Lady Gaga's Tour with Kanye West

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  • Topic: Costs
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  • Published : March 6, 2012
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Lady Gaga A
As Robert Burns said “The best laid plans of mice and men often go astray”. In the third quarter of 2009 Things were looking up for Lady Gaga. She had just announced a joint tour with Kayne West. Together they would be able to sell out big arenas and put on that grand production. This collaboration was a cost effective way to put on a grand performance. It was cost effective because they were splitting the cost of a large scale production. This gave each of them the cost of a mid size theater while getting the venue of a large one. This could serve as a spring board for Lady Gaga’s career. She had a larger than life style, but did not yet have the proven market to go it alone. The two of them together gave a security to go at it in a big way. A few weeks after announcing this concert everything changed. At the VMA awards Kayne rushed the stage and took the microphone from Taylor Swift who won an award and spoke about how the award should have gone to Beyonce. It was at this point the plan started to unravel. It leads to Kayne dropping out of the production and Lady Gaga with a critical decision on her plate. The choice before her was to go it alone, Develop a smaller tour, or cancel the tour all together. No matter what choice she made time was not in her favor. Go big or go home:

The first option would be to go it alone. The preverbal stage was set. She could take over the tour and headline the tour. There are some good and bad reasons to go in this direction. The first thing to consider is the cost. The startup cost if she went with this option would be about twelve million dollars. That does not take into account all of the variable costs such as setup and tear down. These costs are things like the moving of the equipment from town to town. There would be the cost of hiring employees that would need to work the venue. There are many more expenses that also would need to be paid for by Gaga. These are typical cost incurred by a high-profile artist on such a tour. She had yet to reach this level. There were already two million dropped into this tour. While that money was a sunk cost it certainly could be reclaimed if she took this option. The cost would be a overall negative variable with this option. The next thing to consider would be the production on a large scale. She is a fantastic personality with a larger than life persona. The ability to setup a production in a large venue would play into her demeanor. If things went well it could spring board her popularity by leaps and bounds. The potential to be able to put on such a grand performance would be a positive for this option. What would this option do for her brand? As it states in our book a brand is a very powerful thing. A brand can carry you a long way or if your brand goes south it can sink you. I believe this is the most important factor in this entire situation. It states in the physicians oath that they should do not harm to the patient. When it comes to marketing a brand that statement of doing no harm is also true. A marketer may not have a life and death of a patient at stake but in their case the brand is the patient. At this point in her career Lady Gaga had only sold out small venues as a headliner. This is very important. If this tour was to be a success she would need to sell out which ever venues she was in. The main question is if she could go from selling out two thousand seat arenas to selling out sixteen thousand seat arenas. She would be completely bypassing the eight thousand seat arenas. It was kind of like asking if a student could go from grade school directly to high school, bypassing junior high. While there are some that can do this, you better be sure or else you will certainly be taking steps backwards trying to recoup the knowledge you did not gain. When a artist sells out an arena no matter the size it creates excitement. This turns into brand equity. It is...
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