Music world
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Music world Music world Presentation Transcript

  • Case StudyMusic World: Redefining Indian Music Retailing
  • Music World Part of the Rama Prasad Goenka (RPG) Group, a Rs.65 billion company (2000-01) Started in 1820‟s by Ram Dutt Goenka & British East India Company Divisions:  Power  Tyre  IT & Communication  Life Sciences  Retail  Financial Services  Chemicals & Specialty
  • Music World Old formats:  Retailers & distributors (Company had to shell out money for high margins)  Problem of Piracy of cassettes & Cd‟s  Company could not reach its full growth potential 1990-2000  CAGR 25%  Partnerships with international companies 2001  Introduction of the organized retailing  58,573 employees  Rs 66 billion turnover  Rs 68 billion asset base
  • RPG Group Spencer‟s was set up in 1865 as a small store By 1940- 50 large stores spread across the country 1947- unable to foresee demand for imported goods & hence , started declining 1970- sold to an entrepreneur 1989- RPG bought Spencer‟s RPG‟s retail business was run by Spencer‟s
  • Emergence of Music World Spencer‟s undervalued real estate, distribution network, profitable travel agency Many loss making divisions shut down 1991- Spencer‟s store was redesigned and modernized Three formats of the store  “Food World”  “Health & Glow”  “Music World”
  • June 2001 • 61 stores of Food World, 13 Music World outlets & 18 Health and Glow ShopsSpencer‟s • Average earning – Rs.350 million per month Food World RPG GAURDIAN PVT LTD (Alliance between Spencer and Health Dairy Farm International) & Glow JV between Spencer (57%) & Music Saregama (43%) World Hyper Mart October 2001- “MUSIC WORLD” emerged as distinct identity
  • Why Retail Sector? CII estimated that the Indian Retailing Industry will grow at the size of $180 billion. By 2010, it will develop to a $300 billion industry Less competition GCIL turned into a sick unit
  • Story of Saregama 1901- GCE started (British East India Company) 1931- Merged with Columbia Gramophone Company to form Electrical & Musical Industries GCIL marketed its labels through HMV & Columbia HMV lost its monopoly 1990- RPG bought EMI stake in GCIL Diversified into Radio Broadcasting & Cinemas 1999- www.saregama.com was launched 2000- www.humaracd.com 2001- Entered global market Sales increased drastically
  • Promotion & Marketing Celebrity visits – Hrithik Roshan & Shaan Discounts on products during festivities Promotion of local artists – “The MusicWorld unplugged” Tie up with Channel [V], hungama.com, Citibank etc Neon signage „Santana Contest‟ Website launch www.musicworld4u.com www.humaracd.com Mini studio in Pune Tie up with e-commerce websites
  • SWOT analysis
  • SWOT analysis
  • Our Take Soundtracks of Hindi films were flopping Piracy Before music world, only 50 distributors had control over the market Supplies not available easily Customer convenience & satisfaction Tie-ups with popular departmental stores helped in boosting the sales of Music World
  • Present Situation Music industry has been growing at 3% over last 3 years Assets worth Rs. 235 crores Present CAGR of Music World is 30% Over 79 outlets across India More than 5 million consumers walk through Music World stores annually
  • Genre-wise distribution of Music Sales in IndiaNew film music Old Film Music Regional Film Music Popular MusicDevotional International Others 8% 6% 10% 40%8% 7% 21% Source: Industry estimates
  • What more can be done? Cater to wide geographical areas Try to reduce the cost of their cd‟s Diversifying into more products like headphones etc Set up a jamming area in the store to increase customer walk-ins Customized selling
  • Thank You