Global and domestic marketing decisions in the music industry

Global and Domestic Marketing Decisions

Of course, it's tempting to think of business decisions as occurring in a perfect economic bubble -- wouldn't it be nice to simply prepare a strategic SWOT (strengths, weaknesses, opportunities, and threats) analysis based on one's industry alone? Alas -- or fortunately, depending on one's perspective, however, no company exists within such a comfortable bubble in today's business environment. (SWOT Analysis, 2004) Today, companies must keep abreast of the profound technical, cultural, and ethical shifts that have occurred in today's business climate, reflecting the more forward-thinking yet bearish attitude climate of the 21st century, as opposed to the 1990s.

Technology

From a technological point-of-view, the Internet has changed global and domestic commerce. In particular, cultural industries such as the music industry have been impacted. No longer can music companies simply bank on the popularity of an individual artist. Nor can music and entertainment companies ignore the dangers of Internet piracy. Instead, they must make legal downloads affordable, exciting, profitable to the entertainer, and yet also attractive to the consumer.

To make use of the technology of the Internet, and to circumvent pirating and copyright infringements that will bankrupt individual artists (and ultimately the industry), international Virgin entertainment mogul Sir Richard Branson recently started a new music store, VirginDigital.com, selling music as streams of bits to be downloaded from the Internet. Virgin, a unit of the Virgin Group, became "the first major music retailer to enter the download market," which had before been dominated by Apple and Microsoft. (Hansell, 2004)

Virgin is putting its biggest emphasis on its subscription service, rather than on selling songs one at time for 99 cents a track, like Apple or Microsoft, because it is "betting that new customers will join its Virgin Music Club for a $7.99 monthly fee to listen to an unlimited amount of music from Virgin's one-million-track library on their computers, and providing a premier fee option for subscribers who are willing to pay more to transfer the music to their iPods and M3P players. Virgin has done so to keep up not only with current music trends and intellectual property law but also in growing recognition that the line between entertainment and computer technology in consumer's minds and reality is increasingly becoming blurred across the world, and business must respond to these trends. (Hansell, 2004)

Business Ethics

While advertising is becoming increasingly segmented and yet international all at once, given the Internet, the focus on business ethics remains secure in all spheres of domestic and international marketing, given the recent ethics debacles, from Martha Stewart to WorldCom. Most timely is the fact that "a federal grand jury yesterday charged Sanjay Kumar, the former chairman and chief executive Computer Associates International, with securities fraud and obstruction of justice, in what may be the last major white-collar criminal case to come out of the accounting scandals of the late 1990's... Mr. Kumar and other senior executives, according to the indictment, were so desperate to meet Wall Street's forecasts for Computer Associates' quarterly profits that they backdated billions of dollars in contracts to do so." (Berenson, 2004) In other words, to meet public and industry expectations, and to keep up the company image, the company acted unethically. However, to combat such perceptions of unethical behavior in the industry, contemporary companies must work all the harder to not simply prove internally to auditors that they are conducting their business in an above-handed fashion, but also must demonstrate to the public that investors and consumers need have nothing to fear, when risking their dollars and livelihoods, in purchasing a product.