Hmv Market Environment
INTRODUCTION
After a rapid development over the past 10 years, the music market is currently undergoing significant changes. These changes are caused not only by marketing competition but also by the challenges from external marketing environment.
The entertainment industry kept growing for years and as the business grew, the competition also increased. There has also been an increase in the sales of music online. Selling online made it cheaper for customers and as a result many preferred to buy them online rather than going to the stores and buying music. Secondly, there has been an increase in illegal digital downloading; young people tend to download music of various formats which are easily available from the internet. This has lead to the decrease in the sales of music and is right now a major problem today. We are here to do a marketing audit on HMV which is a UK based international entertainment retail chain. It is listed on the stock exchange and earns millions from selling entertainment to countries around the world.
THE MARKETING ENVIRONMENT
This consists of both Macro and Micro forces which are not fully controllable by the business. These external influences can be kept under certain limits of control by identifying and monitoring these forces that are relevant to the business. This is how HMV can keep control.
THE MACRO ENVIRONMENT: PEST
Political
HMVs decisions are hugely affected by the political and the legal environment.
HMV is under the current legislation, any changes in either the government policy Monopolies legislation, Environmental protection laws, Employment laws and Taxation policy will influence on how it makes its decisions. For instance the increase in the VAT to 20% has lead to the decrease in sales of music. As a business HMV will have to make the best decision, they can freeze the VAT so that the price remains low and more customers can buy music cheaply.
Economic
This plays a significant role in determining the likely demand
After a rapid development over the past 10 years, the music market is currently undergoing significant changes. These changes are caused not only by marketing competition but also by the challenges from external marketing environment.
The entertainment industry kept growing for years and as the business grew, the competition also increased. There has also been an increase in the sales of music online. Selling online made it cheaper for customers and as a result many preferred to buy them online rather than going to the stores and buying music. Secondly, there has been an increase in illegal digital downloading; young people tend to download music of various formats which are easily available from the internet. This has lead to the decrease in the sales of music and is right now a major problem today. We are here to do a marketing audit on HMV which is a UK based international entertainment retail chain. It is listed on the stock exchange and earns millions from selling entertainment to countries around the world.
THE MARKETING ENVIRONMENT
This consists of both Macro and Micro forces which are not fully controllable by the business. These external influences can be kept under certain limits of control by identifying and monitoring these forces that are relevant to the business. This is how HMV can keep control.
THE MACRO ENVIRONMENT: PEST
Political
HMVs decisions are hugely affected by the political and the legal environment.
HMV is under the current legislation, any changes in either the government policy Monopolies legislation, Environmental protection laws, Employment laws and Taxation policy will influence on how it makes its decisions. For instance the increase in the VAT to 20% has lead to the decrease in sales of music. As a business HMV will have to make the best decision, they can freeze the VAT so that the price remains low and more customers can buy music cheaply.
Economic
This plays a significant role in determining the likely demand