|
Home / Business / Marketing
CCM Music Recording Company Case Study Part 1 - Company Overview
By:Anastasia Kurdina
Company Overview
History, development and growth of CCM over time
CCM, Colorado Creative Music, is music recording studio, founded in 1995 by Darren Curtis Skanson, primarily established as vanity label for producing, promoting and selling his own records, and consequently developed into microlabel with 4 product lines and 11 different albums. In 2000, the company sold 30,000 of Darren Curtis Skanson CDs and received net profit of $4,292.00. The company aims at expanding its customer base, acquire more popularity, and develop the company from microlabel to the independent one.
Vision/objectives
The business vision of Colorado Creative Music consists of three components - Core Value, Core Purpose and Visionary Goals (Thompson, Strickland, 2003).
Core values of CCM are quality, creativity, and excellent customer service. The core purpose of this organization is to make more people listen to classical and light acoustic music and admire it. As for the visionary goals, the strategic dilemma of the business arises. Thus, one of the visionary goal is to make the music produced, played and recorded by CCM musicians, heard by larger audience. The other visionary goal that doesn't completely go in line with the first one is to win the large custom market for the company's products and services. The collision here is in the primary value and target of the business: in the first case the attention is attached to the product, music, while the second one is focused on the development of the organization. This dilemma is the subject of strategic choice of the organization, which will be outlined and discussed later.
At the present moment, the main objectives of the company are: positioning the business against its rivals, development of distribution channels, development of the products and enhancement of the product line, anticipating changes in demand and adjusting the firm's strategy to respond to them.
Operating environment
The firm operates on American market which is characterized by political and economical stability, technical advancements in producing and distribution processes, large number of potential customers, broad demand and intense competition.
Business model
Business model is the mechanism for the company to generate the revenues and profits. It includes strategy and implementation thereof and should answer such questions as how the firm selects its customers, how it differentiates its products from those or rivals, how it creates utility for the customers, how it acquires and preserves them, promotion and distribution strategies, how it allocates its resources and derives profit. As for promotion and distribution techniques for Colorado Creative Music, the particular attention is attached to Internet aspect of the distribution and its capabilities.
Internet is not only alternative way to traditional methods of music distribution, but also a great opportunity for artists and music-recording companies to expose these products to broad public. The advantages of such means are low cost of entrance and enormous size of potential customers market. Traditional chain of music distribution includes such components as writer/performer, publisher, musical instruments company, live performances, venue equipment and services, recording, studio equipment and services, recorded performances such as night clubs, bars, business music, broadcast, film and music videos, and retail. These are traditional stages through which the song or other musical product must pass to get to the final customer. Internet makes this chain of distribution shorter and simpler, and therefore internet-based promotion, advertisement and distribution can be considered a new business model to base the business on. Further information on virtual distribution will be discussed in relevant section.
CCM business model includes following components:
Value Proposition: satisfaction of customers' needs in quality classic music;
Market Segment: white females (predominantly) and males of 40-60 age range. The market segment needs to be further expanded.
Value Chain Structure: structure of the firm to be described below
Revenue generation: through sales, direct sales in particular; revenue generation roots need to be expanded.
Position in the value network: enters the most specialized industry segment. A large number of competitors from all 4 segments of the industry; business may be complemented through alliance with larger recording company.
Competitive strategy: company's strategy primarily focused on differentiation rather than cost leadership strategy, through internet distribution allows making the products of CCM cheaper than those of competitors.
Market segmentation, targeting, positioning
The music recording industry has 4 clearly identifiable segments: major recording studios, independent labels, micro-labels and vanity labels. Major companies have large quantities of artists under contracts, reaching the number of 100, specialize on multiple types of music - rock, country, jazz, classical, traditional and other, and have formal and reliable national and international channels of distribution. Independent labels have 10-100 artists under contract, focus on recording of one or two major music styles and have either national or most often regional distribution channels.
Micro-labels have less then 10 artists under contract and are tightly focused on definite style of music. They are characterized by small staff and manager performing as the leading artist of the studio. Micro-labels have rarely formal distribution system and heavily rely on direct sales to fans and wholesale to clubs and specialty retailers.
Vanity labels segment is the fourth, the last and the most specialized segment of the music recording industry. They are founded by independent artists for recording and selling their products (Darren& Winn, 2003). At present, CCM is the micro-label that strives to convert into independent label. Therefore, CCM currently occupies rather narrow market niche of classic and traditional acoustic music admirers within the age of 40-60, predominantly white, middle class females throughout the territory of the United States, though the major part of the customers is focused in Colorado region. This is the result of market targeting, when the studio developed the measure of segment attractiveness - loyal customers and fans of performers; music, and selected appropriate target segment.
Today, the company wishes to change the segment it operates into. To expand the company's market segment it should develop product differentiation aimed at selling various products with different characteristics to different market segments. So far such differentiation is not developed.
On the basis thereof, the positioning approach now applied by the firm is differentiation positioning, which lies in filling less competitive, smaller market niche in which the firm locates its brand and attracts its customers.
Products
At present, the company disposes of 4 product lines and 11 different records. The brand names of the Company are: Darren Curtis Skanson, Acoustictherapy, Andrew Thomas Harling and Music for Candles. The style of the music offered is the same throughout all the brands: light classical guitar.
Distribution channels
The distribution channels of CCM are predominantly direct sales. These include sales in the gig, shopping mall distribution and in the back end (which includes CD order through 800 number, website sales, mail order). In 2000 CCM sold 30,000 Darren Curtis Skanson CDs, predominantly through direct sales. Though, traditional chains of distribution are more effective and they include major distributors, one-stop distributors, independent record stores and major chain record stores. Developing traditional distribution methods is one of CCM's primary tasks.
Financial positions
CCM is a micro-label, the third of the four segments in music recording industry. Therefore, in contrast to the premier recording studios as Columbia, Sony Music, EMI and BMG, which possess enormous financial actives, financial position of CCM is rather modest. In 2000, the company reached total income number of $216,614.05 and net income of $4,292.00, which, though, was 4 times less than net income in 1998 (amounting to 20,626.70) and nearly the same as in 1997 and 1999.
Major strategic issues
Major strategic issues of the company are formulated by the manager of the company, Darren Skanson, in the Case Study for Colorado Creative Music (Darren & Winn, 2003) and include the following:
* create a profitable music recording label with expanded range of artists and performers;
* position Darren Curtis Skanson label to compete with major artists who have contracts to Sony Classical. For this, acquiring traditional distribution methods is necessary;
* create new product line similar to Acoustcitherpay which would be saleable and provide funds for the previous two goals.
The strategic tasks and ways of their implementation are not uniform and completely complementary. Thus, the first aim of growing the company contradicts the easiest and most possible way of accomplishing the second goal - promote the music by selling CCM's product lines to recording studio larger than CCM, independent of major label with access to traditional outlets. Thus, the company has to define its prerogative - develop the recording label or promote the music by means other than within CCM capabilities.
Read full Case Study: Marketing
Digg
del.icio.us
Blink
Stumble
Spurl
Reddit
Netscape
Furl
Article keywords: colorado creative music, music marketing, recording label, ccm case study
Article Source: http://www.articles2k.com
Anastasia Kurdina is a person of manifold gifts. Almost every her writing is followed by lavish testimonials from satisfied customers. Anastasia specializes in marketing, management, sociology, history, world cultures, literature and art. Anastasia Kurdina is not an essay writer in a common sense. She is a Poet, an Analyst, an Artist, a Critic, ... . Get to know Anastasia better at Your Personal Writer where she writes custom research papers, term papers, and essays for college students.
|
|
| Top Marketing Articles |
- 1). The Benefits Of Branding By : Marcia Yudkin
Branding is the process of creating distinctive and durable perceptions in the minds of consumers. A brand is a persistent, unique business identity intertwined with associations of personality, quality, origin, liking and more. Here’s why the effort to brand your company or yourself pays off.
1. Memorability. A brand serves as a convenient container for a reputation and good will.
|
- 2). New Marketing Program Draws Thousands To Its Free Teleseminar By : Patrick Riley
Less than three short months ago, a new 1Step System was born with a very real potential for generating a great deal of income in a short time. Co -founders Rod Stinson and Chris Koehl have brought this opportunity to people all over the world. Many are joining now because the company is still in its infancy, which from a marketing standpoint is surely the best time to get on board.
|
- 3). Direct TV and the HD DVR By : dave4
With the inclusion of free or price-reduced TiVo-powered DVRs (digital video recorders), the benefits of DIRECTV have become so much greater. Particularly compelling is the high definition DVR combo that new DIRECTV subscribers can currently receive at a fair price. Of course the question to be asked is: If I can receive a free DVR with my DIRECTV subscription, why dish out the extra cash for the upgrade? There are quite a few reasons.
|
- 4). Seven Offline Viral Marketing Ideas By : Matt DeAngelis
Recently I participated in a forum discussion about offline marketing – that is using more traditional marketing offline to drive traffic to your website or blog. I can still remember the first time I saw a URL in a TV commercial and how cool I thought that was.
The offline world has the constraint of geography, so the least expensive forms of viral marketing are going to be geographically bound, which can be challenging for some sites.
|
- 5). Social Bookmarking - The Ultimate Viral Marketing By : Matt DeAngelis
Social Bookmarking could be one of the best things that ever happened to websites and blogs.
Basically Social Bookmarketing sites allow users to create a set of content bookmarks. These bookmarks are organized by tags, which are (usually) arbitrary words or phrases the user can assign to content. This gives the user a way to classify, rank and organize content using tags.
|
- 6). John Warwicker - Co-Founder of Tomato Design Company By : Robert Palmer
Design company Tomato
( http://www.tomato.co.uk ) was founded in 1991 in London by John Warwicker, Steve Baker, Dirk Van Dooren, Karl Hyde, Richard Smith, Simon Taylor and Graham Wood. In 1994, Michael Horsham and Jason Kedgely joined.
tomato specializes in: Architectural Design, Consultancy, Drawing, Education, Electronic Interactive Media, Film & Commercial Direction, Graphic Design, Fashion, Motion Graphics, Music & Sound, Strategy, Branding & Identity, Photography, Publishing, Title Sequences, Typography, Writing.
|
- 7). The Onset of Digital Vinyl Banner Printing By : Charmaine Joy Caro
Is your business customer-oriented? Does it speak of your company identity? Does it offer the customers the right services and products they really need? If you think your business still needs a little push to effectively make it to the peak of success, then you should opt for vinyl banners for your promotional campaign.
Vinyl banners are proven promotional tools that give boost to your ad campaign.
|
- 8). Teasing Colors in Printing Services By : Maricon Williams
People are basically visual creatures. They are easily turned on by what they see. The outrageousness of the design, graphics and colors teases their sense of sight. It sends excitement and thrill that generates more appetite to stare longer and be charmed.
Among design, graphics and color, the latter is the most difficult to show accurately. This is because color perception can be affected by lots of factors.
|
- 9). Full Color for Stunning Brochures By : viojieley
Have you ever feel so engrossed in something so beautiful and breathe taking? Perhaps a picture or image of a person or a scenic spot that you just find it so difficult to take your eyes off it. If you have, have you ever wondered what made you stare? Well, most of these pictures become attractive because of its color. Yes you read it right, color is the culprit.
|
- 10). Before You Do Anything: Try It Out By : James Calvin
So you know, roughly, what you want your home business to be. Before you go any further and start investing, though, you need to try it out. Here’s how.
Build a Prototype.
If you plan to sell physical things, or you’re going to do something like starting a website or making software, then you should build a prototype to see how your idea will work out.
|
| New Marketing Articles |
- 1). Birkenstocks & The Customizable Art Of Footwear By : JM Anderson
Birkenstocks are a German brand of quality footwear, which is best known for it’s contoured footbed. When most people purchase a new pair of shoes, they expect to have a ‘break-in’ time. This usually lasts for a few days and, at that time, the shoe is pretty comfortable and broken in for everyday wear. The main difference with Birkenstocks is that they approach the ‘break-in’ time much differently.
|
- 2). Millionaire Marketing in 3 Small Steps By : Allyn_Cutts
What is money? A child might say that it’s something rich people have and poor people don’t. An engineer might go into a detailed and lengthy explanation, but we all know that money is what really “makes the world go around.”
In the business world, money is the definition of success or failure. That’s why it’s vitally important that every entrepreneur has a good understanding of money – even if their business is still struggling to get off the ground.
|
- 3). Free T Shirt Offer – Are they really free? By : Isabel Rodrigues
The modern day craze has created a huge demand for designer clothing all over the world. Many young guns are going for a casual wear than what it used to be 20 years ago. A simple T-shirt and low waist jeans makes both the genders comfortable. It’s become almost a compulsory act to hang out in t-shirts and jeans even in colleges. Youths like to have wide collection of t-shirt of current fashion.
|
- 4). How To Promote Your Home Based Business On A Shoestring Budget! By : Kris Bickell
Getting customers is the key to success in any business. There are many ways to promote your home based business - the only way to know which ones are best for your business is to test. Here are some tips for getting customers without spending a fortune!
1. Tell everyone you know that you are starting a business AND ask them to tell everyone they know.
|
- 5). Cash in on Neighbors By : Allyn_Cutts
What could be more welcoming than the spicy smell of hot apple pie to receive you into a brand new neighborhood full of people you’ve never met? Hopefully you life has been full of warm, hospitable neighbors wherever you’ve lived. Perhaps not…
If you’ve ever had a bad experience with a neighbor, you know just how much those invisible people really know about you.
|
- 6). Technology Controlled Marketing By : Allyn_Cutts
RSS feeds and blogs took Internet marketing by a storm in 2005. Every time we turn around there’s a brand new marketing vehicle speeding down the Internet highway. In the fast paced race of the virtual world, it’s easy to get swept away in the current of technology.
If we’re honest with ourselves, we’ll admit that computers have taken control of both our personal world and the business world.
|
- 7). Finding Your Niche In The Business World By : Cheryl Johnson
Who am I and what do I love to do? Well, isn't this the twenty million dollar question! A more appropriate question might be "Who was I and what did I love to do?"
As you search to find yourself, and what it is you love to do, you may find the task harder than you thought it would be. Try to think about your childhood. Can you remember what thrilled you as a child? Like many people you've probably forgotten what brought try joy and excitement to your essence.
|
- 8). 7 Marketing Ideas to Expand Your Customer Base and Profits By : Joel Sussman
Copyright 2006 Joel Sussman
How do you grab people's attention, arouse their interest, trigger their desire, and motivate them to take action? Answer that four-part question correctly and you've identified the secret to achieving tremendous sales and marketing success in your chosen business or field. To complicate matters, however, the potential answers are as numerous and multi-faceted as the growing number of niche markets, products and services, and marketing trends in our culture.
|
- 9). The Housing Market Pitfalls and How I got Trapped. By : Mars
The housing game in Gainesville Virginia, let alone all other areas in Virginia, has become something to smirk at. I mean it’s obvious that during the real estate boom everyone made money except those that were watching from the sideline and jumped on the train as it was inching away only to slip and get crushed on the tracks. Well welcome to my world.
|
- 10). One Little Secret that Makes People Listen to You By : Kathryn Beach
As a marketer, you should be focused on one and only one thing. Not your company, not your product, but on filling your customer's needs. You have to start out with a clear perception of who your target customer is (the more details you know, the better); what his or her needs are, and how your product or service fills that need better than any other.
|
|
|
