Introduction
The records industry, like any other industry, has encountered new trends and challenges that have, consequently, affected business performance of individual firms. The advent of technology has affected the average profits made by firms since technology provides ample room for illegal file sharing and piracy.
This report analyzes the marketing performance of Octone Records in the industry. The report also offers recommendations on how the company can improve its business performance and marketing activities.
Value Creation
Octone Records’ great market performance centers on the basic principles of the marketplace, as well as the customer. The company has studied the needs, demands, and wants of the market fairly well and it strives to perform in accordance with these expectations.
While it has signed Michael Tolcher, the record label is quick to note that his performance may not meet the expectations and demand in the market. Octone, therefore, works toward creating the artist’s value by organizing opening shows where he can curtain raise events for other established artists in the industry.
Organizing live concerts for the artist helped in creating his value more. Octone Records, in its efforts to create value, also works toward determining the exact market that an artist appeals to.
The firm then concentrates its marketing efforts in promoting the artist within this market to enhance his value. In the case of Tolcher, Octone discovered that the artist mostly appealed to people in their thirties. Octone, therefore, focused its efforts toward marketing the artist within this market.
Customer Value
Octone Records has focused on creation of customer value as a part of its marketing activities. This is a move that has seen the firm remain effective in the industry.
Octone works closely with its internal partners, mainly the artists working under its label, to a point where it catapults them to international market standards with significant market demand. The firm understands its magnitude within the industry compared to other major record labels. Therefore, Octone has established a unique way of partnering internally with its clients to create more value.
The patience of the record label’s management in working with unpopular artists or bands is critical in creating customer value. Octone Records does not necessarily rush into registering quick successes with artists. Instead, the firm guides individuals and patiently walks them through the necessary principles until they transform them into industry heavyweights.
Creation of customer value by the firm is further supported by its operation approach of only concentrating on a few artists at any given time. This gives the firm total concentration in marketing each of the artists or groups and polishing any imperfections that may deter positive performance.
Externally, Octone Records has also perfected the art of partnering with other industry players to achieve an advanced value delivery network. In particular, the record label has formed a working relationship with up to three other industry players, including industry leaders SonyBMG and RCA Music Group/ J Records.
This is helpful in influencing Octone Record’s market performance because the label has a relatively inferior capital base compared to other major record labels in the market. This implies that Octone may not successfully empower artists signed under its label to competitively vie for the market with rival artists under the major record labels, especially when they break into the international market.
Thus, the partnership deal with the established record labels ensures that Octone Records hands over such artists to the major record labels for further marketing. Major record labels, such as SonyBMG, have wider distributor networks compared to Octone. Any artist working under the record label is, therefore, more likely to achieve a wider market coverage compared to one working under Octone Records.
Additionally, Sony BMG has greater experience working with internationally acknowledged artists compared to Octone. For instance, SonyBMG has worked with many renowned artists like Alicia Keys, Michael Jackson, and the Backstreet Boys among many others.
The external working relationship creates more customer value in the sense that Octone Records only specializes in an artist’s market performance while still at the grass roots level. The major record labels have little time for such artists.
This gives Octone ample opportunity to perfect its performance. However, Octone hands the artists over to the major record labels once their performance improves to a level where they break into the international market because the label lacks the financial capacity to sustain the artists in the highest echelons.
Recommendations
Octone Records should adopt the selling concept as it seeks to ascertain whether it should continue with plans to market and work with Michael Tolcher. The main principle of this concept suggests that consumers will not acquire enough quantities of the firm’s products unless the firm makes efforts toward undertaking large-scale selling, as well as promotion.
This implies that Tolcher’s performance in the market depends on the efforts that the record label will expend in selling and promoting the artist. The focus should be on the existing product, which in this case refers to Tolcher. Rushing into acquiring other artists and dropping Tolcher will not be helpful in meeting the firm’s business objective.
Thus, what the label needs to explore critically is new selling and promoting means in order to endear him more to the market. This will, in turn, increase the sales volume with respect to the artist’s music and lead to high profits for the firm.
On the decision to sign a new deal with Universal Record or maintain the existing working relation with SonyBMG, the main principle that should guide Octone Records’ course of action should be its mission statement. The record label has in place a strategic plan that seeks to develop its intended fit between its set goals and the changing marketing opportunities.
It is evident that Octone, like other players in the industry, also wishes to establish itself and achieve optimal returns from its sales and marketing activities. From the analysis of its current business portfolio, Octone is not achieving optimal performance in its sales and marketing activities. Some of the artists under its label, such as Tolcher, have failed to break even in the market to influence the overall sales of the company.
With this realization in mind, it is important that the firm takes up the opportunity to work with Universal Records and drops the current existing partnership deal with SonyBMG. Universal Records’ partnership terms will direct more resources towards Octone than the case is with SonyBMG.
This will enhance profitability of the firm and help it drop out weaker resources. Additionally, Universal enjoys a comparatively stronger market position compared to SonyBMG, implying that there is a high likelihood of Octone Record’s signed artists performing better under this new deal.