Music2Go Examples from music2go BREADTH (1 LINE ONLY) T PTH EN DE RTM NE) LI SO (AS HIN A WIT Portable CD Players Youth Standard Vary in: •Tech Level •Style Level •Price Page 1 Music2Go You have a maximum of 3 product slots available to you each year The key to success is the effective use of these product slots Each year you have a selection of new projects that you may launch You have one new project for each market segment available to you New projects can only be launched as new products in empty product slots Page 2 Music2Go Type in a product name & then select a product plan for the segment you want to target Redevelop Tech Level Style level Current Product Offering Reduce cost (from manufacturer) Abandon Page 3 A project may incorporate all 3 of these aspects, e.g. both reduce cost and increase style/tech. Music2Go Select Change Design & then select a design to upgrade your existing product !" Growth Introduction Maturity Decline Sales Profits 0 3 Decision Years Page 4 6 Time Music2Go !# " $ Segment Standard GROWTH DECLINE MATURITY DECLINE Youth GROWTH N/A MATURITY DECLINE DECLINE 0 3 6 9 Years % When managing on the rise, you need to consider Product improvements: Cost, style & technology Price assessment Distribution expansion Promotion enhanced Page 5 Music2Go % & Improvements in styling dimensions Cost reductions redevelopments to facilitate reductions in price Expand distribution coverage rapidly Expand product awareness rapidly via broad reach media (e.g. TV) When managing during maturity, you need to consider Line extensions – New product(s) launched into other available segments. Product modification – Style & technology New promotion initiatives Page 6 Music2Go % & Product launch into new segments may be inappropriate (they may already have matured too) Continue product modifications (maximize styling differentiation) Improve brand awareness, move to broad but more targeted media advertising (e.g. Radio) When managing during decline, you need to consider Efficiency of marketing & production programs Product line contraction – removing unprofitable products in a segment Minimizing all costs relating to product provision Abandoning all products in a segment Page 7 Music2Go % & Targeted promotion – use of targeted advertising media Improve inventory management – minimize inventory holding costs Abandonment of unprofitable products Abandonment of entire segment? Unlikely since it’s one of the last segments to enter the decline stage ' ( ) Slight pricing increase To try to minimize effect of decline in sales on revenue Restrict distribution to the most effective channels E.g. Concentrate effort on the consumer electronic stores Page 8 Music2Go For each m2g segment the “ideal” combination of product style & technology will shift over time + , % Technical Specs *$ "% Style # Original (unmodified) products will become obsolete over time in m2g as Tastes & preferences change New products are introduced Existing products are modified Page 9 Music2Go # # "% The rate of change of tech/style dimension preferences varies by segment Youth consumers are style oriented & quickly adopt higher style levels Standard consumers emphasize neither style nor technology, so preferences change the slowest (they are ‘late adopters’ in the product adoption process) Page 10