QUESTION

What strategy could they have introduced (up

to 10 years ago) to avoid this catastrophe?
Identify and justify key target segment/s with
distinctive and profitable needs and develop a
plan in order to grow strong customer base
for development of the HMV business and
avoidance of collapse. The plan should be
innovative, strategic and practical, and be
clear enough for a marketing administrator
work with.
BACKGROUND
Since 1970s - Worlds biggest and leading music
retailer
2002 - Floated on the London Stock Exchange
More than 200 stores worldwide
2011 - profits warning, share price falling by 20%
closed 60 stores
2013 entered administration
Failed to keep up in the Digital
Age
OBJECTIVES
To diversify its business model and product lines
To maintain its core business with positive growth of
not less than 8% per year
To strengthen its leading position in music industry
To invest 20% of gross profit every year in R&D
Exploring opportunities in the Digital Age
To sustain as a pioneer in the industry by 2010

ANALYSIS P E S T


POLITICAL ECONOMIC
Lack of national regulations
against illegal uploads &
downloads
Shrinking economy after
SARS
More affordable/economical
to purchase a single music
instead of an entire album
SOCIAL TECHNOLOGICAL
Change in consumer
behaviour
Rising trend to shop online
Launch of Web 2.0
Emergence of MP3 or digital
music
Vast increase in use of
Internet
ANALYSIS S W O T


STRENGTHS WEAKNESSES
Established brand
Connection with record
companies
Worldwide chain stores
Large customer base
Estate and overhead costs
Not competitive in pricing
Lack of visionary/strategic
planning
Lack of R & D
Position as retailer
Avoidance of risk taking
OPPORTUNITIES THREATS
New products
New markets
Shrinking market of albums in
physical form
Pirated music/movie/software
Online streaming
Substitutes e.g. video/online
games, portable gaming
systems
Technological advancement
stopping illegal downloads
ANALYSIS FIVE FORCES


Potential
Entrants
Industry
Competitive
Rivalry
Substitutes
Buyers
Suppliers
ANALYSIS FIVE FORCES
Industry Competitive Rivalry
Huge Competition
Potential Entrants
Easy / Virtual / Physical Shopping
Suppliers
Weak bargaining power
Buyers
Strong bargaining power
Substitutes
YouTube / Download / Streaming / Radio

MARKETING PLAN




REINVENTION & DIVERSIFICATION
HMV
Entertainment
Artist
Management
Music
Production
Live
Concert
Production
Media e.g.
Radio
Broadcast
HMV
Online
Shop
Music
Retailors
REINVENTION
Develop digital / online business
Target segment:
Busy professionals
Youngsters aged 15 to 35
Launch online digital store
Develop online shopping platform
Purchase songs via online download
Provide trails for listening songs
Launch bonus point system to encourage substantial
purchase
Ride on e-marketing to promote such as e-banner on
Yahoo! and other popular web sites
Aim to share market with iTunes







REINVENTION
o Membership loyalty program for customers retention:
Discounts on purchasing all products
Earn bonus points for free music and free video
Privilege to pre-order CD, concert tickets in front row
Member gathering events
Member only online entertainment magazines
Campaign for Member-get-member program -
encourage referrals and earn bonus points for gift
redemption or enjoy discount on purchases
DIVERSIFICATION
From a Music/Video Retailor to an Emperor in
Entertainment Industry

Form alliance with big music/ entertainment publishers as
their sole distributor, for labels such as Sony Music
Entertainment which manages the worlds most popular artists
like:-






1. Michael Jackson 5. Beyonc
2. Celine Dion 6. Shakira
3. Christina Aguilera 7. Suede
4. Ricky Martin
8. Britney Spears
DIVERSIFICATION
Expand its retail business to wide-range involvement in
entertainment industry such as :-
Talent Management Training of singers/ bands &
actors/ actresses
Music production and publishing, such as recorded
albums, DVDs, and live music concerts
Music video production share market with YouTube
and Vevo
Media Radio broadcasting, entertainment magazine
publishing, etc.









ANALYSIS ANSOFF MATRIX


Present New
P
r
e
s
e
n
t

Market Expansion
Online digital market

Product Development
Membership loyalty program

N
e
w

Market Development
Alliance with music /
entertainment publishers as
a sole distributor

Diversification
Talent Management
Music and music video
productions and publishing
Media development such as
radio broadcasting and
entertainment magazine
Product
M
a
r
k
e
t



END


Thank you!


Prepared by 1
st
group