Industry Analysis Case Study

Case Title:

FOPP, UK's Music Retailer (A): Profiting from Positioning?

Abstract:
With the current trend of consumers exploring music online and supermarkets offering CDs at competitive prices, stand-alone music retailers face an uphill task to maintain real differentiation in the industry. The Fopp case series (A&B) track the positioning, the challenges and the growth dilemmas of Fopp - a music retailer with 105 stores spread across UK and Scotland. The company had been selling CDs, DVDs, books, and peripherals for about 25 years. Started in early 1980s, the retail chain has grown from a small corner shop to UK's third largest music retailer. What differentiates Fopp from its rivals is its positioning to reach Fifty Quid Bloke: the marketing name for people aged between 25 and 45, who are cash-rich and time-poor. A typical Fifty Quid Bloke is seen on a Friday afternoon buying piles of CDs, all worth £50, thereby giving the company more revenue per visitor. The company is said to have developed strong patronage with these music followers. Case A describes the dynamics of the music industry in general and UK's music retail industry in particular, and will trigger a discussion on Fopp's positioning strategy against the online music stores and supermarkets. When the giant retailers are struggling by selling all-things-to-all-people how could FOPP survive by selling just CDs, DVDs, books and gift items to one consumer segment? How long can the patronage in these dynamic times last? Now, when internet is posing the biggest threat to every other seller, can the company sustain? If yes, how long? If no, does the company need to change its business approach?

Pedagogical Objectives:

• To understand unique business dynamics of music industry and also music retailing
• To analyse the critical success factors in the music retail industry
• To understand and relate consumer behavior in music retail industry to the target market selection.

Keywords : Music Retailing; Customer Segmentation; Customer Targeting; Niche Marketing Fopp; Industry Analysis Case Study; Fifty Quid Bloke; Music Labels; Music Recorders; Universal Music Group; Sony BMG Music Entertainment; HMV; Customer Community; Music Industry; Positioning; Differentiation