EMI Group, PLC
CD Pricing in the Recorded Music Industry
Case Analysis
EMI music group was formed in 1931 when Gramophone Company merges with Columbia Graphophone to form Electric and Musical Industries (EMI 2007). EMI started with operations in nineteen countries and has eventually grown to operations in over fifty countries. EMI has the rights to over one musical composition. Of the five major music companies, EMI has the least market share in the Unites States. This market share may now be in jeopardy as Universal Records has decided to decrease the price of its CD's in an effort to generate sales. EMI must determine what they would gain or lose by dropping or not dropping their retail price for CD's and the price charged to
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Universal worked under the assumption that these strategies would not only increase the number of retail buyers but also move retailers to increase display space for Universal increasing Universal's ability to market their artist. (Smith, 2003).
Possible Solutions
EMI must implement new measures to increase its market share. It can also decrease its CD prices to compete with Universal Records. EMI has less market share because it has less hit recording artists and a smaller music catalog. EMI has several options to increase its prominence in the record industry. One of these solutions is for EMI to change its marketing mix. EMI can consider changing its product mix by offering more music geared toward group of people who have steadily increased the percentage of music they buy for the past ten years; consumers over the age of 40 (Kerin,2007). EMI can also cut cost involved with artists by dropping artists that do not produce, supply the market with high quality artists and increasing productivity. This in turn will also increase its market share. And of course, EMI can decrease the price of its CD's.
New product development is another alternative. EMI can also use the advances in technology to change the way it promotes its artists as well as its product placement within retail outlets as well as placement of those artists on the internet. Using these advances can also include
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Emusic. EMusic’s success results from much more than just selling music, it’s what and how they use technology to get their customer 's attention to meet their needs. Their relationship with their customers is based on a customer-focused marketing strategy. By trying and targeting their customers, eMusic use digital music service for independent-minded music collectors to satisfy online customer experiences. The thing that eMusic use to drives genuine value for their customer’s music is focusing on the independent-minded music lovers and collectors. The ‘Independents’ are defined by certain behaviors. Their musical tastes are more offbeat, as opposed to mainstream. They are also more passionate about music overall and are always actively seeking out music that’s new to them. 71% of the ‘Independents’ purchase digital music files online to own (Business Wire, 2011, p 1).
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