The Current Situation Facing Real Groovy 1

INFOMGMT 191By Sang Jin LIM(ID : 4967702)

1. Trend 2. Market environment3. Price versus Stock4. Current Strategy of Real Groovy 5. Customer needs6. Mirror of Real Groovy7. Future strategy

In the US last year album sales plunged 9.5 per cent compared with 2006, while sales of digital music tracks surged 45 per cent.

[“Shops change tune to battle downloads” New Zealand Herald 10 January 2008]

People prefer downloading songs then buying an album

This trend change is affected a decreasing number of album sales

many music retainers turn the business down these days

People who download Music Album - young people spend more time than older people to buy a music album

on the internet

People who buy Music Album - do not use internet to buy music album or LPs - prefer to posses, high audio quality, etc.

New Zealand music market is getting harder and new entrant do battle over the size of their back catalogues; Borders and The Warehouse jostle over price; The Warehouse in turn keeps an eye on internet retailers’ deals.

[“Shops change tune to battle downloads” New Zealand Herald 10 January 2008]

Price - other shops offer lower price than Real Groovy Online Business - online sales up 69% on the previous year(2006) New competitor - JB HI FI, Warehouse having different sales point

Variety of customers’ demanding - not only selling goods but also selling services

Loyal customers - It is difficult because of other competitor and customers demanding

Trade in second-hand vinyl, CDs and DVDs - buying and then trading through the internet web site

Develop their core business - selling music CDs, DVDs, LPs and Books etc.

Customer service - membership card, magazine, web-service

More than 20,000 titles in stock - the best advantage is large stocks rather than lower price

Expensive vs Cheap vs Free

- why do most retail shops beat a competitors’ price?

Because people want cheap price rather than expensive!!

Expensive vs Cheap vs Free

- why do people prefer download music on internet?

It cost nothing as well as handle easily!!

Decreasing the sales of high street stores

Increasing the sales of on line store

New rivals are coming recently

Lack of ability of market forecasting

Target : Customer friendly

- Cost down

- Aspect of retail price: Even though there are huge number of titles, customers will buy goods

- Reinforce customer service

- increase business volume