Transcript The Furze Strategic Marketing in Practice Case Study June 2007 David Kilburn C A M B R I D G E M A R K.

The Furze
Strategic Marketing in Practice
Case Study
June 2007
David Kilburn
C A M B R I D G E M A R K E T I N G C O L L E G ES
© CMC 2005
Scenario
• You are a newly appointed marketing
manager for a small record label in the
U.K.
• TASK:
– Positioning and branding of the company
– Communications strategy
– International distribution strategy
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Where are we now ?
Audit of current situation
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The music industry today
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The internet has revolutionised the music industry
The global music industry is in turmoil
Overall industry revenues are in freefall
Traditional retail – music stores have suffered a decline in sales CD sales have fallen in value by 23% in the past 5 years
Analogue has been replaced by digital
Young artists can now become famous through word of mouth, peer
to peer file sharing, and by building up a loyal fan base via
YouTube, MySpace
Digital music can be sold across a raft of platforms: mobile phones,
MP3 players such as iPods, personal computers and home hi-f
systems
Fans can collate their own musical compilations, exchange hot tips
with other users, buy merchandise online and interact with their
favourite artists
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Brand issues
• BRAND DOMAIN
(brand’s target market)
• BRAND HERITAGE (how it has achieved success)
• BRAND VALUES
(core values and characteristics)
• BRAND ASSETS
(what makes brand distinctive)
• BRAND PERSONALITY (character of brand)
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The Furze SWOT
Strengths
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Has a loyal and growing following
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Has own interactive website
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Broadband penetration has increased to 40%
in major European cities
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Free downloads on their web site which
promote opportunities to buy
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Merchandise and concert ticket sales
available online
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Fans can post blogs on to web site
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Fans can send downloads via bluetooth
mobile, peer to peer
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Creative – have produced their own comic to
sell to fans
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Venues pay for publicity of performances
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The furze do not have any bank loans
Weaknesses
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Have not produced a top 20 record as yet
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Predominantly U.K. based
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Operating at less than break even at present
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Fledgling band to some extent, established
only 3 years
Opportunities
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To be a highly successful and profitable band
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To target the US market as well as Europe,
Asia and Australasia
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To be featured regularly on radios 1 and 2
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Growing interest in live concerts
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Profiting from technological advances
Threats
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Barriers to entry fairly low
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Band falls out of fashion
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Highly competitive market
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Meteoric rise could create problems and
stretch resources too thinly
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Map of competition
Social networking sites
MySpace
YouTube
Bebo
Corporate record
labels
EMI
Sony
Warner Music
File sharing
Up and coming
bands
Napster
Apple iTunes
Enter Shakira
Arctic Monkeys
Aztec Camera
Lily Allen
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The Business Environment
More than
SLEPT!
Economy
Politics
Porter’s 5
Suppliers
Labour
Capital
Organisation
Legal
Pollution
Product
Wages
Profit
Materials
Society
MICRO
Technology
MACRO
PHYSICAL
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Consider The Furze’s positioning
• Use either BCG or PLC
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Brand Equity
• Bonding –----How does it retain itself with me
• Advantage – --Does it offer something different
• Performance- -Can it deliver
• Relevance – Does it offer something I want
• Presence- Do people know it
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Where do we Want to be?
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Objectives
• Decide
• Objectives
– For U.K. and International
• Deliver
• Outcomes
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Segmentation
• Described and Profiled for each sector
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Targeting
• Specific and Justified for each sector
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Positioning
• Clear and defensible
– Set out USP and Positioning for each sector.
– Are there any commonalities or Single Brand
options
• Vision
• Values
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How do we get there?
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Action
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Decide
Objective
Deliver
Outcomes
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Strategic Development
• Product
– Sector Selection
– Core/ Physical/Augmented Proposition
– Branding
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Pricing
Distribution
Promotion
People
Process
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Implementation and Control
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Budgeting Areas
Metrics
Balanced Scorecard
McKinsey 7S
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Comms Strategy for The Furze
• Audiences –Internal and External, domestic and international,
Small record labels and Corporates
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Media
Messages
Timing/Budget
Stakeholders
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Investors
Suppliers
Partners
Customers
Fan base
Media
Mobile phone operators
ISP’s
YouTube
MySpace
Yahoo Music
Google
Music promoters
Music publishers
Who else ?
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Internationalisation
• Where, when and how
– GE/ Harrel and Keiffer
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Implementation and Control
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Budgeting Areas
Metrics
BS
McKinsey 7S
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Critical success factors
• Create a sustainable brand image and position
amongst competitors
• Change management (PLC,BCG)
• Internal marketing (stakeholder management,
CRM)
• Funding (Borrowing/J.V/Debt/ Licensing/I.P)
• Constraints – Overstretching
- Competitive landscape
- Changes within the music
industry
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Vision
For The Furze to become an established
band who have a strong and loyal fan base,
enabling them to invest in a robust,
innovative marketing plan which will keep
them top of mind and topping music charts
for the next 20 years.
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Mission statement
To become an accomplished band who can
sustain and increase their popularity
amongst music fans who recognise talent,
innovation and a creative spark.
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Values
• Committed to high quality, edgy music
which delights our fans
• Committed to providing our fans with
regular concerts, new releases and an
opportunity to vote for which of our
releases should be A side
• Committed to continual interface with our
fans, provision of merchandise, music
downloads and regular dialogue over the
internet
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Corporate objectives
• To ensure that the group has the correct
financial advice and backing to stay
rocking for the next 20 years.
• To become successful globally and
leverage the financial benefits without
losing our creative musical spark
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Strategic management of marketing mix
• Product
Core – rock music which is readily available to
any one who wants to listen to it
Augmented – can be listened to in a variety of
formats, concerts, CDs, downloads, mobile,
blogs, video
• Price
Favourable price – value for money, Add-ons –
memory sticks with added value, such as band
video, screensavers and web links.
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Strategic management of marketing mix
• Place
UK based primarily – but needs to drive more
sales by targeting the U.S and European markets,
plus Asia and Australasia
• Promotion
Web site – continually update the content.
Showcase endorsements from famous rock stars–
refresh regularly. Highly interactive with fan base
- encourages viral marketing
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Strategic management of marketing mix
• People
Train and develop the existing staff entourage.
Selective recruitment of key
sales/marketing/technical personnel/sound
engineers. Recruit proven staff in overseas
markets to promote the band.
• Processes
Regular internal/external communication. Long
term relationship building. B2B customer
involvement with music promoters, pluggers,
publicists. Relationship marketing. Customer
Lifetime Value. Branding strategy.
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Strategic management of marketing mix
Physical evidence
Interactive, funky web site
Number of blogs, endorsements from fans
The Furze logo and brand
ROI table – comparison with other rock
bands
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Implementation and Control
McKinsey 7S
Structure
Independent or with a large record label
Based in UK or US?
Strategy
Focus differentiated aimed at loyal fan
base and potential fans in U.K. and
overseas
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Implementation and Control
Systems
Develop MKIS and control systems to regularly
review and monitor effectiveness of all marketing
strategies
Develop benchmarking system to monitor against
key market indicators and main competitors
Staff
Continual development of key staff. Advanced
internet sales training, inbound and outbound.
CRM development. Key relationship building with
music promoters, pluggers and influencers.
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Implementation and Control
Skills
Ensure correct training and development
programmes are established to keep the Furze
entourage at the leading edge of digital
technology, systems and processes
Shared values
Ensure company strategy is shared by everyone in
the organisation. Growth strategy and national
and international expansion shared with all staff,
fans, music promoters, and key stakeholders.
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Implementation and Control
Style
Creative, dynamic, innovative, and funky
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Control – Balanced Scorecard
Internal
Develop CRM databases for collecting fans’
feedback and insights into future needs,
wants, industry trends, (market
intelligence)
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Control – Balanced Scorecard
Innovation and learning
Skills training – advanced B2C selling,
super fans who ‘champion’ the band, web
development to interface with fans and
leverage the benefits, digital
enhancement, critical thinking
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Control – Balanced Scorecard
Financial
Sales vs. targets in each sector –
U.K.,EUROPE,U.S.A. Australasia, etc.
Profitability metrics, CLV
Customer
Customer satisfaction surveys – customer
feedback. Customer endorsements - web
based
Brand recall/awareness of brand
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Possible questions
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What branding strategy should The Furze adopt to
maximise sales and profitability?
2.
Prepare a communications plan which will
increase sales and profitability for The Furze
across all its target markets
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What branding and positioning strategy should
The Furze adopt to improve its appeal to music
fans?
4.
Devise a marketing plan to make The Furze a
leading player in the music business
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Possible questions
5.
Prepare a relationship marketing campaign
which will effectively increase The Furze’s
customer loyalty and their lifetime value.
6.
The Furze is at a critical point in its
development and growth. Produce a
strategic marketing plan which will ensure
increased revenue and negate the
marketing strategies of domestic and
international competitors within the music
business.
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Possible questions
7. Prepare a corporate social responsibility
charter for The Furze in the light of the
recent tightening of legal action taken
against piracy and illegal downloads.
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