1. 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 The Furze Strategic Marketing in Practice Case Study June 2007 David Kilburn

2. 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

3. 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 Where are we now ? Audit of current situation

4. 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 The music industry today 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– music stores have suffered a decline in sales - CD sales have fallen in value by 23% in the past 5 years Analogue has been replaced by digital Young artists can now become famous through word of mouth, peer to peer file sharing, and by building up a loyal fan base via YouTube, MySpace Digital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

5. 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 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)

6. 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 The Furze SWOT Strengths Has a loyal and growing following Has own interactive website Broadband penetration has increased to 40% in major European cities Free downloads on their web site which promote opportunities to buy Merchandise and concert ticket sales available online Fans can post blogs on to web site Fans can send downloads via bluetooth mobile, peer to peer Creative – have produced their own comic to sell to fans Venues pay for publicity of performances The furze do not have any bank loans Weaknesses Have not produced a top 20 record as yet Predominantly U.K. based Operating at less than break even at present Fledgling band to some extent, established only 3 years Opportunities To be a highly successful and profitable band To target the US market as well as Europe, Asia and Australasia To be featured regularly on radios 1 and 2 Growing interest in live concerts Profiting from technological advances Threats Barriers to entry fairly low Band falls out of fashion Highly competitive market Meteoric rise could create problems and stretch resources too thinly

7. 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 Map of competition Social networking sites MySpace YouTube Bebo Corporate record labels EMI Sony Warner Music Up and coming bands Enter Shakira Arctic Monkeys Aztec Camera Lily Allen File sharing Napster Apple iTunes

8. 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 The Business Environment MICRO MACRO PHYSICAL Suppliers Labour Capital Product Wages Profit Organisation Materials Pollution Politics Economy Society Technology Legal More than SLEPT! Porter’s 5

9. 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 Consider The Furze’s positioning Use either BCG or PLC

10. 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 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

11. 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 Where do we Want to be?

12. 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 Objectives Decide Objectives –For U.K. and International Deliver Outcomes

13. 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 Segmentation Described and Profiled for each sector

14. 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 Targeting Specific and Justified for each sector

15. 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 Positioning Clear and defensible –Set out USP and Positioning for each sector. –Are there any commonalities or Single Brand options Vision Values

16. 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 How do we get there?

17. 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 Action Decide Objective Deliver Outcomes

18. 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 Strategic Development Product –Sector Selection –Core/ Physical/Augmented Proposition –Branding Pricing Distribution Promotion People Process

19. 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 Implementation and Control Budgeting Areas Metrics Balanced Scorecard McKinsey 7S

20. 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 Comms Strategy for The Furze Audiences –Internal and External, domestic and international, Small record labels and Corporates Media Messages Timing/Budget Stakeholders Investors Suppliers Partners Customers Fan base Media Mobile phone operators ISP’s YouTube MySpace Yahoo Music Google Music promoters Music publishers Who else ?

21. 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 Internationalisation Where, when and how –GE/ Harrel and Keiffer

22. 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 Implementation and Control Budgeting Areas Metrics BS McKinsey 7S

23. 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 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

24. 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 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.

25. 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 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.

26. 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 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

27. 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 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

28. 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 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.

29. 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 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

30. 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 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.

31. 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 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

32. 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 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

33. 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 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.

34. 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 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.

35. 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 Implementation and Control Style Creative, dynamic, innovative, and funky

36. 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 Control – Balanced Scorecard Internal Develop CRM databases for collecting fans’ feedback and insights into future needs, wants, industry trends, (market intelligence)

37. 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 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

38. 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 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

39. 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 Possible questions 1. 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 3.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

40. 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 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.

41. 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 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.