Success Factors for Online Music Marketing

Success Factors for Online Music Marketing – § e. Transformation: From the four P’s to the four C’s § Cornelia C. Krueger § Nhiem Lu § Paula M. C. Swatman Coll. ECTe. R Latin America Sept 29 – Oct 1, 2003

Introduction § P 2 P Networks promote the attitude that online music is free § Major music companies try to sell digital music through “official” Web sites like Pressplay, Musicnet in the US, Popfile and Tiscali Music Club in Europe § Still very unfavourable alternative for young and technically aware consumers § i. Tunes Music Store § Marketing /e. Marketing principles impact on online music offers ØAre music companies online aware of the four C’s? ØSuccess factors for online music marketing Sim. Web www. simproject. de Success Factors for Online Music Marketing – e. Transformation: From the four P’s to the four C’s Coll. ECTe. R Latin America Sept 29 – Oct 1, 2003

Marketing and e. Marketing literature EXTERNAL FORCES Regulation Technology Society Competition Economics Nature Politics Product Marketer Promotion Customer Distribution Price The Marketing Mix The four P’s (Bovée et al. , 1995, p. 17) Sim. Web www. simproject. de Success Factors for Online Music Marketing – e. Transformation: From the four P’s to the four C’s Coll. ECTe. R Latin America Sept 29 – Oct 1, 2003

Marketing mix literature Author 4 C’s Kotler et al. (1999) Product, Price, Place, Promotion Customer needs and wants, cost to the customer, convenience, communication Lautenborn (1990) Product, Price, Place, Promotion Customer needs and wants, cost to satisfy, convenience, to buy communication Strauss and Frost (2001) Product, Price, Distribution, Marketing Communication Convenience, Communication Bovée et al. (1995) Product, Price, Distribution, Promotion Communication, Convenience, Customer needs Hollensen (2001) Product, Price, Place, Promotion Communication Preißner (2001) Product, Price, Place, Promotion Communication Meffert (1991) Produktmix, Distributionsmix, Kontrahierungsmix, Kommunikationsmix Communication, Consumer needs Keegan and Schlegelmilch (2001) Product, Price, Place, Promotion Communication, Customer needs Chaffey et al. (2000) Sim. Web 4 P’s Product, Price, Place, Promotion Communication, www. simproject. de Success Factors for Online Music Marketing – e. Transformation: From the four P’s to the four C’s Coll. ECTe. R Latin America Sept 29 – Oct 1, 2003

The four P‘s and the four C‘s § Product => Customer needs and wants § Promotion => Communication § Place => Convenience § Price => Cost to the customer Sim. Web www. simproject. de Success Factors for Online Music Marketing – e. Transformation: From the four P’s to the four C’s Coll. ECTe. R Latin America Sept 29 – Oct 1, 2003

Research approach § Do legal online music offerings consider the four C’s – customer solution, customer cost, convenience and communication – of e. Commerce in their marketing activities? § What are the key factors for a successful Internet offer in online music? § Analysis of non music-related but successful Internet companies (Amazon and e. Bay) § Comparison to Popfile and Tiscali Music Club Sim. Web www. simproject. de Success Factors for Online Music Marketing – e. Transformation: From the four P’s to the four C’s Coll. ECTe. R Latin America Sept 29 – Oct 1, 2003

Amazon. com Customer needs Customer costs Books DVDs Magazine subscription Music, video Electronics Office products Software Home & Garden Tools & Hardware E-cards Travel Restaurant Mobile access Web services Honour system Wedding and baby registry Auctions Outlet Used Bargain Track recent orders View and change orders Return easy items 1 click shopping Every service is explained detailed Alerts Text only version Credit account Purchase circles Honour system Gold box Improve your recommendation In-store Movie show times Convenience Track recent orders 1 click shopping Text only version Alerts Mobile access Web services Credit account Early adopters New for you Recommendatio n The page you made Combine orders Email notification (deliveries, available to order, etc. ) Personalise Cooperate account Restaurants, travel, movie show Source: http: //www. amazon. com times Wish list Sim. Web Purchase circles www. simproject. de Success Factors for Online Music Marketing – e. Transformation: From the four P’s to the four C’s Buy now, pay Communicati on Friends and favourites E-mail notification Chat Discussion boards Recommendations E-cards My Amazon Coll. ECTe. R Latin America Sept 29 – Oct 1, 2003

e. Bay. com Customer needs Customer costs Convenience Communicati on Antiques, coins, stamps, art Electronics, music, computers Home & Garden Sports Tickets Travel Hobbies & Craft Business, office & industrial Jewellery, gemstones e. Bay live auctions Sell you item Search for item Warranties, safe harbour Guided tour Newsletter Events Community value Selling tools Buyer tools Manage my items for sale Power sellers Buyer and seller guide e. Bay education Selling manager Turbo lister e. Bay toolbar e. Bay wireless Seller services page Assistant tools My e. Bay Notification Checkout Newsletter Announcement Calender Event list Images/HTML board My e. Bay stores Library Suggestion box Community help Search for items and members e. Bay education Feedback forum Feedback discussion board (categoryspecific) chat Answer centre Member spotlight About me page Community value User to user e. Bay Q&A board My e. Bay Reviews Co-branded advertising Source: http: //www. ebay. com Sim. Web www. simproject. de Success Factors for Online Music Marketing – e. Transformation: From the four P’s to the four C’s Coll. ECTe. R Latin America Sept 29 – Oct 1, 2003

Online music platforms Popfile. de (www. popfile. de) Customer needs Customer costs Music files Compilation CD Personal CD Burn CD’s Music DVD Ringing tones Pay per phone bill Prepaid code One price for all tracks Free tracks Convenience Tell a friend Prelistening Reminder Free tracks Theme specials Download charts Communication Newsflash Tell a friend Tiscali Music Club (music. tiscali. co. uk) Customer needs Customer costs Download music files Stream music files Burn music files News & reviews Internet radio CD & record shop Features Who, what, were Guided tour Return music files within 7 days Cumulative library Basic, silver, gold member Convenience Guided tour Playlist services Cumulative library Compilation service Sim. Web www. simproject. de Success Factors for Online Music Marketing – e. Transformation: From the four P’s to the four C’s Communication Send page to a friend Chat Newsletter Forum Coll. ECTe. R Latin America Sept 29 – Oct 1, 2003

Music companies‘ actions 1. Cooperation with Internet service providers which host P 2 P sites 2. Legal action against Kazaa etc. 3. Legal actions against file-sharers themselves 4. Attacking P 2 P networks with damaged files Sim. Web www. simproject. de Success Factors for Online Music Marketing – e. Transformation: From the four P’s to the four C’s Coll. ECTe. R Latin America Sept 29 – Oct 1, 2003

Success factors for online music marketing § Concentrate on selling digital music as a core competence § Customer as an ally • communication and convenience § “De-criminalise” P 2 P networks by making them pay • the Gehrke/ Anding model § “Coopetition” to ensure a great variety of music to offer • customer wants and needs and convenience § Use the Internet technology to make customised offers • acc. to customer wants and needs and customer costs Sim. Web www. simproject. de Success Factors for Online Music Marketing – e. Transformation: From the four P’s to the four C’s Coll. ECTe. R Latin America Sept 29 – Oct 1, 2003

i. Tunes § Catalogue • including the 5 majors repertoire § Mobile listening • i. Pod, streaming on other Macs § Copying is allowed • 5 times per song § AAC format (high quality) MPEG 4 (MP 3 still available) § 99 US-Cent per song § Online music platform for individual preferences • combination of „Jukebox“-Software, Music Store and Music Player i. Pod Sim. Web www. simproject. de Success Factors for Online Music Marketing – e. Transformation: From the four P’s to the four C’s Coll. ECTe. R Latin America Sept 29 – Oct 1, 2003