Uk Music Retailers - Essay Example

UK Music retailers Businesses operating in any industry are bound to experience changing fortunes in so far as trade is concerned. There are several forces that play in the economy thus influencing the fate of each of the entities in a given sector. With this in mind, it is the sole responsibility for individual business organizations to examine factors within its environment and identify the interventions to keep it competitive. This paper focuses on the music retailers in the United Kingdom (UK). I begin by exploring some of the competitors in this industry as well as their performance. This includes carrying out professional analysis that entails identification service sector challenges and assessment of operations, evaluation of changes in the music industry and appraising measures of service quality. I further use interaction matrix to analyze how the business has changed over time. Finally, I conclude by comparing two players in this music sector and offer some appropriate recommendations. Just like in any other economy of the world, the UK economy also suffers from quite a number of challenges. Being an important component of the economy, the UK retailers have not been spared from the difficult moments that occasionally characterize the economy. Therefore, some traditional UK retailers such as music retailers who deal with the selling of music CD and VCD have been critically affected. In the past few years, some famous music retailers went bankrupt one after another. Cases in point include the Towers, KPS, and Virgin. Whilst some of the aforementioned retailers were troubled by the market changes, the likes of Find-CD, which is an online music company, were flourishing (Traynor, 2013). According to findings of Traynor (2013) in his research, nearly 140 music retailers are prone to perilous economic period in the near future. A case in point is the HMV music retailer. HMV is credited for having been one of the longest serving players in the music industry with a history of music retailing of approximately 91 years. It deals with the sale of CDs/DVDs containing music, movies, or video games. Unfortunately, trends in the recent years spell doom to its operations. Currently, the company no longer accepts gift card payment as well as it has stopped issuing new gift cards in over 200 of its retail stores worldwide. In addition, the London Stock Exchange decided to suspend HMV’s stock trading due to persistent poor performance of its shares. In a bid to salvage the sorry situation, HMV has contracted Deloitte to investigate on the possible solution as well as chart a way forward for the company (Savov, 2013). In 2008, the UK largest music retailer Virgin Megastore faced a host of challenges. This company had stood in London Oxford Street for 18 years. After struggles with its finances and the changing fortunes in the industry, Virgin Megastore decided to sell its125 music retail stores to Zavvi Retailer. This is just but an example of the music retailers that have slowly been fading into oblivion in the UK. The other retailers include MVC, MUSIC ZONE, and FOPP. This closures and acquisition serve to signify the changing market fortunes in this industry. Despite the fact that Zavvi Retailer acquired stores from Virgin Megastore, the prospects of the business seem to be bleak and black. This is because Entertainment UK (EUK), which is the major supplier of music records to Zavvi, has also been struggling to survive. The service delivered by the retailers of music bear a number of characteristics that distinguishes them from goods. These characteristics include intangibility, inseparability, perishability, variability, inaccessibility. It is from this nature of services that the marketers of music face quite a number of challenges as they market the service to the customers. These challenges are as discussed below: Intangibility of music makes it difficult for the customers to ascertain the risk factors involved before they receive the service. Music is an art of performance that relies on the quality of sound and the vocals used. Most customers would prefer to physically experience something before they can gauge its quality. Unfortunately, it is hardly possible to verify the quality of a product due to its intangible nature. As regards to the marketer, it is equally hard to assist the customer visualize the in the appropriate perspective as well as differentiate it from the competition. Secondly, inseparability of music from the producer makes the customers and the provider inseparable. Production and consumption simultaneously take place. In some situations, the service may be available but consumers are forced to wait for the production to take place. As regards to the customer, there is an urgent need to interact with the service provider and in some circumstances music production has to be measured with other customers. According to Apte (2004, p18), he asserts that the challenges associated with long waiting time for customers is directly linked with the inseparability of the customer and the producer. As a matter of fact, the producer of music considers a customer as a co-producer and, therefore, has to devise proper means of managing customers. Perishability is the other challenge facing this industry. The production of the products must match the demand. It is not economically viable to produce music when the demand is low not there at all. In other words, a produce cannot produce music and store it for a future use. As regard to the customer, he or she can only receive the production service one she demands for it. Otherwise, the service cannot be stored for use in the future. This presents complexity of harmonization of the demand of the production service and the actual production (Pattenden, 2007, p.23). Another challenge in this industry is that it service production is prone to variability. It is difficult to standardize the quality of production of music as it depends on the circumstances at that time for both the customer and producer. Unlike goods whose quality can easily be standardized through mass production, the skills and technical knowledge in music industry are variable. Also, the quality preference of one customer may differ with that of another customer. The challenges in the marketing of services are directly linked to the nature of music service discussed above. Therefore, to assists resolve some of these challenge, a strategic framework referred to as service triangle is normally used. It is worth understanding that service marketing is all about the promises made and promises kept to the customers. Based on the service triangle, there exists three interlinked groups that operate together in order to develop, promote as well as deliver these service promises. These groups include the company, the customers, and the employees/technology. Within this three crucial groups of service comprise of external marketing (deals with making the promises), interactive (delivering the promise) marketing and internal marketing (enabling the promise). All of these stages need to be aligned to ensure successful delivery of service (Lovelock and Gummesson, 2004, pp. 20-40). Relative to the music retailers, the company here refers to the recording company, the employees/technology includes the artistes, recorded music and any other technology used, and the customers are the consumers of the music. Operations in this music industry begin by individual or corporate organizations inviting the service of possible music retailers. For instance, a business in telecommunication industry may put forth tenders invitation for music retailers to provide a promotional music for that particular company. During external marketing, the management makes promises to the consumers that it will deliver the quality of music they so desire. Afterwards, it is now the role of the marketing to ensure that they actually deliver music whose quality equals the promised measure. Failure to this can cause some of the consumers to get dissatisfied and quit on the deal. The left hand of the service triangle comprise of internal marketing. This stage is critical as it represents the interventions and efforts made by the management to ensure that the music service delivered meets that promised to the customers. This is achieved by recruiting, training, motivating and acquiring the right set of technology. It is also at this stage that the music retailer would seek the service of best vocalists and equipment just to ensure that the service offered is up to par. Unless the service employees are willing and able to deliver the quality of music promised, the service triangle will collapse and thus the company becomes unsuccessful (Vargo and Lusch, 2004, p. 9). The servuction system model can also be used to describe operation of service delivered by music retailers. Based on this model, the service delivered by music retailers is divided into the visible and the invisible parts. The invisible comprises of the backstage operations as well as the technology used in service delivery. On the other hand, the visible aspect is categorized into the physical evidence, which for this case could be the production studio, and the service provide or rather the artistes who directly interact with the customers during the service experience. Furthermore, the interactions in the inanimate environment (studio) also encompass that of customer A and customer B. Music industry has particularly been consistent in the nature of its service and interaction matrix to the customers. Generally, the industry has experienced two types of interaction. The first is the customer going to the organization while the second is the organizations going to the customer. The type chosen depends on the nature of the service required. As earlier stated, it is crucial to understand that organizations in this industry are not only concerned with the marketing of the recorded CDs/DVDs, but are also concerned with the recording of the same music from artists and the organizations of live concert events. As such, this industry has several stakeholders some of whom include the producers, the artistes, as well as the DJs in live music production (Basckerville and Baskerville, 2010, pp. 14-23). Based on the aspects discussed above, it has always been the norm of the individual customers or corporate requesting for the service of a particular music organization. This could be in the form of live performance. At this point, it is the role of the contracted music production company to link up with its artistes and deliver the live performance to the customer. However, the recent technology has gradually reduced this nature of the interactional model. Currently, computer technology has permitted music DJ’s to pre-program their collection of music based on customer request and save it in some storage device. As such, this has given room for customer and the organization to interact on what can closely relate to arm’s length interaction model (Brophy, 2007, pp. 2-3). Face to face delivery of the music services remains one of the most recommended systems. This is because clients can interact directly with the producers and get to understand the quality of service that he or she desires. This is because this type of interaction is much more open and has got the personal appeals. This is however not the case for the interaction mediated by technologies. Internet technology has revolutionized the music industry and a majority of companies have resorted to go online. The later form of interaction eliminates the personal touch between the customer and organization and leaves the customer much more vulnerable to sub-standard products. Nevertheless, the above factor notwithstanding, the online technologies have greatly minimized the effort and the cost of accessing music. This is advantages to the client (Tucker, 1993, 23). Unlike the traditional form of retailing of music, the recent technologies have given room to the emergence of e-retailers. Some of the established e-retailers include CDNow and Amazon.com and Find-CD. As such, sell of CDs and DVDs takes place via the internet. The tremendous success stories of such retailers have triggered many other physical retailers such as Virgin and Sam Goody to consider going online. Also, another format of information disseminators, which include internet radios such as Spinner.com and Net Radio have taken the music industry by storm. This technologies permit for live streaming of audio music directly from the website of the company. The customers are therefore able to stream and listen to the music. Unfortunately, this technology restricts the customers from downloading and storing music in storage devices (Grove, 1999, 2). HMV has stood out as one of the largest music retailing entity in the UK and the world. It receives contracts from some of the largest movies and music producers such as Warner Bros and Sony. It is credited for the large volumes of CDs and DVDs in its retail shops across the across the world. On the other hand, Find-CD is an online music and DVD retailing business that carries out the selling of music via the internet. The products that HMV deals with are stored in the CDs and other portable devices. The promotion of the products is done through live performances that are rolled out in several regions of the world. Also, these stores for HMV are located at some designated places thus implying that the customer has to travel to that place in order to receive the service. Their prices are relatively high thanks to the logistical challenges of delivering the face to face service. Unlike HMV, Find-CD is an online music company that offers its services via online services. This implies that there is no need of physical interaction between the organizations and the customer. The music is sold in digitized format and is available on the website of Find-CD. All what is required of a prospective customer is to visit the site and request for the service. Under the tutelage of well trained personnel, the service entertainment music service is accordingly delivered to the customer (Basckerville and Baskerville, 2011, p.17). In conclusion, the music industry has been characterized by variation in fortunes over the years. The recent technological trends have been a major contributor to this aspect. The HMV music retailers have had a very bad run in so far as its financial position and competiveness in this industry is concerned. However, this does not in any imply that the music industry has been on the gradual declines. Instead, based on the assessment and analysis done above, it is evidently clear that HMV could not adapt appropriately to the technologies that have virtually crippled the traditional means of retailing of music. Therefore, it is highly recommended that other players in the industry also embrace technology and go online in so far as service delivery. The technology has tremendously changed thus giving room to music players that are more compact. For instance, iTunes took the industry by storm after the introduction of iTunes portable devices (Basckerville and Baskerville, 2011, p.21). As part of my recommendation, it is important for players in this music industry to embrace the development in technology. For example, it is evidently clear that the use of internet in the marketing as well as delivery of service minimizes the search costs not only for the retailers but also for the customer. This is because one only desires an internet connected computing device to access several thousands of desired music service. In addition, this service is advantageous to the customers as it allow them to research extensively and identify the best service provider. References Lovelock, C. and Gummesson, E. (2004) ‘Whither services marketing? In search of a new paradigm and fresh perspectives’, Journal of Services Research 7 (August 2004), pp. 20–41. Vargo, S.L. and Lusch, R.F. (2004) ‘Evolving to a new dominant logic for marketing’, Journal of Marketing 68 (January 2004), pp. 1–17. Tucker, B. (1993). Tommy Boy Can CD Future. Fast Company, November 1993. http://www.fastcompany.com/online/00/tboy.html Grove, A. (1999). Digital Entertainment: Mixing It Up. Red Herring, January 1999. http://www.redherring.com/mag/issue62/intro.html http://www.moneyweek.com/news-and-charts/company-news/rivals-demise-boosts-hmv-100114-0729-31157.aspx Pattenden, S. (2007). How To Make It In The Music Business. London: Virgin Books Ltd. P.23. Brophy, C. (2007). Manufacturing, Distribution & Promotion In The Music Industry. Bristol: Music Industry Learning, pp. 2-3. Basckerville, D., and Baskerville, T. (2010). Music Business Handbook And Career Guide. London: Sage, pp. 14-23 Read More