Octone Records Marketing Strategy Analysis & Solution

Marketing & Sales Case Study Analysis and Solution

At Fern Fort University, we use Harvard Business Review (HBR) marketing principles and framework to analyze Octone Records case study. Octone Records is a Harvard Business Review case study written by Anita Elberse, Elie Ofekfor the students of Sales & Marketing. The case study also include other relevant topics and learning material on – Financial management, Joint ventures, Marketing, Product development

Strategic Marketing Analysis of Octone Records case study written by Anita Elberse, Elie Ofek will comprise following sections –

Octone Records Case Description
Marketing Definition
Market Potential Analysis of Octone Records
Market Share Potential Analysis
Segmentation and Segment Attractiveness Analysis
Competition and Competitiveness Analysis of Octone Records
Customer Value Analysis of Octone Records case study

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Octone Records Marketing Case Description

Sales & Marketing Case Study | Authors :: Anita Elberse, Elie Ofek

In February 2007, Octone Records founders James Diener, Ben Berkman, and David Boxenbaum had been highly successful with the first two bands they had signed, Maroon 5 and Flyleaf. Known for its grassroots marketing campaigns, Octone operated through a unique joint venture model with SonyBMG Music Entertainment's RCA Music Group, which enabled the nimble record label to orchestrate mass marketing campaigns once an artist was ready for "prime time." Octone had been less fortunate, however, with its third act, Michael Tolcher. Despite significant investments, Tolcher's first full album had not sold enough copies to recover its costs and merit RCA's marketing support. Octone's executives faced a decision: whether to continue to support Tolcher's first album, increase the stakes by financing a second album, or cut their losses and instead focus on other artists. At the same time, Octone had to evaluate a proposal from Universal Music Group to buy out SonyBMG's interest in the joint venture. Allows for an in-depth examination of new product development and launch strategies in the context of the music industry. Provides rich insights into how grassroots and mass marketing approaches can facilitate new product/artist development. Octone's "hybrid" marketing structure is described in considerable detail, and supporting economic data is provided. By enabling an analysis of how long and how aggressively an artist should be supported before commercial success is achieved, serves as a vehicle for contrasting different approaches to the new product development process.

Financial management, Joint ventures, Marketing, Product development

Marketing Definition

According to American Marketing Association – Marketing is a set of activities that a firm undertakes for creating, communicating, delivering, & exchanging offerings that have value for customers, clients, partners, and society at large.

Kotler explains - Marketing is a process by which organizations can create value for its potential and current customers and build strong customer relationships in order to capture value in return.

Market Potential Analysis of Octone Records

Market potential analysis comprises evaluating the overall market size of the related product that the firm is planning to launch. This will involve defining – Why the target market segment needs the product and how it will provide a solution to full its consumers’ needs. Market potential of Octone Records products various on factors such as –

Maturity of the market. In mature markets the profitability is often stable but the market potential is less as most of the players have already taken market share based on the segment they are serving. New players have to go for market share strategies in marketing.
Technological competence of the existing players and culture of innovation and development in the industry.
Untapped market sizes and barriers to both enter the market and serving the customers. Often companies can easily see the unfulfilled needs in the markets but they are difficult to serve as there are costly barriers.
Define the core need that your product is serving and list out all the direct and indirect competitors in the market place. This will help not only in positioning of the product but also in defining or creating a segment better.
Uncovering the current and untapped market sizes and barriers to serving the larger market. Analyze the areas that you need to sort out while launching the products to wider market and what are the challenges the firm will face in market place.
Estimate the current stage in product life cycle and its implications for marketing decisions for the product.

Market Share Potential Analysis

Understanding the buyer behavior model for Octone Recordsindustry.
Identifying the market share drivers relevant to Octone Records market.
Segment Attractiveness Analysis – Our analysis will work out which are the most attractive segments and which are the one the firm should go ahead and target. We point out in great detail which segments will be most lucrative for the company to enter.
Understanding the different needs and relative value of your offering by segment.
Developing segment priorities and positioning the product based on the product need fit developed by the firm.

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Competition & Competitive Position Analysis

Uncovering customer-based competitive positions for key rivals and firm’s offering. This will not only help in assessing the strengths and weaknesses of the competitors but also help in defining and positioning of the product.
Developing a positioning and launching strategy. It will require not only distribution channel analysis but also promotion mix for the product.
Strategic Marketing Planning — the process of developing and maintaining a strategic fit between the organization’s objectives and capabilities and the ever evolving marketing opportunities for its products.

Octone Records - Customer Value Analysis

Capturing customer value is essential to marketing efforts as it results in higher return in the form of both current & future sales, greater market share, and higher profits. By creating superior customer value, the organization can create highly satisfied customers who stay loyal and buy more. This, in turn, means greater long-run returns for the firm.

The crucial role of customer perceived value in acquiring and retaining profitable customers. Product differentiation is often based on building on a value niche that a firm believes that is very important to the customer. This niche contributes to perceived value. If the perceived value is high then customer stay loyal to the product if not then she can switch to the competitor’s product.
Graphically displaying value differences for deeper understanding and better internal communication. This helps is building a narrative that a customer can identify with. The better the insight more are the chances of connecting with the potential customers.
Identifying and selecting actionable value creation options. This can help in increasing the customer lifetime value. Customer lifetime value is the value of the entire stream of purchases that the customer would make over a lifetime of patronage.