市场营销学第三版Combined_Vix_Records_Fidelity_Freefall.pdf

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1、 Vix Records:Fidelity Freefall(Case#1)Page 1 of 20 Vix Records:Fidelity Freefall Case Overview Fidelity Freefall is an interesting case regarding damage control and determining the appropriate level of response by an organization.In this case,we(Vix Records)sought to limit music piracy by placing so

2、ftware codes on printed compact disks(CDs).Unfortunately,this action had the unintended side effect of making a buyers personal computer vulnerable to computer viruses.As a result,consumers are angry at the record company.And,record company executives are worried their anger will translate into decl

3、ining sales for our products and our artists.So,we must decide the size and scope of a response.And,this action occurred during a period of transition in the music industry as the digital revolution continues to transform the retailing of recorded music.Vix Records cannot change the past.The damage

4、is done.Now,we must decide on the appropriate type and scope of response.This case can be effectively used to focus a discussion on the following topics:Buyer Motivation Branding Brand Equity Ethics Piracy Changing Technology Environment Intellectual Property Rights Summary of Stand-In Positions Do

5、we develop a very public and aggressive campaign to correct the problems created for our customers by including anti-piracy software on CDs sold?Linda Yes.Address the issue directly and publicly.Apologize to consumers.Seek to minimize damage.Erik Absolutely!Embrace this opportunity to turn a negativ

6、e into a positive and reposition the record company.Sharon No.Consumers move on.We should,too.Vix Records:Fidelity Freefall(Case#1)Page 2 of 20 Sequential Presentation of Case Step One:Plan Marketing Problem Our international record company distributed millions of CDs with a new type of copy protect

7、ion software on them to prevent piracy.After a short time there was a deluge of very public complaints that the protected CDs were spying on the consumers internet use,leaving them vulnerable to computer viruses,and not providing any warning that such software would be installed automatically.After

8、consumer and legal uproar,we were forced to recall over two million CDs from retailers around the world,and are facing an ever-growing class action lawsuit.Consumers contend that beyond the illegality of the way the software behaved,that it also caused numerous security and virus risks that damaged

9、their machines.How do we regain the loyalty of our customers?How do we contain the incident?How do we combat the enormous piracy problem?How do we reassert our reputation as an ethical and consumer-friendly company?Data Review Company Documents The case presentation in Marketers Showdown includes fi

10、ve different company documents.A brief overview of these five documents is provided below.1.Brand Focus Group Report a.Consumers tend to have an overall negative perception of the brand(Vix Records)b.Consumers tend to not emotionally identify with the brand(Vix Records)c.When reminded of our artists

11、,consumers reported a higher level of emotional attachment with the brand(Vix Records)d.Consumers perceive Vix Records to be dishonest e.Consumers perceive Vix Records to be“ripping off”consumers f.Vix Records is not perceived to be socially responsible 2.Consumer Complaints Summary a.Provides an ov

12、erview of CD performance and copyright issues Vix Records:Fidelity Freefall(Case#1)Page 3 of 20 3.Piracy Report a.Piracy is increasing in CD and DVD markets b.Enforcement is increasing the number of arrests and/or indictments of conspirators c.Sales of equipment to support piracy have increased d.Nu

13、mber of illegal downloads has increased 4.Business Strategy Overview a.Attract,develop,and retain established and emerging recording artists and songwriters b.Maximize value of music assets and intellectual property c.Need to manage cost structure d.Need to efficiently allocate capital e.Develop and

14、 optimize physical distribution channels f.Capitalize on new methods of entertainment distribution(digital distribution and downloads)g.Contain digital piracy 5.2005 Sales Figures a.Retail sales of recorded entertainment have been flat to declining(overall market fell approximately 8%last year)b.DVD

15、 audio sales increase is lone bright spot Data Review Marketing Concept Documents The case presentation in Marketers Showdown includes three marketing concept documents.A brief overview of these three documents is provided below.1.Buyer Motivation What motives are consumers seeking to address with t

16、he purchase of pre-recorded music?a.Physiological(food,drink,rest,sex)b.Safety(physical well-being)c.Social(love,friendship,esteem)d.Personal(self-esteem,fun,freedom)2.Branding Strategies a.Family Branding b.Multi-Branding c.Private Branding d.Mixed Branding Vix Records:Fidelity Freefall(Case#1)Page

17、 4 of 20 3.Building Brand Equity a.Brand Salience Create brand awareness b.Brand Performance Create strong and favorable associations c.Consumer Judgment/Feelings Create positive accessible reactions d.Consumer-Brand Resonance Create an intense,active loyalty Strategy Generator Students are asked to

18、 answer six questions regarding their initial responses or reactions to the case material presented to this point.Students are acting largely on the content presented in three places:(1)Marketing Problem Internal Memo,(2)the five company documents,and(3)the three marketing concept documents.Student

19、responses to these six questions will suggest a Stand-In character to represent their point of view.The specific questions for“Fidelity Freefall”are presented below.1.The tone of the marketing response should be:a.Honest and forthright b.Severity-minimizing c.Humorous 2.Consumer behavior criteria re

20、volves around:a.The company only b.The artists only c.The company and artists equally 3.The focus should be on:a.Loyalty b.Sales goals c.Branding 4.The priority action is to:a.Promote Vix b.Fight piracy c.Limit damage Vix Records:Fidelity Freefall(Case#1)Page 5 of 20 5.The approach should utilize:a.

21、PR only b.Promotions only c.Entire marketing mix 6.The response scale should be:a.Minimal b.Moderate c.Full-scale Next,students are asked to elaborate on their responses to these six questions.The elaborations can be saved,printed,or emailed.For this case,the elaboration questions are:1.How will a s

22、erve your overall goal?2.Why is/are most/equally important?3.What data determined the focus?4.Why is most important?5.Why did you choose to utilize a approach?6.Why is the appropriate scale?Step Two:Debate Stand-In Selector Marketers Showdown takes the students responses to the above six questions(n

23、ot including their short essay elaborations)and matches them with one of three Stand-In characters in the case.Students then watch their chosen advocate explain their recommended strategy to see if they agree with the position advocated.They can also watch the other two positions(and advocates)to se

24、e if they are more supportive of these alternative positions.The three Stand-In characters and their positions are profiled below.Lindas Position Address the issue directly,apologize to consumers,replace damaged CDs with CDs and/or downloads,and provide a complimentary gift for the prior inconvenien

25、ce.We must minimize the damage done and make a pointed response about our commitment to end piracy.Vix Records:Fidelity Freefall(Case#1)Page 6 of 20 Eriks Position Seek to turn this negative event into a positive for Vix Records.This is an opportunity to re-define the role of the record company.We m

26、ust admit we made a mistake and we must apologize for our actions.We then replace music purchased at no cost to the consumer.Finally,we seek to brand the record company as one of integrity that consumers seek to have some affiliation with(even membership in our family.)Sharons Position Move on.There

27、 is no problem.Consumers care about the artists and not the record company.Replace damaged goods and fix software problems.But,do not draw any more attention to this matter.Let the artists apologize to fans since consumers perceive the primary relationship to be with the artist and not Vix Records.W

28、e do not need to worry about containing this event.Consumers move on and we should,too.Students must select one of the three Stand-In characters and their recommended strategy for the company moving forward.Marketer Meeting Students watch the Marketer Meeting while being prompted periodically to ans

29、wer specific questions regarding the flow of the discussion.Based on the selection of Stand-In character,questions specific to that Stand-In character are presented on the screen for students to address.Stand-In Evaluator The students responses to the six questions posed during the Marketer Meeting

30、are presented on the screen along with an evaluation of that Stand-In characters performance provided by Marketers Showdown.Next,the students can evaluate how well they believe their chosen advocate(i.e.,their Stand-In character)presented their recommended strategy during the Marketer Meeting.This i

31、s done by answering these six elaboration questions.An example question is,“Was this the best approach?Explain why or why not.”These elaborations can be saved,printed,or emailed.Vix Records:Fidelity Freefall(Case#1)Page 7 of 20 Step Three:Execute Stand-In Selector II Each of the three Stand-In chara

32、cters(Linda,Erik,and Sharon)then recaps his/her position one final time.And,they reflect on how well they believe they presented their position in the Marketer Meeting.Here,the student is given one final opportunity to select their desired Stand-In character having seen how each position was receive

33、d relative to the other two proposed strategies.They can stay with their original choice or switch to one of the other two alternatives.Once this selection is made,the student will not be able to switch positions.This strategy will then be implemented in Marketers Showdown.Outcome Predictor A final

34、summary of the position of the designated Stand-In character is presented on-screen along with six questions:1.The new campaign revolves around:a.Branding initiative b.Damage control c.Product push 2.The primary action is:a.Corporate apology b.Artists apology c.Deny fault 3.The secondary action is:a

35、.Widespread image campaign b.Status quo/boost image c.Bond consumer and product 4.The short-term outcome will be:a.Negative publicity ends b.Sales increase c.Reputation improves Vix Records:Fidelity Freefall(Case#1)Page 8 of 20 5.The long-term outcome will be:a.Top artists sales double b.New artists

36、 sales double c.Resume profit levels 6.The next challenge will be:a.Profiting from digital music b.Retaining artists c.New demographics Students respond to these six questions as they seek to predict the impact of implementing their chosen strategy as advocated by their Stand-In character.Outcome Ne

37、wsbrief The students answers to the six questions presented immediately above are presented on the right-side of the screen.On the left-side of the screen,the Outcome Newsbrief presents the ultimate resolution to the case.NOTE:The resolution of the case is driven by the students answers.That is,the

38、choice of Linda,Erik,or Sharon as a Stand-In character leads to the enactment of that specific strategy.The implementation of this strategy then drives the case toward the resolution presented.There were three possible strategies to choose from in this case.In a typical class,each of these three opt

39、ions likely has some support among your students.To help you compare the three strategies available,the table below presents how each strategy would address the six questions presented in the Outcome Predictor module.Vix Records:Fidelity Freefall(Case#1)Page 9 of 20 Breaking Down Lindas Strategy Bre

40、aking Down Eriks Strategy Breaking Down Sharons Strategy The new campaign revolves around:Damage Control Branding Initiative Product Push The primary action is:Corporate Apology Corporate Apology Artists Apology The secondary action is:Status Quo/Boost Image Widespread Image Campaign Bond Consumer a

41、nd Product The short-term outcome will be:Negative Publicity Ends Reputation Improves Sales Increase The long-term outcome will be:Resume Profit Levels New Artists Sales Double Top Artist Sales Double The next challenge will be:Retaining Artists Profiting From Digital Music Profiting From Digital Mu

42、sic The Results of Implementing Each Suggested Strategy This case addressed a central question.Three different strategies/solutions were presented.In the table below,the results of implementing all three strategies are presented.Your students will likely want to know the results of implementing the

43、strategies they did not select.This table helps you answer these questions.Consistently in Marketers Showdown,there is no definitive solution.Rather,an ever-changing marketplace presents a variety of appropriate responses at any given point in time.Vix Records:Fidelity Freefall(Case#1)Page 10 of 20

44、Implementing Lindas Strategy Implementing Eriks Strategy Implementing Sharons Strategy Do we develop a very public and aggressive campaign to correct the problems created for our customers by including anti-piracy software on CDs sold?Yes.Address the issue directly and publicly.Apologize to consumer

45、s.Seek to minimize damage.Absolutely!Embrace this opportunity to turn a negative into a positive and reposition the record company.No.Consumers move on.We should,too.What were the results of implementing this particular strategy?We made reparations to consumers.Further,we abandoned the use of the il

46、legal and harmful software.Vix made a very public apology to consumers.After 12 months,the issue seemed to be forgotten.Our company image stabilized.Profit levels returned to pre-incident levels.CD sales continue to decline.Piracy continues to increase.And,artists continue to look for ways to bypass

47、 record companies in favor of developing their own independent labels.We undertook a major branding initiative.A public and forthright apology was made.This apology,combined with a major promotional program(i.e.,“Your Vix Fix”)sought to reposition the brand.After one year,the firms reputation improv

48、ed substantially.New artist sales have increased as consumers have newly-found confidence in the firm.CD sales continue to decline.Piracy continues to increase.No firm has established itself in the digital download market.As a result of this action,we de-emphasized the firm in favor of putting the f

49、ocus on the artists themselves.The artists blamed the record company.We removed the name of the record company from printed CDs.Artists used non-traditional media(such as blogs and emails)to create a bond with consumers.Top artist sales have increased dramatically(some doubling in sales).The consume

50、r-artist bonding and less visible role for Vix contributed to increasing sales for top artists.But,sales for lesser-known artists continued to plummet,as did overall profitability.CD sales continue to decline.Future challenge is the digital download market.Vix Records:Fidelity Freefall(Case#1)Page 1