Marketing Essay Example | Topics and Well Written Essays - 1250 words - 2

Marketing - examine Example3). E-commerce sites such as Amazon and Play.com are also sources of competitive threat as they offer up the facilities for online purchasing. In online purchasing, the consumers have many of the same advantages when it comes to music downloading. Online purchasing offers greater ease of searching and contrivance and the consumers can sample the point of intersections and read reviews. Online retailers also have the ability to offer a wider selection of titles than it is mathematical for a high street store like HMV. HMV has a solid platform from which to launch its new-fashioned drive. As mentioned before, it has a high brand equity in the foodstuff. Therefore any initiatives are in all likelihood to be welcomed by the market as the consumers have trust in the brand (Kotter & Schlesinger, 2008, p. 138). The management of the lodge needs to formulate strategies which address the competitive threats from three sources downloading, online purchasing and supermarkets. The supermarkets which are competing for the same market tract are Asda, Tesco and Sainsbury. The management of HMV needs to consider the strengths of the competitors and formulate alternative strategies accordingly (Pearlson & Saunders, 2005, p. 19, Wang & Rode, 2010, p. 9). Therefore an industry summary should be conducted (Pascale & Sternin, 2005, p. 73). The threat of new entrants is minimal because of the high competition. The threat of substitute products comes from online. These two threats combine to draw a high threat of competitive rivalry. Buyers do have high bargaining power prone the wide choice from online. For the same reasons the artists who provide the content have high bargaining power. Alternative strategic preferences According to Michael Porters theoretical fashion model for strategy formulation, an organization has three competitive strategies purchasable cost minimization, differentiation and quick focus (Gosling & Mintzberg, 2004, p. 55). In the present context, differentiation is a viable option for HMV. The music and entertainment retailing company can arrange to maintain a diverse product selection, thus reducing the competitive threat from online companies which are eroding the attractiveness of HMVs business model by offering a wide selection of titles. Diverse product categories will also avail to attract a greater number of market segments, thus enhancing the companys market painting (Winfield & Hay, 1997, p. 55). For example, HMV could increase the range of portable digital products. As the popularity of online purchasing grows, so will the demand for portable digital technology. The range of games hardware and software can also be expanded. Nintendo technology has taken the market by storm. Therefore products in this category should be emphasized upon in implementing the differentiation strategy. The set expression could be changed to increase demand. HMV is facing competitive pressure from music do wnloading because downloading facilitates lower prices. However in modifying the prices, HMV should not forget about maintaining its brand image. If the prices were too low, then(prenominal) it would begin to affect its brand image as the consumers would start to suspect the quality of the products which are priced at such a low level. In pricing its products, HMV has five strategies skimming pricing, competition pricing, psychological pricing, premium pricing and cost-based pricing (Teece, Pisano & Shuen, 1997, p. 510, Ross & Perry, 2002, p. 121). If HMV were to implement the pricing option, then it would