Since technology had replaced the positioning of audio recording and playing from LPs to the contemporary digital type find in CDs, there is an un-served market among those males aged 50-60 that still treasure their LPs. As a result, the efficient and flexible promises of internet and digital age are undermined because old recordings that became collector’s item would not let LPs to be played in portable CD-ROMs, DVDs, MP3s and other music CDs.
Market analysis is designed to thoroughly examine the target market which the product is to be offered. The data presented is gathered to a number of United Kingdom’s statistics to further explain the demographics and purchasing behavior of the identified market of males aged 50-60. This presentation will aid our marketing plan later.
Demography of the Target Market
Characteristics of the target market: they are males aged 50-60 years old in inner and outer London. Census 2001 of London indicates 355,152 heads for this classification. Male employment rate in London based on 2003 data is higher than female at 75.5%. There are 72% of men within 50 years to state pension age (SPA) bracket who are working which is most likely through self-employment.
During National Statistics for 2004, it is found that older households 50 years and over have owner-occupied homes wherein there are more old males living with their married and cohabiting couple than female counterparts. Most lone males rear only one child and in very fewer cases compared to female. In 2001, London recorded 17% cases of lone parent families, 7% unemployment rate and the trend of university versus trade certificate or diploma heavily favor the latter with tremendous increase from 1996 census of 8,510 to 2001 censuses of 24,965.
Those who have retired before the SPA are most likely forced to retire by their employers due to health-related issues and also most likely to be deprived of private pension compared those who retired voluntarily. Men have a life expectancy average of 75.9 years, one-fourth of which would obtain certain disability within 50-64 year bracket. For households who are headed by 50-64, 441 pounds is spent for a week which decreases along with age of the head to reflect decrease in family size and income. The upper 20% of families earn 6 times more than the lower 20%.
Listening to music for the target age bracket consumes less than 1 hour but more than 45 minutes of their daily schedules. Top in the list are watching television (3 hours) and social life (2 hours) while reading has almost same stance as listening to music. Friends, relatives and neighbors are common people that they have contact with for socialization purposes.
Purchasing Decisions
With 418 pounds as budget limit per week (considered as average income which is a range for 140 and 905 for low- and high-income brackets), possible household expenditures that can be spent in the product is from leisure and recreation including computers 57, miscellaneous goods and services 33, household goods and services 31, communication 11 and education 5. In aggregate, weekly household expenditures attributable to demand the product in a weekly basis is 137 pounds or 32% of the budget limit 418 pounds based on 2003-2004 national data. As the person in the country becomes old, he increases his spending on food and non-alcoholic drink and decreases restaurant and hotel demand. Those in the age bracket of 50-64 accounted the highest expenditure on fresh fruits and vegetables including purchases on new cars.
For a self-employed person, the highest recorded spending is at 588 pounds a week while retired persons are deprived to only one half of this amount. Further, spending for recreation and culture ranked second trailing behind transport (for the employed at 71) and food (for the unemployed at 27) while economically-inactive households ranked it as their first priority at 38. Spending in London (average expenditure a week is 491 pounds) is above the United Kingdom’s average with the bulk going to housing, fuel and power. This is in contrast to other metropolitan areas with population between 25000 and 100000 that placed highest purchase for recreation and culture. Other rural areas spent the largest share of weekly expenses in transport at 75 pounds while recreations and culture is at 63 pounds.
Fifty eight percent of the household has computers while 49% of which has internet connection. This ownership and connection varies across income levels in the country with London accounted for the highest of these computer-related demand.
The Perceived Target Market and the Projected Demand
Basically, the target market will be males aged 50-60 years old living in either inner or outer London whose household owns computer and have access to internet that could be in dial-up, broadband or wireless type. To apply the statistics gathered above and come-up with a realistic demand projection, there is a need to quantify the most probable number of males that would purchase the product. With benchmark at 355,152 (males living in London), we will categorize their purchasing power and effective demand (the demand that actually purchases the product) according to individual power and household power. An important note to consider is that at this age, children normally flew away from home or even gives the target market “goodwill” allowance. Thus, it is unlikely that household size could hinder their effective demand (the actual purchase of the product) rather enforce it.
To determine the ideal number of effective demand, it is required to rationalize the target market and minimize overestimation. Thus, the 75.5% of 355,152 will show the employed market at 268,140. Further, this result will be reduced to 201,105 when the 25% of the age bracket incurs disability wherein the amount to purchase the product would likely be diverted to health-related services. Lastly, 50% will be deducted to reflect the London household computer ownership and internet connection that could finally show the ideal effective demand of 100,553.
The benchmark weekly expenditure to be used is the national average (with more or less 50 pounds lower than London) at 418 pounds wherein the attributable amount with regards to product demand is at 137 pounds per week. This amount includes product-related household expenditures. However, this amount is restricted by the age bracket inclination to buy fresh fruits regularly and demand for new car. For the purpose of our analysis, such factors will be regarded as mild catalyst because they ca be classified under food and luxury category. Besides, car purchase is relatively seasonal.
In addition, effective demand is enhanced by national emphasis on recreation and culture regardless of income brackets. As a result, the 137 pounds per week possible effective budget allocation for the product is evaluated to be very feasible. Thus, it can be assumed that the household or the male can simply save this amount to finance the product price in the future. This purchase is enforced by almost one hour per day of the markets’ schedule listening to music and at the top priority of the market in London behind housing, fuel and power.
Repeat effective demand would depend in the warranty of the product. In estimate, commercial CD-Burner has tow years warranty. This means that the 100,553 effective demands most likely keep the first version of the product in this span of time unless the manufacturer releases an upgrade type, newer version or innovative accessories depending in the sales and marketing objectives on hand. As the increase in SPA pension continues including the improving economy of the country, demand for the product by this specific perceived market is expected to hold up. Although the manufacturer should be noted that LP vinyl are limited in customers’ hands while borrowing from neighbors could deflect the perceived effective demand after the initial release. As a result, there is a need to provide a strategic marketing plan for the product.
Marketing Plan
Marketing plan is designed to explain the strategies intended to reach and exploit the potential demand and realizing effective demand or actual purchase of the product. So far, we determine the ideal potential demand at 100,553 levels representing London males and weekly budget allocation of 137 pounds representing the ideal budget share for the product.
Product Features Benefits and Competitive Position
The product is a box that fits a gramophone and amplifier of a classical stereo system that resembles a portable CD-burner available today in the market. LP owners can put the LP on the gramophone player, put a blank CD in the box and copy or record the LP onto CD while hearing the music without use of computer. Thus the owner will simply and easily made a CD copy of the LP, which he can safely store away, playing the CD instead.
However, it will be definitely much larger than CD-burners because the size of LPs need more space. A typical long-playing LP format measures 12 inches in diameter with 33 and 1/3 revolutions-per-minute (rpm). Less common formats can measure as small as 7 inches and as large as 16 inches. Due to this, compared to a commercial CD-burner with dimensions of 6.6” x 5.4” x 1.3” (L x W x H), our box will measure 21” x 17” x 4” but will prevent and ease portability controversies as it can accommodate all sizes of LPs from the smallest, standard to largest. The inner compartment allows flexibility to meet all LP sizes.
The box package will consist of the CD-burner (gramophone and amplifier) with remote control, rechargeable battery pack, AC power adapter, batteries for remote control, protective bag, PC connector, instruction booklets and 2-year limited warranty. With this features, it can go head-to-head against the rivals. In view of competition, it will provide customers with original sound with fidelity of their vintage bands like Beatles in a portable version in CDs. Unlike digitalized versions of vintage hits, the box will cater the emotional gratification for customer by giving them the sound that they like to play and listen since the old days. This will be easily done through burning the LPs into CDs. Thus, making their all-time hits portable and available whenever and wherever they are.
Further, in view of the customer’s standby phonograph at their homes, the box will not hinder them from listening to their favorite vintage tunes away from their home. They would simply have to buy a portable CD player and they can ride, drive and listen to the music simultaneously. The bulky phonograph, and conversely the box, will be left at home protected from damage. The phonograph would then be used with household and bedtime functions.
Since target market are highly mobile conceded by large weekly expenditure share of transportation and fuel, securing a portable CD is likely. This is Also, as almost one hour of their day is spent on listening to music, it is likely that the target market would play the tunes in travel or at work: the former will most probably occur when the target market is in public transport (to prevent noise that could be allowed when one has a car) and the latter most probably occur when the target market is self-employed. As a result, frequent public transport traveler and self-employed segments of the target market will be profoundly benefited by the product.
Our position to exclude from the ideal target market those who do not have computers and internet connection can be explained by the second benefit. Having a copy of LP to the CD would limit the latter use to oneself prohibiting the target market to socialize with others and use music to maintain or create companionship, unless the owner would risk the product to lend it to friends and neighbors. With computer and internet connection, the customer would simply copy the LP to CD and then store it to computer through WAV and afterwards MP3 format (using the designed software) to easily send the file through internet for group sharing of the music.
At initial perception, such process will definitely beat the purpose of the product diminishing its value. The internet transfer will provide a situation wherein the receiver will not be satisfied with the compressed quality of MP3, particularly speaking in behalf of 50-60 male bracket, and would be less impressed by smaller file size. As a result, they will borrow the product from the sender which would be detrimental to the manufacturer. But in a positive note, the bulk size of the product would limit original buyers from carrying it from their place to another. Also, the curiosity of receivers will make them ask about the product, creating potential demand.
With this, would let the target market enjoy the music and keep their box in the safe of their homes while making friendly relations with receivers through referrals of the product. Of course, the receivers are scattered across the country giving the customers opportunities to find and keep their interest group in the area of vintage-fidelity music. They will be benefited by the product’s ability to rip LPs to CDs in such a manner that keeps the fidelity of the music compared to MP3’s lossy compression format heard over the internet.
Pricing Strategy
The commercial United States CD-Burner is priced as 136 pounds which is reflective of our weekly projected allocation of target market to the product. With limitations to determine the actual unit cost of producing the product including relevant financial information of the manufacturing operations and related manufacturing costs, the 136 pound benchmark will be used to reflect the over-all cost per unit upon final packaging but before distribution and marketing of the product. Market price will be determined after these are incorporated to the product. It is to note that the product is new to the market and caters to LP owners and enthusiasts.
A contemporary way to convert LP format to CD or MP3 is to use a tape deck or record player with an audio output where an RCA to headphone cable will be connected that will serve as a channel to computer. Their cost to be incurred by the target market is insignificant because this market already owns record player for LPs although they are bound to pay for the software to be installed in the computer. This will allow the format conversion to takes place and amounts to 20 pounds. With this amount, the LP owner could ignore the product and simply do this cost-effective process.
However, this modern transfer involves a computer and internet connection that will basically take the other half of our pre-internet deprived household reduction figure. necessitates our present target market projection to be cut in half. This will be the number of their market. however,
Credit:ivythesis.typepad.com
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