The Marketing of Services: Music Retailers - Essay Example

The Marketing of Services: Music Retailers al Affiliation Introduction The music retail sector has gradually grown to become one of the most recognizable in the United Kingdom. The various enterprises in this industry deal with selling albums and signing artists. Others have changed with the dynamic nature of the global market to offer various entertainment services like tickets for concerts within the UK (Jones 2012). The music industry is highly dynamic. In the last two years, the sector has endured mixed conditions in the market. It experienced major key changes in terms of operations and regulatory control in 2013-2014.In addition, the economic down turn in the United Kingdom and the rest of the world caused increased levels of uncertainty and unemployment among the potential customers. The impact was a reduction in the consumption of the discretionary services offered by the enterprises in the sector. These changes in consumer behavior have affected several music retailers further aggravating the decline that was being experienced in an already underperforming sector. Prior to the financial crisis, various industry players had been facing financial difficulties due to the shifting interest of consumers from the musical services to computer games. However, things look bright as the sector continues to recover albeit at a slow pace. In the music retail industry, there are several retailers and enterprises covering the entire United Kingdom. They include single stores, independent outlets and chains of retail stores. This gives a wonderful mix of shops dealing in a variety of services. Services like instrument hire, music recording, repair of educational establishments, music teaching and site music facilities are offered in the shops. Some of the major competitors include Asda Group limited, HMV, Woolworth Group Plc, Virgin Books Ltd and Play.com. Others are AA Music, Academy Chimes Music and Ackerman Music Limited. Most of these retailers have been affected by the recent decline in purchases. HVM remains the leading retailer in the United Kingdom. Service Challenges in the Music Retail Sector Just like any other service sector, the music retail industry faces a number of problems coming from the nature of services which are offered (Dotchin & Oakland 2004). The five service characteristics are helpful in understanding some of these major problems. Perishability is perhaps one of the most difficult characteristic of the services in this sector to appreciate (Porters 2005). Services are highly perishable compered to physical products. This can be best understood when one considers the kind of services that enterprises such as HVM and Ackerman Music Limited offer. Music and entertainment trends keep changing from time to time depending on the prevalent taste. As such, it is normally important that the latest services are offered. Selling tickets to concerts is another aspect of the sector which clearly shows the perishability of the services. The second characteristic is the intangibility of the services. Unlike the case of physical products that can be displayed in the stores, various music and entertainment services offered cannot be displayed or touched by the consumer (Philip & Armstrong 2004). Therefore, decisions are only made on what to buy on the basis of word of mouth, the prevailing entertainment trends, and from past experience. This gives rise to difficulties for both the consumer and the retailer. The other feature is variability of music services. In some instances, the consumer buys nothing but the skills of the music service provider. A good example is the music teaching and recording services. The value that the consumer will get will hugely depend on the skill and competence of the enterprise or individual offering the service. As such, it is not easy to ensure that the services are consistent in all circumstances. The fourth characteristic is the inseparability of the services. One distinguishing feature of this sector is that at times, the retailer or service provider cannot be separated from the consumer or the service consumption itself. The retailer needs to be present when the various entertainment services like music recording are being offered to the consumer. This in itself may be a challenge due to the level of investment and manpower needed especially when dealing with a large market segment. According to Too, Souchon &Thirkell (2011), the inseparability of the music sector not only have implications on the channels of distribution but also on the scales of operation which can be employed. This in turn affects the overall performance of the business. Non ownership is the final characteristic. When the consumer buys the services, they do not get ownership of those particular services. Intangibility dictates what they will be willing to buy and what they will be avoiding. Operations in the Music Retail Sector Assessment of the operations in this dynamic sector can be best understood on the basis of the service marketing triangle and the Servuction Model. In music retail, the employees, the company and the customers play an integral role in the marketing approach. While the retailers and enterprises have services to offer to the consumers, they still have to rely on the external marketing links like online advertising to be able to reach out and attract the buyers. When the consumers are buying these services, the workers employed by the enterprises interact with them both online and offline. The more effective the interaction, the more sales the business makes. The operations are characterized by internal, external and interactive marketing approaches. Internal marketing focuses mainly on the communication which is taking place between the company and the workers. Most retailers share vital information and news on the various services and procedures with the workers. This way, they become effective in their duties. External marketing aimed at promoting the services is also done by means of several platforms that may include newspaper and TV adverts. Online marketing is greatly used due to the nature of the services sold. The interactive marketing on the other hand is characterized by the direct exchange of information between the employees and the potential buyers. The employees enlighten the consumers on the available services and how they can benefit from them. This goes a long way in inducing buying. Servuction model gives a very comprehensive framework which helps in understanding the experience of customers who buy services from the UK music retail businesses. It takes into account the visible part (the music retailer), the invisible part (the operations, structures and organization) and other personnel interactions. There are those retailers who rely on selling their services in the stores while others use online platforms. In such a case, it can be argued that the interactions and the visible components of the operations disappear. However, Zeithaml (2010) points out that the online platforms used bring about the interaction required for the sale of the services. The service providers put more emphasis on anyone who comes into contact with the consumer during the operations. The telephone operators and the people in charge of the online selling platforms play a key role here. In order to increase sales, the services are provided when the consumers will be requiring them. It calls for analysis of the traffic flows and the buying trends. Transformation of the Music Retail Industry The music retailers in the United Kingdom have been striving to adapt to the new demographic changes as well as improvements and advancements being made in music recording and storage techniques. Such businesses have also had to adjust to the impact of digital technology. Some like HVM have found a compromise between the digital technologies and the traditional models of selling the services. Others like Play.com have been digitized with the intention of streamlining their operations and reaching out to a larger market segment. Sales have gone up compared to the trends witnessed centuries ago. Today, any businesses banking on selling the products in the traditional forms and formats may not be able to effectively compete since the current market has greatly embraced technology. With the coming up of advanced technologies and computer applications, some of the services rendered by the music retailers are fast becoming insignificant. These include the recording and music teaching (Griggs & Leopold 2013). There is a number of software and applications that consumers have access to which allow them to get these services without having to pay for them in retail stores. The trend has a very detrimental impact on the overall sales, profitability and sustainability of the businesses. Technology has been incorporated into the operation of the establishments to increase efficiency and boost the overall store sales. Digital and online selling platforms today have a significant contribution in the performance of the businesses. They allow the consumers to access the services, pay and use them without having to physically visit the stores. Such practices make it easy to sell the services to people who are far from the actual physical store. Moreover, it allows for round the clock operations in some instances thereby providing the consumers with the much needed flexibility in their busy schedules. Appropriate Measures of Service Quality for Interactions With the changing trends in the market and the impact of technology and digital innovations, there is need to reconsider the marketing operations in the music retail sector. One aspect that will be effective in the face to face interactions as well as in the technology mediated interactions is targeted campaigns. This component of direct marketing starts with obtaining reliable consumer data base information (Schmenner 2006). With such data, it is possible to offer greater customer value by means of personalized and customized approaches to service offering. In addition to this, the distribution channels will be tailored to satisfy the needs of the consumers thus helping in building consumer loyalty and repeat buying (Verma 2005). In order to increase sales and brand awareness using this measure, it is imperative to have a consistent and a regularly updated customer profile that gives information on the dormant section or segment of the market. Other measures which can be used to increase value include personalized interaction in the technology mediated platforms, individualized distribution and customized music services (Gunter & Furnham 2010). Comparing the Use of the Extended Marketing at HVM and Play.com HVM is the dominant music retailer in the United Kingdom. On the other hand, Play.com has cut a niche for itself in the market by aggressive integration of technology in its operation. Both companies use the 8Ps in the extended marketing mix. However, the approaches differ in one way or the other due to their lines of operation and the targeted segments. When it comes to products, both companies sell music and entertainment services. However, HVM has diversified to also offer other services like music training and recording services. The prices determine the profit margins for both companies. The prices are set at a standard value. Play.com offers lower charges compared to HVM. Place is the other component of the marketing mix. In both companies, the services are generally bought and used at the same time. HVM has gone a step further to deliver the services to the place required by the buyer. Promotion, which refers to how the businesses market themselves, affects overall performance. Being an online platform play.com relies heavily on online promotions. HVM, on the other hand, uses several promotional platforms both offline and online to develop its brand. The fifth component is people.Play.com has a provision in its selling platforms that allows buyers to rate the services. HVM also uses this component of interaction by ensuring that it maintains professionalism and courtesy. When it comes to processes and positioning HVM and play.com have standardized operating procedures and positioning stratergies.Play.com positions itself as a low cost service provider while HVM has pursues differentiation and service benefits as a strategy. Performance is the final aspect of the 8p marketing approach. It is also referred to as the productivity of the business. HVM ranks higher in this aspect than Play.com. This is because the business is able to consistently offer quality music services to its consumers thus ensuring repeat purchase. Play.com also strives to rely on technology to achieve its financial goals in the dynamic and competitive sector. Reference list Dotchin, J & Oakland, J 2004, ‘Total quality management in services: part 1: understanding and classifying services’, International Journal of Quality and Reliability Management, vol. 11, no. 3, p. 9–26. Griggs, B & Leopold, T 2013, ‘How iTunes changed music, and the world’, CNN 26 April. Available from [10 March 2015] Gunter, B & Furnham, A 2010, Consumer Profiles: Introduction to Psychographics. Thomson Learning, London. Jones , S 2012, ‘UK music sales decline for seventh successive year despite downloads’, The Guradian, 2 January. Available from http://www.theguardian.com/music/2012/jan/02/uk-music-sales-decline-2011[10 March 2015] Philip, K & Armstrong, G 2004, Principles of Marketing. Pearson/Prentice-Hall, Upper Saddle River. Porter, M 2005, Competitive Advantage. New York, Free Press. Schmenner, R 2006, ‘How Can Service Businesses Survive and Prosper?’ Sloan Management Review, 10 October, p. 21–32. Too, L, Souchon, A, &Thirkell, P 2011, ‘Relationship Marketing and Customer Loyalty in a Retail Setting: A Dyadic Exploration’, Journal of Marketing Management, vol. 17, no.4, p. 287-319. Verma, R 2005, ‘An empirical analysis of management challenges in service factories, service shops, mass services, and professional services’, International Journal of Service Industry Management, vol. 11, no. 1, p 40. Zeithaml, V 2010. ‘Service quality, profitability, and economic worth of customers: what we know and what we need to learn’, Journal of the Academy of Marketing Science, vol. 28, no. 1, p. 67-86. Read More