Therefore, the “buyer” has gotten more choices and quality when it comes to music. Issues still do exist in the music sales industry. As technology has changed from the 8-track, to cassette tape, to CD, and now, to the music download, the industry has dealt with the issue of piracy. While it is easier to sit down and download music illegally on your computer (with the ramifications of criminal recourses there are services currently out there that provide legal alternatives for customers to download their favorite music from the Internet.
The objective of this study Is to determine the feasibility of Introducing and selling the Tunes Music Store (items) in Brazil. Macro environmental factors will be analyzed, the marketing matrix will be put into perspective and the Hefted data will be put into detail. The tunes Music Store is an online music service run by Apple Computer through its tunes computer application. Opened on April 28, 2003, the Store proved the practicality of online music sales.
As of February 2006, the Store had sold over 1 billion songs, or more than 80% of worldwide online music sales. Downloaded files come with restrictions on their use (as stated above to combat inline music download piracy), enforced by Fairly, Apple’s version of digital rights management. Debuting on April 28, 2003, the Tunes Music Store was the first online music store to gain widespread media attention. Unlike previous services such as Rhapsody and Musclemen, Apple’s store allows the user to purchase songs and transfer them easily to the Pod through Tunes.
The Pod remains the only dealt music player that works with the tunes Music Store, although some other digital after Apple initiated deals with all four major record labels, MME, Sony BMW (which at he time was still the separate Sony Music Entertainment and BMW), Universal and Manner Brose. Music by more than 600 independent label artists were later added. Ere total offering includes more than 2,000,000 songs, including exclusive tracks from more than 20 artists. Each song can be downloaded for 99 US cents. Free previews are available of every song. Most albums are priced at 9. 9 US dollars, although some longer-than-average albums cost more, and others less. The user can burn downloaded songs to an unlimited number of compact discs, and specific playbills up to seven discs. Currently, the items, is available to consumer whose billing address is in Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Republic of Ireland, Italy, Japan, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom, and United States. On June 15, 2004, the tunes Music Store was launched in France, Germany, and the United Kingdom.
Songs were priced at 99 Euro cents (00. 99) for France and Germany, and 79 pence (E. 79) for the United Kingdom. According to an Apple Press Release, the European tunes Music Stores sold a combined total of 800,000 songs in one week, Ninth 450,000 of those songs sold in the I-J. On October 26, 2004, nine more countries Newer added to the tunes Music Store in a large EX. store expansion: Austria, Belgium, Finland, Greece, Italy, Luxembourg, the Netherlands, Portugal, and Spain. This extended availability to all countries in the Euro-zone except for the Republic of Ireland, where the ‘TM’S became available on January 6, 2005.
These countries also pay 00. 99 for songs, and all these stores share the same catalog and are available only in English. The French, German, American, and British stores are localized for heir respective countries and have different catalogs. On December 3, 2004 the artists Office of Fair Trading referred the tunes Music Store to the European Commission because it prevents consumers in one EX. country from buying music from stores in other EX. countries, in violation of EX. free-trade legislation (the Immediate cause of the referral was because the 00. 9 price charged in the Euro- zone equates to 68 pence in sterling, rather than the 79 pence actually charged there). The tunes Music Store was launched in Canada on December 3, 2004 (where Canadian customers pay $0. 99 (CDC) per song). In May 2005, the tunes Music Store Nas launched in Norway, Sweden, Switzerland and Denmark, after about two weeks of speculation about these countries (and Australia) receiving the store. A major crowning achievement was in August 4, 2005, where Apple officially launched the tunes Music Store in Japan on, with 1 million songs available, and 90% of songs are priced at 150 yen.
This marked the first time the items was introduced outside the US and Europe). In the next four days after the store had sold one million songs Which out paced that of the U. S. Store). This opening to the world’s second largest USIA market, where pod controls about 30% market share, came after a long delay. In addition, Apple failed to have one set price for singles. Pundits have speculated that this may indicate the introduction of new price structure to the rest of the stores in future, in favor of record labels who would like to see higher prices for new songs. He tunes Music Store was launched in Australia on October 25, 2005, where Individual songs were priced at ADD$I . 69 per track, and album prices varied but are store launch with music videos and short films by Paxar available for $3. 9 each, although TV episodes are not currently available. Stores in the Coles Meyer retail chain sell tunes Music Cards in denominations of $20, $50 and $100. Access was inadvertently given to some people in New Zealand, too. Failed negotiations with the Sony BMW label (which had delayed the launch of the Australian items significantly) meant that none of that label’s artists were available at the time of launch.
The wider environment is also ever changing, and the marketer needs to compensate for changes in culture, politics, economics and technology. Examples are: – Economy – Effects of inflation, equines cycles, employment trends, retail and commercial activity, construction activity and availability of capital. – Demographics – Effects of trends in size, age distribution, education, diversity, income and geographic distribution of the population. – Social and cultural factors – Changes in consumer values and lifestyles that affect the purchasing behavior of the target market. Politics/law – Effects of regulation and legislation. Technology – Changes in technology affecting not only products and services but their delivery. – Natural environment – Ecological or other natural concerns–flooding, earthquakes, pollution, etc. –that may affect the organization’s markets or operations. This way to analyze whether convergence or divergence exists in Brazil is to do a PEST analysis. A PEST analysis is an examination of the external macro-environment that affects all firms. P. E. S. T. Is an acronym for the Political, Economic, Social, and Technological factors of the external macro-environment.
As stated above, such external factors usually are beyond the firm’s control and sometimes present themselves as threats. For this reason, some say that “pest” is an appropriate term for these factors. However, changes in the external environment also create new opportunities and the letters sometimes are rearranged to construct the more optimistic term of STEP analysis. Many macro-environmental factors are country- specific. Yet, the number of macro-environmental factors is virtually unlimited. In practice, the firm must prioritize and monitor those factors that influence its industry.
Even so, it may be difficult to forecast future trends with an acceptable level of accuracy. In this regard, the firm may turn to scenario planning techniques to deal Ninth high levels of uncertainty in important macro-environmental variables. Insert Pest Analysis Here) marketing strategies. It specifies the “mixing” of various factors in such a way that both organizational and consumer (target markets) objectives are attained. When applying the model for marketing mix, marketers must consider their target market In this case, Brazil).
They must understand the wants and needs (Mason described four categories of human needs, named as conceive needs, cognitive needs, aesthetic needs and neurotic needs) of the market (in which the customer is buying music) then use these mix elements in constructing an appropriate marketing strategies and Lana that will satisfy these wants. The mix must also meet or exceed the objectives of the organization. In some cases, a separate marketing mix is usually crafted for each product offering or for each market segment, depending on the organizational structure of the firm.
In this case, it is important for a savvy, internet-based market to be in place to be successful (so one marketing mix should be feasible). Marketing decisions generally fall into four controllable categories (subject to internal and external environmental constraints), product, price, placement, and promotion. The product side of the marketing mix refers to the tangible (or physical) products as well as services. In marketing, a product is anything that can be offered too market that might satisfy a want or need.
The overall goal is the complete bundle of benefits or satisfactions that buyers perceive they will obtain if they purchase the product. It is the sum of all physical, psychological, symbolic, and service attributes. Some things to consider when it comes to product decisions are brand name, functionality, quality, packaging, etc. In this case, Apple is looking to market there Tunes online music store to Brazil. Tunes offers music and videos (television shows, music videos) a la carte downloaded from Apples servers to the customer’s computer ‘IA an internet link.
There are three aspects to any product (or service in this case). Ere first would be core benefits. Does a consumer get in-use, psychological, or problem reducing benefit? The core benefit that Apple is affording it’s customers is music. The main thing (problem reduction) going for the online store compared the common compact disc is that you can go online, 24 hours a day, 7 days a week, from the convenience of your home and buy music. The second aspect is tangible service. Does the service have a quality or style to it?
Just by research alone, Apple derives approximately 40% of its revenue yearly from its ‘tunes Online Music store and ‘pod portable music player. There is a certain positive brand name when Apple is associated with music. The third aspect is augmented services (I. E. Installation, delivery, maintenance). A good portion of this doesn’t apply, for the exception of maintenance. The online store will suspend a download if your internet connection goes down and resume later. Pricing is the process of applying prices to purchase and sales orders, based on retain factors.
These factors are fixed amount, quantity break, promotion or sales campaign, specific vendor quote, etc. The selection off price for a service (Apples case of a la carte pricing for a song for example) should have three things working for it; the price should achieve the financial goals of the firm. Does the price, in the end, bring the company profitability? The next criterion is affordability. By setting a price, Nail your customer’s use your service and buy the music? Lastly, does the price marketing mix (does your placement dictate a high price).
From the marketers point f view, an efficient price is a price that is very close to the maximum that customers are prepared to pay. In economic terms, it is a price that shifts most of the consumer surplus to the producer. To determine the price of a download, you first need to ‘riff the current price in US terms. Currently, the price off music download in the US is $. 99. Considering the conversion between the US dollar and the Brazilian Real is: 1 Brazil real = 0. 468121 U. S. Dollars. Thus, the price would be about 2. 11 Real. He next step in the process is to identify whether or not a consumer in Brazil would pay that much for a download. One comparison that can be made is the purchase of compact discs. Let us say that the price off compact disc is IIS$15 in Brazil. If we consider the fact that median household income is about eight times higher in the USA than in Brazil, the comparable price would be US$xx = IIS$120 per compact disc in the USA. Now, it would certainly be difficult to imagine how anyone in the USA Mould pay such a high price, one that is completely out of line with the costs of production.
Furthermore, the remarkable thing is that all of the recorded music producers felt that it was necessary to have keep their prices at this same level. Taken into consideration, it would be a lot harder for consumers to purchase compact discs at this price, so then we would need to consider the single download price to be a sufficient legal way of acquiring music. Placement is about getting the products to the customer. Some examples of placement decisions are distribution channels, market coverage, inventory management, and order processing.
With comparison to other main stay distributors of compact discs, the ‘tunes Online Music store comes to you at your home. This makes it a better convenience for many people. The store can extend out to a wider engage of music lovers and can sell at a price that people can afford. The main question would be does Brazil has the amount of computer users at home to be able to have access to the online store? In a survey as early as last year in Brazil only about 10 per cent of the population (170 million people) has home computers.
Yet, razz’s President, Luis Niacin ad Silva, is keen to bridge what he perceives to be a huge technology gap between Brazil and more advanced economies. This needs in tune with whether or not Apple perceives an investment into the biggest economy in South America feasible with only a small percentage of homes having computers. Promotion represents the various aspects of the marketing communication. This is the communication of information about the product with the goal of generating a positive customer response.
Some promotional decisions include strategy (weather or not to use push or pull, advertising, and sales. A promotional plan can have a Med range of objectives, including: sales increases, new product acceptance, creation of brand equity, positioning, competitive retaliations, or creation of a corporate image. Promotion in Brazil can not only span the computer user initiative Which could be a potential hindrance), but also in paper print, television, and radio. It would be on the same range as other music initiatives (compact discs in brick and mortar buildings). ND the United States: Figure 1: Hefted Dimensions for Brazil Figure 2: Hefted Dimensions for the United States country Abbreviation GNP/cap PDP DIVIDE MASS AU’ racial 3,060 69 384976 65 united states USA 34870 4091 624629 LTO Table 1: Hefted Dimensions summarized for the USA and Brazil Figure 3: Side by Side comparison of the USA and Brazil racial is similar to many Latin American countries when analyzing Hypotheses Dimensions (see Figure 4 below): Figure 4: Hefted Dimensions for Latin American Countries Ere Hefted Dimensions are noted as the Power Distance Index (PDP), Individualism DIVIDE), Masculinity (MASS), Uncertainty Avoidance Index (AJAX), and Long-Term Orientation (L TO). The best way to identify chances of success of the ‘tunes online music store is to compare dimensions for where the store is already profitable: the US. The Power Distance Index (PDP) focuses on the degree of equality, or inequality, between people in the country’s society. A High Power Distance ranking indicates that Inequalities of power and wealth have been allowed to grow within the society. These societies are more likely to follow a caste system that does not allow significant upward mobility of its citizens.
A Low Power Distance ranking indicates the society De-emphasizes the differences between citizen’s power and wealth. In these societies equality and opportunity for everyone is stressed. Brazil scores a 69 for PDP with respect to 40 for the USA (This is indicative of a greater equality between societal levels, including government, organizations, and even within families. This orientation reinforces a cooperative interaction across power levels and creates a more stable cultural environment). There is a significant comparison to dependency here. People will side too tendency on relationships with friends and family, while in the USA; there is a focus on independence.
In the case of the online music store, people in Brazil might weigh more on decision making on other people rather than themselves (as people in the USA would make their own decisions about the store). Individualism (DIVIDE) focuses on the degree the society reinforces individual or collective achievement and interpersonal relationships. A High Individualism ranking indicates that individuality and individual rights are paramount within the society. Individuals in these societies may tend to form a larger number of looser relationships. A Low Individualism ranking typifies societies of a more collectivist nature with close ties between individuals.
These cultures reinforce extended families and collectives where everyone takes responsibility for fellow members of their group. Brazil has a slightly higher Individualism (DIVIDE) rank of 38 compared to the average Latin population score of 21 (see figures 1 and 4). However, virtually all he Latin countries are considered to be Collectivist societies as compared to Individualist cultures. This is manifest in a close long-term commitment to the member ‘group’, be that a family, extended family, or extended relationships. Loyalty is a major difference between the USA and Brazil with respect to individualism. The high Individualism (DIVIDE) ranking for the United States indicates a society with a more individualistic attitude and relatively loose bonds with others.
The populace is more self-reliant and looks out for themselves and their close family members. This shows ore of a individualistic nature towards products. Most of Apples products, from the online store the pod, would be considered trendy, and thus something that would be accepted. In Brazil, the online store would be more socially accepted on a national scale to be successful. The issue with the derivation on change would be the main sticking point. Masculinity (MASS) focuses on the degree the society reinforces, or does not reinforce, the traditional masculine work role model of male achievement, control, and power. A High Masculinity ranking indicates the country experiences a high degree of gender differentiation.
In these cultures, males dominate a significant portion of the society and power structure, with females being controlled by male domination. A Low Masculinity ranking indicates the country has a low level of differentiation and discrimination between genders. In these cultures, females are treated equally to males in all aspects of the society. There is a moderate difference between the scores of Brazil (49) and the United States (62). With respect to the USA, the country experiences a higher degree of gender differentiation of roles. The male dominates a significant portion of the society and power structure. This situation enervates a female population that becomes more assertive and competitive, with Omen shifting toward the male role model and away from their female role.
This Mould discriminate more between cultures particularly with respect to values relating to winning, success, and status (which using considerably in advertising and marketing). The advertising of the music store would have to be toned down a notch Ninth respect to how it’s done in the USA (to pertain more to the feminist side of the country). Uncertainty Avoidance Index (AJAX) focuses on the level of tolerance for uncertainty and ambiguity within the society – I. . Unstructured situations. A High Uncertainty Avoidance ranking indicates the country has a low tolerance for uncertainty and ambiguity. This creates a rule-oriented society that institutes laws, rules, regulations, and controls in order to reduce the amount of uncertainty.
A Low Uncertainty Avoidance ranking indicates the country has less concern about ambiguity and uncertainty and has more tolerance for a variety of opinions. This is reflected in a society that is less rule-oriented, more readily accepts change, and takes more and greater risks. Brazier’s highest Hefted Dimension is Uncertainty Avoidance (AJAX) is 76, indicating the society’s low level of tolerance for uncertainty. In an effort to minimize or reduce this level of uncertainty, strict rules, laws, policies, and regulations are adopted and implemented. The ultimate goal of this population is to control everything in order to eliminate or avoid the unexpected.
As a result of this high Uncertainty Avoidance characteristic, the society does not readily accept change and is very risk adverse. This compares to the USA with a score of 46. The low ranking in the Uncertainty Avoidance Dimension is indicative of a society that has ewer rules and does not attempt to control all outcomes and results. It also has a greater level of tolerance for a variety of ideas, thoughts, and beliefs. Brazil would of all likelihood have an issue with an acceptance off new product. The swaying factor of uncertainty avoidance. Long-Term Orientation (L TO) focuses on the degree the society embraces, or does not embrace, long-term devotion to traditional, forward thinking values.
High Long-Term Orientation ranking indicates the country prescribes to the values of long-term commitments and respect for tradition. This is thought to purport a strong work ethic where long-term rewards are expected as a result of today’s hard work. However, business may take longer to develop in this society, particularly for an “outsider”. A Low Long-Term Orientation ranking indicates the country does not reinforce the concept of long-term, traditional orientation. In this culture, change can occur more rapidly as long-term traditions and commitments do not become impediments to change. Brazil (with a score of 65) direct comparison to the United States (score of 29) shows a potential boundary for acceptance of a new product. BEHAVIORAL IMPLICATIONS
BRAND PERSONALITY TRAITS, EMOTIONS IN ADVERTISING AND COMMUNICATION AND CULTURE Marketers seek to develop or align the expectations comprising the brand experience through branding, so that a brand carries the “promise” that a product or service has a certain quality or characteristic which make it special or unique. A brand image may be developed by attributing a “personality” to or associating an “image” with a product or service, whereby the personality or image is ‘branded” into the consciousness of consumers. Brand Personality is defined to be the attribution of human personality traits (seriousness, warmth, imagination, etc. To brand as a way to achieve differentiation.
This is usually done through long-term above-the-line advertising and appropriate packaging and graphics. These traits inform brand behavior through both prepared communication/packaging, etc. , and through the people who represent the brand – its employees. What makes the ‘tunes Online Music store a unique instance with respect to other services or products because of the technology factor. Through changes from other innovations (I. E. The cassette to the CD), the consumers in Brazil has shown a convergence nature. Counter groups have related to the image of the music store (with many older generations resistant to change). This can be conceived as youthful attribution to brand personality.
A common tread into what and how consumers brand and differentiate products would be the use of emotion. Thus, marketing and advertising Nail play on these emotion in advertising to sway people toward a product. The problem with this is the interpretation of what emotions a consumer might feel about said product. For example if the product is being marketed in Japan and it’s supposed to convey a feeling of comfort in a time of need, the ability to play on the motions of a consumer to buy the product or invest in a service might be misconstrued do to the way the advertising is pitched. This brings up the idea of rational vs.. Emotional advertising.
This choice depends on the nature of the product and the type of relationship that consumers have with it. Overall, the desired consumer end result will depend on how you pitch the advertisement. What ties brand personality traits and emotions is how you communicate. The concept behind this can be conveyed through the classic communications model. Researchers have developed a model that depicts the relationships among the various factors that he process: Figure 5: The Communication Process Ere communications model specifies that a number of elements are necessary for communication to be achieved. The components are as follows: Source: An individual or character who is delivering the message.
Message: Content and execution of the message itself. Receivers: Interpret the message. Feedback: Information going from receiver to source (or marketer behind source). Much of the behavioral implications that might be taken into consideration can be breaking do was to who will be the source of the message (Man, woman, child, celebrity, athlete). As the message is constructed, should the message emphasize negative consequences, show a direct comparison with competition or present a fantasy? When speaking about what media will transmit the message, what would the ‘tunes Music Store use? Print ad, television, door-to-door, Web site (through a computer which is the most obvious)?
Yet, most importantly, what are the characteristics of the target market? Are they young, old, frustrated, status-oriented? As this all intertwines together, you can see how your product can use emotional targeted advertising to achieve a certain brand in the eyes of the consumer. Much of the foreign markets (as even compared to the US) see the ‘tunes and ‘tunes related products as something hip, young and cool with visions of people in the early twenties walking around in the own little world listening to their pod with the music they downloaded from the tunes Music Store. While a French student is walking around in Paris, a group of teenage Japanese girls are downloading new tunes from their favorite band. He report can be summed up by making one strict comparison to determine if this service would be feasible. As stated before, the store is currently available in Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Republic of Ireland, Italy, Japan, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom, and United States. The GNP/cap on average for all the countries on this list span from the low end of $10,000 to the high end of $34,000 (statistics on Luxembourg were unavailable). The GNP/cap of Brazil is three times less the low end. This can coincide in line with the pricing model being a concern.
While adapting the general pricing to the Real, the common household makes 8 times less then the US household. Another potential roadblock is the percentage of homes noted in the report that do have computers. With only 10% of homes in Brazil having computers, the extent of the market via home based consumers will be a major concern. While this might be dire situation, recommendations to the marketing manager might look to 5 years from now where technology and GNP/cap could change the outlook on whether to market the service. Ninth the comments made within the last year by the president to embrace technology, the country shouldn’t be too behind in getting into the stream of the American, so it would be a logical place to start.