Consulting For A Local Record Label Essay

1. Introduction I have been hired as an E-commerce consultant by a local established record label. They are keen to exploit the potential of the global market by expanding their customer and client base and capitalizing on the growing trade in downloading music. Definition of E-commerce extracted from â€Å"E-commerce is a way of doing real-time business transactions via telecommunications networks, when the customer and the merchant are in different geographical places. Electronic commerce is a broad concept that includes virtual browsing of goods on sale, selection of goods to buy, and payment methods. Electronic commerce operates on a bona fide basis, without prior arrangements between customers and merchants. E-commerce operates via the Internet.† 2. Methodology I will be using the following websites to investigate the questions set in this assignment. Yahoo Google HMV Virgin 3. Findings From my research I found that the ongoing development of technology particularly in the World Wide Web has headed millions of companies to take advantage of setting up an internet website where their products and services can be sold and thus maximize the profits of the company by reaching their target market. The benefits of E-commerce developed for the music industry are as follows: In order for record labels, musicians, music stores, and individuals who have an interest in generating profits out of selling music, they identified a gap in the market place called E-commerce and penetrated here to maximize their profits By entering into E-commerce, these companies maximize their profits by fighting against piracy. The benefits of consumers are acquiring quality music at a cheaper price and most importantly legally. The consumers also benefit from peaking up their favorite tracks or the entire album Companies such as HMV entice consumers by offering over one million tracks downloadable over their website. The software that is used to download these tracks is available online or in stores of the company free. It is easy and fast to download music and there is technical support and advice offered to individuals experiencing difficulties in setting up the software. Another advantage of E-commerce is that companies such as HMV do not require have staff (apart from technical workers) which is very cost effective as it minimizes the costs of the company. Customers can shop 24/7 at their convenience. There is always the product they need and thus their needs are met more efficiently and their perception will not change. Moreover, HMV slightly repositions their market place by differentiating their product range which now includes many products which are needed to listen to digital music in the form of MP3. One of these products are MP3 players and an IPod shown below. Customers can also benefit from managing their own music collection and burning their music to CDs concurrently complying with the law. The price is very affordable and reasonable as it meets the needs of diverse types of customers. Please see the price list of HMV Digital Music: Choice A Choice B Choice C Unlimited access à ¯Ã‚ ¿Ã‚ ½14.99 a month right to burn the music to CDs Limited access 50 tracks à ¯Ã‚ ¿Ã‚ ½4.99 a month Individual tracks or entire tracks The price varies The customers are allowed to listen to 30 seconds the music they are interested in buying prior to their purchase. It takes very little time to download a song. Depending in the internet connection: Broadband – 1 to 2 minutes a 4 minute song and Dial up which can take up to 15 minutes respectively. Another similar company is only based online is MSN Music (shown below) at music.msn.com. It has a similar approach as HMV. The prices and product range are very competitive. MSN Music Price List Option one Option two à ¯Ã‚ ¿Ã‚ ½0.60 an individual track à ¯Ã‚ ¿Ã‚ ½5.50 – à ¯Ã‚ ¿Ã‚ ½12.00 (the price depends on the popularity of an artist/band and how new the album is) 4. Conclusion I have found that the majority of respondents recognized the IPod. However, not many of them could afford to buy one. Therefore, the IPod is currently available for people who have a high disposable income which means that the ones who suffer from poverty or are looking for value for money are not able to buy digitalized music. There are other companies that produce similar to iPod products: Nokia’s N91 is specifically designed music phone which carries out functions as the iPod and it also plays video clips. Another company which produces music phones is Motorola, Motorola iTunes Phone which has been in the market for a 3 months (August 2005). It has gor similar functions as has the iPod. Arguably, there are many other companies which produce very similar products such as MP3 players which are much cheaper. However, my research showed that despite the availability of products such as MP3 players, customers still prefer to buy traditional CDs. This may be because of not being able to use the Internet or special software to download music as well as the fact that not many people have a computer. Also, the majority of the respondents did not recognize the websites of companies such as MSN music or HMV, i.e. these companies are not efficient in making sure that people are aware of the availability of online music which can be downloaded legally. In my personal opinion, CDs will soon become old-fashioned as the influence of independent label companies and online businesses selling digitalized music will attract more customers as it is more convenient as the customers can listen to the songs they want to download and also it is cheaper and time effective. Prices will and are coming down.