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