Expert Answers to Biz Questions
Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.
The Biz Question
I'm a marketing major working on a project for a local record store, and I'd appreciate some advice or ideas. Here's the situation. The business is a locally owned record store in a college town. They have only been in business for about 6 years now and are not producing the kinds of numbers they need to stay open. Up till now, the two men who have been running the place have been doing business in the types of music they know, new and used. Along with odd and end items such as posters, collectibles, repairs, music accessories that type of thing. Competition is scarce in this town with only two other businesses. Would love some new, fresh ideas. Don't worry I'll give you the credit!
Answer from our Guest Expert Kent Capener of Capener Consulting
Our Musical Marketing Menu
Looking at the situation as you've described it, we have a couple of ideas we can offer up to help you and the record store's slumping sales.
To begin, it seems your guys have been invited to a banquet and chose a seat at the salad bar. With a college nearby, the students there are very likely in the highest music-consuming age group. Incidentally, this 18-22 age group also has a high average of disposable income as well. So the marketing problem that's making business slow, in part, is a likely disconnect with the nearby college-buying public. Since competition is scarce (it isn't really), -- maybe we should call it the local competition -- the marketing menu would call for a "quick meal" of college students for your sales-hungry store owners.
Don't be discouraged, this type of thing isn't rare. In fact, it's quite common to find businesses structured and literally targeted at non-existent markets, but they still sell enough to get by. Marketing is definitely their answer.
An obvious marketing move would be for them to break out and provide the most current music trends and target the college student body with advertising. There may be a financial reason why they haven't expanded or chosen to appeal to a closed market so close by. Often, small players in big markets suffer from the inability to purchase inventory at the same cost as larger players. Could it be they think they can't buy low enough to make a profit and compete?
If you look at the record industry in total, it could be frightening for any record or music retailer. Why? MP3! The only obstacle holding back MP3 from totally revolutionizing the way music is produced and sold is the copyright and intellectual property laws. Yes, you can already down load CD-quality music from sites on the web using MP3. The problem is that the artists -- who are paid for the efforts via royalties from sales of their music -- are out of the loop. Once a method is derived (likely membership) of using MP3 lawfully for all uses, in my opinion, within four years or so, the music CD will have gone the way of the 8-track tape. (If you need historical references on the 8-track, you can find it in any good encyclopedia under "music history!")
Back to the store's competition for a moment. Consumers can buy music CDs legitimately on many various web sites. One difference though between them and your record store: unless the warehouse that drop ships the product is next door -- the customer pays shipping and handling and has to wait for delivery. To most music lovers, the ability to drive two minutes to your friends' store and buy a CD and listen to it on the way back to the dorm is worth the extra cost over the cost of the product from competitors. The same is true if the customer needs to drive to the next town to a "hip" music store. So that's an edge worth touting.
Student Body Specials
One marketing special would be to look to the college's students and try to develop relationships with them in order to foster increased sales. How? Look for any and all media sources that target that student body. Is there a campus newspaper, radio station or TV station you can advertise or send news releases to? Get involved with student government. campaigns. Sponsor student events. Advertise on student boards, both online and off.
Another way to reach the student market would be to sponsor concerts that appeal to them. Now before you freak out because you might think that all concerts are very expensive, they don't have to be. Most people when they hear the word, concert, automatically think, "Big name." That means big bucks. Artists don't start at the top; they have to start somewhere and work their way up.
Your owners can take advantage of that. How? Say the new group, Bokle (fictitious), has a new CD. They will likely have a clause in their contract and/or distribution deal that says they have to do so many promotional dates. The connection is your owners' concerts are in fact the band's promotional dates. The advantages are new music to sell in pre and post concert, and the ability to generate public relations as well. And don't forget the concerts could make money for the owners as well. This is the extremely short version of this concept, but you get the idea.
Look to local radio stations. If they play the type of music your owners know, offer to tie in with some of their promotions. The business should try to tie in very strongly to the student body as well. If by chance, the owners do decide to break out, they can simply listen to the most popular radio station in town for what's new. Even better, it's easy to get a station to give you a copy of their play list. Then, you buy and sell that music, in addition to all their other offerings.
Dessert (It Comes with the Meal!)
Lastly, "the types of music they know" can be an advantage if it's marketed correctly. If their knowledge follows along the lines of music genres, then they can crescendo to increased sales. Using a web site to buy, sell, and trade music in the genres and the collectibles and posters, etc. would be one way. Selling some of their wares on Ebay and other auction sites might help in the short-term in terms of cash flow too.
In addition, their web site could set them up as "music gurus" -- Looking for an old record album? What band sang, "Sugar, Sugar"? What was best album of 1984? Just ask us! Perhaps the owners could use their passion and knowledge for music history and certain genres to bring others into the store who are looking for "older" music and memorabilia. If this is something they could do and enjoy, it's an added service of their store and it should be publicized using fun, unique marketing stunts. A weekly feature on a radio station where they give music trivia or sponsor a music history quiz. How about an Elvis look-a-like contest?
Unless the music they know is some type of whigged-out xylophone bird calls or something, other folks out there could make up another market for your owners. As you know, no retailer needs be bound by the confines of their walls or their locations.
Hope this "freshens" up your marketing efforts for your friends! Good luck!
Kent Capener of Capener Consulting
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DISCLAIMER: We hope whatever you find on this site is helpful, but be cautioned that it may not apply to your own situation, or be totally current at any given time. Idea Cafe Inc. and all of its current and past experts, sponsors, advertisers, agents, contractors and advisors disclaim all warranties with regard to anything found anywhere on this family of websites, quoted from, or sent from Idea Cafe. and its related sites, publications and companies. We also take no responsibility for comments published by others on these pages.
TRADEMARKS: The following are Registered Trademarks or Servicemarks of DevStart, Inc.: Idea Cafe®, Online Coffee Break®, The Small Business Gathering Place®, Take out Info®, Biz Bar & Grill®, Complaint-O-Meter®, A Fun Approach to Serious Business, CyberSchmooz, and BizCafe.