U.S digital music player industry
INTRODUCTION
MP3, an obscure compression format that has the music industry shaking in its gold-studded boots, is surely one of the Web’s most unlikely heroes. It all started in the mid-1980s, at the Fraunhofer institute in Erlangen, Germany, which began work on a high quality, low bit-rate audio coding with the help of Dieter Seitzer, a professor at the University of Erlangen. In 1989, Fraunhofer was granted a patent for MP3 in Germany and a few years later it was submitted to the International Standards Organization (ISO), and integrated into the MPEG-1 specification.
Frauenhofer also developed the first MP3 player in the early 1990s, but it turned out to be a pretty underwhelming application. In 1997, a developer at Advanced Multimedia Products named Tomislav Uzelac created the AMP MP3 Playback Engine, which is regarded as the first prime-time MP3 player. Shortly after the AMP engine hit the Net, a couple of university students, Justin Frankel and Dmitry Boldyrev (who more recently created MacAMP), took the Amp engine, added a Windows interface and dubbed it “Winamp.” In 1998, when Winamp was offered up as a free music player, the MP3 craze began: Music fiends all over the world started MP3 hubs, offering copyrighted music for free. Before long, other programmers jumped in to create a whole toolset for MP3 junkies. New encoders, rippers, and players were sprouting up every week, and the movement was growing strong. Search engines made it even easier to find the specific MP3 files people wanted and portable players like the Rio let them take MP3 tracks on the road.
BRIEF HISTORY
The earliest portable music players were the transistors radio, introduced by the company Regency in 1954, which offered their listeners mobility but generally suffered from weak signal reception. Then in 1979, the consumers could purchase first truly portable music player by Sony which offered only playing cassettes. In 1984, these tape cassettes were replaced by the Compact Disc (CD) and again Sony was among the pioneers with the development of portable compact disc player or CD player. The first MP-man player was introduced to the US market in 1998 and its second predecessor Rio PMP300 was introduced in September, 1998 and was very successful during the Christmas that it led to significant investment in the MP3 player industry. In 1999, Remote solutions introduced the first hard-drive based player, the personal Jukebox which had a 4.8GB hard drive and could store up to 1200 songs enabling the consumers to a wide variety of flash drives, hard drives. But with the legendary release of Apple IPod in 2001, MP3 Industry was virtually revolutionized spurring the development of many look-a-like products from the competing manufacturers. Due to this enormous growth in the Digital music player industry, the sales of digital audio players had reached 27.8 Million units in 2004. And during the Christmas Season only, the sale of MP3 player reached up to $270 Million
In creating the initial product, Apple was targeting a market for portable music that had existed in one form or another since the invention of the transistor radio in the 1950s. But the success of the iPod is due to more than just its ability to access a wide variety of audio–and now video–content on the go. Its versatility is popular with users as well. The addition of a simple accessory turns the iPod into a recorder, allowing the user to capture audio content that can be quickly uploaded and distributed anywhere in the world via the Internet. And several related software technologies that link with the iPod enable people with little training to do things like organizing, editing, and publishing photos, music, and video that once were the sole province of dedicated hobbyists or professional artists.
Since its October 2001 debut, the iPod has enjoyed enormous popularity, and the reasons for it have not gone unnoticed by educators at all levels.
CONSUMER DEMANDS
Now-a-day, the manufacturers of electronic devices including MP3 Players, have begun to combine as many features as possible into a single portable unit. Combinations of Cameras, MP3 players, Digital diaries and even cell phones are becoming abundantly popular. Consumers in US markets are leading increasingly busy lives and with more people constantly on the go so there is an increased demand for the products that would let people carry their different devices combines in a single portable unit so they can essentially listen to their music while they search the internet, plan a meeting, or call a person.
COMPETITION IN THE MUSIC PLAYER INDUSTRY
Although there is large number of companies manufacturing their MP3 products in the market but only 7 that could legitimately claim real importance in the US market. These are:
Apple
Archos
Creative
Dell
I-River
San-Disk
Sony
However, the market in currently dominated by the APPLE, that constitutes almost 60 to 65 percent of the market share and each of the other posses almost 6 percent of the total market share. But all manufacturers realized the fact that their success depended in larger part as how they could satisfy their consumer’s needs as well as their ability to attract new customers. As research showed, that most consumers shopped for players on the basis of songs capacity, availability and compatibility with the online music stores, unit battery life and weight specification and ease of use.
MARKETING STRATEGY
By keeping this fact in mind, the new player can enter the market and focus on the marketing strategy to spread its business.
As we approach the year 2007, marketers need to figure out what consumers will want and how they will shop in the future. In the coming years the industrialized world will age dramatically, resulting in markets that are very different from those that exist today. As the baby-boom generation settles into middle age throughout the industrialized world, their market for consumer products will expand not only in size but also in purchasing power.
To use the means-end approach most effectively in solving marketing problems, managers of the new organization should frame each marketing problem as a consumer decision (or as a series of decisions for complex problems). The process of framing the marketing issue or problem as a consumer decision can be formalized by requiring the researcher or manager to answer four questions:
1. Who are the relevant consumers or customers whose decisions the company needs to understand?
2. For consumers, what particular behavior or actions like shopping, branding and consumption decisions are most relevant to the current marketing problem?
3. What are the social and physical contexts in which those behaviors or actions occur?
4. What choice alternatives does the consumer consider when making the key decisions in those situations?
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