Pricing Strategy in the Music Industry

Paper Summary:

This paper contends that in today's hyper-competitive music industry, the pricing strategies implemented, for CDs, by music manufacturers are crucial to their success. It explains that the threats from the plethora of music labels now producing music, as well as substitutes to CD purchase, such as online downloads, are significant. The paper focuses on the implementation of a variety of tactics to ensure their success in the industry like,product bundling to segmented pricing. The author claims that a sound pricing strategy in the CD industry not only gains competitive advantage, but can also place a company in a leadership position.

From the Paper:

"In today's hyper-competitive music industry, the pricing strategies implemented, for CDs, by music manufacturers are crucial to their success. Threats from the plethora of music labels now producing music, as well as substitutes to CD purchase, such as online downloads, are significant. As such, organizations have implemented a variety of tactics to ensure their success. From product bundling to segmented pricing, a sound pricing strategy in the CD industry not only gains competitive advantage, but can also place a company in a leadership position. Pricing Strategies Overview: Pricing strategies occur as one facet of a product's marketing strategy. Different pricing strategies are often employed, despite the marketing of very similar products, due to the unique targeted customer demographics, for the product. These generic strategies include: skim pricing, penetration pricing, and neutral pricing. Skim pricing produces high margins and low sales volume for products ..."

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