iTunes and the Future of Music Essay

by means of its iTunes, iPod, and proprietary music software system, orchard apple tree dominates the healthy music slewload industry. yet with the iPod contributing half of all the firms revenues, Apple faces step up competition posed by imitators such as the joint jeopardy between Microsoft and MTV, and Samsungs Helix. In addition to the free-enterprise(a) pressures, iPod also faces legal challenges. In France for example, legal enactments that compel firms with proprietary music management software to open their code to others are about to be passed.Such a law will also standardize formats across the industry so that songs from one vendor could be played on a digital player from any other system. Apple has also had to stare down the four largest record labels as far as pricing is concerned. trance the four largest record labels preferred variable pricing in magnitude to maximize earnings, Apple successfully argued for the prostrate 99 cents price which is more than co mpetitive (Boone and Kurtz, 2008, ch. 4). The success of Apple illustrates how commitment to the marketing orientation school of thought is useful in ensuring organizational success.Unlike the major(ip) record labels which insisted on selling music packaged in CDs, Apple realized that music consumers tastes and preferences had shifted in favour of the more convenient digital format, and developed a point of intersection around such needs. Through the strategy of product education as identified by the Ansoff Matrix, we see Apple adding on to its product line music videos, popular TV shows, and short movies (Mercer, 1996). Apart from the product, Apple also got other elements of its marketing mix right.In particular, its adoption of the flat $0. 99 price rather than the variable pricing pushed by major record labels ensures that the product remains competitive. Its ability to bundle together its trine products the iPod, iTunes and proprietary music software is also a smart mark eting gimmick that has enabled it to lock in customers (Boone and Kurtz, 2008, ch. 4). Apple derives its sustainable competitive benefit from its proprietary music software as well as its quaint player iPod.By enacting laws that allow Apples rivals access to its code, and by standardizing formats across the industry so that songs from other vendors could play from the iPod and vice versa, the forward-looking regulations will in essence be eroding the source of the competitive advantage enjoyed by Apple in the digital music industry. For that reason, should the french legislation succeed, it would be better for Apple to pull iTunes out of the french market (Boone and Kurtz, 2008, ch. 4).