t e d be t w e en U S$2 3 0 a n d U S $2 50 m ill ion w o r ldw id e in G uin nes s a d v er t isin g a nd pr om o t i ons . H o wev e r , w it h a c ost - cut t in g obj ec t iv e, t he c om pa ny r e duc ed m ar k et ing ex p ens es in b ot h I r e la nd a nd t he U K by up t o 10 per c ent in 2 00 1 a n d t he num ber o f glo b a l G uinn es s a g enc ies fr om six t o tw o .
  • N ev er t hele ss , G uin nes s r e m a ined on e of t he m ost a dv er t ise d br a nds i n Ir ela nd. I t wa s t he le a din g c ine m a a d v er t ise r a n d, in t er m s of o ut doo r a dv er t isin g, w a s se co nd on ly t o t he na t iona l t e leco m s pr ov id er , E ir c om . G u inne ss wa s a ls o he a v i ly pr om ot ed a t le a din g s por t ing a nd m u sic ev ent s , in p a r t i cula r t hos e t ha t w er e po pu la r w it h t he y oung er a ge g r o ups . T h e u lt im a t e t r ibut e t o t he br a nd w a s t h e open ing of t he new G uinn ess S t or eh ous e in D u b lin in la t e 20 0 0, a so r t of M ec ca f or a ll G ui nnes s f a ns . T h e S t or eh ous e wa s a ls o a fa sh iona bl e v is it or c entr e w it h a n ar t g a ller y a n d r est a ur a nt s , a nd r egul a r ly h ost ed ev enin g e v e n t s . Th e c om pa ny ’ s design br ief hig h lig h t e d a no t h er k ey obj ec t iv e: T o u se a n ult r a m oder n f a c ilit y t o br ea t he lif e int o a n a gein g br a nd, t o r ec onne ct a n o ld c om p a ny w it h y oung ( s k ep t ical ) c ust om er s. A s t h e st or eh ous e’ s des ign f ir m ’ s dir ec t or , Ra lph A r dil l, e x pla ined : G uinn es s S t o r e hou se is a w a y t o g et in t o uc h w it h a ne w g en er a t ion t o he l p y o ung p eo p le r eev a lua t e G uinne ss . Wi t h in a y ea r , t he S t or e hou se ha d b ec om e t he t op t ou r is t d es t in at ion in I r ela nd, a t t r a ct in g m or e t ha n ha lf a m ill ion p e ople a nd hos t in g 45 ,0 00 pe op le f or sp ec ia l ev ent s a nd t r a inin g. T h e S t or e hous e a ls o h a d t ra ining f a c ilit ies f or G u inne ss ’ s bar t end er s and 3 0 0 0 I r is h em ploy ees . T h e Q u a lit y of t he G ui nnes s pin t r em a ined a hig h p r io r it y for t he co m pa ny , wh ich no t only de v e l ope d pu b- l ik e cl a s s r oom s a t t he S t or eh ous e bu t a ls o e m plo y ed t ea m s of dr a ft t e ch nicia ns t o t ea ch ba r m a n how t o pou r a pr op er p int . T h e p r oc ess inv o lv ed t w o st e ps— t he pou r a n d t h e t o p- up— a nd t oo k a t ot a l o f 11 9. 5 sec ond s. B ar m e n a lso ne ede d t o lea r n pr op er ly set and c hec k t hat t h e pr es sur e ga uge s we r e p r o per ly s et a nd t ha t t h e p r o por t ion of nit r oge n t o ca r b on d iox id e i n t he g a s w a s corr e ct . T h e unc er t a in f ut ur e o f t he G uinne ss br a nd i n Ir el a nd D es ir e G u inne ss / UD V’ s at t e m p t t o app ea l t o t h e y ou n ger gen er a t ion of dr ink e r s a n d boo st it s fa ding im a g e, r um o ur s per sis t e d in Ir ela nd a b out t he br a nd’ s f ut ur e. T he co unt r y’ s lea ding a n d r es pe ct ed new spa p er , t he Ir is h R im e s, r epo rt ed in a n a rt ic le in J uly 2 0 01: T h e un cer t a in t y ov e r it s f ut ur e a ll a d ds t o t he a ir of cr is is t ha t is b ui ldi n g a r ou nd G ui nnes s. S a les of t he F am ou s s t o ut in I r ela nd, s t i ll it s s in gle m o st im por t a nt m ar k et , a r e f a llin g … T he d ec line in I r ish sa l es tr igg er ed a r ev iew pr oc es s a t G uinn es s I r e la nd Gr ou p four m o nt hs a go … T he r e v iew is not co m pl et e a n d t he a s su m pt ion is t ha t t her e is m or e ba d new s t o c om e. I n t h e p ubs a cr os s Ir el a nds , t he t r a dit io na l G uinn ess d r in k er s look e d o n a n x iou sly a s t he y ou nge r gene r at ion dr a nk B ac ar di B r e ez er s, S m ir nof f Ic es or C a li fo r n ia n w in es . C ould t h e g olia t h G u inne ss su r v ive a not he r tw o cent ur ies ? Wa s t he p r e f er enc e f or t h ese new dr ink j u st a f a d or fa s hion , o r di d D ia ge o nee d t o ser ious ly r ec ons ider ho w it ma r k et ed G u inne ss ? A q u i c k so l u ti o n ? I n la t e F ebr ua r y 2 00 2, D ia ge o C E O P a ul W a ls h r e v ea led t ha t t he c om pa ny w as t es t in g t e ch nolo gy t o cut t he w a it ing t im e f o r a pin t of G uinn es s f r o m 1 m in ut e
  • 59 s ec onds t o 1 5- 25 s e co nds . U lt r a sound c o ul d r e lea s e bu b b les i n t h e s t ou t a n d f or m t he h ea d in st a nt ly , m a k ing a pin t of G uin nes s t hat w ould b e ind ist in g uish a b le f r om one pr oduc ed by t he s low er , t ra dit iona l m e t h od. ‘ A t w o- m in ut e po ur is no t r el ev a nt t o our cu st om er s t od a y,’ W a ls h sa id. A G uinn es s sp ok e sw om en c ont inu ed, ‘ We h a v e g ot t o m ov e w it h t he t im es a n d t h e br a n d m us t ev olve . W e m us t t a k e a ll t he op por t unit ie s t h a t w e ca n. In ou t le t s w her e it is r ea lly bu sy , if y ou wa lk in a f t er nin e o’ c lock in t he ev enin g th er e w ill be a clo t h o v er th e G u inne ss p u m p be ca u se it t a k es lo nger t o p our t ha n o t her dr ink s. ’ Aw ar e t ha t s om e c ons um er s m igh t not be at t r a ct ed by t he inn ov a t io n, sh e a dd ed ‘ I t w oul dn’ t be put ev e r y w her e— only w h er e peop le w a nt a quic k pint w it h no e ff e ct on t he qua lit y . ’ A lt ho ugh st ill be ing t e st ed , t he ‘ qu ick - p our p int ’ w a s a p opu la r t op ic of co nv e r s at ion in D ub li n p u bs a m ong b a r m e n a n d cu st om er s a lik e . T he r e w er e r um o ur s t ha t it wou ld b e int r oduc ed in B r it a in on ly ; o t h er s t hou ght i t w ould b e r elea se d w or ldw id e . S om e m a r k et com m e nt at or s v ie w ed t he qui ck - po ur p int a s a n inno v a t iv e wa y t o a p pea l t o t he y oun ger , les s p a t ie nt s eg m en t in w h ich G uin ne s s ha d un der per f or m ed. O t her s f ear ed t h at t he y oun g w ould be u nco nv in ce d by t h e int r odu ct ion , a nd loy a l c ust om er s w ould be t u r n ed of f b y wh a t t h ey c ha r ac t er iz e d a s a’ m a r k et ing u-t u r n’ . Q u e st i o n s: - 1. Fr om a m a r k et ing p er sp ect iv e, w hat ha s G uinn es s d o ne t o e nsu r e its long ev it y ? 2. H ow w ould y ou c ha r a ct er iz e t he G uinn ess br a nd ? 3. Wha t cou ld G ui nnes s do t o a t t r a ct y oung er dr ink er s? A nd t o r et a in it s olde r lo y a l c us t o mer ba se ? C a n b ot h be done a t t h e sa m e t im e? 4. Is t he qu ick - po ur con ce pt a goo d or ba d idea ? Wh y ?
  • C as e 2 Pl ayi n g t o a n e w b e at : m ark e t i n g i n t h e mu si c i n d u st r y (2 0 M ar ks) G oo d old f a s hion e d r oc k ‘ n’ r oll co ul d be dea d. If a m obile p hon e r in gt on e i n t h e sh a pe of t h e v ocaliz a t ions o f t he anim a t ed cr a z y Fr og do m ina t es t he bil lbo a r d ch a r t s f or m ont hs on end , t h en it c ould w el l s i gna l t he d ea t h k nell fo r t h e ind ust r y , a nd how i t ope r a t e s. If th is ubi q uit ous a m phi b ia n’ s a ur a lly a nn oy in g so ng, co nv e r t e d f r om a m ob ile pho n e r ingt on e, out so l d ev en m a inst a y a ct s s uc h a s O a sis a nd C oldp la y , w hy s hou l d m us ic c om pa n ies i n v es t m illio ns in c ult iv a t in g f r esh m us ica l t a lent , hop ing f or t hem t o be t he n ex t big t h ing, w hen t h e ir ef f or ts ca n be bea t e n b y b a s ic sy n t h es iz e r m us ic? T he in du s t r y is f a cing a n u m be r of ch a lle nges t ha t it ha s t o a dd r e ss, s uch , inc r e a s ing cos t pr es sur e s, d em a ndin g pr im a don na s a nd c ha nging cus t om e r n eed s. G one a r e t he da y s wh en m usic m o guls w er e r e liant on s a le s f r om a lb um s a lone , no w t he ind ust r y tr a w ls f or r ev e nue f r om a v a r ie t y of s our c es, su ch a s r ing t o nes , m er cha nd ising , c onc er t s, a n d m usi c D V Ds , le v er a g ing ex t en si v e b a ck c a t a log ues , a n d m us ic r ig h t s fr om a d v er t isin g, m o v ies a nd T V pr ogr a m m in g. T h e m us ic ind u st r y is i n a st a t e of f lux a t t h e m om ent . T he c or ner st o ne of t h e ind ust r y — t h e s ingle s c ha r t — ha s be en f a cing t e r m ina l dec l ine s inc e t he m id- 19 9 0s . S om e r et aile r s a r e now n ot ev en st oc k ing sin gles du e t o t h is m ar k e d f r eef a l l. S om e ind ust r y c om m en t a t or s bla m e t h e I nt er net a s t he so le c a us e, w hile ot he r s p oi nt t o v a lu e d if f er enc e b et w een t he p r ice of a n a lbum a nd t h e pr ic e o f a s ingle a s t oo m u ch. Lik ewis e, s om e com m e nt at or s cr it ic iz e t he h ea v y pr e- r elea se pr om ot ion of new so ngs , t he t ar get ing o f ev er - y oung er m ar k et s b y po p a c t s , a nd t he ex p losi on of d ig it a l t e lev isio n m us ic c ha n nels a s r oot ca u ses of t he s ingle ’ s d em is e. T h e da y wh en t he t y pic a l r e cor d buy e r b r ow ses t hr ough r o ws of s helv es f or a m uch sou ght - a ft er ba nd or s ong on a S a t u r d ay a ft er n oon m a y b e a t hin g of t he pa st . Lo ng- t er m s uc ce ss st or ie s f or t he m u sic ind ust r y a re inc r e a s ingly dif f ic ult t o de v elo p. T h e o ld t r a dit ion o f A & R ( whic h s t a nds fo r ‘ A rt is t s & R eper t o ir e’ ) w a s t o si gn, n ur t u r e a n d d ev e lop m us ic a l t a le nt ov er a pe r io d o f y e a r s. T he indu st r y r elied on co nt inua l ly f eed i ng t he s y s t e m w it h fr e sh t a le nt t h a t c ou ld pr ov e t o b e t he ne x t big t hi ng a nd c a pt ur e t he p ublic i m a g ina t ion . N o w c or por at e s hor t - t er m t hink ing ha s e nv e lope d b usin es s st r a t egie s. I f a n a ct f a ils t o be a n imm edia t e hit , t he r ec or d la bel dr ops t hem . T he in dus t r y is now cha r a c t er iz ed by a n end less su cc es sio n o f on e- hit w o nder s a nd vide og e nic a r t ist s chu r ni ng out cla ss ic co v er so ngs , bef o r e v a nish in g o f f t h e c eleb r it y ra da r . F our la r ge m u s ic la be ls now do m ina t e t h e i ndus t ry ( s ee T a b le1. ) , a nd ha v e em er ged t hr ou gh y e a r s of co ns olida t io n. T he ‘ big f ou r’ m aj or la b els h a v e t he m a r k et ing c lout a n d re so ur ces t o inv e st h eav ily in t h eir a ct s, pr ovid in g t hem w it h ex p ens iv e v i deos , p ubl ic it y t our s a nd P R c ov er a ge. T h is clo ut a llow s t h eir a ct s t o ge t v it a l r a dio a irp la y a n d v id eo r o t at ion on ded ica t e d T V m usic c ha n nels . M aj o r r e cor d la b els ha v e ev en be en a c cus ed o f of f er ing c a s h induc em ent s or gif t s t o r a dio s t a t ions a nd D J s in a n e f f or t t o ge t t he ir s on gs o n p la y li st s . T his a ct iv it y is k no w n in t he in d ust r y as ‘ r a dio pa y ola’ . C on sum er s ha v e flo ck e d t o t h e I nt er ne t , t o do w n- lo a d, t o st r ea m t o ‘ r i p a n d bu r n’ c opy r ig ht ed m u sic m a t er ia l. The d i git a l m us ic r ev o lut ion ha s ch a nge d t h e w a y p eop le list e n, use a nd o bt a in t h ei r f a v our it e m u sic . T he v er y bus ine ss m od el t hat ha s w or k ed for de ca d es , bu y in g a s ingl e or a lbu m fr om a high - st re et s t or e, m a y not sur v iv e . M us ic ex ec ut iv es a r e lef t q ues t ionin g wh et her t he I nt er net w ill k ill t he m usic bus ines s m o de l ha s b ee n fu n da m en t a lly a lt er ed . A c cor d ing t o t h e B r it ish P hono gr a ph ic I ndu st r y (B P I) , it e st im at ed t ha t 8 m il lion pe o ple i n t h e U K a r e do w nloa ding m us ic f r o m t he I nt er ne t — 92 p er c en t of t he m doi ng so i llega l ly .
  • I n 2 00 5 a lon e, s a le s o f C D s ingl es f ell b y a c ol os sa l 23 pe r ce nt . T o put t h e ch a ng e i nt o c ont e x t , t he sa les of digi t a l s in gle s i ncr e a se d b y 7 46. 6 p e r c ent in 20 0 5. C ons um er s a r e T ab l e 1 . T he ‘ big f our ’ m u sic la be ls U n i v er sal M u si c S o n y B M G T h e l a r ges t m usic l a be l w it h 26 pe r c ent of glo b a l m us ic m a r k et sh a r e; inc lude U 2 , lim p B iz k it , M ar ia h C a r e y a n d N o D ou bt M er ger c ons olid a t ed it s pos it ion; a r t ist s o n it s r o st er inc lu de M ic ha e l J a c k s on, La ur y n H ill, W es t lif e D i do , O u t k a st a n d C hr ist in a A gui ler a War n e r Mu si c E M I T h ir d bigg es t m us ic gr oup ; a r t ist s on i t s r ost e r in clu de M a do nna , R ed H ot C h ili P epp er s a n d R EM A r t is t s on it s r oste r in clud e t h e R ollin g S t o nes , C oldp la y , N o ra h J o nes , R a d iohe a d a nd R obb ie Willi a m s B uy ing t heir m usic t hr oug h dif f er ent cha nne ls a nd a l so lis t e nin g t o t heir f a v our it e so ngs t hr o ugh dig it a l m e di a r at her t ha n t hr ou gh st a nda r d C D , ca ss et t e or v in y l. T h e em er gen ce of M P 3 p la y e r s , par t icu lar ly t he im m ens ely pop u la r A pp le iP od , ha s t r a ns f or m e d t he m usic la nds ca pe ev e n f u rt he r . C ons um er s ar e no w dow nlo a din g s ong s e lec t r on ica lly f r om t he In t ern et , a nd st o r in g t he m o n t hes e dig it a l dev ic e s or bu r n ing t hem ont o r ewr it a bl e C D s. G l o ss ary o f o n l i ne m u si c j arg o n S t re a mi n g : a llow s t he us er t o lis t e n t o or w at ch a f ile a s it is bein g si m ult a n eou sly do w n loa d ed. R a dio c h a nne ls ut il iz e t his t ech nolo gy t o t r a nsm it t heir pr og r a m m ing on t h e I nt er net . ‘ Ri p n b u rn ’: M ean s do w nloa din g a s on g or a udi o f ile f r om t he I nt er n et a nd t he n bu r ni ng t he s ong o n t o a r ewr it a ble C D or D V D. M P3 fo rm at : MP 3 i s a po pula r dig i t a l m u sic f ile f or m a t . T he so und q ua lit y is si m ila r t o t hat of a C D. T he f or mat r edu ce s t he s iz e o f a son g t o one -t en t h of its or igin a l si z e a llow ing f o r it t o be t r ans m i t t ed quic k ly o v er com p ut er net wor k s . A p p l e i Po d : T he ‘ di git a l j uk ebo x’ t hat ha s t r a ns f or m e d t he f ort un es o f t h e pio nee r P C m ar k e r. B y t he end o f 2 004 A p ple is ex p ect e d t o ha v e so ld clo se o n 5 m i llion un it s of t h is ult r a - hip ga dget . I t w a s t h e ‘ m us t - h a v e it e m’ f or 2 003 . T h e st a ndar d 20G B iP o l pla y er ca n ho ld a r ound 50 0 0 son gs. O t h er ha r d w ar e co m p et ing ha r d w ar e br a nd s c a n r et a il f o r le ss t ha n £75 . P e e r - to - p e e r n e t wo r ks ( P2 P ) : T hese net w or k s a llow us er s t o s har e t hei r m usic libr a r ie s w it h ot he r n et us er s. T he r e is n o ce nt r a l se r v er , r at her ind iv i du a l co m p ut er s on t he I nt er net c om m un ica t in g w it h on e a no t her . A P 2P pr ogr am a llo w s us er s t o s ea r ch for m at er ia l, s uch a s m usi c f iles , o n ot her c om p ut er s. T h e pr og r a m l et s use rs f in d t he ir des ir ed m us ic f iles t hr oug h t he us e of a ce nt r a l co m p ut er s er v er . T he sy s t em w or k s lik e t hi s: a us er s ends in a r e que st f o r a so ng; t he s y st e m ch ec k s w he r e on t he I nt er ne t t ha t s ong is loc a t ed : t ha t s ong is do wn loa d ed dir ec t l y o nt o t h e c om put er of t he u ser who m a d e t h e r eq ues t . T h e
  • P 2 P s er v er nev er a c t ua lly h olds t he ph y sic a l m u sic f i les — it j u st f a cilit a t e s t h e pr oc es s. T h e I nt er ne t o f f er s a num be r o f be nef it s t o m u sic sh opp er s, s uch a s ins t a nt de liv er y , a c ce ss t o huge m us ic c a t a lo gues a nd p r o v is ion of ot h er r ic h m u ltim ed ia m a t er ia l li k e con ce r t s or v ideo s, a cc es s t o sa m pl es of t r a c k s, che a pe r pr icin g ( buy ing son gs f o r 9 9p r a t h er t ha n a n e x pe nsi v e sin gle) a nd, a bo v e a ll, co nv e nien ce . O n t he pos it i v e s i de , la be ls n ow ha v e a cc es s t o a w ide r glob a l a u dien ce, p os sib ili t i es of n ew r ev e nue s t r ea m s a n d le v er a g ing t h eir v a st b a ck ca t a log ues . I t ha s dim inis he d t he b a r ga in ing pow er of lar ge r et a iler s, it is a ch ea p er dis t r ib ut ion m e dium t ha n t r a dit ion a l f or m s and la b els ca n no w cr ea t e v a lue- la d en m ult im edia m at er ia l fo r co nsu m er s how ev e r , a nd t h e b ig ge st pr ob lem is t ha t of pir a c y a nd cop y r ight t heft . M illio ns of so ngs a r e bein g do wn loa d ed f r om t he I nt er ne t ille ga lly w it h no p a y m ent t o t he co pyr igh t ho lder . T h e In t er net a llo ws su rf e r s t o dow nlo a d s ong s us ing a f o r m at ca lled “ M P 3’ , w hic h do esn ’ t ha v e in bu ilt c opy r ight pr o te ct ion , t h us a llo win g t he us er t o c opy a n d sh a r e w it h o t h er sur f er s w it h e a se . P e er t o pe er ( P 2 P ) ne t wor k s su ch as K a za a a n d G r o k st er ha ve em er ged a nd pos e a n ev e n de adlie r t hr ea t t o t he m usic ind ust r y — t h ey a r e ene m ies t ha t ar e ev en h a r der t o t ra ck a nd c ont a in . C ons um e rs ca n e a s ily s our c e a nd d ow nloa d ill ega l co py r igh t e d m at er ia l w it h co ns ider a b le ea se u sing P 2P n et w or k s ( s ee a cc om pa ny ing bo x ) . P2 P N et wo r ks u se d fo r fi l e sh a ri n g K az aa G nut e lla G r ok st er M or phe us eD o nk e y I m e sh B ea r s ha r e Wi nM X A la r ge nu m be r of lega l d ow nlo a d si t es h a v e n ow b een la unc hed , w her e s ur fer s ca n eit her st r e a m t he ir digit a l m usic lib r a r i es. T his h a s bee n due t o t h e r a p id su cc es s of sm a ll digit a l m e dia pla y er su ch a s t he A p ple iP o d. T he leg a l do wn loa d in g of so ngs ha s g r o w n ex pone nt ia lly . A la car t e dow nlo a d s er v ic es a n d su bs cr ipt ion - ba se d se r v ice s ar e t he t w o m a in b usi n es s m o del s. In dep end e nt r es ear ch r ev ea ls t ha t t he A pp le’ s iT u nes se r v ice ha s o v er 7 0 p er ce nt of t he m a r k et . H igh li ght i ng t h is g r o wi ng ph eno m en on o f t h e I nt er net a s a n of f ic ia l ch a nn el of d ist r ibut ion , ne w m usic a r e n ow b eing c r e a t ed, su ch a s t he ‘ O ff ic ia l D ow nlo a d C ha rt ’ . In dus t r y so ur ce s sug ges t t ha t out of a t y p ica l 99 p d ow nlo a d, t he m usic la be l ge t s 65 p, wh ile cr ed it c ar d co m p a nie s get 4p , le a v in g t h e onlin e m u sic st or e wit h 30 p p er so ng d ow nloa d. T he se s e r v ices m a y f un da m ent a l ly er a d ica t e t he co nc ept o f a n a l bum , w it h c us t o m er s selec t ing o nly a ha ndf ul of t heir f a v ou r it e so ngs r a t her t ha n e nt ir e st a ndar d 12 tr a c k s. T he se pr ice s a r e ha v ing k no ck - o n c ons equ enc es f or t he pr icin g of phy s ic a l f or m at s. C ons um e r s a r e now lo ok in g f or a m or e v a lue- la d en m us ic pr odu ct r a t her t h a n s im p ly 1 2 so ngs wit h a n a lb um co v er . N ow t he y a r e ex pec t ing be hind t he s ce nes a cc es s t o t heir fa v our it e gr ou p, liv e c onc er t foot a g e a nd o t her cont ent - r i ch m a t er ial. B ig n oise Mu sic is a n e x a m ple o f o ne of t he le g it im a t e dow nl oa di n g s it e s r unnin g t he O D 2 sy st em . T he sit e is d if f er ent in t h a t for ev er y £1 do wn loa d , 1 0 p of t h e r ev e nue g oes t o t he c ha r it y O x fa m .
  • T h e m us ic in d ust r y is f e r o ciou sly f ig ht ing ba c k by is s u ing la w s uit s f or br ea c h of co py r igh t t o pe ople w ho a r e il lega lly dow nlo a din g so ng s f r om t he in t er net usin g P 2 P so ft war e. T h e r ecor d ing in dus t r y h a s st a r t e d t o sue t h ous a nd s of pe ople wh o ille g a lly s ha r e m usic us ing P 2P . T h ey ar e is su ing w a r nin gs t o ne t s ur f er s w ho ar e us ing P 2 P so ft w ar e t ha t t he ir a ct iv it ies a r e bei ng w a t ch ed a nd m on it o r e d. I nst a nt I nt e r net m es sa ges a r e bein g se nt t o t ho se w ho a r e sus pe ct ed o f off e r in g so ngs i lle ga lly . I n a dd it io n, t h ey ha v e b een a wa rd ed c o ur t or der s s o t ha t I nt er net pr ov i der s m u st iden t if y p eop l e wh o a r e hea v ily inv olv e d in s uc h a c t iv it y. T he m usic i n dus t r y is a lso inv o lv e d h ea v ily in iss ue a d v er t isin g ca m p a ign s, by pr om o t in g a n t i- pir a cy w e bsit e s s uch a s w w w. pr o- m u sic . or g t o ed uca t e peop l e on t he in dus t r y a n d t h e im p a ct of pir ac y on a r t ist s . T hes e t y pes of pu bl ic a w ar ene ss ca m pa ign a r e des ig ne d t o ill us t r a t e t he im plic a t ions of ille g a l do w nloa d in g. S m a ll i ndep en d ent m us ic la be ls v i e w P 2P net w or k s d if fe r ent ly , see ing t hem as v it a l in a chi ev in g publ i cit y a n d dist r ibu t io n f or t he ir a ct s. T h ese f ir m s sim ply d o no t ha v e t he pr om ot ion a l r e so ur c es or d ist r ibut ion c lo ut of t he ‘ big f ou r ’ r ec or d la b els . T hey s ee P 2P ne t wo r k s a s a n e x c ellen t v ir a l m ar k et ing t ool , c r e at ing b uzz a b out a so ng or a r t is t t h at w ill ul t im a t ely l ea d t o w ide r m a inst r e a m a n d co m m er cia l a pp ea l. T he I nt er ne t is us ed t o c r ea t e c om m u nit ies a pp e a l. T h e I nt er net is u se d t o cr ea t e c om m u nit ies o f fa ns w ho ar e int er est ed in t he ir m us ic, pr ov iding t he m a cc es s t o f r ee v ideo s a nd o t h er m at er ia l. It a llo ws i nde p end e nt a c t s t h e o ppo r t un it y t o dis t r ib ut e t heir m usi c t o a w ide r a ud ienc e, b ui l din g u p t heir f a n ba se t hr ou gh w or d of m ou t h . S a v v y uns igne d ba nd s ha v e so ph is t ica t e d w ebs it es s how c a sin g t he ir w or k , a nd of f er ing f r e e dow nlo a ds a s w e ll a s op por t unit ies f or a udio - p hili es t o p ur cha se t he ir t une s. A lt er nat iv ely m aj or la b els s t i l l s ee t ha t t o g a in su cc es s one ha s t o g et a v ideo o n r ot a t io n on M T V a n d t ha t t h is i n t ur n e nc our a ge s gr eat er a ir p la y on r a dio st a t ion s, u lt im a t e ly lea din g t o i ncr ea se d pur ch a s es. T ab l e 2 . T he m aj or legit im at e on line m us ic pr ov ider s N am e D e t ai l s P ri ci n g A pple iT une s H ug e ca t a logu e of ov er 75 0, 00 0 s ongs ; c om p a t ible w it h A pp le’ s v er y hip iP o d s y s t e m; off er s fr ee s ingle o f t he we ek a nd o t her ex clus iv e m at er ia l 79 p p er t r ack , £7 . 9 9 pe r a lbum N a ps t er T he no w- leg it im a t e w e bsit e o ff e r s ov e r 1, 00 0, 00 0 s ongs ; o ff e r s s ev e ra l st r ea m ing r a dio s t a t ions t o o S u bsc r ipt ion b a se d— s ubs cr ib er s p a y £9 . 99 a m on t h t o s t r e am a ny o f t he ca t a l ogue , pl us a not he r 99p t o d ow nloa d on t o a C D S ony C o nne ct O v er 300, 00 0 so n gs f r o m t he m aj or la b els; ex ce llent so und q ua lit y bu t c om pa t ible only F r o m 8 0p- £1 .2 0 p er t r a c k , a nd £8- £10 p er a lbum
  • F o r t r a di t io na l m us ic r et a ile r s t he r et a ili ng la n dsc a p e is g et t ing m or e co m p et it iv e, w it h m ult ipl e cha nne ls of dis t r ibu t io n em er ging d ue t o t h e In t er net a n d la r ge s upe r m ar k et c ha i ns no w s elli n g m u sic C D s. Sup er m a r k et s a r e b ec om in g on e o f t he m a in c ha nn els of d ist r ibut io n t hr ou gh w h ich co nsu m er s bu y m us ic. T h ese sup er m ar k et s ar e s t o ck ing on l y a lim it e d num be r of t he be st - se lli ng m usi c t it les , lim it ing t he n um ber of dis t r ibu t ion ou t le t s f or new a n d ind e pen de n t m us ic. O nly c ha r t s hit s and g r e a t est hit s c ollec t ions w i ll m a k e it o n t o t he s h elv e s of su ch o ut let s. N ow co nsu m er ca n buy a lbum s f ro m t r a dit iona l Int e r n et r et a iler s su ch a s A m az o n. co m, a nd a ls o on w ebs it es t ha t ut iliz e a c ce ss t o gr ey m ar k et s s uch a s cd w ow . co. u k , a s w ell a s t hr ou gh l e git im a t e dow n loa d r e t a iler s. T his ha s lef t t r a dit ion a l m u sic re t a il ope r a t i ons w it h a s ev er e co nun dr um : how c a n t hey ent ic e m o r e sho ppe r s i nt o t h eir st or es ? T he a cc om pa n y ing b o x hig h li ght s w he r e t y pic a l sh opp er s s our ce th eir m us ic a t p r e se nt . Wh e r e d o p e o p l e b u y t h ei r m u si c ? M us ic st or e s ( lik e H MV , V ir gin M e ga st or e) 16 p er cen t C ha ins ( lik e Wo olw or t hs, WH Sm it h) 16 p er cen t S up er ma rk et s ( like T es co, A s da ) 2 1. 6 pe r c ent M a il or de r 3 .9 per ce nt I nt er net sa les ( lik e A m az on. co m) 7 pe r c ent D ow nlo a ds N ot y et m ea s ur ed S ou r c e: B r it ish P hono gr a ph ic I ndu st r y T h e is sue of on li ne m us ic r e t a iler s usin g pa r a llel im po rt ing , suc h a s C D W ow ( www . c dw ow . co. u k) is a c onc er n. T he se r et a ile r s a r e t ak ing a d v a nt a ge of w or ldw ide pr ic e d isc r e pa n cie s f or leg it im a t e m u sic C Ds , so ur cing t hem in low - w it h S o ny pr od uct s due t o p r o pr iet a r y f ile f or m at s B leep .c om S m a ll ca t a log ue of 15, 00 s ong s w it h a f oc us on in de pe nd e nt m us ic la bels ; hi gh- qua l it y do wn loa d s d ue t o m edia fi les u sed 99 p p er t r ack , £6 . 9 9 pe r a lbum W ipp it U K- ba sed s er v ice; 17 5, 00 0 s ong s t o dow n lo a ds ; giv es a s elec t ion of f r e e t r a c k s e v er y m ont h F r o m 30 p t o £1 t o d ow nloa d; a lt er n a t iv e ly , u ser s c a n s ubs cr ibe t o t he s er v ic e f or £ 50 a y ea r t o ga in a c cess t o 60 , 000 s o ng s O D 2 S y st em , us ed b y : M y cok em usic . co m H MV . c om M SN . c om T ow er R ec or ds . co. uk B ig N ois e M usic T hes e onlin e sit es use t he O D 2 s y s t e m f or m us ic dow nl oa ds ; t he y look a ft er enc r y pt ion , ho st ing , r o y a lt y m a n a ge m e nt a nd t h e ent ir e e- co mm er ce s y s t e m; pr ov id es a c ce ss t o ne a r ly 35 0, 00 0 t r a c k s f r om 12 , 0 00 r ec or ding a r t is t s V a r y ing p r o duc t b und le s, t y pic a lly 99 p fo r t ra ck d ow nloa d, a nd 1p f or str ea m in g
  • co st c ount r ies lik e H o ng K o ng a nd ex por t ing t he m in t o Eur ope a n c oun t r ie s. P r ic es f or m us ic in t he se m a r k et s a r e c ons ider a b ly low er t ha n t he m ar k e t t hat t hey ar e ex por t ing t o, a n d t hey d on’ t ev en c ha r ge s f or int er na t io na l d eliv e r y . Y et t ec hnol ogic a l im pr ov em ent s ha v e led t o r ev e nue op por t unit ies fo r t he ind ust r y . D ev elop m en t s uc h a s onlin e r a dio , di git a l r igh t s ma na g em e nt , In t er net st r ea m ing , t et her ed d ow n lo a ds ( loc k ed t o P C ) , do w nloa ds ( b ur na b le, p o r t a ble) , in- st or e k iosk s, r in g- t o nes , m obile m es sa ge clip s, v ide o c h ip s a n d ga m es so und t r a c k s ar e g r e at po t e nt ia l r ev enu e s our ce s. I n a n e ff o rt t o u nloc k t his po t e nt ia l t he m aj or la b els h a v e digit i z ed t he ir e nt ir e bac k ca t a log ue. I n t he w a k e of t hes e dr a m at ic env ir o nm e nt a l c hang es t he in du st r y ha s ha d t o ra dica lly a d a pt . T h e ‘ b ig fo ur ’ m us ic la be ls a r e con sol ida t ing ev en f u r t her , de v e lopin g a dig it a l m u sic s t r a t egy , an d r e ev a lua t ing t he ir en t ir e t r a dit iona l bus ine ss m ode l. M ob ile ph ones a r e s een a s t he ne x t pr im ar y cha nne l o f dis tr ib ut ion f or dig it a l m us ic. H igh p ene t r at io n lev e ls in t he m a r k e t f or m o bile p hone s a n d t he inh er ent m o bilit y a dv a nt a ge s m a k e t his t he ne x t cr uc ia l ba t t le f ield f or t he m us ic ind ust r y . T h e I nt er n et m a y em er ge a s t h e pr im ar y c ha nn el of d ist r ibut io n f or m usic , a n d t he m usic indu st r y is go in g t o ha v e t o a d a pt t o t h ese cha nge . T he m o v e t ow ar ds t he on line dis t r ib ut ion of ent er t ain m en t is s t ill i n it s in f a nc y , w it h m or e inv es t m ent int o t he T e lec om m uni ca t io ns inf r a st r u ct ur e, suc h a s g r e at er In t er net a c ce ss , inc r ea s ed a c ce ss t o br oa dba n d t e chn olo g y , 3 G t ec hno logy a nd c ha ngin g t he w a y p eop le sh op f or m us ic w ill u n doub t ed ly t a k e t im e . T h e dig it a l r e v olu t io n w ill f u n da m en t a lly cha nge t he w a y pe opl e pu r c ha s e a nd co ns um e t he ir m us ic a l pr ef e r e nce s. I n f or t hc om ing y ea r s t h e di g it a l f o r ma t wil l bec om e m or e m a ins tr ea m , le a din g t o a p r o lif er at ion of ch a nn els of dis t r ib ut ion f or m us ic. H ow ev er , as w it h m os t ne w ch a nne ls or t ec hno logy , ca ta logu e s h op pi ng ne v er su r p a s sed r egu lar h igh- st r eet sho ppin g, I nt er ne t sh opp in g l ik ew is e, a nd ‘ v ide o ne v er r ea lly k illed t h e r a dio st ar ’ … but w ill t he I nt er net k ill t h e r eco r d st or e? Q u e st i o n s: - 1. D isc us s t he m icr o a nd m a cr o f or ce s t h at a r e a ffe ct ing t he m usic ind ust r y . 2. B a s ed o n t h is a n a ly s is, w ha t st r at eg ic op t i ons w o uld y o u r e com m e nd f or bo t h m us ic p u bl i s her s a nd m usic r e t a iler s i n t h e cu r r ent m ar k et in g en v ir onm ent ? 3. D isc us s t h e a d v a n t a ges a nd d is a dv a n t a ges a ss ocia t ed w it h onlin e dis t r ib ut ion f r om a m u sic l a be l’ s pe r spe ct iv e .
  • C as e 3 Th e g r e y m ar ke t (2 0 M ark s) In t ro d u c t i o n T h e o v er - 50s m a r k e t ha s long b een ign or ed by a d v er t isi ng a nd m a r k et ing f ir m s in f a v our o f t h e y o ut h m ar k et . T he co m p lex it y of how t o a ppe a l t o t od a y’ s m a t ur e c ust om er s , w it ho ut t ar ge t i ng t h eir a ge, ha s p ro v ed j us t t oo c ha lle ng in g f or m a ny c om p anie s. B ut t his pr eo cc upa t io n w it h y ou t h r uns c oun t e r t o de m og r a phic c ha nges . T he ov er - 50 s r e pr es ent t h e la r ges t s egm ent of t h e po pu la t io n, a cr os s w es t er n d ev e lope d c ou nt r ie s, due la r g ely t o t h e pos t- S e con d Wo r l d War ba by bo om . T h e sh eer siz e of t his gr e y ma r k et , w hich w ill c ont inu e t o gr ow a s b ir t h a nd m o r t a lit y r at es f a ll, c ou ple d w it h it s phen om ena l sp end in g po we r , pr es en t s eno r m ous opp or t unit ies fo r b usin ess . H ow ev er , s uc ces sf u lly un lea s hin g it s p o t ent ia l w ill de pe nd o n com pa n ies t r uly un der s ta ndin g t h e a t t it ude s, Lif e st y le s a n d pur c ha s ing int e r e st s o f t hi s po st -w a r g ener a t io n. D e mo g rap h i c fo rc e s F o llow ing t he S ec ond W or ld Wa r m a ny c oun t r ie s ex per ien ced a ba b y boom ph enom en on a s r et ur nin g s old ie r s be ga n fa m ilie s. T his, c ou p led wit h a m or e po sit iv e out loo k on t h e f ut ur e, r es ult ed i n t he ba b y b oom gen er a t ion , b or n be t w e en 194 6 a nd 19 64. N ow b egin ning t o ent e r r et ir em e nt , t his af f luen t gr ou p glo ba l ly n um b er s a p pr ox im at ely 532 m illion. I n We st er n Eur op e t hey a cc oun t f or t he l a r gest pr opor t ion of t he t ot a l pop ula t io n a t 14 .9 %, f ollo we d c l o se ly b y 14 .2 % in N or t h Am er ica a nd 13 . 5% in A u st r a la s ia . T a ble. 1 G loba l po pula t ion a ge d 45 - 5 4 b y r eg ion: b a b y bo om e r s a s a % of t h e t ot a l po pula t i on 1 9 90/ 2 00 2 T h e G r ey m ar k et is big a nd g et t i ng big ge r . B et w ee n 1 990 a n d 2 0 02 t he glob a l ba by boo m er pop u la t ion inc r ea s ed b y 41 %. T h is r a t e o f gr ow t h is pr edic t ed t o B a by bo om e r s a s a % o f t o t a l po pu la t i on 199 0 200 2 % po int c ha ng e W est e r n E ur ope 12. 9 14. 9 2. 0 N or t h Am er ica 9. 9 14. 2 4. 3 A u st r a las ia 10. 4 13. 5 3. 1 Ea st er n E ur o pe 9. 7 13. 0 3. 3 A s ia - P a c if ic 7. 8 9. 8 2. 0 L a t in Am er ica 6. 6 8. 4 1. 8 A fr ica /M id dle Ea st 2. 6 2. 3 20 .3 W O R LD 7. 9 9. 5 1. 6
  • de cr ea s e t o 3 5% bet w ee n 2002 a n d 201 5 . P a rt icula r ly no t e wor t h y i s t h e pr ed ict ed in cr ea se in t he p r o por t ion of ba by bo om e r s i n m a ny We st er n Eu r o pea n co unt r ies , s uch a s A us t r ia , S p a in, G er m a ny , It a l y a n t he U K . I n de v elo p co unt r ies , a c cor din g t o t he U nit ed N a t ions , t he p er ce nt a ge of eld er ly p eop le ( 60+ ) is f or eca st ed t o r is e fr om on e- fif t h of t he eld er ly p op ul a t i on is ex a ce r bat ed by f a llin g f er t ilit y r a t es in m a ny dev e lop c oun t r ie s, c ou ple d w it h a r ise i n hum a n lo ngev it y . Th e i n fl u en c es an d b u y e r b eh avi o u r p at t e rn s o f b ab y b o o m e rs T h e m em be r s o f t he b a by b oom er g ene r a t i on ar e qu it e u nl ik e t he ir m or e co ns er v at iv e p a r ent s’ ge ner at ion . T h ey a r e t h e child r e n o f t he r ebe ll ious ‘ s win ging six t ie s’ , g r o wi ng u p on t he so un d s of t he B ea t le s a nd t he R ollin g S t one s. B et t er ed uca t e d t ha n t he ir p a r ent s, in a t im e of gr ea t er pr o spe rit y , t he y ind u lge d in a m or e he don ist ic lif e st y le . I t h a s be en s a id t hey w e r e t he f ir st ‘ m e ge ner a t ion’ . N o w, in la t e r lif e , t hey ha v e r et a ined t h eir li ber a l, a dv ent u ro us a n d y o ut hf ul a t t it u de t o lif e. A p t ly te r m ed ‘ y o ung er o lder peop le’ t hey a b hor a n t iq ua t ed st er eot y pes of el der ly p eop l e, pr ef er r ing t o t he def in ed b y t heir a t t it ude r a t h er t h an t hei r a g e. B a b y boo m e r s a lso t en d t o b e v er y w ea lt h y . Ma ny ar e pr op er t y ow ner s a nd m a y ha v e ga in ed a n i n her it a nc e fr o m p ar ent s or o t h er r ela t iv es . T he y h a v e hig her t ha n a v er a ge in co m e o r h a v e r et ir e d w it h pr iv a t e pe nsio n p la ns. W i t h t heir ch ildr en ha v in g fl o w n t he nes t t hey ha v e gr ea t er f in a nc ia l f r ee dom a n d m or e t im e t o in dulg e t he m s elv e s. H a v in g w or k e d a ll t hei r liv es , a n d e duc at ed t heir ch ildr en, m a ny b a b y boo m er s do n ot b el iev e it is t heir r e sp ons ibil it y t o sa f egu a r d t he f ina nc ia l f ut ur e o f th eir ch ildr en b y ca r ef ully p r o t ect in g t heir ch ildr en’ s inhe r it a nce . T h ey ar e in st ea d l iqui da t ing t heir a ss et s , in t e nt o n en j o y ing t h eir la t er lif e t o t he f ull , o ft e n t hr ough con spi cuo us c ons um pt io n. T ab l e .2 P op ula t ion a ge d 4 5- 54 in t hous a nd s by c ou n t r y : d ev e lope d c oun t r ies 20 0 2- 20 15 C o u n t ry 2 0 0 2 2 0 1 0 2 0 1 5 % ch an g e 2 0 0 2 / 20 1 5 A us t r ia 1, 05 9 1 ,2 7 7 1, 3 7 1 29 S pa in 4, 92 1 5 ,7 4 1 6, 1 8 9 26 G er ma ny 10 ,9 91 12 , 9 63 13 ,5 08 23 I ta ly 7, 68 4 8 ,5 9 1 9, 3 4 7 22 U K 7, 78 6 8 ,7 3 1 9, 3 8 8 21 N ew Z e a la nd 521 607 613 18 I r e la nd 474 529 555 17 S w it z er la nd 997 1 ,1 2 0 1, 1 5 9 16 A us t r a lia 2, 66 1 3 ,0 0 6 3, 0 5 7 15
  • G r eec e 1, 35 9 1 ,4 7 6 1, 5 5 9 15 C a n a da 4, 50 5 5 ,3 2 0 5, 1 2 2 14 N et he r la nds 2, 30 1 2 ,4 9 2 2, 6 0 4 13 P o rt ug a l 1, 33 4 1 ,4 3 8 1, 5 1 1 13 N or wa y 612 640 678 11 D en m ar k 745 761 802 8 U SA 38 ,9 51 44 , 1 40 42 ,2 07 8 B elg ium 1, 42 3 1 ,5 4 9 1, 5 2 6 7 S w ed en 1, 20 6 1 ,1 7 9 1, 2 3 3 2 J a pa n 18 ,3 44 15 , 6 61 16 ,4 59 - 10 F in la nd 820 749 718 - 12 Fr a n ce 8, 26 6 7 ,6 2 6 7, 2 9 2 - 12 B a s ed on r es ea r c h con duc t ed by Eur om on it o r , t he ma in a r eas o f ex pen dit ur e in t he ba by bo om er m ar k et ar e f ina ncia l s er v ic es , t o ur i sm , f oo d a nd d r in k s, lux ur y ca r s, ele ct r ica l/ e lec t r o nic good s, c lot hin g, h ea lt h pr od uct s , a nd D I Y a n d ga r d enin g. U ns ur pr isin gly t he f ina nc ia l se r v ice s se ct or is t he la rg est in t hi s m ar ke t . B a b y bo om e r s ar e c on cer ne d w it h be i ng f in a nc ia lly sec ur e in t h eir r e t ir em e nt . A n a g eing po p ula t io n, c oup le d wi t h a r is e in h um a n lo n g e v it y , i s g iv in g r ise t o a pe nsio n’ s c r is is a c r os s Wes t er n Eur op e. B a by bo om e r s a r e t h er ef or e r ight t o b e pr eo cc upie d wi t h ho w t he y w ill m a in t a in t heir lif est y le ov e r t he lo ng t er m. T he y a r e a ct iv ely eng a gin g i n f ina nc ia l pla n nin g , bot h bef or e a nd a ft er r et ir em ent . P o pula r f ina n cia l ser v ic es p r o duc t s inc lude e ndo wm ent s , lif e in sur a n ce , pe r s on a l pe nsio ns , P EP s a nd I S A s. B a b y b oom er s h av e a d v en t ur o us at t it u des w it h a des ir e t o see t he wo r ld. In t heir r et ir em e nt f or eign t r a v el is a k ey e x pe nd it ur e. G iv e n t heir gr ea t e r le v els of so phis t ica t io n a nd ed uca t ion, ba b y b oom er s ar e m u ch m or e dem and in g of ho lida y s t ha t s uit t h eir lif est y les . T his g r o up is v er y div er se , w it h h oli da y I nt er es t r a n ging f r om a ct io n- pa c k ed a dv ent ur es t o cul tu r a lly r ich e x pe r i enc es. B a b y b oom er s w ant t o m a int a in a y ou t h f ul a ppe a r a nc e in lin e w it h t h eir m or e y o ut hf ul wa y of li v ing. F ea r of b ec om in g i nv is i ble is a gen u ine co nc er n a m on g old er ge ner a t ion s. T his im a ge c onsc ious nes s is r ef le ct ed in t he ir sp end in g o n cl ot hing , co sm et ics a nd a nt i- a ge ing pr od uct s . Lu x ur y ca r s a r e k ey st at us sy m b ols f o r t his gr oup . T h e ho m e is a no t her a r ea o f ex p end it u r e . O nc e c hild r e n ha v e f low n t he ne st , m a ny b a by boo m e r s r ede cor at e t he ho m e t o su it t h eir nee ds. E lec t r ic a l a n d ele ct r onic pur c has es a r e k ey indu lgen ces a m ong t h ese t e ch nolog ica ll y s a v v y
  • co ns um e r s . G ar den ing is a not he r p a st im e en j oy e d by o lder gen er a t ion s. H ea lt h is a ls o a pr io r ity . Ba by boo m er s inv es t in pr iva t e he a lt h i nsu r a nce a nd ov e r- t he- co unt er ph ar ma c eu t ic a l p r o duc t s t o m a int a in t he ir h ealt hy liv es . B u si n e ss o p p o rt u n i t i e s T h e s he er s iz e of t he gr ey m a r k et , w h ich is ge t t in g b igge r in m a ny co unt r ies — ch a r a c t er iz ed by c ons um er s w it h hig h dis pos a b l e i nc om e , a m p le f r ee t im e, int er es t in t r a v e l, co nce r n a b out f ina ncia l se cur it y a nd h ea lt h , a w ar ene ss of y o ut h c ult ur e a nd br a nd s, a nd des i r e f or a sp ir a t ion Liv i ng— m a k es t his m a r k et en or m ou sly at t ra ct iv e t o m a ny busines s s ec t or s. P h a r m a ceut i ca ls , he a lt h a n d be a ut y , t ec hnolo gy , t r av e l, f ina nc ia l se r v ice s, lux u ry c ar s , la v ish f ood a n d en t e rt a inm e nt ar e k e y gr ow t h se ct or s f o r t he g r e y m a rk et . H ow ev e r , s ucc es sf ul ly t a pp ing in t o t h is m a r k et w ill de p end on co m p a ni e s t r u ly un der st a nding t h e a t t it ude s, li fe st y le s a nd pu r c ha s ing int er e st s of t h is pos t - w ar g ene r a t i on. C om m u nica t ing wit h t his gr ou p is a t r ic k y bu sine ss bu t , don e r igh t , it ca n b e hug ely r ew a r d ing. Wh en t a r get ing t he old er c ons um er it is im po r t a nt t o t ar get t h eir lif e st y le a n d no t t he ir a g e. O lder peo ple d o n ot w a nt t o be r em ind e d, in a pa t r on iz ing wa y , of t heir a ge o r w hat t hey s hould b e do in g n ow t he y ar e a t a c er t a in st a ge in lif e. Wi t h a n in t e r e st in m a in t a ining a y o ut hf ul w a y of lif e t he se con sum er s ar e int er es t ed in sim ila r b ra nds t o t hose t h at a ppea ls t o y oun ger gene r a t ions . T h e k e y f or com pa nies is t o f ind a w a y of m a k in g t heir br a nds a lso a ppe a l t o a n o lder co ns um e r w it h out e x pl i cit ly t a r g et ing t his gr oup is t o use no st a lg ia . M er ce des B enz us ed t he J a nis J o plin s ong ‘ O h Lo r d w o n’ t y ou bu y m e a M er c ede s B en z’ t o gr ea t ef f ect d es pi t e t h e obv ious ir on y in t h a t t he s ong w a s wr it t en t o high lig ht t he da n ger s of ma t er i a lis m ! V o lk s wa gen ’ s new r et r o -s t y le B ee t l e h a s als o bee n po pu la r am on g t h is gr ou p. I n t he t our is m se ct or Sa g a H olid a y s , t h e lea d er in holi d a y s f or t h e ov er - 50 s, ha s ch a ng ed it s p r o duc t o ff er in g t o r e f lec t c ha n ging t r end s a m ong t h is gr ou p . I n lin e w it h t he m or e a dv ent ur ou s a t t it ude s of m a ny o lder co nsu m e r s it n ow of f er s m or e a c t ion- pa c k e d a dv ent ur e h olida y s t o f a r - f lun g des t ina t ion s. M or e r ec ent ly , Tho m a s C o ok ha s r e br a nd ed i t o v er - 50s ‘ F or ev e r Y oun g’ pr og r a m m e t o r efle ct t he d iv er se int er est s o f it s t ar get c ust om er s . It s new pr im et im e br o chu re t ar ge t s f iv e dis t inct gr oup w it h t he f ollo wi ng holi d a y t y pe s: ‘ D is cov er ’ , ‘ Lea r n’ , ‘ R ela x ’ , ‘ A ct iv e’ and ‘ Enj oy Lif e’ . C o n c l u si o n T h e ov er - 50s r epr es ent t h e la r g est seg m en t of t he po pu la t io n a cr os s Wes t er n de v elo p ed cou nt r ie s. T h is a ff lu ent m ar k et is big a nd ge t t in g big ger . H a v in g ign or ed it f or s o lon g m a r k et er s a r e f ina ll y be gi nn in g t o s ee t he e no r m ous op por t unit ies pr esent ed b y t h e gr ey m ar k et . B ut co nque r in g t his m ar k et w ill not be ea sy . T he ba by boo m er g ene r a t ion is quit e un lik e it s pr ed ec ess or s. Wit h a y o ut hf ul a n d a d v en t u r e som e s pr it e t hes e ‘ y oung er olde r p eop le’ w a nt t o b e de fi ne d by t he ir at t it ude a n d n ot t he ir a g e. O n ly t im e w ill t e ll w he t h er t od a y’ s m a r k et er s a r e up t o t he c ha lleng e.
  • Q u e st i o n s: - 1. Wh y is t he gr ey m a r k e t s o at t r a ct iv e t o bus ine ss ? 2. I den t if y t he inf lue nce s on t h e p ur cha sin g be ha v ior o f t he ov er - 50 s co ns um e r . 3. D isc us s t he c ha lleng es in v olv e d in t a r ge t ing t he gr e y m a r k et .
  • C as e 4 Th e S u d ku ri e r ( 2 0 M ar ks) T h e su dk u r ie r is a r egi ona l d a ily n ew sp a pe r in sou t h w est er n G er ma n y . O n a v er a ge 31 0 , 00 0 peop l e i n t he a r ea r e a d t he ne ws pa per r egu lar ly . T he gr ea t m a j or it y of t h ose r e a der s s ub sc r ib e t o it s hom e deliv er y ser v ice , w hi ch pu t s t h e pa per o n t he ir do or st ep s e ar ly in t h e m or ning . O n th e m ar k e t f or t he pa st 35 y e a r s, t he S ud k ur ier co nt a ins e dit or ia l s ect io ns on p olit ics t h e ec ono m y , sp or t s, loc a l ne w s, ent er t a in m en t a nd f ea t ur e s, a s we ll a s a dv e rt is ing. T h e new s pa p er is f ina ncia lly in de p e nde nt a n d it s st a ff is fr ee of a ny p olit ica l a f f ilia t i on. M a na gem ent at t he S ud k ur ier w o uld lik e t o br in g t he pa per in t o line w it h t h e cu rr e nt ne eds of it s r ea der s. F or t his pu r p os e, t he m a na gem ent t ea m is co ns ider ing t h e us e of m a r k et r e se ar ch. M an ag e m en t wo u l d l i ke t o h av e i n fo r m at i o n ab o u t t h e fo l l o wi n g . 1 Wh a t new s pa p er s or ot he r m edia ar e t he S u dk u r ier’ s ma in co m pe t it or s ? 2 D o m os t r ea der s r e a d t he S udk ur ier f or t h e loc a l ne w s, s por t s a nd cl a ss if ied a d s, a n d sh oul d t hes e se ct ion s t h er ef or e be ex pa n ded a t t he ex pen se o f t he se ct ions on p olit ics a nd t h e ec ono m y ? 3 S ho uld t he S udk uri er ’ s la y out be m od er niz ed? 4 D o m ost ly low er lev e ls o f s oc iet y r ea d t h e S ud k ur ier ? 5 I nt o w h a t po lit ica l ca t e gor y do r ea d er s a nd non -r ea der s put t h e S ud k ur ier ? 6 Wh ich sup pli er of p r o duc t s a n d se r v ice s c ons ide r t he S ud k ur ier es pec ia lly a pp r o pr ia t e f or t heir a d v er t isin g? 7 Wh a t a dv er t i sing o r in f or m at io n do t he r ea der s t hin k is m iss ing f r om t he S ud k ur ier ? Y o u a r e a n em ploy ee of t he S ud k u r ier w ho ha s b een ins t r u ct ed t o o bt a in t h e r equ est e d inf or ma t i on a nd t o p r e par e y o ur fin ding s f or t h e dec isio n- m a ker s. Y o u a r e in t h e fort u nat e pos it ion of r e cei v ing r egu la r r epor t s a bou t peo ple’ s m ed ia us e f r om t he Ar beit s gem eins ch a f t M edia - A n a ly s es e.V . R elev a nt e x c er pt s fr om t he m ost r ec ent s ur v ey ar e sh ow n her e a s T a bles C 4. 1 a nd C 4. 2 T ab l e .1 M ed ia a n aly s is o f r ea der s hip s tr uc t ur e R an g e i n C i rcu l at i o n A re a (1 ) R e ad e r s p e r ed i t i o n o f S U DKU R I ER N at i o n al av e rag e i n %R an g e To t al i n %i n % A b so l u t e T ot a l 53 .5 3 10, 00 0 10 0. 0 1 00. 0
  • G end er M en 55 .5 1 50, 00 0 4 9. 0 47. 2 Wo m e n 51 .6 1 60, 00 0 5 1. 0 52. 8 A ge G r ou ps 14- 19 y ea r s 51 .8 20, 0 00 8. 0 7. 2 20- 29 y ea r s 41 50, 0 00 1 5. 0 19. 1 30- 39 y ea r s 52 .1 50, 0 00 1 6. 0 16. 4 40- 49 y ea r s 61 .8 50, 0 00 1 6. 0 15. 2 50- 59 y ea r s 61 .1 60, 0 00 1 9. 0 16. 5 60- 69 y ea r s 53 .6 40, 0 00 1 3. 0 13. 5 70 y ea r s a nd ol der 57 .4 40, 0 00 1 3. 0 12. 2 Edu ca t io na l Le v el S ec ond a r y s cho ol w it hout a p pr ent ice sh ip 49 .4 60, 0 00 1 8. 0 17. 6 S ec ond a r y s cho ol w it h a p pr ent ice sh ip 50 .8 1 00, 00 0 3 1. 0 39. 6 C ont in uing e duc a t ion w it hout A b it ur 60 .8 1 10, 00 0 3 6. 0 27. 0 A bit ur , univ er sit y pr ep a r a t ion, uni v er sit y / c olle ge 49 .7 50, 0 00 1 5. 0 15. 8 O cc upa t io n T r a in ee, pu pi l, st ud ent 44 .7 40, 0 00 1 1. 0 11. 0 F u ll- t im e em ploy ee 54 .6 1 60, 00 0 5 0. 0 51. 7 R et ir ee , p ens ione r 57 .3 70, 0 00 2 3. 0 21. 8 U ne m plo y ed 52 .4 50, 0 00 1 6. 0 15. 5 O cc upa t io n of m a in w a ge ea r ner S elf - em ploy ed, m id- t o lar ge bus ine ss es / F r e elan cer 63 .8 20, 0 00 5. 0 3. 1 S elf - em ploy ed, s ma ll bus ine ss , / F ar m er 59 .9 30, 0 00 9. 0 8. 7 M a na ger s a nd c iv il s er va n t s 58 .6 30, 0 00 9. 0 8. 7 O t her em ploy ees a nd civ i l se r v a nt s 49 .3 1 20, 00 0 4 0. 0 42. 9 S k il led s t a f f 57 .6 1 00, 00 0 3 2. 0 32. 5 U ns k ille d st a f f 38 .7 10, 0 00 4. 0 5. 6 N et H ous eh old I nco m e/ m ont h 450 0 a nd m or e 62 .7 1 00, 00 0 3 1. 0 23. 9 350 0- 45 00 52 .7 60, 0 00 1 9. 0 20. 8 250 0- 35 00 54 .9 80, 0 00 2 6. 0 25. 9 t o 250 0 44 .1 70, 0 00 2 3. 0 29. 3 N um ber of w a ge ear ne r s 1 ea r n er 45 .4 1 00, 00 0 3 3. 0 40. 4 2 ea r n er 56 .5 1 30, 00 0 4 1. 0 42. 6 3 ea r n er 62 .7 80, 0 00 2 5. 0 16. 9 H ous eh old S iz e 1 P e r s on 41 .8 50, 0 00 1 4. 0 17. 9 2 P e r s on s 55 .5 90, 0 00 2 9. 0 31. 8 3 P e r s on s 59 .5 70, 0 00 2 2. 0 22. 4 4 P e r s on s a nd m or e 54 .8 1 10, 00 0 3 5. 0 27. 9 C hild r e n in H ous eh old C hild r e n les s t ha n 2 y e a r s of a g e 52 .7 10, 0 00 4. 0 3. 8 2 t o les s t ha n 4 y ea r s 38 .4 10, 0 00 4. 0 5. 4
  • 4 t o les s t ha n 6 y ea r s 45 .8 10, 0 00 5. 0 5. 2 6 t o les s t ha n 10 y ea r s 43 .8 20, 0 00 8. 0 8. 5 10 t o le ss t h a n 14 y ea r s 54 .1 30, 0 00 1 0. 0 9. 2 14 t o le ss t h a n 18 y ea r s 57 .1 50, 0 00 1 6. 0 13. 7 N o c hildr en u nde r 1 4 54 .9 2 50, 00 0 7 9. 0 77. 4 N o c hildr en u nde r 1 8 53 .6 2 10, 00 0 6 7. 0 68. 1 D r i v ing Lic enc e Y e s 55 .2 2 50, 00 0 8 0. 0 73. 0 N o 47 .3 60, 0 00 2 0. 0 27. 0 P r iv a t e A ut om obi le 55 .5 2 70, 00 0 8 6. 0 80. 0 G ar den ow n g a r den 60 .4 2 40, 00 0 7 6. 0 57. 0 w it h out ga r d en 39 .8 70, 0 00 2 3. 0 43. 0 ow n ho us e 62 .1 1 80, 00 0 5 8. 0 46. 0 ow n a par t m e nt 45 .9 10, 0 00 3. 0 3. 0 r ent hou se or a par t m e nt 44 .7 1 20, 00 0 3 8. 0 49. 0 Ele ct r i ca l A pp lia nc e Fr ee z er / D ee p f r e ez e 59 .6 2 00, 00 0 6 2. 0 51. 0 La st H olida y J o ur ney Wit hi n t h e la s t 12 m o nt hs 55 .1 1 90, 00 0 6 2. 0 n. a 1- 2 y e a r s a g o 51 40, 0 00 1 4. 0 n. a m o r e t h a n t w o y ear s a go 48 .6 50, 0 00 1 6. 0 n. a N ev er 55 .4 30, 0 00 9. 0 n. a La st H olida y D es t in a t ion G er ma ny 57 .4 70, 0 00 2 3. 0 n. a A us t r ia , S wit z er lan d, S out h T y r o l 48 .7 60, 0 00 2 0. 0 n. a Els ew he r e i n Eur op e 53 .4 1 30, 00 0 4 2. 0 n. a C ou nt ry out si de Eu r o pe 51 .4 20, 0 00 5. 0 n. a D id no t t r a v e l 56 .4 30, 0 00 9. 0 n. a T h er e r ea lly is a new s pa p er ca ll ed S ud k ur ier a nd t h e da t a p r o v ide d a r e r ea l. T h e ca se st udy , h ow ev er , is com pl et ely f ic t it io us . 1) En t ir e c ir cula t i on a r ea 310, 0 0 0 r ea d er s pe r e dit ion E xam p l e: 53 .5 % of peo ple o ld er t h a n 14 y ea r s in t he c ir cu la t ion of t he S u dk u r ie r r ea d t h e S ud k ur ier da ily . 55 .5 % o f a ll m en old er t ha n 1 4 y ea r s a nd 51. 6 % of w om en olde r t ha n 14 r ea d t he S u dk u r ier d a ily ; t hat is 1 50, 0 0 0 m e n a nd 1 60, 0 0 0 w om e n T ab l e .2 R ea de r b eha v iou r Wh a t pur ch a s ing inf o r m a t ion i s us ed? M edia pur ch a s ing i nf o r m a t ion f or m ediu m a n d lon g - t er m a cq uis it io n ( 11 pr od uct ar ea s; B a s is: t ot a l po pula t io n)
  • D a ily new s pa pe r s 61 % P o st er on t he st r eet 9% Le a f let s 36 % T e lev is ion 24 % R a d io 13 % M a ga z in es 27 % Fr ee new s pa p er s 49 % A dv er t ising in … . I s m os t inf or ma t iv e ( B as ic: br oa d est r ea ding g r o up) R eg iona l new s pa p e r s ( sub sc r ip t i on) 62% T e lev is ion 47% P u blic r a d io 29% P r iv a t ely ow n ed r adi o 26% M a ga z in es 27% Fr ee new s pa p er s 36% I of t en c ons ult / d epe nd on a dv er t is ing i n … . ( B as is br oa des t use r g r o up in e a ch ca s e) R eg iona l new s pa p e r s ( sub sc r ip t i on) 27% T e lev is ion 11% P u blic r a d io 8% P r iv a t ely ow n ed r adi o 6% M a ga z in es 7% Fr ee new s pa p er s 18 % C r edib ilit y of a d v er t isin g in t he m ed i a A dv er t ising in … . I s gene r a lly be liev a ble a nd r elia ble ( B as is: br oa d est us er gr oup in ea ch c a s e) R eg iona l new s pa p e r s ( sub sc r ip t i on) 49 % T e lev is ion 30 % P u blic r a d io 20 % P r iv a t ely ow n ed r adi o 1 4% M a ga z in es 1 5% Fr ee new s pa p er s 2 3% T im e s pent r ea ding d a ily n ew sp a per ( B as is: br oa d est us er gr oup ) Le ss t h a n 15 m inu t e s 7% 15 - 24 m inu t e s 21 % 25 - 34 m inu t e s 28 % 35 - 65 m i nut es 34 % M or e t ha n 65 m i nut es 10 %
  • Q u e st i o n s: - 1. Ex pla in h ow y ou w ill m et ho dic a lly go a bout co m p iling t he r equ est e d i nf or m a t io n co v er e d i n t he s ev en qu est io ns f or m a n a ge m en t . I nclude in y o ur e x pla na t ion a n es t im a t e of t h e ex pens e in v o lv ed in o bt a inin g t he inf o r m at ion s 2. D ev elop a 10- que s t ion que st ionn a ir e f or t he pu r p ose of m a k ing a sur v e y . T h is ca se w a s w r itt e n by J ens - Mo gen s H olm , pr of es sor f or ma r k et ing a t Eu r o pea n sc ho ol of bu si ne ss , R eut ling en U n iv er si t y a nd p r e sid ent of Eu ro pa is ch e F e r n hoc hs chu le H a m bu r g . T h e m at er ia l w a s dr a w n fr o m publi cly a v a ila b le so ur ce s. T he ca s e s t udy , ho w ev e r, is com ple t e ly f ict it iou s.