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Marketing Marketing Document Transcript

  • Lowe Key Entertainment — Marketing Plan 1.0 EXECUTIVE SUMMARY Lowe Key Entertainment reaches the young African American audience who is planning to or has already started a family. To reach this market, Lowe Key Entertainment must gain market leverage, form a formula for reaching the market, and measure the success of reaching the market. Therefore, Lowe Key Entertainment must recognize the importance of the Internet, release products around the same time with the necessary promotion, and monitor and compare the success of released products with those of competitors. Lowe Key Entertainment and its products must differentiate itself from its competitors by branding, keeping in touch with social trends, and keeping products accessible to the market. To do such, seasonal releases must have revenue of at least $1 million to break even. 1
  • 2.0 MISSION Lowe Key Entertainment is a production company that provides its customers with quality, ground-breaking soul and rhythm & blues music. We creatively and strategically develop artists by providing creative and economical input. Lowe Key Entertainment strives to create a balance that tailors to the artist’s and the customer’s needs. This balance is achieved by promoting creativity among artists and providing the finances and marketing strategy that reaps a profit without comprising the integrity of the company. VISION The vision of Lowe Key Entertainment is to include different audio and visual mediums of entertainment to become the leading entertainment entity among its customers. VALUES • Cultural diversity Our company recognizes the advantages a diverse staff can bring to benefit our company. Our goal is to capitalize on our diversity to create a unique culture that differentiates our company from competitors and reflects the many cultural backgrounds of our customers. • Teamwork Teamwork draws upon the many unique talents each employee brings to the company. By working together, our company is able to bring the best products and services effectively and efficiently. • Moral responsibility Lowe Key Entertainment strives to be the leading moral example within the music industry. Considering the effect a decision will have on the company and its customers is the key to maintaining our ethical standards. • Creative environment 2
  • Lowe Key Entertainment is a company that balances both the creative and business aspects of the music industry. The company provides financial resources for the artist and creative input. However, employees are divided according to expertise. Business employees are not allowed to be in the creative process, and musical employees are not allowed to tamper with the business process. • Respect for others Our company wants to create an understanding between both the business and the creative aspects of the music industry. Lowe Key Entertainment will take all employee ideas into consideration and expect employees to do the same. Disciplinary action will be taken if anyone of our employees disrespects are takes illegal action causing a threat to other employees, customers, and/or the company. CURRENT SITUATION 1. Competitive forces. R&B/Urban music is the third most consumed genre of music within the music industry. For 2005, the R&B/Urban genre shared 10.2 % of the music industry. This genre has also had an average share of 11.02 % of the music industry for the past ten years. Although this means that the genre holds a reasonable share of the music industry, this also means that there is more competition. The R&B/Urban genre often shares the same radio format and charts of the genre Rap/ Hip-hop. This places many of our labels artists in competition for the same radio airplay and chart position with Rap/Hip-hop labels. The Rap/Hip-hop genre has an average 11.63 % share of the music industry.(RIAA) There is also competition against record labels that are subsidiaries of a larger record label. Sony and Universal Records both control most of the music industry. These companies also own subsidiary R&B labels such as Motown (Universal) and J Records (Sony). Since these labels are subsidiaries of major labels, they have more control over the industry making it harder for independent labels to succeed. 3
  • 2. Economic forces. The music industry is facing a huge change in the way music is purchased. Just like LPs and analog tapes, compact discs are becoming an obsolete medium for listening and transferring music. The amount of physical CDs purchased has steadily decreased since the turn of the century. There was-8 percent change from 2004 to 2005 in the amount of CD units shipped. Contrary to the decrease in CDs purchased, there has been a huge increase in the amount of music digitally downloaded. For the period of 2004-2005, there has been a +163.3% change in singles digitally downloaded and a +198.5% change in albums digitally downloaded. This trend continues to expand. (RIAA) 3. Political forces. There have been no political influences on the music industry since the passing of the Telecommunications Act of 1996 that can significantly impact the marketing of Lowe Key Entertainment. 4. Legal and regulatory forces. Illegal downloaded has become a major issue within the music industry. Although Naspter has stopped illegal downloading and started charging consumers, there are new formats for illegally downloading music—Aries. The music industry’s responses to this issue were criticized by the public and even musicians. There are two popular defective methods the music industry has used to stop illegal downloading: legal litigations held against (a plethora of) people who have violated the copyright laws and by defectively adding preventive software to CDs, which has resulted in a recall of those CDs. It is important to monitor the affects that illegal downloading can have on the music industry. 5. Technological forces. There has been a major change in the way digital music is transferred for listening. One of the most popular is the cellular phone. Some of cellular phones can also play music videos. Music can also be transferred into small MP3 players and even sound systems in cars. Music is also being purchased as ring tones and the backdrops of video games. These new formats for music as opened other lucrative ways of marketing music. 6. Sociocultural forces. Music plays a major part in world. It is incorporated into all forms of entertainment. Social networking websites are just one of the many forms of entertainment that incorporates music. The social networking website MySpace has 4
  • allowed artists to connect with their fans increasing exposure and expanding the artist’s fan base. However, there have been reports that MySpace is being sued by major record labels for allowing fans to upload music onto their personal social networking webpage. If there is legislation against uploading music unto personal web pages, it can have either a negative impact on the music industry or a positive affect. The fans will either stop using MySpace, or purchase the music for uploading onto their MySpace page creating another form of revenue for record labels. 2.1 SWOT-TOWS Strengths • A specific genre to reach a specific audience • Small, independent company • Diversity of genre Weakness • Lack of resources • Inability to expand as easily • No distribution control Opportunity (see Appendix 6-12) • Internet download to avoid distribution manufacturers • Social networking websites for increasing exposure • Different mediums of distributing and profiting off of music Threats (see Appendix 8; 13-15) • Consolidation of music companies with other media outlets • Increase in bootleg material and its accessibility • Programmed radio station play lists example Clear Channel TOW ANALYSIS Strengths/Weakness Lowe Key Entertainment is a small genre-specific independent label. Lowe Key Entertainment must expand its opportunities to expand its financial resources. With a diverse genre of R&B and 5
  • soul (from pop acts such as Whitney Houston to real soulful acts like Al Green), Lowe Key Entertainment can reach more than one target market and even merge some of these target markets without losing the interest of either market. Opportunities/Weakness Lowe Key Entertainment has no control of distribution; however, the expansion of Internet downloading is allowing independent record labels like Lowe Key Entertainment to eliminate the need of distribution. Internet exposure on sites like MySpace has allowed artists (Cassie) to break into markets. Also by associating certain songs with a product (U2 and Itunes), it can increase exposure and sells for artists. Strengths/Threats The Telecommunications Act of 1996 and the increasing consolidations of independent record labels with larger labels (Motown and Universal) has made it harder for independent records labels to get FM radio air play and exposure. Illegal downloading is also available making it harder to reach the specific audience targeted. Lowe Key Entertainment must maintain its independency to avoid losing its target market. Weakness/Threats The increase in consolidation of the music industry and the accessibility of illegal downloading has made it harder for Lowe Key Entertainment to expand and in increase its resources. This and programmed radio play lists has also made it harder to distribute music. These threats should be eliminated are kept at a minimum. 2.2 GAP ANALYSIS GAP 1: Lowe Key Entertainment lack financial resources and leverage within the music industry because of its independency. Major record labels control most of the industry. Lowe Key Entertainment must increase exposure to gain leverage within the music industry and to maintain its independency. GAP 2: Lowe Key Entertainment has not created a formatted method of measuring success. The only measurement of 6
  • success is the number of people in the market that purchase R&B music. GAP 3: There is also no formulated formula for success. Since Lowe Key Entertainment is a relatively new record label, there is no basic formula to follow for success. 2.3 STRATEGIES TO CLOSE GAPS To maintain its independency Lowe Key Entertainment must expand its resources. One way of closing this gap is through exposure of artists on social networking websites such as MySpace, associating the music with a product such as a television show, and focusing on distribution over the Internet than over the counter. Our company must avoid losing its independency to large record labels to maintain its target market and address the issue of piracy. Closing this gap will help the company to grow. Another possible strategy to gain market leverage is to release groups of CDs and other musical products around the same time. From there, a tour can be created centered around those artists having the artist promote each other and the label simultaneously. This is called the pull strategy where distributors are forced to distribute products because the customers demand the product. To measure success, it is vital for Lowe Key Entertainment to keep records of sales and compare them to other record sales from competitors within the music industry. After such an activity is done for a reasonable amount of time, a strategy for achieving and maintaining success can be formulated. 3.0 GOALS OF ORGANIZATION AND MARKETING OBJECTIVES Lowe Key Entertainment strives to reach its market with the best in musical products within the R&B/Urban genre. One way Lowe Key Entertainment will reach this goal is by having a diverse line up of artist that can provide our customers with at least four new products available for purchase within the market. Developing a new musical act at least every two years and gaining a 10% share of R&B/Urban genre will help provide our customers with more than four new quality products for purchase each year. 7
  • 3.1 MARKETING STRATEGY Lowe Key Entertainment is creating a niche for itself within the music industry which gives the company room to grow. It is important to separate our products from others by creating a loyal fan base. Our market is for people who share a love of R&B and soul music. To reach this audience it is important to maintain radio airplay on the right format, keep in touch with social trends, and to keep in touch with the markets changing needs. It is also important to keep our products accessible for our market. Being aware of the changes within the music industry and maintaining independence are the keys to keeping our products accessible. Our products should also reflect quality for a reasonable price. 3.2 Marketing Objectives The mobility of music has made a single song more marketable; therefore, it would be lucrative to integrate the products into other industries besides the music industry. The marketing strategy is to associate our products with economically stable products such as a model cell phone, a popular TV show, or with a movie or video game. The best way to reach our market is to allow our product to be accessible on the Internet and to rely on the Internet as a primary source for promotion and revenue. The Internet is known for increasing exposure and has become a very important part of everyday life. It is not only used for entertainment but also for business and work. By recognizing the importance of the Internet, the potential market can expand. For music fans, print media is one way of finding more about music and the artist. Magazines are one of the most popular print mediums to find information about an artist. Lowe Key Entertainment will promote artists and their products through interviews. It is important to have the artist on the cover of the magazine which forces fans to recognize that the artist is inside the magazine and is promoting a product immediately. 3.3 Financial Objectives 8
  • 1. to create a revenue of over $1 million for the year 2. to steadily increase revenue by 10% the following 2 years 3. and to have 5% profit of revenue the next two years. 3.4 TARGET MARKET IDENTIFICATION Using research from Mediamark Research Inc., the approximate size of the target market is 6,456,267 to 69,168,778 people. The best case scenario is that a population of 69,168,778 purchases musical products that are available within the market each year from Lowe Key Entertainment. The worst case scenario is that less than 6,456,267 of the population purchase the products available within the market each year from Lowe Key Entertainment. The population total for the best case scenario was calculated by averaging all of the prominent demographics Total ‘000 data from the research database. The population total for the worst case scenario was calculated by averaging all of the prominent demographics Projected Count ‘000 data. (The Proj ‘000 is the projected full population of that demographic, example Ages 18-24, who have used a similar product. For example, projected to the full population, 3,719,000 people Ages 18-24 has bought rap music within the last 12 months.) (See Appendix*; include how to read MRI in appendix) The demographics of the target market: - Ages 18-24 - Martial status: single - Black/African American - Education: post graduate - Black/African American only - Adults 18-34 - Men 18-34 - With Child Age 12-23 months - <1 year at present Address These demographics were divided into segments to determine the target market segments. These target market segments were divided into two segments. One of the segments is more inclusive of the population pool than the other. The more inclusive target market segment includes the following demographics: 9
  • - Ages 18-24 - Martial status: single - Black/African American This target market will now on be referred to Target Segment 2. The least inclusive target market segment includes the following demographics: - Ages 18-24 - Martial status: single - Black/African American - Education: post graduate - Black/African American only - Adults 18-34 - Men 18-34 - With Child Age 12-23 months - <1 year at present Address This target market segment will be referred to as Target Segment 1. The demographic profile data that is not included in the demographic profile data of Target Segment 2 occurred less often within the research data; therefore Target Segment 1 is more specific. 3.5 CUSTOMER REQUIREMENTS Target Segment 1 Target Segment 1 is more persistent about purchasing music from their favorite artists. This segment expects the best product from an artist although they buy more of products than the other target segment. This segment seems to more devoted fans the other segment; therefore, they want to know more about the artist and buy more than just the music. They also buy other products like T- shirts associated with the artist. Because this target segment is young and either single or just starting a family, it is safe to assume that this market is price- oriented. It is important to price the products at a reasonable price for this target segment. Target Segment 2 10
  • Target Segment 2 is not persistent in purchasing music. Most likely, they do not have a favorite artist. Instead, music is only purchased with leisure money. Music is taken normally purchased at a discount. They normally purchase music from rack jobbers like Wal-Mart and Target. Therefore, music is a secondary purchase. It is normally purchased with other, mostly non-related, products. This segment is not as financially stressed as the other segment. Therefore, price is not a primary concern; instead, they are more concerned with what type of music its. Sound and musical quality is also not a primary concern. This segment normally gravitates to more danceable and pop- oriented music. 4.0 IMPLEMENTATION STRATEGY 4.1 ACTION PLAN 1 A. Description: Create a promotion plan for to promote artist and their music. This promotion is plan is focused on getting radio airplay for the first single on the urban contemporary radio format. B. Objective: The promotion plan should reach the desired target market. The target market should know what product is being promoted, where it can be purchased, when it can be purchased, and who are the artist and company offering the product for purchase. The mediums for promotion should be clearly identified and the costs associated with using the mediums. Five-thousand purchases/radio spins of the single are expected for the first week for. C. Target Market: The main target markets for getting radio airplay is West North Central, East North Central, South Central, South Atlantic, and Middle Atlantic regions. The other regions (Pacific, Mountain, and New England) are secondary target markets, meaning that financial resources should not be stressed in those regions as they are in main the main target regions. 11
  • Urban Contemporary: Audience Share by Region Mon-Sun, 6AM-Mid, Persons 12+, AQH Shares 55 42 129 101 38 117 103 106 West North Central East North Central South Central South Atlantic Mountain Pacific New England Middle Atlantic *Index-100 percent is the norm. * Reproduced from Arbitron 2006 *Format Share-percentage of those in the Metro area listening to a particular radio format. 12
  • Urban AC: Audience Composition Percent of Audience by Demographic Mon-Fri, 6AM-Mid 25.10 % 20.20% 19.40 % 18.30% 5.40% 3.90% 4.60% 3.00% P45-4 P50-5 P55-6 P12-17 P18-24 P25-34 P35-44 9 4 4 P65+ D. Description of Action Plan: A single must be chosen for radio airplay. All forms of the single (radio edits, instrumental, etc.) should be included. The proper radio formats for the single to be played on should then be targeted. A radio promotion budget should then be devised. The following graphs should be of aid when deciding when and where to market for radio promotions: 13
  • Black Listeners Favorite Formats 24.00% 20.30% 13.40% 10.60% Urban Urban AC Urban CHR Urban Contemporary Religious *Recopied version from Arbitron 2005 14
  • Urban Contemporary Listeners Ethnic Composition* (Black Adult, Black Contemporary, and Black Dance Music) AQH Persons *Reproduced version from Arbitron 2006 *AQH (Average Quarter-Hour Persons)-The average number of persons listening to a particular station for at least 5 min. during a 15 min. segment. *Only in DST-controlled markets 15
  • Black Radio: Urban Contemporary AQH Share of Listening by Daypart Persons 12+ 29.40% 26.00% 24.40% 23.30% 21.60% 24.40% Mon-Sun 6AM-Mid Mon-Fri Mon-Fri Mon-Fri Mon-Fri Sat-Sun 6AM-10 10AM-3 3PM-7P 7PM- 6AM- AM PM M Mid Mid *Reproduced from Arbitron 2006 E. Responsibility: This action plan will be assigned to the radio promotions department. The workload will then be divided by regions. Each team will have an experienced team leader and assign further responsibilities thereafter. F. Timing: The radio promotions plan should be done and put into action within a month. Radio promotion will continue for at least three months for the first single. G. Budget: The expected budget for radio promotions should is in the Urban AC radio format is $20,000. The leader of the radio promotions department should then allocate a budget for each region. H. Controls: For the radio department, billboard charts will be monitored. The ultimate goal is to reach number 1 on the Hot R&B/Hip Hop Chart, Hot R&B/Hip Hop Airplay Chart, and Hot R&B/Hip Hop Single Sales. After those chart positions are reached, the goal should be to reach the top 10 on the Hot 100 Chart. To reach those positions, the single should reach number 1 on the Bubbling Under Hot R&B/Hip Hop Chart first. All released singles should then steadily increase to reach 16
  • number 1 on all charts. It is important to compare charting results with the previous weeks’ chart positions. After such is done, the charting results for the singles should then be compared with the chart positionings of the album. The radio promotions team will be divided by regions. There are 7 regions—Pacific, Mountain, West North Central, East North Central, South Central, South Atlantic, Middle Atlantic, and New England. The radio plays in each region should be compared among each other and the charting positions on the Billboards. 4.2 ACTION PLAN 2 A. Description: Create a promotion plan for to promote artist and their music. This promotion is plan is focused on getting radio airplay for the first single on the urban adult contemporary radio format. B. Objective: The promotion plan should reach the desired target market. The target market should know what product is being promoted, where it can be purchased, when it can be purchased, and who are the artist and company offering the product for purchase. The mediums for promotion should be clearly identified and the costs associated with using the mediums. Five-thousand purchases/radio spins of the single are expected for the first week for. C. Target Market: The main target markets for getting radio airplay is South Central, South Atlantic, East North Central, and Middle Atlantic regions. The other regions (Pacific, Mountain, New England, and West North Central) are secondary target markets, meaning that financial resources should not be stressed in those regions as they are in main the main target regions. 17
  • Urban AC: Audience Share by Region Mon-Sun, 6AM-Mid, Persons 12+ 7 31 88 95 49 99 118 117 West North Central East North Central South Central South Atlantic Mountain Pacific New England Middle Atlantic *Index-100 percent is the norm. * Reproduced from Arbitron 2006 *Format Share-percentage of those in the Metro area listening to a particular radio format. This target is African Americans from the age of 25-35. The following graph should be used for support: 18
  • Urban AC: Audience Composition Percent of Audience by Demographic Mon-Fri, 6AM-Mid 26.90 % 15.20 % 13.70 11.50 14.40 % % % 8.10% 6.60% 3.70% P12-17 P18-24 P25-34 P35-44 P45-49 P50-54 P55-64 P65+ *Reproduced from Abritron 2006. D. Description of Action Plan: A single must be chosen for radio airplay. All forms of the single (radio edits, instrumental, etc.) should be included. The proper radio formats for the single to be played on should then be targeted. A radio promotion budget should then be devised. The following graph should be of aid when deciding when and where to market for radio promotions: 19
  • Black Radio: Urban AC AQH Share Listening by Daypart (‘80s/90s/current hits) Persons 12+ 24.10% 21.50% 21.50% 23.40% 20.80% 22.30% Mon-Sun 6AM-Mid Mon-Fri Mon-Fri Mon-Fri Mon-Fri Sat-Sun 6AM-10 10AM-3 3PM-7P 7PM- 6AM- AM PM M Mid Mid *Reproduced from Arbitron 2006 E. Responsibility: This action plan will be assigned to the radio promotions department. The workload will then be divided by regions. Each team will have an experienced team leader and assign further responsibilities thereafter. F. Timing: The radio promotions plan should be done and put into action within a month. Radio promotion will continue for at least three months for the first single. G. Budget: The expected budget for radio promotions should is in the Urban AC radio format is $20,000. The leader of the radio promotions department should then allocate a budget for each region. H. Controls: For the radio department, billboard charts will be monitored. The ultimate goal is to reach number 1 on the Hot Adult R&B Chart Airplay. After those chart positions are reached, the goal should be to reach the top 10 on the Hot 100 Chart. All released singles should steadily increase to reach number 1 on all charts. It is important to compare 20
  • charting results with the previous weeks’ chart positions. After such is done, the charting results for the singles should then be compared with the chart positionings of the album. The radio promotions team will be divided by regions. There are 7 regions—Pacific, Mountain, West North Central, East North Central, South Central, South Atlantic, Middle Atlantic, and New England. The radio plays in each region should be compared among each other and the charting positions on the Billboard charts. 4.3 Action Plan 3 A. Description: Create a promotion plan for to promote artist and their music. This promotion is plan is focused on exposing the artist through the television advertisement. B. Objective: The promotion plan should reach the desired target market. The target market should know what product is being promoted, where it can be purchased, when it can be purchased, and who are the artist and company offering the product for purchase. The mediums for promotion should be clearly identified and the costs associated with using the mediums. C. Target Markets: Generally, Target Segment 1 should be targeted first. Once Target Segment 1 is reached, Target Segment 2 should be reached next. D. Description of Action Plan: TV commercials and music videos should be played during the 11:30 PM – 1:00 AM time slots Monday – Friday. This time slot is the most beneficial for reaching both Target Markets. The primary channels for reaching such markets should be MTV2. MTV and VH1 should then follow. Award shows/specials are the most popular TV programs viewed by our target market. TV commercials and performances should be pushed during awards shows/specials. (See Appendix 4) E. Responsibility: This action plan will be assigned to the promotions department team dealing with television. There should be an experienced team leader to assign further responsibilities. 21
  • F. Timing: The television ads should be playing within two weeks before the album release. The ad must be approved by the executive at least two months before the release of the album. G. Budget: The expected budget for the television ad is $10,000. H. Controls: The ratings for the TV shows viewed during the ad slots should be used to figure out an approximate number of people who viewed the commercial. The number viewed should be compared with the chart positionings of both the single and the album. More than 10% of those who viewed the ad should have purchased the single, album, or both. 4.4 ACTION PLAN 4 A. Description: Create a promotion plan for to promote artist and their music. This promotion is plan is focused on exposing the artist on television, websites, and any other medium that will display music videos. B. Objective: The promotion plan should reach the desired target market. The target market should know what product is being promoted, where it can be purchased, when it can be purchased, and who are the artist and company offering the product for purchase. The mediums for promotion should be clearly identified and the costs associated with using the mediums. C. Target Markets: Generally, Target Segment 1 should be targeted first. Once Target Segment 1 is reached, Target Segment 2 should be reached next. D. Description of Action Plan: TV commercials and music videos should be played during the 11:30 PM – 1:00 AM time slots Monday – Friday. This time slot is the most beneficial for reaching both Target Markets. The primary channels for reaching such markets should be MTV2. MTV and VH1 should then follow. Award shows/specials are the most popular TV programs viewed by our target market. TV commercials and performances should be pushed during awards shows/specials. (See Appendix 4) 22
  • E. Responsibility: This action plan will be assigned to the promotions department team dealing with music videos. There should be an experienced team leader to assign further responsibilities. F. Timing: The music video should be playing within one month before the album release. The video concept must be approved by the executive before production begins. G. Budget: The expected budget for the music video is $50,000. H. Controls: The goal of the music video is to reach number one on all music countdowns and number one in video rotations. The music videos charting on countdowns (TRL, 106 & Park, etc.) and video rotations should be compared with the Billboard charting positions of both the album and single. The success of both the album and single should be parallel with the success of the music video. The ratings for the TV shows and countdowns should also be compared with the singles’ and album’s chart positions. There is an expected 5% increase in sales for the week (album, single, or both) if the music video reaches an audience of more than 50,000. 4.5 ACTION PLAN 5 A. Description: Create a promotion plan for to promote artist and their music. This promotion is plan is focused on exposing the artist through magazine ads. B. Objective: The promotion plan should reach the desired target market. The target market should know what product is being promoted, where it can be purchased, when it can be purchased, and who are the artist and company offering the product for purchase. The mediums for promotion should be clearly identified and the costs associated with using the mediums. C. Target Markets: Generally, Target Segment 1 should be targeted first. Once Target Segment 1 is reached, Target Segment 2 should be reached next. 23
  • D. Description of Action Plan: Based on data gathered from Mediamark Research Inc., Lowe Key Entertainment’s target market reads Ebony, Essence, Outside, Spin, Jet, and Vibe magazines most often. The promotion team should push for interviews and advertisements within these magazines. It is also important to avoid putting interviews and ads in the magazines that may hinder reaching the desired target market. For example, it would be unreasonable to advertise a male artist whose primary target market is men 18-35 in Essence since Essence’s target market is women. (See Appendix 1-3) The magazine ads should be effective and efficient. This means that the ads should be placed where it can immediately capture the target market’s attention without exhausting all of the resources necessary for reaching the target market. E. Responsibility: This action plan will be assigned to the promotions department team dealing with print and public relations. There should be an experienced team leader to assign further responsibilities. F. Timing: The magazine ads should be placed within the magazine one month before the album release. The ad must be approved by the executive at least two months before the release of the album. G. Budget: The expected budget for the magazine ads is $10,000. H. Controls: The circulation numbers for each magazine should be compared with the sales for the album. There is an expected 25% increase in sales for each circulation number over 50,000 per magazine. 4.6 ACTION PLAN 6 A. Description: Create a promotion plan for to promote artist and their music. This promotion is plan is focused on exposing the artist through magazine interviews. B. Objective: The promotion plan should reach the desired target market. The target market should know what product 24
  • is being promoted, where it can be purchased, when it can be purchased, and who are the artist and company offering the product for purchase. The mediums for promotion should be clearly identified and the costs associated with using the mediums. C. Target Markets: Generally, Target Segment 1 should be targeted first. Once Target Segment 1 is reached, Target Segment 2 should be reached next. D. Description of Action Plan: Based on data gathered from Mediamark Research Inc., Lowe Key Entertainment’s target market reads Ebony, Essence, Outside, Spin, Jet, and Vibe magazines most often. The promotion team should push for interviews and advertisements within these magazines. It is also important to avoid putting interviews and ads in the magazines that may hinder reaching the desired target market. For example, it would be unreasonable to advertise a male artist whose primary target market is men 18-35 in Essence since Essence’s target market is women. (See Appendix #1-3) E. Responsibility: This action plan will be assigned to the promotions department team dealing with print and public relations. There should be an experienced team leader to assign further responsibilities. F. Timing: The magazine interviews should be placed within the magazine at the most two months before the album is release. G. Budget: The expected budget for the magazine interviews or as little to none. The team in head of public relations should try to convince magazines to put interviews and the artist on the cover of their magazines. H. Controls: The circulation numbers for each magazine should be compared with the sales for the album. There is an expected 25% increase in sales for each circulation number over 50,000 per magazine. 4.7 ACTION PLAN 7 25
  • A. Description: Create a promotion plan for to promote artist and their music. This promotion is plan is focused on correlating music products with other products that compliment the music product. B. Objective: The promotion plan should reach the desired target market. The target market should know what product is being promoted, where it can be purchased, when it can be purchased, and who are the artist and company offering the product for purchase. The mediums for promotion should be clearly identified and the costs associated with using the mediums. C. Target Markets: Generally, Target Segment 1 should be targeted first. Once Target Segment 1 is reached, Target Segment 2 should be reached next. D. Description of Action Plan: The promotions department should be aware of new products with potential success at sales with the target market and products that have a reputation of being a successful with the target market. The following tables should aid in choosing which products are the most beneficial: 26
  • Black Urban AC Listeners Represen Index t (100= % of This% Black Black Urban Adult Contemporary Strengths of the Urban AC National This format's black listeners are more Listener likely to: Category s Average) Live in a household planning to buy a used full-size car in the next 12 months 47.00% 2.70% 127 Live in a household planning to buy an MP3 player in the next 12 months 45.30% 3.20% 122 Live in a household that has spent $200+ on groceries in the past 7 days 42.00% 12.00% 113 Live in a household that has a home improvement loan 45.10% 3% 122 Have gone in-line skating in the past 12 months 43.10% 3.90% 116 Have gone bowling in the past 12 months 41.60% 23.90% 112 Have attended movies 3+ times in the past 3 months 41.90% 22.40% 113 Have Eaten at fast-food restaurants 5+ times in the past 30 days 39.20% 61.70% 106 Have children in household 40.80% 57.00% 110 *Reproduced from Abritron 2005 27
  • Black Urban AC Listeners Index Represent (100= This% % of Black Black Urban Adult Contemporary Strengths of the Urban AC National This format's black listeners are more likely to: Category Listeners Average) Live in a household planning to buy a used full-size car in the next 12 months 53.90% 5.60% 129 Live in a household planning to buy an MP3 player in the next 12 months 57.00% 9.70% 137 Live in a household that has spent $200+ on groceries in the past 7 days 56.90% 11.90% 113 Live in a household that has a home improvement loan 47.70% 8% 115 Have gone in-line skating in the past 12 months 53.70% 4.30% 129 Have gone bowling in the past 12 months 54.00% 16.10% 130 Have attended movies 3+ times in the past 3 months 47.80% 22.70% 115 Have Eaten at fast-food restaurants 5+ times in the past 30 days 47.60% 66.40% 114 Have children in household 50.80% 63.20% 122 * Reproduced from Arbitron 2005 E. Responsibility: This promotions plan should be given to the promotions department. There will be a general team that deals with product correlation. F. Timing: The promotion plan should be at least two months before the release of the album or single. The music product should be released at the same time the other product is released. G. Budget: The expected budget should be kept to a minimum of fees, such as legal fees for negotiating the mechanical license. H. Controls: The sales of the non-musical product should be parallel with the sales of the musical product. There should 28
  • not be more than a 5% difference between the inventory sale count for the two products. If the non-musical product has sold 50,000 items, the music product must sale between the range of 47,500 - 52,500. 4.8 ACTION PLAN 8 A. Description: Create a promotion plan for to promote artist and their music. This promotion is plan is focused on exposing the artist through web ads. B. Objective: The promotion plan should reach the desired target market. The target market should know what product is being promoted, where it can be purchased, when it can be purchased, and who are the artist and company offering the product for purchase. The mediums for promotion should be clearly identified and the costs associated with using the mediums. C. Target Markets: Generally, Target Segment 1 should be targeted first. Once Target Segment 1 is reached, Target Segment 2 should be reached next. D. Description of Action Plan: There should be web ads on MTV.com. These web ads should include the music video or the song and the release date. Drop-down banners should be located on pages with tags similar to the artist, such as an article about CD releases for that season. (See Appendix 4) E. Responsibility: This action plan will be assigned to the promotions department team dealing with Web and Internet public relations. There should be an experienced team leader to assign further responsibilities. F. Timing: Web ads should be placed two weeks before the release of the album and two weeks within the release of the album. The same should be done for single releases except single releases should target sites where the single can be downloaded. G. Budget: The expected budget for webs ads is $10,000. H. Controls: The number of tabs on each website where advertising is placed should be calculated. Once that is done, 29
  • those tabs should be compared with the sales of the album or single for that week. The number of tabs versus the number of clicks on the ad should then be compared. With every click, there is an expected increase in sales for the album or single. 4.9 ACTION PLAN 9 A. Description: Create a website for the artist and/or musical product. B. Objective: The website (MySpace) should reach the desired target market. The target market should know what product is being promoted, where it can be purchased, when it can be purchased, and who are the artist and company offering the product for purchase. C. Target Markets: Generally, Target Segment 1 should be targeted first. Once Target Segment 1 is reached, Target Segment 2 should be reached next. D. Description of Action Plan: MySpace is the assumed best website format to promote the artist. There should be about one or two websites. One for the artist and the other for the musical product. The singles should play singles. Any unreleased singles should me shorter than the original radio single. The unreleased single should include only one verse and the chorus (less than 2 min). (www.myspace.com/tonexworld) E. Responsibility: This action plan will be assigned to the promotions department team dealing with Web and Internet public relations. There should be an experienced team leader to assign further responsibilities. F. Timing: The websites for both the artist and the product should be updated two months prior to the release of the musical product. G. Budget: The expected budget for both web pages is $500. H. Controls: The number of tabs on each website should be calculated. Once that is done, those tabs should be compared 30
  • with the sales of the album or single for that week. The number of tabs versus the number of clicks on the ad should then be compared. With every 25 clicks, there is an expected 5% increase in sales for the album or single. The number of plays on the player should also be compared with the radio airplay of the single. The number of plays should correlate with the radio airplay of the single based on Billboard. 4.10 ACTION PLAN 10 A. Description: Distribution through rack jobbers to gain market leverage (Wal-Mart, Target, etc.). B. Objective: The distributing CDs through rack jobbers should reach the desired target market. This strategy will be used to gain market leverage through low pricing. This strategy is known as sales-oriented pricing. C. Target Markets: Generally, Target Segment 1 should be targeted first. Once Target Segment 1 is reached, Target Segment 2 should be reached next. D. Description of Action Plan: All distribution through rack jobbers should grab the target market’s attention. This means that most CDs should be placed where the consumers can see it. The number of physical CDs purchased has decreased while Internet downloading has increased. The percentage of music purchased at “other stores” has not reached lower than 30% with the lowest percentage at 31.5% in 1996 and the highest percentage at 53.8% in 2004. The number of music downloaded has increased 163.3% for singles (2004-2005) and 198.5% for albums (2004-2005). The change in the number of physical CDs shipped has decreased -8% (2004-2005). There has been an average decrease of -5.52% from 2000 to 2005. Therefore it is important to expect the number of physical CDs shipped to decrease at least -5.52% each year. From 1996 to 2005, the R&B/Urban genre has shared an average 12.24% share of the industry. This data should be used to estimate the number of CDs that should be physically shelved each year. (See Appendix 11,12) 31
  • E. Responsibility: This action plan will be assigned to the sales and promotion department. There will be a team formed for each region. There should be an experienced team leader to assign further responsibilities. F. Timing: Retailers should have the CDs in the week of the release date. (This will reduce bootlegging.) G. Budget: The expected budget for distribution through rack jobber is $50,000. H. Controls: The data used to figure out the number of physical CDs that should be released for that year should correlate with the sales of the album or single. For example, if there is an expected sale of 250,000 units purchased per each CD for that year, 250,000 CDs should have been physically purchased per each CD that year. There should be no more than a -10% difference in the actual sales and the estimated sales of physical CDs. 4.11 ACTION PLAN 11 A. Description: Distribution through major music downloading services (iTunes, Napster, etc.). B. Objective: The distribution through the Internet should reach the desired target market. This strategy will be used to gain market leverage through low pricing. C. Target Markets: Generally, Target Segment 1 should be targeted first. Once Target Segment 1 is reached, Target Segment 2 should be reached next. D. Description of Action Plan: All distribution through Internet should grab the target market’s attention. The number of physical CDs purchased has decreased while Internet downloading has increased. The percentage of music purchased at “other stores” has not reached lower than 30% with the lowest percentage at 31.5% in 1996 and the highest percentage at 53.8% in 2004. The number of music downloaded has increased 163.3% for singles (2004-2005) and 198.5% for albums (2004-2005). The change in the 32
  • number of physical CDs shipped has decreased -8% (2004-2005). There has been an average decrease of -5.52% from 2000 to 2005. From 1996 to 2005, the R&B/Urban genre has shared an average 12.24% share of the industry. This data should be used to estimate the number of music downloads each year. By estimating the number of music downloads for that year, the budget for web promotion for downloading can be devised (See Appendix 11,12) E. Responsibility: This action plan will be assigned to the sales and promotion department. There should be an experienced team leader to assign further responsibilities. F. Timing: Music should be available for downloading on its release date. G. Budget: The expected budget for distribution through the Internet is $10,000. H. Controls: The data used to figure out the number of music downloads for that year should correlate with the sales of the album or single. For example, if there is an expected sale of 500,000 downloads for each album for that year, 500,000 downloads should have been purchased per each album that year. There should be no more than a -10% difference in the actual sales and the estimated sales of downloads. 4.12 ACTION PLAN 12 A. Description: Distribution through special retailers to reach our target market (ex. Starbucks). B. Objective: The distribution of CDs through special retailers should reach the desired target market. This strategy should be used to penetrate new products within the market. C. Target Markets: Generally, Target Segment 1 should be targeted first. Once Target Segment 1 is reached, Target Segment 2 should be reached next. D. Description of Action Plan: All distribution through special markets should grab the target market’s attention. This means that most CDs should be placed where the consumers can see it and music from the CD should be heard over the 33
  • intercom. For this strategy to be effective there should be no more than five other musical products available for purchase. The number of physical CDs purchased has decreased while Internet downloading has increased. The percentage of music purchased at “other stores” has not reached lower than 30% with the lowest percentage at 31.5% in 1996 and the highest percentage at 53.8% in 2004. The number of music downloaded has increased 163.3% for singles (2004-2005) and 198.5% for albums (2004-2005). The change in the number of physical CDs shipped has decreased -8% (2004-2005). There has been an average decrease of -5.52% from 2000 to 2005. Therefore it is important to expect the number of physical CDs shipped to decrease at least -5.52% each year. From 1996 to 2005, the R&B/Urban genre has shared an average 12.24% share of the industry. This data should be used to estimate the number of CDs that should be physically shelved each year. (See Appendix 11,12) The data from Urban Adult Contemporary Strengths and Urban Contemporary Strengths tables should assist in deciding which special retailers should be used. Sixteen percent of our target market who listens to Urban AC radio formats has gone bowling in the last 12 months. Therefore, it is probable to use a bowling alley as a special retailer. E. Responsibility: This action plan will be assigned to the sales and promotion department. There should be an experienced team leader to assign further responsibilities. F. Timing: Special retailers should have the CDs in the week of the release date. (This will reduce bootlegging.) G. Budget: The expected budget for distribution through special retailers is $20,000. H. Controls: The data used to figure out the number of physical CDs that should be released for that year should correlate with the sales of the album or single. For example, if there is an expected sale of 250,000 units purchased per each CD for that year, 250,000 CDs should have been physically purchased per each CD that year. There should be no more than a -5% difference in the actual sales and the estimated 34
  • sales of physical CDs. Sales from special retailers should be at least 10% of the estimated CD sales. 4.13 ACTION PLAN 13 A. Description: Promotion plan for retailers to follow. This includes posters and other forms of advertisement used to attract customers. B. Objective: Promotions through retailers should reach the desired target market. The target market should have a full understanding of the product being offered. C. Target Markets: Generally, Target Segment 1 should be targeted first. Once Target Segment 1 is reached, Target Segment 2 should be reached next. D. Description of Action Plan: All promotion should grab the target market’s attention. This means that most advertisement should be placed where the consumers can see. The product should be near the advertisement are direct the customer in the direction of the product. The advertisement must be distinctive to be effective. E. Responsibility: This action plan will be assigned to the sales and promotion department. Teams will be regionally formed. There should be an experienced team leader to assign further responsibilities. F. Timing: Promotional devices should be placed in the retailer’s store the week of the product release. G. Budget: The total expected budget is $15,000. H. Controls: The revenue from the musical product sold from that retailer should cover the expenses used for promotional advertisement in the retailer’s store. Therefore, if $100 was used for promotional advertising, there should be $100 in revenue from the sale of the product in the retailer’s store. 4.14 ACTION PLAN 14 35
  • A. Description: Merchandise the label the artist, musical product, and the label. (This includes making T-shirts, personal posters, etc.) B. Objective: The objective of this action is to increase product awareness, brand the label and its artists and products, and to provide over means of income to cover expenses to increase market leverage. C. Target Markets: Generally, Target Segment 1 should be targeted first. Once Target Segment 1 is reached, Target Segment 2 should be reached next. Description of Action Plan: All merchandising should grab the target market’s attention. By merchandising, the label and artist becomes more of a brand. Merchandising can resort in free promotion. One example is if a fan wears a T- shirt with an artist on it, other people get to see the T-shirt. D. Responsibility: This action plan will be assigned to the sales and promotion department. There should be an experienced team leader to assign further responsibilities. E. Timing: Merchandise should be available during tours and album release signings. F. Budget: The expected budget for distribution through special market is $10,000. G. Controls: The sale of merchandise should boost and compliment the sale of musical product. If the merchandise is available, so should the music product be available. Therefore, the number of merchandises sold should equal the number of CDs sold if the merchandise is available for purchasing. There should be no more than a -5% difference between the units of merchandise sold and the units of CDs sold. 4.15 ACTION PLAN 15 A. Description: Create a tour for Lowe Key Entertainment artist released for during that season. 36
  • B. Objective: The objective of this action is to increase product awareness and to increase market leverage. C. Target Markets: Generally, Target Segment 1 should be targeted first. Once Target Segment 1 is reached, Target Segment 2 should be reached next. D. Description of Action Plan: Artist released within the same season should tour together. This tour should touch cities where the target markets reacted the most to the products. Cities that have a high potential of reaching a target market should be touched also. Merchandise should be available during tours and album release signings. Sponsors should be sought to support the tour. Sponsorship should come from the local radio stations, certain products, and the venues. E. Responsibility: This action plan will be assigned to the promotion department. There should be an experienced team leader to assign further responsibilities. F. Timing: Touring should begin at least a month after the release of the album. G. Budget: The expected budget for touring is 100,000 with sponsorship. H. Controls: Five percent of the population should correlate with the number of CDs purchased for that week in the region toured. 4.16 ACTION PLAN 16 A. Description: Create a fan club for the artist signed to Lowe Key Entertainment. B. Objective: The objective of this action is to get contact information from loyal consumers to market directly to them. C. Target Markets: Target Segment is the target market because this segment is probably more loyal than Target Segment 2 or any other target segment. However, all loyal consumers should be included in the fan base. 37
  • D. Description of Action Plan: All consumers should be asked to join the fan club. Those who join will generally be accepted as a loyal consumer. Consumers should be asked through the website, through notes listed in products purchased, and through touring. Further information should be inquired out about what product the consumer purchased last from Lowe Key Entertainment, when and where the product purchased, what does the consumer like about the product, and preferred contact. The consumer should be given incentives to join the fan club. Examples of such incentives include reduced ticket prices and exclusive downloads. E. Responsibility: This action plan will be assigned to a fan club leader. The responsibility of further assignment is given to the fan club leader. F. Timing: This process should be continuous. G. Budget: The expected budget is $10,000 per year. This includes the cost of incentives given to members of the club. H. Controls: The number of members of the fan club should equal the number of music products purchased within the week of the product release. 4.17 ACTION PLAN 17 A. Description: Release free products to the media for review. B. Objective: The objective of this action is to increase product awareness. C. Target Markets: Target market is magazines, radio stations, and/or any other critc. D. Description of Action Plan: Free goods should be released to critics in hope of favorable reviews. The critic should know that the product is only for promotional purposes. These products can be used for other promotional activities such as radio free giveaways. 38
  • E. Responsibility: This action plan will be assigned to the promotion and public relations department. There should be an experienced team leader to assign further responsibilities. F. Timing: Free goods should be released at least two weeks before the release of the album. G. Budget: The expected budget for free goods is $500. H. Controls: The amount spent should be recovered within the first week of the release. Favorable reviews are also expected. 4.18 ACTION PLAN 18 A. Description: Schedule CD signings in major at major stores. B. Objective: The objective of this action is to increase product awareness. C. Target Markets: Generally, Target Segment 1 should be targeted first. Once Target Segment 1 is reached, Target Segment 2 should be reached next. D. Description of Action Plan: Artist should have in store signings to reach fans. The artist should sign autographs and take pictures. E. Responsibility: This action plan will be assigned to the promotion department. There should be an experienced team leader to assign further responsibilities. F. Timing: This should occur during the first two weeks of the album release. G. Budget: The expected budget should be kept at a minimum to none. H. Controls: The number of attendees present should have purchased the CD. 39
  • 4.19 Proposed Implementation Schedule Production for Artist 1 Promotion Plan Artist 1 Promtion Artist 1 Production for Artist 2 Promotion Plan Artist 2 Promtion Artist 2 Production for Artist 3 Promotion Plan Artist 3 Promtion Artist 3 Production for Artist 4 Promotion Plan Artist 4 Promtion Artist 4 Tour Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec *Promotion will normally last a year. 40
  • 5.0 FINANCIAL ANALYSIS AND PROJECTIONS Revenue CD 1 1,000,000 CD 2 1,000,000 CD 3 1,000,000 CD 4 1,000,000 4,000,000 Expenses Radio Airplay - Urban Contemporary 20,000 Radio Airplay - Urban AC 20,000 TV ads 10,000 Music Video 50,000 Magazine ads 10,000 Magazine Interviews 0 Correlation of product 0 Web ads 10,000 Web site design 500 Distribution: Rack Jobbers 50,000 Distribution: Internet 10,000 Distribution: Special Retailers 20,000 Retailer Promotion 15,000 Tour 100,000 Fan Club 10,000 Free goods 500 CD signings 0 x4 326,000 CDs 1,304,000 NET INCOME 2,696,000 6.0 CONTROLS The success of the musical products should be monitored through chart positions. All products are expected to break- even. The chart positions will be compared with Lowe Key Entertainment’s past records and with the records of competitors. The success of ads should be monitored with the number of units shipped to each region. There is an expected 5% increase in sales that week for music videos, an increase in sales for TV ads viewed by 10% of the audience, and a 25% increase in sales per magazine ad and interview read by over 41
  • 50,000 people. The number of website tabs/clicks and the number of members of fan clubs should correlate with the sale of the product. The number of units shipped, digital downloads, and promotion materials necessary for distribution should also correlate with the number of units sold. 42