HMV 2
HMV cooperated with The MoBank Group to create a set of apps offering them with a well-developed mobile strategy, allowing consumers to interact with their brand in a range of meaningful methods. It not only encouraging HMV’s platform transactional to generate a new sales channel, but also using smartphone to support consumers seek products in shop, rise sign up conversion for HMV’s reward scheme and drive consumers in shop through their pre-played games division1.
The MoBank Group’s main objectives in producing HMV’s mobile strategy were to involve the broadest base of consumers possible, and offer them with a wide range of related and valuable services. Using Bowman’s clock [Appendices 1], HMV’s pricing strategy could be classified as broad differentiation. The CDs and DVDs HMV offer is expensive than its competitors such as Amazon2. HMV differentiates itself from the market through offering its consumers high-perceived value. By doing so HMV has to incur more cost, thus the price of its products are higher than others. Despite HMV offering expensive products, consumers are willing to pay for it. It is true as consumers spending for HMV’s products have increased by almost 50% compared to this time last year3. HMV is ‘last man standing’ in the high street entertainment market. Thus, HMV is the only music retailer which can create additional value through customer service and amusement to enhance the in-store experience. This is important for a differentiation strategy to be successful in future.
By using the Ansoff Matrix model [Appendices 2], HMV is developed a new product to new market. It means that there is high risk tactic according to this model. However, high risk will gain high return and this is one of the best ways HMV can compete with its competitors. HMV is not trying to change the preference of existing customer in the market, but attracting the new customer which is teenagers group. This is because teenagers like online purchase, rather than go
The MoBank Group’s main objectives in producing HMV’s mobile strategy were to involve the broadest base of consumers possible, and offer them with a wide range of related and valuable services. Using Bowman’s clock [Appendices 1], HMV’s pricing strategy could be classified as broad differentiation. The CDs and DVDs HMV offer is expensive than its competitors such as Amazon2. HMV differentiates itself from the market through offering its consumers high-perceived value. By doing so HMV has to incur more cost, thus the price of its products are higher than others. Despite HMV offering expensive products, consumers are willing to pay for it. It is true as consumers spending for HMV’s products have increased by almost 50% compared to this time last year3. HMV is ‘last man standing’ in the high street entertainment market. Thus, HMV is the only music retailer which can create additional value through customer service and amusement to enhance the in-store experience. This is important for a differentiation strategy to be successful in future.
By using the Ansoff Matrix model [Appendices 2], HMV is developed a new product to new market. It means that there is high risk tactic according to this model. However, high risk will gain high return and this is one of the best ways HMV can compete with its competitors. HMV is not trying to change the preference of existing customer in the market, but attracting the new customer which is teenagers group. This is because teenagers like online purchase, rather than go
References: 1 FIGARO DIGITAL (2014).HMV.[online]. http://www.figarodigital.co.uk/case-study/hmv.aspx 2 THEGUARDIAN (2013) http://www.theguardian.com/music/musicblog/2013/jan/15/hmv-enters-administration 3 Graham Ruddick (2015) (Source: Franteractive Inc, 2008-2009) Porter 's Five Forces model is made up by identification of 5 fundamental competitive forces: