Red Records Sales, Marketing and Accounting Processes - Example

Music Business Plan Name Date Executive summary Red Records will be the name of the business which will be operating in the music industry. The business will operate a retail store that will sell the music online as well as at its premises. A capital of $ 155,000 will be required to start the business. Music industry is quite competitive and it has a high number of companies. The number of customers is high but the main challenge that affects the industry is piracy. External factors favor the growth and development of the business. The main marketing objective of the business is to create awareness about the business as well as enhance the brand image. Target customers will be dependent on demography as people from different ages listen to different types of music. The business will be positioned as affordable and ethical in the music industry. This is due to the high levels of copyright infringement in the industry. Prices of the products of the company will be affordable although it will not be constant. Social media will play an important role in promoting communication with the stakeholders. The physical evidence of the business will be its premises and the people will be comprised of 6 employees. The process will involve sales, marketing and accounting processes. Table of Contents Executive summary 2 Table of Contents 3 Introduction 4 I.Situation analysis 4 A.Market situation 4 B.Competitive situation 5 C.Macro environment situation 6 II.SWOT Analysis 6 A.Strengths and Weaknesses 6 B.Opportunities and threats 7 C.Issues analysis 8 III.Marketing objectives 8 IV.Target Audience profile 9 V.Market positioning strategy 10 VI.Product profiles 11 VII.Pricing strategy 11 VIII.Distribution strategy 12 IX.Integrated communication strategy 12 X.People, Processes and Physical evidence 13 XI.Financial requirements 13 Bibliography 14 Introduction The business will be in the music industry and will be responsible for selling recorded music through an online and a physical retail store. The name of the business will be Red Records. Headquarters of the company will be in Melbourne Australia. The mission of the company is to promote access to original recorded music in a legal way. The vision of the business is to be the market leader in the next five years. All the activities of the company will be carried out in a coordinated manner. A capital of about $ 155,000 will be required to establish the business. The paper is thus a business plan that will be used to implement the business. Logo I. Situation analysis A. Market situation The market is quite competitive as a number of individuals as well as companies are involved. In the music business there are different stakeholders who play a specific role. The market has record labels which are responsible for producing the music. The distributers then distribute the recorded music to the retailers who in turn sells the music to the consumers (Park, 2014).Other stakeholders are involved in managing the artists while others are promoters who are involved in booking the live performance for the artists. The business will however focus on selling the music directly to the consumers. This will require a close cooperation with the distributors and the record labels. An online store and a physical retail store will have to be opened in order to carry out different activities. Currently, there are thousands of online and retail stores in the market which allows the consumers to buy the music (Park, 2014). This has made the market quite competitive. The market is also faced with the problem of piracy which is an infringement of the copyright. However, the demand for music is quite high which has made the industry quite lucrative. The number of musicians is also on the increase which is set to expand the market. B. Competitive situation The level of competition in the market is quite high as there are a lot of players involved. A high number of well known companies are involved in the music business. A company like Sony which is well known internationally is currently one of the market leaders (Park, 2014). The company is currently one of the largest digital music retailers. The market also faces stiff competition from other online platforms which allows for the consumers to access the music. You Tube and other social media sites offer the greatest competition to the industry. The music in such sites can be downloaded almost for free (Park, 2014). In some instances, the consumers can share the music for free through the social media and hence impacting negatively on the competition in the market. Companies like Wal-Mart are also involved in retailing the music. Consumers can purchase the music recorded in digital devices from Wal-Mart and other retail stores. This raises the level of competition as such companies are well known by the customers. It is also convenient to the customers as they can purchase the music as well as other products. The competition is thus stiff and large companies occupy the largest market share. C. Macro environment situation The business’ macro environment involves the external forces that are beyond the control of the company. The political situation in Australia where the business will be physically located is stable. Copyright laws are also in place which plays an important role in preventing privacy which affects the industry. The economic environment is stable and it supports to growth and development of businesses. This has positive impacts on the ability of the business to make profits. The economic situation for most people is improving which may enable them to purchase the music. Socially, music is preferred by a high number of people (Hammond, 2014).The social environment therefore favours the growth and development of the industry. This is an advantage to the industry as it promotes its profitability. On a daily basis, people listen to different types of music although the taste and preferences of the individuals usually change with time. Technological changes are also taking place at a very high rate. The technological changes have direct impacts on the industry. Currently the CDs and DVDs are being replaced by digital music. Most of the customers prefer downloading the music directly from the internet. The technological changes affect how the customers access the music. II. SWOT Analysis A. Strengths and Weaknesses The main strength lies on the high number of customers. High number of customers translates to better business opportunities for the retailers. The growth and development of the industry is quite high which plays an essential role in promoting growth. The industry is profitable as music is popular among almost every individual (Hammond, 2014). Every individual at one time purchases or downloads music. The entry into the industry does not require much capital. The business is likely to perform well as s result of high demand for the products of the industry. The existing copyright laws are not strong enough to prevent antitrust issues. This leads to negative effects on the growth and development of the business. Any technological changes affect the operations of the whole industry. The company may experience massive losses in case of any technological changes. The retailers in the past faced massive losses when the technology replaced cassettes and CDs (Hammond, 2014). Adjusting to new technologies is also a challenge to most of the retailers as infrastructure has to undergo some changes. The music industry also has middlemen which has negative impacts on the industry. B. Opportunities and threats The main opportunity lies on the use of the internet and new technology. The business has the potential of using the internet to sell the music to the global audience. The online digital store can be accessed by customers located in any part of the globe (Park, 2014).The company can therefore collect a high amount of revenue through the online platform. The business can also use the internet for marketing it products and services at a cheaper cost. Advertisements play an important role in promoting the popularity of the organization among the customers. The music business has opportunities for diversification. The business can also be engaged in promoting and managing the artists. Diversification is important in the growth and development of the business. A lot of focus should be placed on the international market which has a huge potential. The music business also has some potential threats which may affect the growth and development of the business. Illegal music downloading and recording which is commonly referred to as piracy is one of the main threats to the industry. It denies the retailers as well as musicians a high amount of revenue. Currently, the advancement of technology has made it easy for music to be downloaded and shared online (Park, 2014).This is a threat to the businesses as it may be unable to find customers. The ability of the social media to be used for sharing and downloading of music is a threat to the business. This is because the music can be shared and downloaded for free through the social media. This may deny the business a lot of revenue and profits. C. Issues analysis The copyright issue remains one of the main challenges facing the industry. In Australia, there are copyright laws that are aimed at preventing the copyright infringement. The high levels of copyright infringement are the main challenge facing the industry (Park, 2014).It is also difficult for the authorities to tackle the problem s of piracy. The industry is however profitable despite the challenges as a high number of people are in need of the music. The demand for music among the customers is quite high which is beneficial to the industry. The hit songs can be profitable as it may be downloaded by a high number of people. The industry however requires a lot of flexibility in order to deal with any changes that may be brought about by macro-environment. III. Marketing objectives The main marketing objective is to ensure that a high number of people are able to know about the business. The business has to be popular among the customers in order to achieve success. The success of a business is mainly dependants on how it is marketed. The marketing objective will also be aimed at creating a good brand image among the customers. Enhancing the brand image of the company will also play an important role in attracting more customers. Creating awareness about the services being offered by the business will be an important marketing objective. The customers have to be aware of the products and services in order to make their purchase decisions (Kotler & Armstrong, 2013). Creating customer loyalty is also an important marketing objective. The high levels of competition in the market require customer loyalty in order to collect more revenue. Businesses can benefit through the loyalty of the customers. Marketing is important for any organization in terms of ensuring that it gains popularity. In order to achieve the marketing objectives, several resources will be required. Financial resources will be required in order to meet the goals and objectives of marketing. Expertise will also be required during the process in order to achieve the marketing objectives. IV. Target Audience profile The business will target audience from diverse demographics. The business will be dealing with different genres of music which is popular among a diverse demographic of audience. The business will target the youth who are between the ages of 18 to 35 years when it comes to the rap music. The number of youth is high and the popularity of the rap music is also on the increase. These demographics will therefore impact positively on the growth and development of the business. The women are popular with the RnB type of music and will also be targeted by the business. A high number of the target customers will also be youthful. Other genres of music such as country music are popular among the mature adults as well as the elderly. The profile of the audience will therefore be dependent on their demographics. Understanding the needs of the target customers is important in any industry and it determines the ability to satisfy the customers (Jobber & Ellis-Chadwick, 2012). The business will however carry out further research from time to time in order to meet the needs of the targeted audience. The audiences that will be targeted by the business have a high potential in terms of growing the business. V. Market positioning strategy Positioning is an important marketing aspect that is aimed at making the brand occupy a distinct position in the market. Different types of positioning will be utilized in order to ensure that the business is able to attract a high number of customers. Functional positions will be utilized in order to provide benefits to the customers. A favourable perception of the business is important during the positioning. Symbolic positions will also be used for the purposes of positioning the business. Symbolic positioning mainly involves putting in place measures to enhance the self image of the organization (Percy, 2014). Self image of the organization will be enhanced through the use of advertisements. The social media will be used for the purposes of ensuring that creating a good brand image of the business. Social media will also be used to communicate directly with the customers. The business will ensure that it sells the products at affordable rates to the customers. The business will also ensure that the customers are able to easily download the music through the online store. The business will therefore position itself as affordable, accessible and efficient in terms of downloading music. Since the market is full of problems associated with piracy, the business will also position itself as an ethical business in the music industry. VI. Product profiles The product profile mainly involves details about the products or services being offered by the company (Andreas, et al, 2011).The main product of the business are music of different genres. The business will have both the physical as well as the digital retail store. The physical store will mainly be selling the music CDs and DVDs. Customers will also be able to download their favourite music into the digital devices legally at the retail music stores. The business will sell both the local as well as the international music at the retail stores. A website will also be established by the business which will be used for the purposes of facilitating the digital downloading of music. The customers from any part of the world will be able to download their favourite music through the website. However, all measures will be put in place to ensure that the business is fully in compliance with the copyright as well as the intellectual property laws. The customers will also make their payments through the online means if they are to download the music from the website of the company. The business will also put in place measures to ensure that it sells the latest and popular music in the market. The business will strive at ensuring the customers obtain products which are of the highest quality. VII. Pricing strategy The prices of the products of the company play a significant role in influencing the purchase decision (Lee, 2014). In the music industry, the price of the products is important to the customers. The prices of the products in most cases are standard. In other instances, the products are cheaper and this can be as a result of piracy. However, since the company will be involved in original products from the record labels, the prices will be slightly higher but affordable. The products of the company will range from $ 3 which is affordable to most of the music lovers. In the music industry, the bargaining powers of the customers are higher as compared to that of the companies. However the company will create a high level of customer loyalty which will be useful in attracting the customers. Customer loyalty will be important in ensuring that the customers are able to purchase the products at the set prices. The prices of the products will however not be constant as the demand for music is dependent on how long it has lasted in the market. The process of the products will may increase or reduce from time to time depending on the time it has lasted in the market. VIII. Distribution strategy The distribution of the product is important in determining the access by the customers (Ryan, 2014). As a retailer in the music industry, the products will be accessed by visiting the physical retail store of the company. The customers can also access the products of the company through the online means which is much easier. Initially, the business will have a single retail store. However, depending on the growth and development of the business, branches will also be set up in different parts of the country. The retails store will mainly be used for the purposes of facilitating access to the local customers. The business as a retail will however be dependent on other distributors working with the record label companies. A good relationship with the distributors as well as high levels of professionalism will be maintained. This is for the purposes of ensuring that the products are available to the customers at all times. IX. Integrated communication strategy Communication is an important aspect of any business. It can be used for informing the customers as well as receiving information from the customers (Charlesworth, 2014). Different methods of communication will be utilized at the organization. The social media will be the main method of communication that will be utilized. Social media is interactive in nature and it will ensure that immediate feedback is obtained from the customers. Other official methods of communication such as the email will also be used. Telephone calls as well as the print media will be utilized by the business. The role of communication will be to inform the customers, obtain feedback as well as promoting the products of the company. X. People, Processes and Physical evidence People are directly involved in the operations of the business (Charlesworth, 2014).The company will have a dedicated team of employees who will be required to carry out the daily operations. The owner of the business will double up as the chief executive officer. The other personnel will include a marketing officer, finance officer, human resource management officer and an information technology officer. Two sales clerks will also be part of the team during the establishment of the business. Each member of staff will carry out specific duties. However, the number of staff can be increased as the business expands. The processes involve the activities that are carried out at the company to meet its goals and objectives (Charlesworth, 2014).This will include the uploading the music on the website of the company, selling the music directly to the customers over the counter. Other processes will involve marketing and accounts management. The physical evidence will be the premises of the company. This will include the retail store as well as the offices which will be located in the same premises. XI. Financial requirements Item Cost ($) Remarks Rent 45,000 The monthly rent for will be 50,000. The initial amount will carter for three months rent in advance. Salaries and remuneration of employees 50,000 The amount will carter for the salaries of employees for three months. A total of 6 employees will be hired at the start of the business. Logistics 30,000 The logistics cost will carter for an initial three months period. Permits and licenses 10,000 This will carter for all the permits and licenses required to start the business. Capacity building 5,000 The amount will be used to recruit and train the employees before they can start carrying out their duties. Office operations 5,000 The amount will be used on a daily basis for a period of three months. It will be used to purchase office supplies and running the office operations. Miscellaneous 10,000 The amount will be on standby for use in any emergency situation Total 155,000 Capital Bibliography Park, D. J., 2014.The death and life of the music industry in the digital age. New Media & Society, 16(3), pp. 534-535. Hammond, R. G., 2014. Profit leak? Pre-release file sharing and the music industry. Southern Economic Journal, 81(2), pp 387-408. Kotler, P., & Armstrong, G., 2013. Principles of Marketing 15th Global Edition. Pearson. Jobber, D., & Ellis-Chadwick, F., 2012. Principles and practice of marketing (No. 7th). McGraw-Hill Higher Education. Percy, L., 2014. Strategic Marketing Communication. London: Routledge. Andreas, K. et al., 2011. Two hearts in three-quarter time: How to waltz the social media/ viral marketing dance. Business Horizons, 54(3), 253-263. Lee, I., 2014. Integrating Social Media into Business Practice, Applications, Management and Models. Advances in E-business Research Book Series. Ryan, D., 2014. Understanding digital marketing: marketing strategies for engaging the digital generation. Kogan Page Publishers. Charlesworth, A., 2014. Digital marketing: A practical approach, Routledge, London Read More