The market study on MP3XYZ was prepared for the management team of Global Corporation MusicToGo, which aims at covering a niche of portable MP 3 players. The scope of my research would have been unlimited if taken overall marketing strategy of MusicToGo, therefore I decided to evaluate the possibility of the MusicToGo to compete with Apple iPod in the Netherlands market and find out what features will enable MusicToGo to improve its performance. The core approach lies in the evaluation of Apple and MusicToGo products with regard to their functionalities and price.
Slide 2. Executive summary
The research was conducted to define the target market, its size, competitors, potential distribution channels, and the willingness of people from the Netherlands to pay for an MP 3 player. The barriers to market entry made an important factor of the research, as well. At the end of the presentation key recommendations and conclusions will be presented.
Slide 3. Industry overview
The iPod came out as a revolutionary of the music industry by offering users unique opportunity to download music and customize their playlists. The unique accessories made iPod a brand, impossible to compete with. Today the CD industry faded away and music listening devices became more and more differentiated, but at the same time appeared beyond the pale of modern High-Tech devices, such as smartphones and tablets. iPod found its main competitors, not outside, but within the Apple Corporation - both iPad and iPhone are frequently used as substitutes for an MP-3 player, threatening iPod’s monopoly on music-lovers.
Slide 4. List of figures
The numbers prove that users want their device perform multiple tasks, such as music, gaming, and access to a web. Despite the introduction of iTouch, the iPod’s share in the company’s revenues is constantly decreasing, giving away to iPad and iPhone. These data should be understood as a global phenomenon, therefore applicable to a particular country, such as the Netherlands.
Slide 5. The Netherlands profile
The Netherlands’ profile is very attractive for the investors. Its dynamic trade, competitive and constantly growing market, and simple legal systems contribute to choosing it as an object of my study enormously. The Netherlands can be considered a gateway to Europe due to its internationally oriented economy. The Netherlands can be a starting point for the Mp3XYZ to be launched.
Slide 6 Market size and target market
Despite all problems and internal competition with iPhone and iPad, iPod remains to be a market leader for the segment known as the stand-alone music players. The iPod’s share in the industry approximates to 72%, which leaves only 28% for other competitors. The graph shows continuous shrinking of the Portable Media Player (the actual target market of mp2 XYZ) share, which requires MusicToGo find new solutions to introduce its product to other market segments.
Slides 7 & 8. Major competitors and distribution channels
The MusicToGo has multiple competitors, such as iPod, smartphones, and tablets. After introducing iPod Touch, the only successful vendor that could compete with it became PlayMG, a product designed predominantly for gaming. Its lower price, access to Google Apps, Prepaid MasterCards, and parental control were important features for successful competition with iPod Touch. Mp3 XYZ can borrow some of them, as well. PlayMG targets children and teens and has reliable distributors like Amazon, Toys R Us, and Target. These channels of distribution will be favorable for MusicToGo as well in contrast to iPod’s iTunes.
Slide 9 Willingness to pay
Mp3XYZ is at disadvantage due to late entry to the market in comparison to iPod that has a world-wide recognition, therefore, the strategy of entering the market should be based on two important factors: differentiation of features and low price. The price should be equal to PlayMG (approximately $100 lower), whereas the features should correspond to particular needs of people from the Netherlands. At this point relationship between bicycle and the mp3XYZ can be extremely important (31.2% of the population uses bikes as the main mode of transport).
Slide 10. Barriers to market entry
Finally, it is important to mention all possible impediments to entering the market. Launching a competition with an iPod, one should consider erosion of the Mp3 market due to increasing popularity of smartphones and tablets. Even if choosing this uneasy path MusicToGo should keep in mind that an iPod remains the owner of the biggest share in mp3 player segment (72%). Overall decline of Mp3 sales and risky dependence on USD/EUR exchange rate make overall enterprise less attractive.
Slide 11 Recommendations
Before entering the Mp3 market MusicToGo needs to conduct a survey on willingness to pay, examine the relationship between bicycling in the Netherlands and Mp3 players, and add features from other segments (such as portable gaming consoles) to attract broader scope of buyers.