For this activity, you will play the role of a marketing consultant advising a small change of CD/music retail stores how they can best adapt to the changing lifestyle and technological macro-environment. You are presented with some introductory information regarding the key trends in this sector. What advice would you have for this firm?
A CD music shop has approached you for advice. They are concerned about their long-term viability in the new environment. In particular, they are concerned with the following trends:
- Many consumers now use a smart phone or an MP3 players (devices that don’t require a physical CD) for the storage and playback of their music collection
- Apple iTunes represent a fairly recent form of competition and have gained a significant share of the market
- YouTube videos have also emerged as a substitute competitor
- There are still significant issues with consumers sharing music and piracy issues
- DVD’s have cut into the sales of CD’s, especially for the gift market
- Internet usage is very high among the under 40 years market, which is their key target market
- There is a desire by late teens and early adults to “try-before-they-buy” (listen to the CD in the store)
- However, there has been a significant increase in music interest, due to a number of very popular reality/talent music shows
- Which of the identified trends do you consider to be the most significant for the retailing chain?
- Are there any other trend/issues that should also be highlighted?
- Given all these issues, how would you advise this firm (as their marketing consultant) to adapt to this changing environment?
- Do you foresee a long-term future for this firm, or do you predict that they will need to significantly change their business model?